BEYOND BOUNDARIES
BREAKING CONVENTION
Annual Report 2020-2021
Subex Annual Report 2020-21
02
ANNUAL REPORT
2020-2021
Forward-looking statement
In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and make informed
investment decisions. This report and other statements - written and oral - that we periodically make, contain forward-looking statements that
set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by
using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with
any discussion of future performance. We cannot guarantee that these forward-looking statements will be realized, although we believe we have
been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or
unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those
anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
03
Overview
04 Strategic Framework
05 Chairman’s Statement
07 Message from our Chief Executive
09 Investor Fact Sheet
10 Quick Facts & Investment Highlights
11
Strategic Report
11 Where We Operate & Our Distinctive Resources
12 Our Business at Glance
13 Products & Services
15 Chief Executive’s Strategic View
19 Stronger Together
21 The future is in collaboration and partnerships
25 IDcentral: The platform for identity analytics,
verification-as-a-service and on-boarding
27 Cutting through the murkiness of data becomes
important for an organization transforming itself
29 The world shifted but so did we
31 Subex Charitable Trust
32 Financial Highlights
33
Governance
33 Board of Directors
34 Leadership Team
35
59
78
85
101
153
Board's Report
Report on Corporate Governance
Business Responsibility Report
Management Discussion and Analysis
Standalone financial statements
Consolidated financial statements
206 Shareholders’ Information
03
Subex Annual Report 2020-21
BEYOND
BOUNDARIES
BREAKING CONVENTION
One of the biggest lessons from the pandemic is that change is the
only constant in business. Since the onset of the crisis, the definition
of normal life and work has changed radically. Traditional technolo-
gies were challenged, remote work models were put to the ultimate
test, digital transformation projects were accelerated at break-neck
speed, and businesses faced tougher demands than ever before. It is
our agility and resilience to embrace change that has helped us
move forward - To overcome tough market challenges, adapt to
new styles of work, think beyond the boundaries of traditional
business areas, reimagine our future, and develop cutting-edge AI
innovations like HyperSense that break conventions. We understand
the power of AI - the potential it has - to analyze data, generate
insights, drive automation, solve difficult problems, and most
importantly, give organizations the agility, and confidence they need
to adapt to change – no matter what the future holds. With
HyperSense, we are now bringing that power of AI to the enterprises
and everyone within the enterprise. The future of data analytics is
here, and we are ready.
Subex Annual Report 2020-21
04
STRATEGIC FRAMEWORK
TO UNLOCK POSSIBILITIES
3 HORIZON STRATEGY
Expand the core
• Revenue Assurance
• Fraud Management
• Partner Ecosystem Management
• Network Asset Management
• Capacity Management
• HyperSense
Growth in New Areas
• Subex Secure
• Analytics Center of Trust
Invest in New Verticals
(Multi-vertical SaaS)
• IDcentral
E
S
O
P
R
U
P
R
U
O
N
O
I
S
I
V
R
U
O
S
L
A
O
G
S
E
U
L
A
V
R
U
O
Y
G
E
T
A
R
T
S
R
U
O
Customers
Partners
Subexians
Shareholders
TO BE THE GLOBAL LEADER
IN ENABLING DIGITAL TRUST
VIBRANT SUBEX
REVENUE GROWTH
Think Customer
Make It Happen
Create Value
Win Together
Be Open Be Fair
05
Subex Annual Report 2020-21
Chairman’s
Statement
Message from
Anil Singhvi
Chairman of the Board
Dear Shareholders,
The global pandemic caused by COVID-19 has
resulted in ‘the new normal’, which has led to a
disruption in lives, livelihoods, and businesses,
worldwide. Despite the challenges posed by the
pandemic, I am pleased to say that the management,
through active guidance and support from the Board,
was able to navigate through the uncertainty adeptly.
Today, we are a zero-debt Company with a strong
balance sheet and a net cash balance of over ₹ 140
crores, giving considerable scope to invest in many
exciting areas, even in this challenging environment.
I have always valued how Subexians rise to meet every
challenge and opportunity. On behalf of the Board, I
thank them for taking the company to new heights
during the last year. Their determination and passion
symbolize our values and vision statement in adapting
to unforeseen challenges to ensure that all our
customer projects were uninterrupted, especially at a
time when our customers needed us the most.
A look back at our journey over the
last 10 years.
Overall, during the period FY10 to FY17, Company
went through a very difficult period; one marked by a
failed acquisition, losses, declining revenues,
negative cash flow, and above all, a deteriorated
reputation. It was a tumultuous period for all
stakeholders during which the world expected the
Company to declare bankruptcy, and customers too,
were concerned over their ongoing projects with
Subex. Despite the hardships Company had to face
in the last decade, none of its customers left us.
The Board steered the company through this difficult
period and handled intense negotiations with the
bondholders to convert the majority of the FCCB
debt into equity. This helped in resolving a major
issue of the long-term debt overhang and was a
significant milestone in the journey of Subex.
Without the overhanging challenge of debt, the
Company now has the flexibility and resources to
look towards new areas of investment and
innovation.
In the year 2018, Company extended into new areas
outside the core products of revenue management.
This required inviting strategic partners and talent to
grow in these areas. The board also made changes to
the management, who relooked at the strategic
focus of the business and identified a 3-Horizon
framework of growth for the business, in close
discussions with the board.
company over the years. It is a matter
of great satisfaction to me, that the
board announced a dividend of 15%
after a long gap of 14 years.
Business update – FY22
Outlook
We are making good progress in the
new areas, and I am also excited to see
the early interest for HyperSense, our
new augmented analytics platform,
and a path towards a successful
transition to a SaaS-based business. As
the industry continues to focus on
enhanced efficiency and reduced
capital expenditure, the prospects of
Subex continue to be brighter than
ever, indicating better performance
ahead with the clarity of purpose and
mission of stability. Further, with
Digital Trust gaining more prominence
both at a business and societal level,
Subex’s offerings will continue to
increase their relevance in the digital
era and look forward to the future with
more excitement. You will find more
detailed information in further sections
of this annual report on Subex’s
journey towards enabling Trust in the
digital ecosystem.
I take this opportunity to thank all the
stakeholders once again for standing
by the Company. The Company
remains resolutely committed to
deliver enhanced value to all
stakeholders and feels confident to
achieve results through our focus on
core and growth areas.
With Warm regards,
Anil Singhvi
Chairman of the Board
Right sizing the Balance
Sheet - Capital reduction
Scheme
As we addressed the issue of the debt
overhang due to the FCCB loan and
converted them to equity, the board
realized that there was a need to
address and resolve the issue of the
Company’s large equity capital base and
accumulated losses, to create value for
the shareholders.
To serve the purpose, the Company
underwent a scheme of capital
reduction. As part of the exercise, the
capital reduction was carried out by
writing off the accumulated losses
against the share capital and share
premium of the company and reducing
the face value of the equity shares from
₹ 10/- to ₹ 5/- each. After its full
implementation in FY21, the capital
reduction resulted in making the
balance sheet leaner and downsized.
The restructuring of the financials today
enables the Company to have a rational
structure that is commensurate with the
current business, allowing it to serve the
equity better.
Financial highlights FY21
The Company performed well in FY21
and closed the year with growth and
profitability. The revenue for the year
stood at ₹ 372 crores as against ₹ 365
crores in FY20, which translates to a 2%
growth. EBITDA margins ended at ₹ 98.5
crores as against ₹ 94.2 crores in FY20.
Profit after tax was at ₹ 51.7 crores as
against a loss of ₹ 269.2 crores in FY20.
Rewarding your patience –
Shareholder’s Dividend
The Company’s performance and cash
improving since FY19 onwards. The
Company today has a cash balance of
over ₹ 140 crores as against peak debt of
₹ 602 crores in the past.
Given the overall improvement in the
business performance and healthy cash
balances, your board felt it was time to
reward the shareholders for their
immense patience and support to the
Retaining Key Talent –
Launch of ESOP Scheme
While the focus shifted entirely
towards sustainability and growth of
the business, it was equally important
to invest and retain the best of talent,
being the core asset within the
Company. The equity base of the
Company is widely held with no
the Subex Employees Stock Option
Scheme-2018 enabled the Company
to buy up to 5% of the Equity Shares
from the Secondary Market thereby
strengthening the management and
creating an opportunity for Subex to
be one of the larger employee-owned
Indian Listed Companies. This also
helps the Company in providing
stability and retaining key talent.
Promoter shareholding. The launch of
position have consistently been
Subex Annual Report 2020-21
06
company over the years. It is a matter
of great satisfaction to me, that the
board announced a dividend of 15%
after a long gap of 14 years.
Business update – FY22
Outlook
We are making good progress in the
new areas, and I am also excited to see
the early interest for HyperSense, our
new augmented analytics platform,
and a path towards a successful
transition to a SaaS-based business. As
the industry continues to focus on
enhanced efficiency and reduced
capital expenditure, the prospects of
Subex continue to be brighter than
ever, indicating better performance
ahead with the clarity of purpose and
mission of stability. Further, with
Digital Trust gaining more prominence
both at a business and societal level,
Subex’s offerings will continue to
increase their relevance in the digital
era and look forward to the future with
more excitement. You will find more
detailed information in further sections
of this annual report on Subex’s
journey towards enabling Trust in the
digital ecosystem.
I take this opportunity to thank all the
stakeholders once again for standing
by the Company. The Company
remains resolutely committed to
deliver enhanced value to all
stakeholders and feels confident to
achieve results through our focus on
core and growth areas.
With Warm regards,
Anil Singhvi
Chairman of the Board
The Company’s
performance and
cash position have
consistently been
improving since
FY19 onwards.
Today, we are a
zero-debt
Company with a
strong balance
sheet and a net
cash balance of
over ₹ 140 crores,
giving considerable
scope to invest in
many exciting areas.
Retaining Key Talent –
Launch of ESOP Scheme
While the focus shifted entirely
towards sustainability and growth of
the business, it was equally important
to invest and retain the best of talent,
being the core asset within the
Company. The equity base of the
Company is widely held with no
Promoter shareholding. The launch of
the Subex Employees Stock Option
Scheme-2018 enabled the Company
to buy up to 5% of the Equity Shares
from the Secondary Market thereby
strengthening the management and
creating an opportunity for Subex to
be one of the larger employee-owned
Indian Listed Companies. This also
helps the Company in providing
stability and retaining key talent.
Right sizing the Balance
Sheet - Capital reduction
Scheme
As we addressed the issue of the debt
overhang due to the FCCB loan and
converted them to equity, the board
realized that there was a need to
address and resolve the issue of the
Company’s large equity capital base and
accumulated losses, to create value for
the shareholders.
To serve the purpose, the Company
underwent a scheme of capital
reduction. As part of the exercise, the
capital reduction was carried out by
writing off the accumulated losses
against the share capital and share
premium of the company and reducing
the face value of the equity shares from
₹ 10/- to ₹ 5/- each. After its full
implementation in FY21, the capital
reduction resulted in making the
balance sheet leaner and downsized.
The restructuring of the financials today
enables the Company to have a rational
structure that is commensurate with the
current business, allowing it to serve the
equity better.
Financial highlights FY21
The Company performed well in FY21
and closed the year with growth and
profitability. The revenue for the year
stood at ₹ 372 crores as against ₹ 365
crores in FY20, which translates to a 2%
growth. EBITDA margins ended at ₹ 98.5
crores as against ₹ 94.2 crores in FY20.
Profit after tax was at ₹ 51.7 crores as
against a loss of ₹ 269.2 crores in FY20.
Rewarding your patience –
Shareholder’s Dividend
The Company’s performance and cash
position have consistently been
improving since FY19 onwards. The
Company today has a cash balance of
over ₹ 140 crores as against peak debt of
₹ 602 crores in the past.
Given the overall improvement in the
business performance and healthy cash
balances, your board felt it was time to
reward the shareholders for their
immense patience and support to the
The global pandemic caused by COVID-19 has
resulted in ‘the new normal’, which has led to a
disruption in lives, livelihoods, and businesses,
worldwide. Despite the challenges posed by the
pandemic, I am pleased to say that the management,
through active guidance and support from the Board,
was able to navigate through the uncertainty adeptly.
Today, we are a zero-debt Company with a strong
balance sheet and a net cash balance of over ₹ 140
crores, giving considerable scope to invest in many
exciting areas, even in this challenging environment.
I have always valued how Subexians rise to meet every
challenge and opportunity. On behalf of the Board, I
thank them for taking the company to new heights
during the last year. Their determination and passion
symbolize our values and vision statement in adapting
to unforeseen challenges to ensure that all our
customer projects were uninterrupted, especially at a
time when our customers needed us the most.
A look back at our journey over the
last 10 years.
Overall, during the period FY10 to FY17, Company
went through a very difficult period; one marked by a
failed acquisition, losses, declining revenues,
negative cash flow, and above all, a deteriorated
reputation. It was a tumultuous period for all
stakeholders during which the world expected the
Company to declare bankruptcy, and customers too,
were concerned over their ongoing projects with
Subex. Despite the hardships Company had to face
in the last decade, none of its customers left us.
The Board steered the company through this difficult
period and handled intense negotiations with the
bondholders to convert the majority of the FCCB
debt into equity. This helped in resolving a major
issue of the long-term debt overhang and was a
significant milestone in the journey of Subex.
Without the overhanging challenge of debt, the
Company now has the flexibility and resources to
look towards new areas of investment and
innovation.
In the year 2018, Company extended into new areas
outside the core products of revenue management.
This required inviting strategic partners and talent to
grow in these areas. The board also made changes to
the management, who relooked at the strategic
focus of the business and identified a 3-Horizon
framework of growth for the business, in close
discussions with the board.
07
Subex Annual Report 2020-21
Dear Shareholders,
I hope you are safe and doing well. As I write this, I reflect on the
profound impact the pandemic has had on our lives - We have all
faced tremendous challenges in some form or the other. We have also
witnessed the power of human unity, and resilience to overcome the
crisis. As the pandemic continues, it is important than ever before for
us to stand strong, and stay true to our values to safeguard our
employees, customers, stakeholders, and the communities we operate
in. I wish for you and your loved ones to be safe and healthy. These are
trying times, but I am optimistic that we will come out of this stronger.
On that note, I would like to share the progress and updates made by
your company in the last financial year and the outlook for the year
ahead.
We stand strong.
Last year, we adapted quickly and realigned our objectives, and
strategies to protect the wellbeing of our stakeholders. The agility
helped in ensuring business continuity for our customers in 90+
countries and supporting new enterprises in their digital
transformation journey. I am happy to share that despite the
pandemic, we managed to perform well and move forward
with our business objectives. The pandemic has increased
digitization across verticals and digital technology has
become a must-have for sectors like manufacturing that
traditionally have been disconnected from the internet. With
the increased dependence on online channels, Digital Trust
has become pivotal for the sustenance of today’s business
and security is a top priority for enterprises across
verticals. We understand our unique differentiation as
enablers of this new digital ecosystem and our critical
role in helping our customers to build digital trust. As a
company, we are committed to fulfilling this crucial role -
to make the digital ecosystem more secure and to help
our customers succeed in their digital journeys. As we
move forward, we will continue to empower our
customers to accelerate their digital
transformation projects, build customer trust,
gain resilience, and move forward.
With HyperSense, we are entering a new
phase of growth in a multi-vertical
environment and will be expanding our
product offering to new industry
verticals beyond telecom.
A MESSAGE FROM OUR CHIEF EXECUTIVE
Subex Annual Report 2020-21
08
rapid transition to a new hybrid model of
work. We were able to come together as
a team and deliver value to our
customers with grit and determination.
We expanded our R&D capabilities within
AI lab, enhanced our threat research
capabilities and launched new products.
To provide required bandwidth in
product engineering, delivery and
business development organization we
increased our headcount by 25%. We
also increased our investments in
Learning and Development of Subexians
and have adopted frameworks like LPE
(Leadership Performance Expectation),
CA (Career Architecture) and OKR
(Objective and Key Results) to improve
our performance. Talent acquisition and
retention will be a key area of focus and
will be essential to building Subex as a
fast-growing technology company.
We are committed to
building a better future
As we move forward, we stand strong in
our vision to make the digital world
trustworthy and thereby unlocking
possibilities for all our stakeholders. We
will continue to work hard, innovate,
invest in the right technologies to
overcome challenges, deliver value to
our customers, investors and Subexians.
Thank you for supporting us, believing in
us, and being a part of our journey.
Warm regards,
Vinod Kumar Padmanabhan
Managing Director &
Chief Executive Officer
Growth in the face of
adversity
Amidst the challenges of pandemic, we
performed well in FY21 and closed Q4
with growth and profitability. Lock down
in various geographies affected our
business development and deliveries in
the first half of last financial year.
However, from the mid of Q3 things
started improving and we were able to
close the year with a good order book.
We were also successful in completing
the capital reduction process as planned
in November. We diversified our product
portfolio with the launch of HyperSense,
the new-age Augmented Analytics
Platform. As we head into FY22, we will
continue to adapt to new market trends
and focus on high-return business assets
to meet our revenue goals.
Welcoming a new phase of
growth with HyperSense
We started the company’s platform
journey with the launch of HyperSense -
our new augmented analytics platform
that has generated favorable interest in
the market. According to IDC, the big
data and analytics market is expected to
grow at a five-year CAGR of 12.5%. The
analytics market size is forecasted to
reach $500 billion by 2025. With
HyperSense, we are democratizing
enterprise AI and venturing into this
emerging market segment. We are
entering a new phase of growth in a
multi-vertical environment and will be
expanding our product offering to new
industry verticals beyond telecom. To
deliver greater value to our clients, we
will be moving all our flagship products
to HyperSense. The strategic shift will
begin with Horizon 1 products that
generate most of our revenue such as
fraud management, revenue assurance,
partner ecosystem management, and
capacity management. We have also
augmented our entire solution suite to
support 5G and new-age digital
requirements. We built an advanced
Partner Ecosystem Management offering
for our telecom clients. We also entered
several strategic partnerships for
Blockchain to drive innovation and
accelerate its adoption to tackle complex
challenges of the industry. The
company’s Capacity Management
solution has also gained a considerable
amount of traction in the year.
A customer-first approach
to support the digital
ecosystem
Our IoT Security solution has been
upgraded to address Operational
Technology (OT) use cases. With our
ability to secure converged networks that
have OT and IoT deployments, we are
well-positioned to explore new growth
opportunities in this sector. We also
added new features such as Vulnerability
Management and Micro-segmentation
into our product to meet specific client
needs. Our current clientele includes
maritime, appliance manufacturers,
automotive manufacturers, and
enterprises in the O&G sector. We are
also strategically collaborating with key
distributors and resellers to take our new
geography-focused cybersecurity
solutions to the market. We are also
seeing greater adoption of our
cybersecurity products in the telecom
sector with increased deployment of
5G-enabled services. We will continue to
develop new product capabilities and
build strategic partnerships for market
expansion.
Building inspiring products that create an
impact and build digital trust
On Horizon 3, we are supporting AI/ML
technological innovations through our
startups such as IDcentral. IDcentral is an
identity verification system that’s part of
the new age API economy and is
designed to strengthen the digital
ecosystems of telecoms, e-commerce,
fintech, and other verticals. We are
exploring several key use cases such as
onboarding based on the API economy
model with multiple clients from various
industries. We are primarily targeting
identity and onboarding marketing. We
will continue to work tirelessly to build
impactful, inspiring products to help our
clients succeed and further our vision to
build digital trust.
Nurturing talent and driving innovation
We are proud of what we have achieved
as a team despite the several challenges
we faced due to the lockdown and the
09
Subex Annual Report 2020-21
INVESTOR FACTSHEET
Subex is a pioneer in enabling Digital Trust for businesses across the globe. Founded in 1994, Subex has spent over 25 years
in helping Global Communications Service Providers maximize their revenues and profitability. Having served the market over
the last 25 years by providing world-class solutions for business optimization and analytics, Subex is now leading the way by
enabling all-round Digital Trust in the business ecosystems of its customers. Focusing on privacy, security, risk mitigation,
identity and intelligence, Subex helps businesses embrace the disruptive changes in the business landscape and succeed with
Digital Trust.
STOCK PROFILE
VALUATION MAR ’21
Sector
BSE
NSE
IT Software Products
EV/Sales (x)
SUBEX I 532348
EV/ EBITDA (x)
4.68
16.07
SUBEXLTD
Source: ThomsonOne
Incorporated
December 06, 1994
Issued Shares (Cr)
Share Price* (₹)
Market Cap* ( ₹ Cr)
56.2
62.2
3,493
52-week H/L Range (₹)
67.40 - 7.06
Float as % of O/S Shares
84%
*Share Price and Market Cap (BSE) as on 17th May'21
SHAREHOLDING
PATTERN (%)
MAR’21
Promoters - 0.00%
Public - 96.46%
Non Promoter-Non Public - 3.54%
Subex Annual Report 2020-21
10
QUICK FACTS
1994
Foundation of Company
25+
Years of experience
1000+
Employees
300+
Global Installations
90+
Countries
200+
Customers Globally
35+
Industry Awards
US$ 3 mn
R&D spend in new areas
US$ 40 mn
Order Book in FY21
INVESTMENT HIGHLIGHTS
• Leader in Digital Trust space and helping businesses thrive by leveraging Digital Trust as a competitive advantage
• Making strong inroads in the multi vertical IoT Security space; IoT Security Market is expected to touch US$ 4.5
billion by 2022
• Incubating virtual startups within the organization to diversify into new areas and verticals
• Sticky Revenue Model – about 60% of revenue is annuity / recurring and >98% customer retention
• Investing heavily in newer areas like Digital Trust and AI/ML, Augmented Analytics and Deep learning-based
anomaly detection
• With launch of HyperSense and progress on IOT-Security and IDcentral company transitioning towards a
Platform based SaaS business model
• Passionate and committed team led by Vinod Kumar Padmanabhan, MD & CEO, with clear focus to put the Company
on growth track
1994300+35+1000+200+40 mn25+90+3 mn 11
Subex Annual Report 2020-21
WHERE WE OPERATE
OUR DISTINCTIVE RESOURCES
FINANCIAL
STRENGTH
Our strong balance sheet
and robust cash flows,
gives us the strength and
ability to invest in
Horizon 2 and 3 areas
and upgrade our
products in core business
with latest technologies.
Last year we invested
$ 3 Mn in horizon 2 & 3
related initiatives
PEOPLE
The commitment &
make it happen
attitude of 1000+
Subexians is a
foundation of our
business
CUSTOMERS
INNOVATION
Our wide and long
standing customer
base is the strength of
our business. We have
200+ customers in
90+ countries
OUR BRANDS
We are also incubating
virtual startups within
Subex and we own 2
brands: Subex Secure &
IDcentral
The virtual startups is a
testimony of
continuous investment
in R&D to stay at the
forefront of the
industry trends
PARTNERS &
SUPPLIERS
Our partners &
suppliers also form
a core of our
ecosystem
Subex Annual Report 2020-21
12
OUR BUSINESS AT GLANCE
The pandemic has “fundamentally accelerated” the process of
digital transformation across industries including rapid migration to
the cloud and the move to work from home. Shifting dynamics in
terms of consumer behavior and content consumption has clearly
led to a drastic increase in the generation of data and information
during the period. The usage of digital technologies became the
norm, thereby leading to a faster and broader adoption of data and
predictive analytics, cognitive automation and AI, application and
infrastructure platforms, digital reality, digital supply networks,
smart factories, and e-commerce. Furthermore, the pandemic has
accelerated the shift of off-line processes to on-line across the
spectrum of the organisation’s function.
Amidst the uncertainty of the pandemic, one thing has become
evident: Cultivating trust has become more critical than ever. Trust
is the centerpiece for every interaction on a personal, societal and
business level — in both traditional and digital business models.
With the lines blurring between the digital and physical worlds,
multiple disparate elements like people, processes and products
come together to work in tandem. Digital Business revolves around
agile and ephemeral digital interactions and leverages digital
supply chains that are established dynamically to enable each
interaction. In such a scenario Digital Trust becomes the key
enabler for high-quality digital interactions by measuring and
quantifying expectations of an entity – specifically validating who
or what it claims to be, and if it will behave in an expected manner
within a digital business transaction. Digital Trust is viewed as the
lifeblood or currency of digital business, and it wraps around every
aspect of digital business.
As an organization handling huge volumes of data from different
sources, structures and at varying velocities for more than two
decades, Subex is well poised to help businesses leverage Digital
Trust to succeed in the digital era. Focusing on privacy, security,
risk mitigation, identity and intelligence, Subex leverages its
world-class software suite to help organizations infuse Trust into
their digital ecosystems. Subex helps drive Digital Trust across
multiple dimensions addressing Transactional Trust, Competence
Trust and Representational Trust across its customers’ businesses,
consumers and partners. Addressing each of these dimensions of
trust is necessary to create an all-encompassing, robust and
fail-proof framework for Digital Trust, and our portfolio of
products and solutions is designed to do exactly that.
To summarize, multi-dimensional, multi-directional Digital Trust is
the key to succeed in the digital era, and Subex is leading the way
by enabling businesses create inspiring digital experiences.
13
Subex Annual Report 2020-21
PRODUCTS & SERVICES
HyperSense
• HyperSense is an end to end augmented analytics platform that uses machine learning and AI to assist with data preparation,
insight generation, and insight explanation to augment how enterprises explore and analyze data
• It is a cloud-native and SaaS-based platform that democratizes AI across the entire data value chain and delivers agility, elasticity
and scalability
Business Assurance
• It is an active risk intelligence-based platform where the customers can assess and address impacts in near real-time or proactively.
• It provides the most comprehensive AI/ML tooling in the Business Assurance industry with the largest operational library of controls
from over 25 years of implementation experience.
• Offers Cloud Native with auto-scaling, subscription model ensures for value-added rolling upgrades and User controllable TCO
based on only what you use.
Fraud Management
• Built to increase fraud prevention by eliminating known frauds, uncovering new fraud patterns, minimizing fraud run time,
augmenting internal controls, and supporting continuous fraud management process improvements
• Combines a traditional rules engine, advanced AI/ML capabilities and a scalable architecture to ensure proactive detection of
fraudulent activities on the network
Network Asset Management
• Helps operators save millions of dollars through its analytics-driven asset harvesting insights
• Provides a framework to audit network assets, evaluate inventory and make a business case for a network upgrade
• Offers an in-depth view of network assets and inventory to optimise opex as well as capex
• Drives smarter network capital investment and network asset lifecycle management through its AI/ML-based capabilities
Capacity Management
• Provides proactive, actionable business intelligence with the power of AI/ML capabilities to ensure operators can provide
customers with a superior experience
• Leverages proprietary ML models to improve accuracy and efficiency in network planning and optimization
• Make accurate decisions quickly to maximize network ROI and ensure competitive advantage
Subex Annual Report 2020-21
14
Partner Ecosystem Management
• A convergent solution that offers a 360-degree view of the evolving telecom ecosystem across Mobility, Content, and
Entertainment, 5G for Business Enterprise and Internet of Things
• Identify the right partners for your business and onboard them quickly through a configurable workflow-based process to
add new revenue streams.
• Leverage automation and data analytics to facilitate accurate billing and settlement to manage revenue and margins across
interconnect, digital partners, enterprise and roaming.
• Create transparent partnerships by allowing partners to access critical information and make informed business decisions.
ACT (Analytics Center of Trust)
• Provides an end-to-end analytics framework to ensure a successful Analytics Journey
• Ensures the right analytics strategy by establishing CSPs current maturity, defining the business vision, and identifying the required
roadmap
• Delivers real-time insights on the shifts in trends across the spectrum through a trusted information infrastructure powered by
AI/ML Capabilities
• Provides Analytics-as-a-Service to provide actionable business intelligence around Product, Customer, Risk, and Revenue
Subex Secure
Subex Secure’s agentless and non-intrusive solution:
• Discovers and maps all IT-OT and IoT devices across the network (both managed and un-managed) assesses risks and helps
prioritize fixes
• Mitigates cyber risks by applying micro-segmentation and various policies to facilitate trusted network behavior
• Detects anomalies and threats in real-time within the network to break the attack kill chain
• Remediates cyber attacks with automated playbooks aligned to industry frameworks
• Offers critical infrastructure grade security
IDcentral
• A comprehensive identity repository enabling enterprises to convert attributes to digital identities
• Identity verification and authentication solutions based on phone number and alternate ID
• Data driven intelligence for a comprehensive behavioral score of your consumers
15
Subex Annual Report 2020-21
“Trusted and Secure”,
‘’Platforms and
Services”: The Future
of Subex
A conversation with
Vinod Kumar Padmanabhan,
Managing Director &
Chief Executive Officer
Our CEO Vinod Kumar outlays the experiences of the
pandemic and how Subexians made the company beat
hard times
With the rapid acceleration of digitization driven by the
COVID-19 pandemic, the topic of Digital Trust is even
more relevant to everyone with a digital business. Digital
Trust is becoming the key enabler for high quality digital
interactions by measuring and quantifying expectations
with customers. It is viewed as the centerpiece for success,
from enhancing brand image, customer experience and
adopting new technologies to bringing in investments,
rolling out new offerings and expanding the partner
ecosystem.
As data breaches continue to occur with increasing
frequency, digital trust will gain momentum – shifting from
a “nice to have” to a necessity.
Mr. Vinod Kumar, MD & CEO, Subex brings his perspective
on the future of Subex with platforms powered by AI and
blockchain. He talks about why Subex is the fastest
growing technology company. He also talks about how
Subexians have rallied together to make this future a
reality. Here are the excerpts of the interview:
There is life before the pandemic and life after, it's almost
like the world woke up to transform itself - how was the
year for you personally and for the company?
The global pandemic, COVID-19, has halted life as we
know it and it is here to stay for a while. Like every other
organization, we also hurriedly packed our desks to work
from home, thinking we would be back within a few weeks.
As the coronavirus pandemic leapt from a handful of
outbreak zones to the rest of the country, weeks stretched
into months, we had to take quick decisions and adapt to a
new way of working. As an organization enabling critical
operations for customers in over 90 countries, our
objective was to ensure the right balance between safety of
our Subexians while ensuring smooth running of our
operations with minimal business impact our customers.
While setting up “work from anywhere” was relatively easy,
what was challenging was ensuring the shift of mindset
from measuring the productivity based on activities and
tasks to measuring it based on outcome. Every day is a new
learning and we are trying our level best to adjust to this
paradigm shift. We also recently moved into a new office
space and ensured that the new office is prepared for its
new role as a collaboration hub by creating more meeting
spaces.
I am happy to state that despite the pandemic, we have
managed to sustain the momentum, that we had built
before the crisis and moved forward on planned projects.
Multiple challenges were placed in front of us; however, we
could band together and deliver value to our customers
with grit and determination. This has
resulted in us finishing the year on a
positive note. We had announced deals
with a few marquee names for our core
products. At the same time, our newer
focus areas like IoT Security, Capacity
Management, and IDcentral also had good
traction, and we should see more growth
coming from these areas in the next year.
Moreover, we have augmented our entire
product suite to support 5G and other
digital requirements, by leveraging AI/ML
capabilities. This product strategy and our
focus on Digital Trust continue to see an
encouraging response from customers. As
we move forward, a key area of focus for
us will be HyperSense, our new, no-code,
augmented analytics platform.
Whenever there is a crisis, Subexians rally
together and we become an effective
team. There has been a lot of effort from
every Subexian, to ensure that the effect
of this phase is minimal to our customers.
We are grateful to say that majority of our
customers have been extremely
cooperative and are fully supporting our
operations in a BCP mode.
Has the digital economy converged
business functions (Finance, Marketing
etc.) with technology? Are business users
now required to be closer to IT and Data
Science?
will only get bigger in years to come. The
concern here is not the staggering
amount of data, it is about what do we do
with data is what matters. Companies
that leverage data to drive
decision-making, gain a competitive
advantage, reduce business costs, and
increase profit.
Majority of CxOs agree that their teams
need to more effectively leverage data to
extract business insights. Many enterprises
struggle with data-related issues such as
organizing multiple sources of data, a lack
of collaboration between their business
teams and data science team, low data
accuracy, data silos and poor data
accessibility.
In order to get maximum value out of the
data, enterprise s need to ensure that all
The world is being overrun with data. The
survey say that 2.5 quintillion bytes of data
is produced by humans every day and they
right time.
data to make decisions; they need to
make sure they are working from a
single source of truth. This will provide
decision-makers with a clearer picture
of the data they have and the obstacles
that stand in the way of an optimized
data strategy.
Having a single source of truth will help
enterprises bridge the gaps between
disparate systems and departments that
deal with infinite data streams providing
decision makers with right data at the
Alongside, our 25 years of experience
dealing with analytics, especially in the
telecom industry, has taught us how to
integrate and manage data at scale and
solve some of the most complex
problems. We have brought all that
learning to the recently launched
HyperSense – an augmented analytics
platform for our enterprise customers.
People don't want to share data (there is
GDPR and a host of committees across
the world protecting consumers) - so
when we talk digital transformation we
also need to build "distributed" digital
trust in this new age economy - where
are we on this journey of establishing
digital trust between all parties?
Digital Trust is now quickly becoming a
top priority for global leaders, and the
society is moving towards definitive
action on it, leading to increasing
investments in the area. Our focused
strategy towards Digital Trust, remains
strengthened, and this is one of the
factors that has enabled us to compete
well and win large deals in the recent
past. If the lifeblood of the digital
economy is data, its heart is digital
trust— it is the level of confidence in
people, processes, and technology to
build a trusted digital world. The
concept of trust has been through
significant evolution in human history.
Earlier trust was based on one-to-one
interactions and personal reputation.
Next came institutional trust when we
went through mass urbanization and
institutional trust was imperative to
trade internationally. Now technology
is leading by taking institutional power
and distributing it across a wide range
For Subex, enabling digital trust for our
customers and their stakeholders is a
three-tiered framework of risk
mitigation, identity & security and
intelligence & privacy, and is built into all
our products and solutions. We are
living in an increasingly interconnected
world personally and professionally. It is
imperative that a tight circle of trust is
developed, to ensure customer
experience is always positive.
Overall, we are progressing steadfastly
towards our vision of being the leaders
in the space of enabling digital trust,
which will result in significant value
addition to all our stakeholders”.
How is AI becoming the core for
Subex?
AI is becoming a crucial element of
Subex’s solutions suite. We take
Artificial Intelligence very seriously!
Towards this, Subex AI Labs was
started three years ago with a charter
to embed AI in Subex’s product suite.
Subex AI Labs leverages the latest and
greatest in the field of AI and applies
them to solve business challenges in
the digital world. Our data scientists
love massive and complex datasets,
and this space is to showcase their
work! This lab based in Bangalore
functions across development,
delivery, fulfilment and operations.
Some of the popular products include
the Alternate Credit Scoring Model,
e-KYC module for verification using AI
and CrunchMetrics – an AI based
anomaly detection, causation and
alert engine.
We leverage AI and ML models that
can automatically learn patterns when
we crunch billions of transactions and
make predictions on a real- time basis,
mitigate issues such as data theft and
frauds and also helps enterprises
identify the opportunities they can
profit from. Our recent launch of
HyperSense, an end-to-end
Augmented Analytics platform helps
enterprises make faster, better
decisions by leveraging Artificial
Intelligence (AI) across the data value
chain aimed at democratising AI at
scale.
Can you explain more about
HyperSense. How do you envision this
solution benefiting your customers,
and how does this new platform
change the playing field and
addressable markets for Subex?
HyperSense will be a gamechanger for
both our customers as well as Subex.
For enterprises, HyperSense will
change how AI is adopted within
business teams. For Subex,
HyperSense marks the start of the
company’s platform journey and will
improve our ability to roll out
products to the market faster.
According to IDC, the big data and
analytics market is expected to grow
at a five-year CAGR of 12.5%. The
analytics market size is forecasted to
reach $500 billion by 2025.
Using AI in business is not
straightforward. There are issues
around having data which is organized
in a way that AI can leverage. Around
70 to 80% enterprises struggle with
uniform AI and data stack, along with
attracting and retaining great talent.
While dealing with some of the
seemingly impossible problems to
solve in enterprises, we got inspired to
build HyperSense.
As mentioned earlier, HyperSense is
an end-to-end Augmented Analytics
platform that helps enterprises
make faster, better decisions by
leveraging Artificial Intelligence (AI)
across the data value chain. Built on
our extensive data analytics
experience, HyperSense contains all
the Augmented Analytics
flexible and modular platform.
HyperSense’s unique no-code
capabilities allow users without a
knowledge of coding to easily
aggregate data from disparate
sources, turn data into insights by
building, interpreting, and tuning AI
models, and effortlessly share their
findings across the organization.
We are all fascinated with
blockchain - give us insight in to
your blockchain experiments?
With Subex’s strategy of enabling
businesses to build trust within the
digital ecosystem, we believe that
blockchain-based technologies will
play an important piece to that
puzzle. Towards this, we have made
significant strides towards
leveraging blockchain in solving
challenges across multiple use
cases such as fraud managment and
partner settlement.
We have been members of few
industry consortiums like GLF's CBN
initiative to work towards
democratizing trust and simplifying
the settlement process by using
blockchain and RAG Wangiri
intelligence on fraud by utilising
blockchain.
We definitely see some challenges in
the blockchain adoption. This
because of the low performance of
enterprise blockchain and the
complexity of the technology. It
takes more than a couple of telcos to
essentially it enables a peer-to-peer
network, so the more participants
there are, the value of the blockchain
becomes so much higher.
Can you tell us about the work Subex
is doing in the space of IoT?
As the world gets absorbed by the
COVID-19 pandemic, cyberattacks
have become a critical area for all
technology-focused organizations.
Hackers have been exploiting various
means of stealing valuable and
sensitive corporate data. One
common means of hacking systems
is via the Internet of Things (IoT)
route.
Our IoT Security solution has been
upgraded to address Operational
Technology (OT) use cases. With our
ability to secure converged networks
that have OT and IoT deployments,
we are well-positioned to explore
new growth opportunities in this
sector. We also added new features
such as Vulnerability Management
and Micro-segmentation into our
product to meet specific client
needs. Our current clientele includes
maritime, appliance manufacturers,
Blockchain Consortium, to develop
automotive manufacturers, and
real-time industry threat
enterprises in the O&G sector. We are
also strategically collaborating with key
Talk about your team and how they
distributors and resellers to take our
stood by company values during the
new geography-focused cybersecurity
pandemic?
detection offering. This has helped us
to be more innovative as It carves out
space and money for breakthrough
innovations without neglecting our
solutions to the market. We are also
seeing greater adoption of our
I feel proud to be associated with Subex
current business.
cybersecurity products in the telecom
and Subexians. We are united by our
sector with increased deployment of
values of Make it Happen, Win
5G-enabled services. We will continue
Together, Think Customer, Create
Subex is a listed company and there are
rules and regulations, yet, within that
to develop new product capabilities
Value, and Be open Be Fair, that make
ambit we do work like a startup. I am
and build strategic partnerships for
us undefeatable during such crisis. I
confident that when these products
market expansion.
would like to acknowledge and
succeed it will become a handbook for
appreciate the strength in our team.
established enterprises to work like
Talk about customers and partners and
Each Subexian works tirelessly,
startups.
how they supported you over last year?
channelizing all their energy and skills
to meet the needs of our customers
After a gap of 14 years, Subex has
For Subex, it has been a testing period,
and partners. They do whatever it takes
announced a 10 percent interim
since we are handling sensitive data of
to get the job done.
our customers globally, we could not
dividend. What are the factors behind
this announcement?
have moved an inch without getting
I am thankful for the continued efforts
their consent. There were many
of every Subexian, and through the
regulations we had to pass through and
support of our customer and partner
We were at the brink of a disaster and
we came back from a difficult past. It
garner multi-level permissions to move
community, we have been able to keep
was definitely a great sense of
in to work from anywhere set up. It was
operations steady and witness
satisfaction to announce the dividend
important to keep our customers and
sustained growth for our business. We
after a gap of 14 years.
continuity plan. I should acknowledge
our capabilities and relevance in
There was such a big debt overhang for
that our customers and partners have
helping the telecom world meet the
several years and for a long period of
been very reasonable and supportive to
new challenges and capitalize on
time we could not do anything because
effortlessly move in into remote
hidden opportunities posed during this
of balance sheet challenges. Towards
working. Infact, many customers wrote
period.
to us that they did not feel that the BCP
managed remotely in a seamless
manner.
had kicked in and the operations were
Why is startup thinking relevant today?
sheet was cleaned up and the company
I guess it is important to have a startup
mindset to stay innovative and keep
To address the company’s large equity
growing. Fast, intense, and incredibly
base and bring it in line with our
purpose-driven: that’s what a startup
current size of the business, we looked
looks like. At Subex, we strongly believe
at multiple options and chose to do a
the end of 2017-18, a significant
portion of the debt on our balance
became completely debt free.
capital reduction. The write-off against
the paid-up share capital was achieved
by reducing the face value of the share
from ₹ 10 to ₹ 5. This exercise has saw
a positive response from our
shareholder community, indicative of
the fact that we have achieved a
market capitalisation in excess of ₹
1,500 crores (as on 1st December, 2020)
after a gap of 12 years. As a result of
this exercise, we were able to also
offset the accumulated losses.
Subsequently based on the cash
position post our investment needs,
the board decided to declare dividends
totaling to 15% for FY21. I am thankful
to our shareholders and other
stakeholder in trusting and supporting
us during this period. Our focus will be
to put the company back on aggressive
growth.
that Innovation can come from
anywhere, anytime, hence Subexians in
all job functions and at all levels are
encouraged to come up with innovative
ideas and they are given the support
needed to implement them.
Now the trickiest part for established
organizations like us is balancing the
sustenance of existing business while
also building new products and
solutions for customer to stay ahead of
the curve. That’s why we have adopted
a three-horizon strategy. Horizon 1
comprises traditional business focused
on risk management for its telecom
clients. Horizon 2, which has just hit the
market, is a top growth area with focus
on internet of things (IoT), security, and
analytics. Horizon 3 is its identity
analytics and automated anomaly
stakeholders are actually using the same
of sources.
capabilities enterprises need in one
justify a blockchain because
partners informed about our business
have been able to truly demonstrate
Our CEO Vinod Kumar outlays the experiences of the
pandemic and how Subexians made the company beat
hard times
With the rapid acceleration of digitization driven by the
COVID-19 pandemic, the topic of Digital Trust is even
more relevant to everyone with a digital business. Digital
Trust is becoming the key enabler for high quality digital
interactions by measuring and quantifying expectations
with customers. It is viewed as the centerpiece for success,
from enhancing brand image, customer experience and
adopting new technologies to bringing in investments,
rolling out new offerings and expanding the partner
ecosystem.
As data breaches continue to occur with increasing
frequency, digital trust will gain momentum – shifting from
a “nice to have” to a necessity.
Mr. Vinod Kumar, MD & CEO, Subex brings his perspective
on the future of Subex with platforms powered by AI and
blockchain. He talks about why Subex is the fastest
growing technology company. He also talks about how
Subexians have rallied together to make this future a
reality. Here are the excerpts of the interview:
There is life before the pandemic and life after, it's almost
like the world woke up to transform itself - how was the
year for you personally and for the company?
The global pandemic, COVID-19, has halted life as we
know it and it is here to stay for a while. Like every other
organization, we also hurriedly packed our desks to work
from home, thinking we would be back within a few weeks.
As the coronavirus pandemic leapt from a handful of
outbreak zones to the rest of the country, weeks stretched
into months, we had to take quick decisions and adapt to a
new way of working. As an organization enabling critical
operations for customers in over 90 countries, our
objective was to ensure the right balance between safety of
our Subexians while ensuring smooth running of our
operations with minimal business impact our customers.
While setting up “work from anywhere” was relatively easy,
what was challenging was ensuring the shift of mindset
from measuring the productivity based on activities and
tasks to measuring it based on outcome. Every day is a new
learning and we are trying our level best to adjust to this
paradigm shift. We also recently moved into a new office
space and ensured that the new office is prepared for its
new role as a collaboration hub by creating more meeting
spaces.
I am happy to state that despite the pandemic, we have
managed to sustain the momentum, that we had built
before the crisis and moved forward on planned projects.
Multiple challenges were placed in front of us; however, we
could band together and deliver value to our customers
Subex Annual Report 2020-21
16
with grit and determination. This has
resulted in us finishing the year on a
positive note. We had announced deals
with a few marquee names for our core
products. At the same time, our newer
focus areas like IoT Security, Capacity
Management, and IDcentral also had good
traction, and we should see more growth
coming from these areas in the next year.
Moreover, we have augmented our entire
product suite to support 5G and other
digital requirements, by leveraging AI/ML
capabilities. This product strategy and our
focus on Digital Trust continue to see an
encouraging response from customers. As
we move forward, a key area of focus for
us will be HyperSense, our new, no-code,
augmented analytics platform.
Whenever there is a crisis, Subexians rally
together and we become an effective
team. There has been a lot of effort from
every Subexian, to ensure that the effect
of this phase is minimal to our customers.
We are grateful to say that majority of our
customers have been extremely
cooperative and are fully supporting our
operations in a BCP mode.
Has the digital economy converged
business functions (Finance, Marketing
etc.) with technology? Are business users
now required to be closer to IT and Data
Science?
The world is being overrun with data. The
survey say that 2.5 quintillion bytes of data
is produced by humans every day and they
will only get bigger in years to come. The
concern here is not the staggering
amount of data, it is about what do we do
with data is what matters. Companies
that leverage data to drive
decision-making, gain a competitive
advantage, reduce business costs, and
increase profit.
Majority of CxOs agree that their teams
need to more effectively leverage data to
extract business insights. Many enterprises
struggle with data-related issues such as
organizing multiple sources of data, a lack
of collaboration between their business
teams and data science team, low data
accuracy, data silos and poor data
accessibility.
In order to get maximum value out of the
data, enterprise s need to ensure that all
Our focused
strategy towards
Digital Trust,
remains
strengthened, and
this is one of the
factors that has
enabled us to
compete well and
win large deals in
the recent past.
stakeholders are actually using the same
data to make decisions; they need to
make sure they are working from a
single source of truth. This will provide
decision-makers with a clearer picture
of the data they have and the obstacles
that stand in the way of an optimized
data strategy.
Having a single source of truth will help
enterprises bridge the gaps between
disparate systems and departments that
deal with infinite data streams providing
decision makers with right data at the
right time.
Alongside, our 25 years of experience
dealing with analytics, especially in the
telecom industry, has taught us how to
integrate and manage data at scale and
solve some of the most complex
problems. We have brought all that
learning to the recently launched
HyperSense – an augmented analytics
platform for our enterprise customers.
People don't want to share data (there is
GDPR and a host of committees across
the world protecting consumers) - so
when we talk digital transformation we
also need to build "distributed" digital
trust in this new age economy - where
are we on this journey of establishing
digital trust between all parties?
Digital Trust is now quickly becoming a
top priority for global leaders, and the
society is moving towards definitive
action on it, leading to increasing
investments in the area. Our focused
strategy towards Digital Trust, remains
strengthened, and this is one of the
factors that has enabled us to compete
well and win large deals in the recent
past. If the lifeblood of the digital
economy is data, its heart is digital
trust— it is the level of confidence in
people, processes, and technology to
build a trusted digital world. The
concept of trust has been through
significant evolution in human history.
Earlier trust was based on one-to-one
interactions and personal reputation.
Next came institutional trust when we
went through mass urbanization and
institutional trust was imperative to
trade internationally. Now technology
is leading by taking institutional power
and distributing it across a wide range
of sources.
For Subex, enabling digital trust for our
customers and their stakeholders is a
three-tiered framework of risk
mitigation, identity & security and
intelligence & privacy, and is built into all
our products and solutions. We are
living in an increasingly interconnected
world personally and professionally. It is
imperative that a tight circle of trust is
developed, to ensure customer
experience is always positive.
Overall, we are progressing steadfastly
towards our vision of being the leaders
in the space of enabling digital trust,
which will result in significant value
addition to all our stakeholders”.
How is AI becoming the core for
Subex?
AI is becoming a crucial element of
Subex’s solutions suite. We take
Artificial Intelligence very seriously!
Towards this, Subex AI Labs was
started three years ago with a charter
to embed AI in Subex’s product suite.
Subex AI Labs leverages the latest and
greatest in the field of AI and applies
them to solve business challenges in
the digital world. Our data scientists
love massive and complex datasets,
and this space is to showcase their
work! This lab based in Bangalore
capabilities enterprises need in one
justify a blockchain because
partners informed about our business
have been able to truly demonstrate
functions across development,
delivery, fulfilment and operations.
Some of the popular products include
the Alternate Credit Scoring Model,
e-KYC module for verification using AI
and CrunchMetrics – an AI based
anomaly detection, causation and
alert engine.
We leverage AI and ML models that
can automatically learn patterns when
we crunch billions of transactions and
make predictions on a real- time basis,
mitigate issues such as data theft and
frauds and also helps enterprises
identify the opportunities they can
profit from. Our recent launch of
HyperSense, an end-to-end
Augmented Analytics platform helps
enterprises make faster, better
decisions by leveraging Artificial
Intelligence (AI) across the data value
chain aimed at democratising AI at
scale.
Can you explain more about
HyperSense. How do you envision this
solution benefiting your customers,
and how does this new platform
change the playing field and
addressable markets for Subex?
HyperSense will be a gamechanger for
both our customers as well as Subex.
For enterprises, HyperSense will
change how AI is adopted within
business teams. For Subex,
HyperSense marks the start of the
company’s platform journey and will
improve our ability to roll out
products to the market faster.
According to IDC, the big data and
analytics market is expected to grow
at a five-year CAGR of 12.5%. The
analytics market size is forecasted to
reach $500 billion by 2025.
Using AI in business is not
straightforward. There are issues
around having data which is organized
in a way that AI can leverage. Around
70 to 80% enterprises struggle with
uniform AI and data stack, along with
attracting and retaining great talent.
While dealing with some of the
seemingly impossible problems to
solve in enterprises, we got inspired to
build HyperSense.
As mentioned earlier, HyperSense is
an end-to-end Augmented Analytics
platform that helps enterprises
make faster, better decisions by
leveraging Artificial Intelligence (AI)
across the data value chain. Built on
our extensive data analytics
experience, HyperSense contains all
the Augmented Analytics
flexible and modular platform.
HyperSense’s unique no-code
capabilities allow users without a
knowledge of coding to easily
aggregate data from disparate
sources, turn data into insights by
building, interpreting, and tuning AI
models, and effortlessly share their
findings across the organization.
We are all fascinated with
blockchain - give us insight in to
your blockchain experiments?
With Subex’s strategy of enabling
businesses to build trust within the
digital ecosystem, we believe that
blockchain-based technologies will
play an important piece to that
puzzle. Towards this, we have made
significant strides towards
leveraging blockchain in solving
challenges across multiple use
cases such as fraud managment and
partner settlement.
We have been members of few
industry consortiums like GLF's CBN
initiative to work towards
democratizing trust and simplifying
the settlement process by using
blockchain and RAG Wangiri
intelligence on fraud by utilising
blockchain.
We definitely see some challenges in
the blockchain adoption. This
because of the low performance of
enterprise blockchain and the
complexity of the technology. It
takes more than a couple of telcos to
essentially it enables a peer-to-peer
network, so the more participants
there are, the value of the blockchain
becomes so much higher.
Can you tell us about the work Subex
is doing in the space of IoT?
As the world gets absorbed by the
COVID-19 pandemic, cyberattacks
have become a critical area for all
technology-focused organizations.
Hackers have been exploiting various
means of stealing valuable and
sensitive corporate data. One
common means of hacking systems
is via the Internet of Things (IoT)
route.
Our IoT Security solution has been
upgraded to address Operational
Technology (OT) use cases. With our
ability to secure converged networks
that have OT and IoT deployments,
we are well-positioned to explore
new growth opportunities in this
sector. We also added new features
such as Vulnerability Management
and Micro-segmentation into our
product to meet specific client
needs. Our current clientele includes
maritime, appliance manufacturers,
Blockchain Consortium, to develop
automotive manufacturers, and
real-time industry threat
enterprises in the O&G sector. We are
also strategically collaborating with key
Talk about your team and how they
distributors and resellers to take our
stood by company values during the
new geography-focused cybersecurity
pandemic?
detection offering. This has helped us
to be more innovative as It carves out
space and money for breakthrough
innovations without neglecting our
solutions to the market. We are also
seeing greater adoption of our
I feel proud to be associated with Subex
current business.
cybersecurity products in the telecom
and Subexians. We are united by our
sector with increased deployment of
values of Make it Happen, Win
5G-enabled services. We will continue
Together, Think Customer, Create
Subex is a listed company and there are
rules and regulations, yet, within that
to develop new product capabilities
Value, and Be open Be Fair, that make
ambit we do work like a startup. I am
and build strategic partnerships for
us undefeatable during such crisis. I
confident that when these products
market expansion.
would like to acknowledge and
succeed it will become a handbook for
appreciate the strength in our team.
established enterprises to work like
Talk about customers and partners and
Each Subexian works tirelessly,
startups.
how they supported you over last year?
channelizing all their energy and skills
to meet the needs of our customers
After a gap of 14 years, Subex has
For Subex, it has been a testing period,
and partners. They do whatever it takes
announced a 10 percent interim
since we are handling sensitive data of
to get the job done.
our customers globally, we could not
dividend. What are the factors behind
this announcement?
have moved an inch without getting
I am thankful for the continued efforts
their consent. There were many
of every Subexian, and through the
regulations we had to pass through and
support of our customer and partner
We were at the brink of a disaster and
we came back from a difficult past. It
garner multi-level permissions to move
community, we have been able to keep
was definitely a great sense of
in to work from anywhere set up. It was
operations steady and witness
satisfaction to announce the dividend
important to keep our customers and
sustained growth for our business. We
after a gap of 14 years.
continuity plan. I should acknowledge
our capabilities and relevance in
There was such a big debt overhang for
that our customers and partners have
helping the telecom world meet the
several years and for a long period of
been very reasonable and supportive to
new challenges and capitalize on
time we could not do anything because
effortlessly move in into remote
hidden opportunities posed during this
of balance sheet challenges. Towards
working. Infact, many customers wrote
period.
to us that they did not feel that the BCP
managed remotely in a seamless
manner.
had kicked in and the operations were
Why is startup thinking relevant today?
sheet was cleaned up and the company
the end of 2017-18, a significant
portion of the debt on our balance
became completely debt free.
I guess it is important to have a startup
mindset to stay innovative and keep
To address the company’s large equity
growing. Fast, intense, and incredibly
base and bring it in line with our
purpose-driven: that’s what a startup
current size of the business, we looked
looks like. At Subex, we strongly believe
at multiple options and chose to do a
that Innovation can come from
capital reduction. The write-off against
anywhere, anytime, hence Subexians in
the paid-up share capital was achieved
all job functions and at all levels are
by reducing the face value of the share
encouraged to come up with innovative
from ₹ 10 to ₹ 5. This exercise has saw
ideas and they are given the support
a positive response from our
needed to implement them.
Now the trickiest part for established
organizations like us is balancing the
sustenance of existing business while
also building new products and
solutions for customer to stay ahead of
the curve. That’s why we have adopted
a three-horizon strategy. Horizon 1
comprises traditional business focused
on risk management for its telecom
shareholder community, indicative of
the fact that we have achieved a
market capitalisation in excess of ₹
1,500 crores (as on 1st December, 2020)
after a gap of 12 years. As a result of
this exercise, we were able to also
offset the accumulated losses.
Subsequently based on the cash
position post our investment needs,
the board decided to declare dividends
totaling to 15% for FY21. I am thankful
clients. Horizon 2, which has just hit the
to our shareholders and other
market, is a top growth area with focus
on internet of things (IoT), security, and
analytics. Horizon 3 is its identity
analytics and automated anomaly
stakeholder in trusting and supporting
us during this period. Our focus will be
to put the company back on aggressive
growth.
Our CEO Vinod Kumar outlays the experiences of the
pandemic and how Subexians made the company beat
hard times
With the rapid acceleration of digitization driven by the
COVID-19 pandemic, the topic of Digital Trust is even
more relevant to everyone with a digital business. Digital
Trust is becoming the key enabler for high quality digital
interactions by measuring and quantifying expectations
with customers. It is viewed as the centerpiece for success,
from enhancing brand image, customer experience and
adopting new technologies to bringing in investments,
rolling out new offerings and expanding the partner
ecosystem.
As data breaches continue to occur with increasing
frequency, digital trust will gain momentum – shifting from
a “nice to have” to a necessity.
Mr. Vinod Kumar, MD & CEO, Subex brings his perspective
on the future of Subex with platforms powered by AI and
blockchain. He talks about why Subex is the fastest
growing technology company. He also talks about how
Subexians have rallied together to make this future a
reality. Here are the excerpts of the interview:
There is life before the pandemic and life after, it's almost
like the world woke up to transform itself - how was the
year for you personally and for the company?
The global pandemic, COVID-19, has halted life as we
know it and it is here to stay for a while. Like every other
organization, we also hurriedly packed our desks to work
from home, thinking we would be back within a few weeks.
As the coronavirus pandemic leapt from a handful of
outbreak zones to the rest of the country, weeks stretched
into months, we had to take quick decisions and adapt to a
new way of working. As an organization enabling critical
operations for customers in over 90 countries, our
objective was to ensure the right balance between safety of
our Subexians while ensuring smooth running of our
operations with minimal business impact our customers.
While setting up “work from anywhere” was relatively easy,
what was challenging was ensuring the shift of mindset
from measuring the productivity based on activities and
tasks to measuring it based on outcome. Every day is a new
learning and we are trying our level best to adjust to this
paradigm shift. We also recently moved into a new office
space and ensured that the new office is prepared for its
new role as a collaboration hub by creating more meeting
spaces.
I am happy to state that despite the pandemic, we have
managed to sustain the momentum, that we had built
before the crisis and moved forward on planned projects.
Multiple challenges were placed in front of us; however, we
could band together and deliver value to our customers
with grit and determination. This has
resulted in us finishing the year on a
positive note. We had announced deals
with a few marquee names for our core
products. At the same time, our newer
focus areas like IoT Security, Capacity
Management, and IDcentral also had good
traction, and we should see more growth
coming from these areas in the next year.
Moreover, we have augmented our entire
product suite to support 5G and other
digital requirements, by leveraging AI/ML
capabilities. This product strategy and our
focus on Digital Trust continue to see an
encouraging response from customers. As
we move forward, a key area of focus for
us will be HyperSense, our new, no-code,
augmented analytics platform.
Whenever there is a crisis, Subexians rally
together and we become an effective
team. There has been a lot of effort from
every Subexian, to ensure that the effect
of this phase is minimal to our customers.
We are grateful to say that majority of our
customers have been extremely
cooperative and are fully supporting our
operations in a BCP mode.
Has the digital economy converged
business functions (Finance, Marketing
etc.) with technology? Are business users
now required to be closer to IT and Data
Science?
will only get bigger in years to come. The
concern here is not the staggering
amount of data, it is about what do we do
with data is what matters. Companies
that leverage data to drive
decision-making, gain a competitive
advantage, reduce business costs, and
increase profit.
Majority of CxOs agree that their teams
need to more effectively leverage data to
extract business insights. Many enterprises
struggle with data-related issues such as
organizing multiple sources of data, a lack
of collaboration between their business
teams and data science team, low data
accuracy, data silos and poor data
accessibility.
In order to get maximum value out of the
data, enterprise s need to ensure that all
top priority for global leaders, and the
society is moving towards definitive
action on it, leading to increasing
investments in the area. Our focused
strategy towards Digital Trust, remains
strengthened, and this is one of the
factors that has enabled us to compete
well and win large deals in the recent
past. If the lifeblood of the digital
economy is data, its heart is digital
trust— it is the level of confidence in
people, processes, and technology to
build a trusted digital world. The
concept of trust has been through
significant evolution in human history.
Earlier trust was based on one-to-one
interactions and personal reputation.
Next came institutional trust when we
went through mass urbanization and
institutional trust was imperative to
trade internationally. Now technology
is leading by taking institutional power
and distributing it across a wide range
For Subex, enabling digital trust for our
customers and their stakeholders is a
three-tiered framework of risk
mitigation, identity & security and
intelligence & privacy, and is built into all
our products and solutions. We are
living in an increasingly interconnected
world personally and professionally. It is
imperative that a tight circle of trust is
developed, to ensure customer
experience is always positive.
Overall, we are progressing steadfastly
towards our vision of being the leaders
in the space of enabling digital trust,
which will result in significant value
addition to all our stakeholders”.
How is AI becoming the core for
Subex?
AI is becoming a crucial element of
Subex’s solutions suite. We take
Artificial Intelligence very seriously!
Towards this, Subex AI Labs was
started three years ago with a charter
to embed AI in Subex’s product suite.
Subex AI Labs leverages the latest and
greatest in the field of AI and applies
them to solve business challenges in
the digital world. Our data scientists
love massive and complex datasets,
and this space is to showcase their
work! This lab based in Bangalore
stakeholders are actually using the same
of sources.
data to make decisions; they need to
make sure they are working from a
single source of truth. This will provide
decision-makers with a clearer picture
of the data they have and the obstacles
that stand in the way of an optimized
data strategy.
Having a single source of truth will help
enterprises bridge the gaps between
disparate systems and departments that
deal with infinite data streams providing
decision makers with right data at the
Alongside, our 25 years of experience
dealing with analytics, especially in the
telecom industry, has taught us how to
integrate and manage data at scale and
solve some of the most complex
problems. We have brought all that
learning to the recently launched
HyperSense – an augmented analytics
platform for our enterprise customers.
People don't want to share data (there is
GDPR and a host of committees across
the world protecting consumers) - so
when we talk digital transformation we
also need to build "distributed" digital
trust in this new age economy - where
are we on this journey of establishing
digital trust between all parties?
Digital Trust is now quickly becoming a
The world is being overrun with data. The
survey say that 2.5 quintillion bytes of data
is produced by humans every day and they
right time.
17
Subex Annual Report 2020-21
functions across development,
delivery, fulfilment and operations.
Some of the popular products include
the Alternate Credit Scoring Model,
e-KYC module for verification using AI
and CrunchMetrics – an AI based
anomaly detection, causation and
alert engine.
We leverage AI and ML models that
can automatically learn patterns when
we crunch billions of transactions and
make predictions on a real- time basis,
mitigate issues such as data theft and
frauds and also helps enterprises
identify the opportunities they can
profit from. Our recent launch of
HyperSense, an end-to-end
Augmented Analytics platform helps
enterprises make faster, better
decisions by leveraging Artificial
Intelligence (AI) across the data value
chain aimed at democratising AI at
scale.
Can you explain more about
HyperSense. How do you envision this
solution benefiting your customers,
and how does this new platform
change the playing field and
addressable markets for Subex?
HyperSense will be a gamechanger for
both our customers as well as Subex.
For enterprises, HyperSense will
change how AI is adopted within
business teams. For Subex,
HyperSense marks the start of the
company’s platform journey and will
improve our ability to roll out
products to the market faster.
According to IDC, the big data and
analytics market is expected to grow
at a five-year CAGR of 12.5%. The
analytics market size is forecasted to
reach $500 billion by 2025.
Using AI in business is not
straightforward. There are issues
around having data which is organized
in a way that AI can leverage. Around
70 to 80% enterprises struggle with
uniform AI and data stack, along with
attracting and retaining great talent.
While dealing with some of the
seemingly impossible problems to
solve in enterprises, we got inspired to
build HyperSense.
HyperSense will be a gamechanger for both
our customers as well as Subex. HyperSense
marks the start of the company’s platform
journey and will improve our ability to roll out
products to the market faster.
As mentioned earlier, HyperSense is
an end-to-end Augmented Analytics
platform that helps enterprises
make faster, better decisions by
leveraging Artificial Intelligence (AI)
across the data value chain. Built on
our extensive data analytics
experience, HyperSense contains all
the Augmented Analytics
capabilities enterprises need in one
flexible and modular platform.
HyperSense’s unique no-code
capabilities allow users without a
knowledge of coding to easily
aggregate data from disparate
sources, turn data into insights by
building, interpreting, and tuning AI
models, and effortlessly share their
findings across the organization.
We are all fascinated with
blockchain - give us insight in to
your blockchain experiments?
With Subex’s strategy of enabling
businesses to build trust within the
digital ecosystem, we believe that
blockchain-based technologies will
play an important piece to that
puzzle. Towards this, we have made
significant strides towards
leveraging blockchain in solving
challenges across multiple use cases
such as fraud management and
partner settlement.
We have been members of few
industry consortiums like GLF's CBN
initiative to work towards
democratizing trust and simplifying
the settlement process by using
blockchain and RAG Wangiri
Blockchain Consortium, to develop
real-time industry threat
intelligence on fraud by utilising
blockchain.
We definitely see some challenges in
the blockchain adoption. This
because of the low performance of
enterprise blockchain and the
complexity of the technology. It
takes more than a couple of telcos to
justify a blockchain because
essentially it enables a peer-to-peer
network, so the more participants
there are, the value of the blockchain
becomes so much higher.
Can you tell us about the work Subex
is doing in the space of IoT?
As the world gets absorbed by the
COVID-19 pandemic, cyberattacks
have become a critical area for all
technology-focused organizations.
Hackers have been exploiting various
means of stealing valuable and
sensitive corporate data. One
common means of hacking systems
is via the Internet of Things (IoT)
route.
Our IoT Security solution has been
upgraded to address Operational
Technology (OT) use cases. With our
ability to secure converged networks
that have OT and IoT deployments,
we are well-positioned to explore
new growth opportunities in this
sector. We also added new features
such as Vulnerability Management
and Micro-segmentation into our
product to meet specific client
needs. Our current clientele includes
maritime, appliance manufacturers,
automotive manufacturers, and
enterprises in the O&G sector. We are
also strategically collaborating with key
Talk about your team and how they
detection offering. This has helped us
distributors and resellers to take our
stood by company values during the
to be more innovative as It carves out
new geography-focused cybersecurity
pandemic?
solutions to the market. We are also
space and money for breakthrough
innovations without neglecting our
seeing greater adoption of our
I feel proud to be associated with Subex
current business.
cybersecurity products in the telecom
and Subexians. We are united by our
sector with increased deployment of
values of Make it Happen, Win
Subex is a listed company and there are
5G-enabled services. We will continue
Together, Think Customer, Create
rules and regulations, yet, within that
to develop new product capabilities
Value, and Be open Be Fair, that make
ambit we do work like a startup. I am
and build strategic partnerships for
us undefeatable during such crisis. I
confident that when these products
market expansion.
would like to acknowledge and
succeed it will become a handbook for
appreciate the strength in our team.
established enterprises to work like
Talk about customers and partners and
Each Subexian works tirelessly,
startups.
how they supported you over last year?
channelizing all their energy and skills
to meet the needs of our customers
After a gap of 14 years, Subex has
For Subex, it has been a testing period,
and partners. They do whatever it takes
announced a 10 percent interim
since we are handling sensitive data of
to get the job done.
dividend. What are the factors behind
our customers globally, we could not
this announcement?
have moved an inch without getting
I am thankful for the continued efforts
their consent. There were many
of every Subexian, and through the
We were at the brink of a disaster and
regulations we had to pass through and
support of our customer and partner
we came back from a difficult past. It
garner multi-level permissions to move
community, we have been able to keep
was definitely a great sense of
in to work from anywhere set up. It was
operations steady and witness
satisfaction to announce the dividend
important to keep our customers and
sustained growth for our business. We
after a gap of 14 years.
partners informed about our business
have been able to truly demonstrate
continuity plan. I should acknowledge
our capabilities and relevance in
There was such a big debt overhang for
that our customers and partners have
helping the telecom world meet the
several years and for a long period of
been very reasonable and supportive to
new challenges and capitalize on
time we could not do anything because
effortlessly move in into remote
hidden opportunities posed during this
of balance sheet challenges. Towards
working. Infact, many customers wrote
period.
to us that they did not feel that the BCP
managed remotely in a seamless
manner.
had kicked in and the operations were
Why is startup thinking relevant today?
sheet was cleaned up and the company
the end of 2017-18, a significant
portion of the debt on our balance
became completely debt free.
I guess it is important to have a startup
mindset to stay innovative and keep
To address the company’s large equity
growing. Fast, intense, and incredibly
base and bring it in line with our
purpose-driven: that’s what a startup
current size of the business, we looked
looks like. At Subex, we strongly believe
at multiple options and chose to do a
that Innovation can come from
capital reduction. The write-off against
anywhere, anytime, hence Subexians in
the paid-up share capital was achieved
all job functions and at all levels are
by reducing the face value of the share
encouraged to come up with innovative
from ₹ 10 to ₹ 5. This exercise has saw
ideas and they are given the support
a positive response from our
needed to implement them.
shareholder community, indicative of
the fact that we have achieved a
Now the trickiest part for established
market capitalisation in excess of ₹
organizations like us is balancing the
1,500 crores (as on 1st December, 2020)
sustenance of existing business while
after a gap of 12 years. As a result of
also building new products and
this exercise, we were able to also
solutions for customer to stay ahead of
offset the accumulated losses.
the curve. That’s why we have adopted
Subsequently based on the cash
a three-horizon strategy. Horizon 1
position post our investment needs,
comprises traditional business focused
the board decided to declare dividends
on risk management for its telecom
totaling to 15% for FY21. I am thankful
clients. Horizon 2, which has just hit the
to our shareholders and other
market, is a top growth area with focus
stakeholder in trusting and supporting
on internet of things (IoT), security, and
us during this period. Our focus will be
analytics. Horizon 3 is its identity
analytics and automated anomaly
to put the company back on aggressive
growth.
Our CEO Vinod Kumar outlays the experiences of the
pandemic and how Subexians made the company beat
hard times
With the rapid acceleration of digitization driven by the
COVID-19 pandemic, the topic of Digital Trust is even
more relevant to everyone with a digital business. Digital
Trust is becoming the key enabler for high quality digital
interactions by measuring and quantifying expectations
with customers. It is viewed as the centerpiece for success,
from enhancing brand image, customer experience and
adopting new technologies to bringing in investments,
rolling out new offerings and expanding the partner
ecosystem.
As data breaches continue to occur with increasing
frequency, digital trust will gain momentum – shifting from
a “nice to have” to a necessity.
Mr. Vinod Kumar, MD & CEO, Subex brings his perspective
on the future of Subex with platforms powered by AI and
blockchain. He talks about why Subex is the fastest
growing technology company. He also talks about how
Subexians have rallied together to make this future a
reality. Here are the excerpts of the interview:
There is life before the pandemic and life after, it's almost
like the world woke up to transform itself - how was the
year for you personally and for the company?
The global pandemic, COVID-19, has halted life as we
know it and it is here to stay for a while. Like every other
organization, we also hurriedly packed our desks to work
from home, thinking we would be back within a few weeks.
As the coronavirus pandemic leapt from a handful of
outbreak zones to the rest of the country, weeks stretched
into months, we had to take quick decisions and adapt to a
new way of working. As an organization enabling critical
operations for customers in over 90 countries, our
objective was to ensure the right balance between safety of
our Subexians while ensuring smooth running of our
operations with minimal business impact our customers.
While setting up “work from anywhere” was relatively easy,
what was challenging was ensuring the shift of mindset
from measuring the productivity based on activities and
tasks to measuring it based on outcome. Every day is a new
learning and we are trying our level best to adjust to this
paradigm shift. We also recently moved into a new office
space and ensured that the new office is prepared for its
new role as a collaboration hub by creating more meeting
spaces.
I am happy to state that despite the pandemic, we have
managed to sustain the momentum, that we had built
before the crisis and moved forward on planned projects.
Multiple challenges were placed in front of us; however, we
could band together and deliver value to our customers
with grit and determination. This has
resulted in us finishing the year on a
positive note. We had announced deals
with a few marquee names for our core
products. At the same time, our newer
focus areas like IoT Security, Capacity
Management, and IDcentral also had good
traction, and we should see more growth
coming from these areas in the next year.
Moreover, we have augmented our entire
product suite to support 5G and other
digital requirements, by leveraging AI/ML
capabilities. This product strategy and our
focus on Digital Trust continue to see an
encouraging response from customers. As
we move forward, a key area of focus for
us will be HyperSense, our new, no-code,
augmented analytics platform.
Whenever there is a crisis, Subexians rally
together and we become an effective
team. There has been a lot of effort from
every Subexian, to ensure that the effect
of this phase is minimal to our customers.
We are grateful to say that majority of our
customers have been extremely
cooperative and are fully supporting our
operations in a BCP mode.
Has the digital economy converged
business functions (Finance, Marketing
etc.) with technology? Are business users
now required to be closer to IT and Data
Science?
will only get bigger in years to come. The
concern here is not the staggering
amount of data, it is about what do we do
with data is what matters. Companies
that leverage data to drive
decision-making, gain a competitive
advantage, reduce business costs, and
increase profit.
Majority of CxOs agree that their teams
need to more effectively leverage data to
extract business insights. Many enterprises
struggle with data-related issues such as
organizing multiple sources of data, a lack
of collaboration between their business
teams and data science team, low data
accuracy, data silos and poor data
accessibility.
In order to get maximum value out of the
data, enterprise s need to ensure that all
The world is being overrun with data. The
survey say that 2.5 quintillion bytes of data
is produced by humans every day and they
right time.
data to make decisions; they need to
make sure they are working from a
single source of truth. This will provide
decision-makers with a clearer picture
of the data they have and the obstacles
that stand in the way of an optimized
data strategy.
Having a single source of truth will help
enterprises bridge the gaps between
disparate systems and departments that
deal with infinite data streams providing
decision makers with right data at the
Alongside, our 25 years of experience
dealing with analytics, especially in the
telecom industry, has taught us how to
integrate and manage data at scale and
solve some of the most complex
problems. We have brought all that
learning to the recently launched
HyperSense – an augmented analytics
platform for our enterprise customers.
People don't want to share data (there is
GDPR and a host of committees across
the world protecting consumers) - so
when we talk digital transformation we
also need to build "distributed" digital
trust in this new age economy - where
are we on this journey of establishing
digital trust between all parties?
Digital Trust is now quickly becoming a
top priority for global leaders, and the
society is moving towards definitive
action on it, leading to increasing
investments in the area. Our focused
strategy towards Digital Trust, remains
strengthened, and this is one of the
factors that has enabled us to compete
well and win large deals in the recent
past. If the lifeblood of the digital
economy is data, its heart is digital
trust— it is the level of confidence in
people, processes, and technology to
build a trusted digital world. The
concept of trust has been through
significant evolution in human history.
Earlier trust was based on one-to-one
interactions and personal reputation.
Next came institutional trust when we
went through mass urbanization and
institutional trust was imperative to
trade internationally. Now technology
is leading by taking institutional power
and distributing it across a wide range
For Subex, enabling digital trust for our
customers and their stakeholders is a
three-tiered framework of risk
mitigation, identity & security and
intelligence & privacy, and is built into all
our products and solutions. We are
living in an increasingly interconnected
world personally and professionally. It is
imperative that a tight circle of trust is
developed, to ensure customer
experience is always positive.
Overall, we are progressing steadfastly
towards our vision of being the leaders
in the space of enabling digital trust,
which will result in significant value
addition to all our stakeholders”.
How is AI becoming the core for
Subex?
AI is becoming a crucial element of
Subex’s solutions suite. We take
Artificial Intelligence very seriously!
Towards this, Subex AI Labs was
started three years ago with a charter
to embed AI in Subex’s product suite.
Subex AI Labs leverages the latest and
greatest in the field of AI and applies
them to solve business challenges in
the digital world. Our data scientists
love massive and complex datasets,
and this space is to showcase their
work! This lab based in Bangalore
functions across development,
delivery, fulfilment and operations.
Some of the popular products include
the Alternate Credit Scoring Model,
e-KYC module for verification using AI
and CrunchMetrics – an AI based
anomaly detection, causation and
alert engine.
We leverage AI and ML models that
can automatically learn patterns when
we crunch billions of transactions and
make predictions on a real- time basis,
mitigate issues such as data theft and
frauds and also helps enterprises
identify the opportunities they can
profit from. Our recent launch of
HyperSense, an end-to-end
Augmented Analytics platform helps
enterprises make faster, better
decisions by leveraging Artificial
Intelligence (AI) across the data value
chain aimed at democratising AI at
scale.
Can you explain more about
HyperSense. How do you envision this
solution benefiting your customers,
and how does this new platform
change the playing field and
addressable markets for Subex?
HyperSense will be a gamechanger for
both our customers as well as Subex.
For enterprises, HyperSense will
change how AI is adopted within
business teams. For Subex,
HyperSense marks the start of the
company’s platform journey and will
improve our ability to roll out
products to the market faster.
According to IDC, the big data and
analytics market is expected to grow
at a five-year CAGR of 12.5%. The
analytics market size is forecasted to
reach $500 billion by 2025.
Using AI in business is not
straightforward. There are issues
around having data which is organized
in a way that AI can leverage. Around
70 to 80% enterprises struggle with
uniform AI and data stack, along with
attracting and retaining great talent.
While dealing with some of the
seemingly impossible problems to
solve in enterprises, we got inspired to
build HyperSense.
As mentioned earlier, HyperSense is
an end-to-end Augmented Analytics
platform that helps enterprises
make faster, better decisions by
leveraging Artificial Intelligence (AI)
across the data value chain. Built on
our extensive data analytics
experience, HyperSense contains all
the Augmented Analytics
flexible and modular platform.
HyperSense’s unique no-code
capabilities allow users without a
knowledge of coding to easily
aggregate data from disparate
sources, turn data into insights by
building, interpreting, and tuning AI
models, and effortlessly share their
findings across the organization.
We are all fascinated with
blockchain - give us insight in to
your blockchain experiments?
With Subex’s strategy of enabling
businesses to build trust within the
digital ecosystem, we believe that
blockchain-based technologies will
play an important piece to that
puzzle. Towards this, we have made
significant strides towards
leveraging blockchain in solving
challenges across multiple use
cases such as fraud managment and
partner settlement.
We have been members of few
industry consortiums like GLF's CBN
initiative to work towards
democratizing trust and simplifying
the settlement process by using
blockchain and RAG Wangiri
intelligence on fraud by utilising
blockchain.
We definitely see some challenges in
the blockchain adoption. This
because of the low performance of
enterprise blockchain and the
complexity of the technology. It
takes more than a couple of telcos to
essentially it enables a peer-to-peer
network, so the more participants
there are, the value of the blockchain
becomes so much higher.
Can you tell us about the work Subex
is doing in the space of IoT?
As the world gets absorbed by the
COVID-19 pandemic, cyberattacks
have become a critical area for all
technology-focused organizations.
Hackers have been exploiting various
means of stealing valuable and
sensitive corporate data. One
common means of hacking systems
is via the Internet of Things (IoT)
route.
Our IoT Security solution has been
upgraded to address Operational
Technology (OT) use cases. With our
ability to secure converged networks
that have OT and IoT deployments,
we are well-positioned to explore
new growth opportunities in this
sector. We also added new features
such as Vulnerability Management
and Micro-segmentation into our
product to meet specific client
needs. Our current clientele includes
maritime, appliance manufacturers,
Blockchain Consortium, to develop
automotive manufacturers, and
real-time industry threat
enterprises in the O&G sector. We are
stakeholders are actually using the same
of sources.
capabilities enterprises need in one
justify a blockchain because
Subex Annual Report 2020-21
18
also strategically collaborating with key
distributors and resellers to take our
new geography-focused cybersecurity
solutions to the market. We are also
seeing greater adoption of our
cybersecurity products in the telecom
sector with increased deployment of
5G-enabled services. We will continue
to develop new product capabilities
and build strategic partnerships for
market expansion.
Talk about customers and partners and
how they supported you over last year?
For Subex, it has been a testing period,
since we are handling sensitive data of
our customers globally, we could not
have moved an inch without getting
their consent. There were many
regulations we had to pass through and
garner multi-level permissions to move
in to work from anywhere set up. It was
important to keep our customers and
partners informed about our business
continuity plan. I should acknowledge
that our customers and partners have
been very reasonable and supportive to
effortlessly move in into remote
working. Infact, many customers wrote
to us that they did not feel that the BCP
had kicked in and the operations were
managed remotely in a seamless
manner.
Each Subexian
works tirelessly,
channelizing all
their energy and
skills to meet the
needs of our
customers and
partners. They do
whatever it takes to
get the job done.
Talk about your team and how they
stood by company values during the
pandemic?
I feel proud to be associated with Subex
and Subexians. We are united by our
values of Make it Happen, Win
Together, Think Customer, Create
Value, and Be open Be Fair, that make
us undefeatable during such crisis. I
would like to acknowledge and
appreciate the strength in our team.
Each Subexian works tirelessly,
channelizing all their energy and skills
to meet the needs of our customers
and partners. They do whatever it takes
to get the job done.
I am thankful for the continued efforts
of every Subexian, and through the
support of our customer and partner
community, we have been able to keep
operations steady and witness
sustained growth for our business. We
have been able to truly demonstrate
our capabilities and relevance in
helping the telecom world meet the
new challenges and capitalize on
hidden opportunities posed during this
period.
Why is startup thinking relevant today?
I guess it is important to have a startup
mindset to stay innovative and keep
growing. Fast, intense, and incredibly
purpose-driven: that’s what a startup
looks like. At Subex, we strongly believe
that Innovation can come from
anywhere, anytime, hence Subexians in
all job functions and at all levels are
encouraged to come up with innovative
ideas and they are given the support
needed to implement them.
Now the trickiest part for established
organizations like us is balancing the
sustenance of existing business while
also building new products and
solutions for customer to stay ahead of
the curve. That’s why we have adopted
a three-horizon strategy. Horizon 1
comprises traditional business focused
on risk management for its telecom
clients. Horizon 2, which has just hit the
market, is a top growth area with focus
on internet of things (IoT), security, and
analytics. Horizon 3 is its identity
analytics and automated anomaly
detection offering. This has helped us
to be more innovative as It carves out
space and money for breakthrough
innovations without neglecting our
current business.
Subex is a listed company and there are
rules and regulations, yet, within that
ambit we do work like a startup. I am
confident that when these products
succeed it will become a handbook for
established enterprises to work like
startups.
After a gap of 14 years, Subex has
announced a 10 percent interim
dividend. What are the factors behind
this announcement?
We were at the brink of a disaster and
we came back from a difficult past. It
was definitely a great sense of
satisfaction to announce the dividend
after a gap of 14 years.
There was such a big debt overhang for
several years and for a long period of
time we could not do anything because
of balance sheet challenges. Towards
the end of 2017-18, a significant
portion of the debt on our balance
sheet was cleaned up and the company
became completely debt free.
To address the company’s large equity
base and bring it in line with our
current size of the business, we looked
at multiple options and chose to do a
capital reduction. The write-off against
the paid-up share capital was achieved
by reducing the face value of the share
from ₹ 10 to ₹ 5. This exercise has saw
a positive response from our
shareholder community, indicative of
the fact that we have achieved a
market capitalisation in excess of ₹
1,500 crores (as on 1st December, 2020)
after a gap of 12 years. As a result of
this exercise, we were able to also
offset the accumulated losses.
Subsequently based on the cash
position post our investment needs,
the board decided to declare dividends
totaling to 15% for FY21. I am thankful
to our shareholders and other
stakeholder in trusting and supporting
us during this period. Our focus will be
to put the company back on aggressive
growth.
19
Subex Annual Report 2020-21
Stronger Together
A conversation with
Venkatraman G S,
Chief Financial Officer &
Senior Vice President
The pandemic has brought about years of change in
the way companies in all sectors and regions do
business. It has significantly accelerated the pace of
adoption of digital transformation technologies
placing utmost relevance and importance on Digital
Trust.
Digital trust is a concept that enables users to carry
out business transactions in a safe, secure, ethical, and
reliable manner. Subex continues to lead the way in
enabling digital trust to our customers and we have
covered in detail the progress we have made in this
journey in rest of this annual report.
Despite the challenging business environment in
FY20-21 your company delivered a good performance
financially. Your company achieved revenue growth
of 2% to close the financial year with revenues of ₹
3,720 Million. Our profitability continued to be strong
and our Profit Before Tax for the year was ₹ 893.7
Million versus a loss last year.
We successfully completed the process of Capital
Reduction exercise which we commenced in FY19-20,
thereby utilizing ₹ 2,810 million from paid-up share
capital and ₹ 1,030 million from securities premium to
write-off its accumulated losses of ₹ 3,840 million.
This not only helped in cleaning up the balance sheet,
but also improved free cash flows that enabled us to
invest in newer businesses and service our reduced
capital base well. The new equity shares, with face
value of ₹ 5 was listed in the stock exchanges w.e.f. 5th
November 2020. Our market capitalization end of
March 2021 was more than ₹ 20,000 million as against
₹ 1,730 Million end of FY20.
Your company also got back to paying dividend to
shareholders after a long gap of 14 Years with an
interim dividend of 10% in February 2021 followed by
the Board of Directors recommending a final
dividend of 5%, which is subject to your approval in
the upcoming Annual General Meeting. Thereby a
total dividend of 15%.
Here are a few other financial highlights I wanted to
draw your attention to:
Other Financial Highlights of
FY2020-21
• Our EBITDA grew 4.6% to ₹ 985 million in FY21 from
₹ 942 million in FY20.
• Diluted Earnings Per Share is ₹ 0.94 per share in
FY21 as against a loss of ₹ 4.94 per share in FY20
• Cash flow conversion (EBITDA to operating cash
flow conversion) has been impressive at 92.3% and
analytics platform that helps enterprises
make faster, better decisions by
leveraging Artificial Intelligence (AI)
across the data value chain. Hypersense
helps democratize AI across
enterprises, it contains all the
Augmented Analytics capabilities
enterprises need in one flexible and
modular platform. Its unique no-code
capabilities allow users without a
knowledge of coding to easily
aggregate data from disparate sources,
turn data into insights by building,
interpreting, and tuning AI models, and
effortlessly share their findings across
the organization.
• With HyperSense your company will
transition from a traditional on-prem
License, Support business and revenue
model to a Platform based SaaS
company. Your company will start
transitioning to a subscription-based
revenue from our existing license,
implementation, and support revenues.
We will continue to keep you updated
on the progress we are making in this
important transition. As our Horizon 2
and 3 products like IOT-OT Security,
IDcentral start scaling, the revenue
models for these products are also
subscription/device/API pull based. This
will help your company further
strengthen its position as a SaaS based
product company.
• We continue to make good progress
and make investments in our new areas
like IOT-OT Security, Analytics,
IDcentral as part of our Horizon 2 & 3
strategic focus areas. There are more
updates on the progress your company
is making on these areas in rest of this
annual report.
• During the year your company carried
out a strategic re-organization and
centralized certain key Sales and
Business support functions into the
listed entity, to drive better efficiencies
of scale and overall operations.
Outlook for FY2021-22
analytics platform, will enable us offer
cloud enabled solutions by using low
code AI and data analytics. We are also
working to transition all our existing
products of Business Assurance, Fraud
Management, Partner Settlement on
to this platform, so that our customers
can experience the full benefits of the
digital transformation the platform
can help exploit and drive business
benefits to our customers.
• HyperSense as a platform will also
help us to solve business problems of
customers in verticals outside of
Telecom and thereby addressing a
larger market.
• In FY22 your company is expecting to
grow revenues in double digits.
Historically Subex Q1 revenues have
always been a little weaker and hence
we expect that to continue in Q1 of
FY22 as well, but we hope to step up
pace in the rest of the quarters to help
us meet our expected revenue growth
for the year. Will continue to focus on
running the operations of the
company efficiently so that we
continue to maintain and improve our
overall operating margins.
• As called out earlier we will continue
to make investments in new areas
called out under Horizon 2 & 3, as
these investments will help us identify
the next set of products which will
help us grow faster and also take our
products and solutions to verticals
outside of telecom.
Our success has been possible due to
the outstanding efforts of our Finance
and Procurement team at Subex that I
am so honored and proud to lead. The
past year has been extremely
challenging to all our teams, and they
have stepped up to the challenges of
remote working and ensured they do
not drop the ball on any of our core
operations and strategic initiatives we
had called out at the beginning of the
year. I thank all the Subexians, Clients,
Investors, Bankers, Auditors and
• Looking forward in FY22, we expect
Advisors for their trust and support to
customer demand for digital and
us and gratefully acknowledge their
transformational services as they invest
contribution in working towards our
into data and cloud-enabled solutions.
vision of being a global leader in
HyperSense our new augmented
Digital Trust.
Free Cash Flow at ₹ 824 million. During
FY20, our cash flow conversion was
70.3% and Free Cash Flow was ₹ 627
million.
• Days Sales Outstanding (DSO) on trade
receivables improved from 92 days in
FY20 to 90 days in FY21.
Other sections of this annual report
highlight the initiatives and activities
taken up by Subex in our effort to be
responsible corporate citizens. We
remain dedicated to enhancing
transparency and to maintain disclosure
to shareholders through various
additional disclosures such as Board’s
Report, Management Discussion and
Analysis, Consolidated and Standalone
Ind-AS financials and Shareholder’s
Information.
Strategic Highlights of
FY2020-21
• We are excited with the launch of
HyperSense our new augmented
The pandemic has brought about years of change in
the way companies in all sectors and regions do
business. It has significantly accelerated the pace of
adoption of digital transformation technologies
placing utmost relevance and importance on Digital
Trust.
Digital trust is a concept that enables users to carry
out business transactions in a safe, secure, ethical, and
reliable manner. Subex continues to lead the way in
enabling digital trust to our customers and we have
covered in detail the progress we have made in this
journey in rest of this annual report.
Despite the challenging business environment in
FY20-21 your company delivered a good performance
financially. Your company achieved revenue growth
of 2% to close the financial year with revenues of ₹
3,720 Million. Our profitability continued to be strong
and our Profit Before Tax for the year was ₹ 893.7
Million versus a loss last year.
We successfully completed the process of Capital
Reduction exercise which we commenced in FY19-20,
thereby utilizing ₹ 2,810 million from paid-up share
capital and ₹ 1,030 million from securities premium to
write-off its accumulated losses of ₹ 3,840 million.
This not only helped in cleaning up the balance sheet,
but also improved free cash flows that enabled us to
invest in newer businesses and service our reduced
capital base well. The new equity shares, with face
value of ₹ 5 was listed in the stock exchanges w.e.f. 5th
November 2020. Our market capitalization end of
March 2021 was more than ₹ 20,000 million as against
₹ 1,730 Million end of FY20.
Your company also got back to paying dividend to
shareholders after a long gap of 14 Years with an
interim dividend of 10% in February 2021 followed by
the Board of Directors recommending a final
dividend of 5%, which is subject to your approval in
the upcoming Annual General Meeting. Thereby a
total dividend of 15%.
Here are a few other financial highlights I wanted to
draw your attention to:
Other Financial Highlights of
FY2020-21
• Our EBITDA grew 4.6% to ₹ 985 million in FY21 from
₹ 942 million in FY20.
• Diluted Earnings Per Share is ₹ 0.94 per share in
FY21 as against a loss of ₹ 4.94 per share in FY20
• Cash flow conversion (EBITDA to operating cash
flow conversion) has been impressive at 92.3% and
Subex Annual Report 2020-21
20
We will continue to
make investments
in new areas as
these investments
will help us identify
the next set of
products which will
help us grow faster
and also take our
products and
solutions to
verticals outside of
telecom.
Free Cash Flow at ₹ 824 million. During
FY20, our cash flow conversion was
70.3% and Free Cash Flow was ₹ 627
million.
• Days Sales Outstanding (DSO) on trade
receivables improved from 92 days in
FY20 to 90 days in FY21.
Other sections of this annual report
highlight the initiatives and activities
taken up by Subex in our effort to be
responsible corporate citizens. We
remain dedicated to enhancing
transparency and to maintain disclosure
to shareholders through various
additional disclosures such as Board’s
Report, Management Discussion and
Analysis, Consolidated and Standalone
Ind-AS financials and Shareholder’s
Information.
Strategic Highlights of
FY2020-21
• We are excited with the launch of
HyperSense our new augmented
analytics platform that helps enterprises
make faster, better decisions by
leveraging Artificial Intelligence (AI)
across the data value chain. Hypersense
helps democratize AI across
enterprises, it contains all the
Augmented Analytics capabilities
enterprises need in one flexible and
modular platform. Its unique no-code
capabilities allow users without a
knowledge of coding to easily
aggregate data from disparate sources,
turn data into insights by building,
interpreting, and tuning AI models, and
effortlessly share their findings across
the organization.
• With HyperSense your company will
transition from a traditional on-prem
License, Support business and revenue
model to a Platform based SaaS
company. Your company will start
transitioning to a subscription-based
revenue from our existing license,
implementation, and support revenues.
We will continue to keep you updated
on the progress we are making in this
important transition. As our Horizon 2
and 3 products like IOT-OT Security,
IDcentral start scaling, the revenue
models for these products are also
subscription/device/API pull based. This
will help your company further
strengthen its position as a SaaS based
product company.
• We continue to make good progress
and make investments in our new areas
like IOT-OT Security, Analytics,
IDcentral as part of our Horizon 2 & 3
strategic focus areas. There are more
updates on the progress your company
is making on these areas in rest of this
annual report.
• During the year your company carried
out a strategic re-organization and
centralized certain key Sales and
Business support functions into the
listed entity, to drive better efficiencies
of scale and overall operations.
Outlook for FY2021-22
• Looking forward in FY22, we expect
customer demand for digital and
transformational services as they invest
into data and cloud-enabled solutions.
HyperSense our new augmented
analytics platform, will enable us offer
cloud enabled solutions by using low
code AI and data analytics. We are also
working to transition all our existing
products of Business Assurance, Fraud
Management, Partner Settlement on
to this platform, so that our customers
can experience the full benefits of the
digital transformation the platform
can help exploit and drive business
benefits to our customers.
• HyperSense as a platform will also
help us to solve business problems of
customers in verticals outside of
Telecom and thereby addressing a
larger market.
• In FY22 your company is expecting to
grow revenues in double digits.
Historically Subex Q1 revenues have
always been a little weaker and hence
we expect that to continue in Q1 of
FY22 as well, but we hope to step up
pace in the rest of the quarters to help
us meet our expected revenue growth
for the year. Will continue to focus on
running the operations of the
company efficiently so that we
continue to maintain and improve our
overall operating margins.
• As called out earlier we will continue
to make investments in new areas
called out under Horizon 2 & 3, as
these investments will help us identify
the next set of products which will
help us grow faster and also take our
products and solutions to verticals
outside of telecom.
Our success has been possible due to
the outstanding efforts of our Finance
and Procurement team at Subex that I
am so honored and proud to lead. The
past year has been extremely
challenging to all our teams, and they
have stepped up to the challenges of
remote working and ensured they do
not drop the ball on any of our core
operations and strategic initiatives we
had called out at the beginning of the
year. I thank all the Subexians, Clients,
Investors, Bankers, Auditors and
Advisors for their trust and support to
us and gratefully acknowledge their
contribution in working towards our
vision of being a global leader in
Digital Trust.
21
Subex Annual Report 2020-21
The Future is in
Collaboration and
Partnerships
A conversation with
Suresh Chintada, Chief Technology Officer
It is very important for businesses today to keep
pace with technology, and this holds true for
Subex as well. Today, Subex has pushed its
products and solutions ahead of the
technological trends with the use of emerging
technologies like Artificial Intelligence and
Blockchain. Through its startups like IDcentral,
the company has also pioneered the use of
digital identity management and AI in analytics.
Recently, Subex unveiled Its latest no-code
augmented analytics platform ‘HyperSense’,
which allows organizations to make the best
use of cloud native micro-services
architectures through its studio-based
approach. HyperSense is the fruition of Subex’s
vision to democratize AI and to enable
enterprises to easily infuse AI into their business
decisions.
To put the above into context, Our CTO, Suresh
Chintada, discusses the roadmap of our
25-year-old startup. Through this interview you
will learn why Subex is at the forefront of the
5G revolution and what the future holds for the
company. Here are the excerpts:
Give us a quick peek into the evolution of
technology at Subex?
For Subex, since the very beginning, our core
customer base has been the telecom segment.
Anyone who has ever worked in the telecom
space can testify that telcos have access to a
vast amount of data, probably the largest
across any industry. This vast dataset holds
significant amount of insights, opportunities
and red flags. But the challenge comes from
leveraging this data. Towards this, Subex has
been partnering and co-creating with our
customers by leveraging data to solve complex
issues such as maximizing revenue, preventing
revenue leakages, combatting fraud, Capex and
network optimization etc. We have been
leveraging our expertise in data engineering
and dealing with the large-scale data, even
before big data became a mainstream word. To
put it simply, we understand analytics.
Over the years the software that we offered
was largely built for on-prem deployment with
traditional relational databases and as the
technology progressed, we adopted Hadoop as
a platform and made innovations around big
data.
Today, with rapid digitalization of enterprises
and CSPs journey towards becoming a digital
telco, we are now seeing an increased adoption
and performance, which are at the heart of
studio-based architecture.
and migration to cloud infrastructures.
Moreover, the increasing maturity of AI
and ML practices and their move towards
mainstream to solve complex problems,
provided us with an opportunity to move
to a larger playing field. Customers today
want control in their hands to choose their
best course of action to solve their
problems. This led us to go back to the
drawing board and on one hand, reimagine
the way we were serving our customers
and on the other, reimagine how our
customer will be conducting business in
the future.
The need of the hour was to go beyond a
traditional software license-based model;
deliver the value in a much shorter cycles
of innovation; equip customers to make
better and efficient decisions using the
data they already have and bring the data
to life using bleeding edge advanced data
science and AI/ML techniques. Of course,
what was imperative, was to successfully
achieve the above while keeping the basic
tenets of security, scalability, affordability
our Digital Trust vision. In summary, at
Subex our endeavor is to help our
customers cross the chasm of using AI
capabilities to get a disproportionate
advantage, despite the harsh realities of
lack of data science skills.
The resultant of this is HyperSense, our
new platform, built on open cloud native
micro services architecture which makes
things composable. With a studio-based
approach, HyperSense now puts the
solution in the hands of the customer.
You recently announced the launch of
HyperSense - an augmented analytics
platform. Could you please brief about the
capabilities of HyperSense?
solve different problems, be it, churn
management or campaign management.
All the complexity also requires CSPs to
constantly upgrade in-house skills, which
comes at a cost. To aggravate the
challenges, they work with siloed datasets
leading to suboptimal solutions.
What HyperSense provides is a robust way
to handle data at the fundamental layer,
where it helps aggregate and organize the
data for an enterprise, to ensure value to
insights. The most important thing for
enterprises is to move data from silos into
adding value to the bottom-line.
HyperSense facilitates this data journey by
organizing data into a highly composable
HyperSense, as part of our initial offering,
has five studios which we think is essential
to solve any end-to-end use case. The Data
Management studio handles data
governance aspects like curation of data,
cleaning of data and finally validating it and
putting the data in the warehouse.
The Business Modeling studio helps in
codifying business rules that can run on
the data. It will simulate business processes
to aggregate performance. It will help in
segregation, filtering, comparison,
enrichment, and augmentation of the data.
The AI Studio provides all the smarts to
make decisions smarter, profitable and
agile. We have codified a plethora of AI/ML
easy drag and drop capabilities. It
minimizes the need for expensive data
scientists or data science skills to solve
very regular problems that occur in a
business operation.
The Business Intelligence Studio offers
drag and drop features to explore, analyze
and visualize complex datasets. This studio
supports contextual drilldowns, along with
slicing and dicing capabilities. It allows you
to understand the operations completely.
Today CSPs need a plethora of solutions to
techniques and made them available with
It is very important for businesses today to keep
pace with technology, and this holds true for
Subex as well. Today, Subex has pushed its
products and solutions ahead of the
technological trends with the use of emerging
technologies like Artificial Intelligence and
Blockchain. Through its startups like IDcentral,
the company has also pioneered the use of
digital identity management and AI in analytics.
Recently, Subex unveiled Its latest no-code
augmented analytics platform ‘HyperSense’,
which allows organizations to make the best
use of cloud native micro-services
architectures through its studio-based
approach. HyperSense is the fruition of Subex’s
vision to democratize AI and to enable
enterprises to easily infuse AI into their business
decisions.
To put the above into context, Our CTO, Suresh
Chintada, discusses the roadmap of our
25-year-old startup. Through this interview you
will learn why Subex is at the forefront of the
5G revolution and what the future holds for the
company. Here are the excerpts:
Give us a quick peek into the evolution of
technology at Subex?
For Subex, since the very beginning, our core
customer base has been the telecom segment.
Anyone who has ever worked in the telecom
space can testify that telcos have access to a
vast amount of data, probably the largest
across any industry. This vast dataset holds
significant amount of insights, opportunities
and red flags. But the challenge comes from
leveraging this data. Towards this, Subex has
been partnering and co-creating with our
customers by leveraging data to solve complex
issues such as maximizing revenue, preventing
revenue leakages, combatting fraud, Capex and
network optimization etc. We have been
leveraging our expertise in data engineering
and dealing with the large-scale data, even
before big data became a mainstream word. To
put it simply, we understand analytics.
Over the years the software that we offered
was largely built for on-prem deployment with
traditional relational databases and as the
technology progressed, we adopted Hadoop as
a platform and made innovations around big
data.
Today, with rapid digitalization of enterprises
and CSPs journey towards becoming a digital
telco, we are now seeing an increased adoption
Subex Annual Report 2020-21
22
and migration to cloud infrastructures.
Moreover, the increasing maturity of AI
and ML practices and their move towards
mainstream to solve complex problems,
provided us with an opportunity to move
to a larger playing field. Customers today
want control in their hands to choose their
best course of action to solve their
problems. This led us to go back to the
drawing board and on one hand, reimagine
the way we were serving our customers
and on the other, reimagine how our
customer will be conducting business in
the future.
The need of the hour was to go beyond a
traditional software license-based model;
deliver the value in a much shorter cycles
of innovation; equip customers to make
better and efficient decisions using the
data they already have and bring the data
to life using bleeding edge advanced data
science and AI/ML techniques. Of course,
what was imperative, was to successfully
achieve the above while keeping the basic
tenets of security, scalability, affordability
and performance, which are at the heart of
our Digital Trust vision. In summary, at
Subex our endeavor is to help our
customers cross the chasm of using AI
capabilities to get a disproportionate
advantage, despite the harsh realities of
lack of data science skills.
The resultant of this is HyperSense, our
new platform, built on open cloud native
micro services architecture which makes
things composable. With a studio-based
approach, HyperSense now puts the
solution in the hands of the customer.
You recently announced the launch of
HyperSense - an augmented analytics
platform. Could you please brief about the
capabilities of HyperSense?
Today CSPs need a plethora of solutions to
solve different problems, be it, churn
management or campaign management.
All the complexity also requires CSPs to
constantly upgrade in-house skills, which
comes at a cost. To aggravate the
challenges, they work with siloed datasets
leading to suboptimal solutions.
What HyperSense provides is a robust way
to handle data at the fundamental layer,
where it helps aggregate and organize the
data for an enterprise, to ensure value to
At Subex our endeavor is to help
our customers cross the chasm of
using AI capabilities to get an
unfair advantage, despite the
harsh realities of lack of data
science skills or long tail cycles.
insights. The most important thing for
enterprises is to move data from silos into
adding value to the bottom-line.
HyperSense facilitates this data journey by
organizing data into a highly composable
studio-based architecture.
HyperSense, as part of our initial offering,
has five studios which we think is essential
to solve any end-to-end use case. The Data
Management studio handles data
governance aspects like curation of data,
cleaning of data and finally validating it and
putting the data in the warehouse.
The Business Modeling studio helps in
codifying business rules that can run on
the data. It will simulate business processes
to aggregate performance. It will help in
segregation, filtering, comparison,
enrichment, and augmentation of the data.
The AI Studio provides all the smarts to
make decisions smarter, profitable and
agile. We have codified a plethora of AI/ML
techniques and made them available with
easy drag and drop capabilities. It
minimizes the need for expensive data
scientists or data science skills to solve
very regular problems that occur in a
business operation.
The Business Intelligence Studio offers
drag and drop features to explore, analyze
and visualize complex datasets. This studio
supports contextual drilldowns, along with
slicing and dicing capabilities. It allows you
to understand the operations completely.
The Process Automation Studio
essentially does the closed- loop
feedback and ensures agility by having
a micro-services workflow engine and
helps in visualization, operations and
reporting. The process automation
studio facilitates collaboration with
stakeholders in the organization for
effective case issues and resolution.
We are fascinated with AI and ML,
where are we on that journey?
Subex started on the path of AI/ML a
couple of years back. If you see the
emergence of AI, over the last five
years, it has taken a new shape. It has
become a lot more affordable and there
are a lot more tools and technologies
available. We have realized that a lot of
enterprises have gone down the path of
AI and have started to drive down some
of their investments because they were
not seeing any advantages from the
technology, especially in terms of ROI.
The lack of ROI from analytics projects
has caused enterprises to drive down
some of their AI investments.
To enable businesses to understand the
benefits of AI we have set up AI Labs,
which helps us to experiment with AI.
Through our AI Labs our customers and
partners can experiment before
deploying AI commercially. So, we
started picking up problems that are
important for a customer and started
putting them through the labs, and this
It is very important for businesses today to keep
pace with technology, and this holds true for
Subex as well. Today, Subex has pushed its
products and solutions ahead of the
technological trends with the use of emerging
technologies like Artificial Intelligence and
Blockchain. Through its startups like IDcentral,
the company has also pioneered the use of
digital identity management and AI in analytics.
Recently, Subex unveiled Its latest no-code
augmented analytics platform ‘HyperSense’,
which allows organizations to make the best
use of cloud native micro-services
architectures through its studio-based
approach. HyperSense is the fruition of Subex’s
vision to democratize AI and to enable
enterprises to easily infuse AI into their business
decisions.
To put the above into context, Our CTO, Suresh
Chintada, discusses the roadmap of our
25-year-old startup. Through this interview you
will learn why Subex is at the forefront of the
5G revolution and what the future holds for the
company. Here are the excerpts:
Give us a quick peek into the evolution of
technology at Subex?
For Subex, since the very beginning, our core
customer base has been the telecom segment.
Anyone who has ever worked in the telecom
space can testify that telcos have access to a
vast amount of data, probably the largest
across any industry. This vast dataset holds
significant amount of insights, opportunities
and red flags. But the challenge comes from
leveraging this data. Towards this, Subex has
been partnering and co-creating with our
customers by leveraging data to solve complex
issues such as maximizing revenue, preventing
revenue leakages, combatting fraud, Capex and
network optimization etc. We have been
leveraging our expertise in data engineering
and dealing with the large-scale data, even
before big data became a mainstream word. To
put it simply, we understand analytics.
Over the years the software that we offered
was largely built for on-prem deployment with
traditional relational databases and as the
technology progressed, we adopted Hadoop as
a platform and made innovations around big
data.
Today, with rapid digitalization of enterprises
and CSPs journey towards becoming a digital
telco, we are now seeing an increased adoption
and performance, which are at the heart of
studio-based architecture.
and migration to cloud infrastructures.
Moreover, the increasing maturity of AI
and ML practices and their move towards
mainstream to solve complex problems,
provided us with an opportunity to move
to a larger playing field. Customers today
want control in their hands to choose their
best course of action to solve their
problems. This led us to go back to the
drawing board and on one hand, reimagine
the way we were serving our customers
and on the other, reimagine how our
customer will be conducting business in
the future.
The need of the hour was to go beyond a
traditional software license-based model;
deliver the value in a much shorter cycles
of innovation; equip customers to make
better and efficient decisions using the
data they already have and bring the data
to life using bleeding edge advanced data
science and AI/ML techniques. Of course,
what was imperative, was to successfully
achieve the above while keeping the basic
tenets of security, scalability, affordability
our Digital Trust vision. In summary, at
Subex our endeavor is to help our
customers cross the chasm of using AI
capabilities to get a disproportionate
advantage, despite the harsh realities of
lack of data science skills.
The resultant of this is HyperSense, our
new platform, built on open cloud native
micro services architecture which makes
things composable. With a studio-based
approach, HyperSense now puts the
solution in the hands of the customer.
You recently announced the launch of
HyperSense - an augmented analytics
platform. Could you please brief about the
capabilities of HyperSense?
solve different problems, be it, churn
management or campaign management.
All the complexity also requires CSPs to
constantly upgrade in-house skills, which
comes at a cost. To aggravate the
challenges, they work with siloed datasets
leading to suboptimal solutions.
What HyperSense provides is a robust way
to handle data at the fundamental layer,
where it helps aggregate and organize the
data for an enterprise, to ensure value to
insights. The most important thing for
enterprises is to move data from silos into
adding value to the bottom-line.
HyperSense facilitates this data journey by
organizing data into a highly composable
HyperSense, as part of our initial offering,
has five studios which we think is essential
to solve any end-to-end use case. The Data
Management studio handles data
governance aspects like curation of data,
cleaning of data and finally validating it and
putting the data in the warehouse.
The Business Modeling studio helps in
codifying business rules that can run on
the data. It will simulate business processes
to aggregate performance. It will help in
segregation, filtering, comparison,
enrichment, and augmentation of the data.
The AI Studio provides all the smarts to
make decisions smarter, profitable and
agile. We have codified a plethora of AI/ML
easy drag and drop capabilities. It
minimizes the need for expensive data
scientists or data science skills to solve
very regular problems that occur in a
business operation.
The Business Intelligence Studio offers
drag and drop features to explore, analyze
and visualize complex datasets. This studio
supports contextual drilldowns, along with
slicing and dicing capabilities. It allows you
to understand the operations completely.
Today CSPs need a plethora of solutions to
techniques and made them available with
23
Subex Annual Report 2020-21
has helped us to build up our
competency in addressing issues
through AI. We also took a conscious
decision to incorporate an AI-first
approach for every product that we put
out in the market. This is a fundamental
shift in how we conceptualize products
today.
We also went through the journey of
building the right competencies and
hiring the top talent in the data science
space across the last two years. We
have recently been identified as the
15th among Top 50 Best Places for
Data Scientist to Work in India, by
Analytics India Magazine.
Give us few insights into your
technology labs and virtual start-ups.
How is it helping Subex to come out
with innovative products and solutions?
At Subex, we are constantly working on
creating an innovation pipeline of
products and solutions. What we have
done is create a framework or a
container to house all these
innovations. So, we do have an internal
virtual start-up ecosystem that enables
the tech entrepreneurs within the
company to lead with an idea and solve
problems at scale and take it to the
market. This has helped us launch new
solutions which solve very intriguing
business problems. Our anomaly
detection solution is an early example.
The solution helps in detecting
anomalies in any data stream. For
example, a company can find out the
type of attacks on its payment gateway
and how the nature of these attacks
changes over time. This gives power to
the enterprise to protect themselves.
We have a solution called the Capacity
Management, which is an AI enabled
network investment planning solution.
We also have IDcentral, which is a
consent first identity and access
management solution to help
organizations leverage data while
protecting customer privacy.
Apart from these, we also have
technology solutions which we are
incubating in the form of prototypes.
and are working with our customers
and partners towards creating
solutions, for example a revenue
reconciliation solution using
Blockchain technology, and liveness
detection using Deep Learning etc, So,
there are several experiments
happening in our organization.
Can you tell me some of the works
Subex is doing around the Blockchain
space and how is this going to evolve in
the next few years?
Blockchain may bring the benefit of
immutable trust and is a key bet for
Subex. As far as tech trends go, the last
year has been an unparalleled
whirlwind of next-generation
developments; it’s also been seminal
for blockchain. From cryptocurrencies
to tracking vaccines, DLT is having its
day and the trend is gaining pace in
telecoms too.
By 2023, it is expected that blockchain’s
use in telecoms will be worth $993.8
million, following a compound annual
By 2023, it is
expected that
blockchain’s use
in telecoms will
be worth $993.8
million, following
a compound
annual growth
rate (CAGR) of
84.4% since 2018
growth rate (CAGR) of 84.4% since
2018
Subex’s move into blockchain was a
natural progression and our
participation in the blockchain tech
space is essentially moderated by our
vision of enabling trust in the digital
ecosystems.
At Subex, digital trust has three
components: the “non-negotiable”
foundation layer of risk management;
the “sustenance layer” that binds
identity and security; and the
strategic layer, which creates
competitive advantage and supports
brand reputation elements. Our view
is that, on the three-point trust scale,
blockchain is a layer three
technology; that is, it can enhance
brand reputation by delivering the
immutable trust required in
transactions.
There are exciting possibilities for
blockchain adoption in the telco
space. The immediate blockchain use
cases that telcos can leverage dealer
management, margin management
and data governance. And it does not
stop there. The decentralized,
trust-based ecosystem of the future
– as envisioned by us– can even
deliver greater value for telcos
transitioning to digital players.
In 2019, the ITW Global Leaders’
Forum named Subex as one of 10
technology provider partners
supporting the Communications
Business Automation Network, and
today we participate in several telco
forums where industry use cases are
discussed. We are also a member of
RAG Wangiri Blockchain Consortium,
working with partners to develop
real-time industry threat intelligence
on fraud by utilizing blockchain.
With digitalisation in full swing, the
outlook for blockchain is strong. Last
year, IDC forecast global spending on
the tech could reach $17.9 billion in
2024, up from $4.1 billion in 2020.
However, this will not be driven by
telcos alone and IDC says the growth
will predominantly stem from
manufacturing and banking.
It is very important for businesses today to keep
pace with technology, and this holds true for
Subex as well. Today, Subex has pushed its
products and solutions ahead of the
technological trends with the use of emerging
technologies like Artificial Intelligence and
Blockchain. Through its startups like IDcentral,
the company has also pioneered the use of
digital identity management and AI in analytics.
Recently, Subex unveiled Its latest no-code
augmented analytics platform ‘HyperSense’,
which allows organizations to make the best
use of cloud native micro-services
architectures through its studio-based
approach. HyperSense is the fruition of Subex’s
vision to democratize AI and to enable
enterprises to easily infuse AI into their business
decisions.
To put the above into context, Our CTO, Suresh
Chintada, discusses the roadmap of our
25-year-old startup. Through this interview you
will learn why Subex is at the forefront of the
5G revolution and what the future holds for the
company. Here are the excerpts:
Give us a quick peek into the evolution of
technology at Subex?
For Subex, since the very beginning, our core
customer base has been the telecom segment.
Anyone who has ever worked in the telecom
space can testify that telcos have access to a
vast amount of data, probably the largest
across any industry. This vast dataset holds
significant amount of insights, opportunities
and red flags. But the challenge comes from
leveraging this data. Towards this, Subex has
been partnering and co-creating with our
customers by leveraging data to solve complex
issues such as maximizing revenue, preventing
revenue leakages, combatting fraud, Capex and
network optimization etc. We have been
leveraging our expertise in data engineering
and dealing with the large-scale data, even
before big data became a mainstream word. To
put it simply, we understand analytics.
Over the years the software that we offered
was largely built for on-prem deployment with
traditional relational databases and as the
technology progressed, we adopted Hadoop as
a platform and made innovations around big
data.
Today, with rapid digitalization of enterprises
and CSPs journey towards becoming a digital
telco, we are now seeing an increased adoption
and performance, which are at the heart of
studio-based architecture.
and migration to cloud infrastructures.
Moreover, the increasing maturity of AI
and ML practices and their move towards
mainstream to solve complex problems,
provided us with an opportunity to move
to a larger playing field. Customers today
want control in their hands to choose their
best course of action to solve their
problems. This led us to go back to the
drawing board and on one hand, reimagine
the way we were serving our customers
and on the other, reimagine how our
customer will be conducting business in
the future.
The need of the hour was to go beyond a
traditional software license-based model;
deliver the value in a much shorter cycles
of innovation; equip customers to make
better and efficient decisions using the
data they already have and bring the data
to life using bleeding edge advanced data
science and AI/ML techniques. Of course,
what was imperative, was to successfully
achieve the above while keeping the basic
tenets of security, scalability, affordability
our Digital Trust vision. In summary, at
Subex our endeavor is to help our
customers cross the chasm of using AI
capabilities to get a disproportionate
advantage, despite the harsh realities of
lack of data science skills.
The resultant of this is HyperSense, our
new platform, built on open cloud native
micro services architecture which makes
things composable. With a studio-based
approach, HyperSense now puts the
solution in the hands of the customer.
You recently announced the launch of
HyperSense - an augmented analytics
platform. Could you please brief about the
capabilities of HyperSense?
solve different problems, be it, churn
management or campaign management.
All the complexity also requires CSPs to
constantly upgrade in-house skills, which
comes at a cost. To aggravate the
challenges, they work with siloed datasets
leading to suboptimal solutions.
What HyperSense provides is a robust way
to handle data at the fundamental layer,
where it helps aggregate and organize the
data for an enterprise, to ensure value to
insights. The most important thing for
enterprises is to move data from silos into
adding value to the bottom-line.
HyperSense facilitates this data journey by
organizing data into a highly composable
HyperSense, as part of our initial offering,
has five studios which we think is essential
to solve any end-to-end use case. The Data
Management studio handles data
governance aspects like curation of data,
cleaning of data and finally validating it and
putting the data in the warehouse.
The Business Modeling studio helps in
codifying business rules that can run on
the data. It will simulate business processes
to aggregate performance. It will help in
segregation, filtering, comparison,
enrichment, and augmentation of the data.
The AI Studio provides all the smarts to
make decisions smarter, profitable and
agile. We have codified a plethora of AI/ML
easy drag and drop capabilities. It
minimizes the need for expensive data
scientists or data science skills to solve
very regular problems that occur in a
business operation.
The Business Intelligence Studio offers
drag and drop features to explore, analyze
and visualize complex datasets. This studio
supports contextual drilldowns, along with
slicing and dicing capabilities. It allows you
to understand the operations completely.
Today CSPs need a plethora of solutions to
techniques and made them available with
Subex Annual Report 2020-21
24
In short, blockchain – much like
communications – will be the force
multiplier across multiple industries.
We pride ourselves with industry
partnerships and associations with
technology forums, explain why those
partnerships are bleeding edge for the
future?
Partners and industry associations are
crucial to the grow and push the
business forward, through driving
development, co-creating
customer-centered approaches, and
winning new markets. We essentially
look at two types of partnerships. One
is our technology alliances, and the
other one is Business Alliances. In
terms of the first aspect, we look for
industry partnerships, primarily with
the intention to provide solutions to
our customers and accelerate
outcomes. Today we have
partnerships with public cloud
providers which are strategic as we
evolve HyperSense and look to
strengthen our technology stack.
On the solution side, we collaborate
with several partners, OSIs, boutique
players etc to create a synergy and
work on the optimal solution for our
customers.
On the other side we are part of
industry forums where we mainly
drive thought leadership, and address
industry problems. We are members
of industry-leading forums, such as
GSMA, CFCA, and RAG. These industry
bodies meet periodically to discuss
the current trends and issues around
the topics of business assurance,
fraud and security and come out with
best practices to address the
challenges faced by telcos Recently,
we joined hands with the O-RAN
alliance and TMForum (TMF). TMF is
the most recognized global industry
association in our space, that drives
collaboration and collective
problem-solving to maximize
business success. With this
membership, we are now part of an
alliance of 850+ global companies
and 90,000+ professionals, working
together to break down technology
and cultural barriers between digital
Teams with the best ideas are
given funding, mentorship,
and time off from their regular
job functions to make their
ideas a reality.
service providers, technology
suppliers, consultancies, and systems
integrators. In line with our approach
to building world class products, we
will actively look at TMF driven Open
Digital Framework/Open Digital
Architecture guidelines to make our
products and solutions offerings more
robust and industry complaint. The
O-RAN alliance will provide us with a
platform to work on use cases
leveraging our ML-based advanced
network analytics solution to help
drive innovation in the radio access
network domain.
Could you please give us insights
about the R&D cycle in our company?
In an age of rapid disruption,
continuous innovation is the only way
forward and to stay innovative, it is
important to have a start-up mindset.
At Subex, we have personally
experienced success that comes from
this mindset. Teams with the best
ideas are given funding, mentorship,
and time off from their regular job
functions to make their ideas a reality.
We will continue to incubate several
startups and continue our spend on
R&D to come out with products and
solutions that will help our customers
to stay ahead in their digital
transformation journey.
Your thoughts on the kind of talent
need to veer Subex into the future in
terms of technology?
We will continue to hire top talent
wherever we see a role fitment. Given
the direction that Subex is taking,
our current talent pool lies in the
cloud space, towards cloud
infrastructure, specifically for
cloud-native development. On
the other side hiring investments
are also directed towards building
further competencies around
AI/ML; an area where we are
expanding and up-scaling. This
includes data scientists, data
engineers, folks with AI/ML or
Deep Learning skills, etc. Of
course, as part of this journey UI
UX and customer centricity is at
the core, and we are looking for
the top talent in those areas as
well. Beyond these, we will
continue to look out for
programmers and OSEs, technical
architects and product
management talent.
Along with hiring top talents, we
are also looking to upscale
organically where upskilling and
reskilling our current Subexians
plays an important role. We have
a very comprehensive Learning
Management System (LMS) in
place. Hence, all our engineers
can get certified in certain skills
that are important for us. We have
also partnered with some of the
industry's best MOOC providers.
We also have a robust career
architecture in place which helps
Subexians at different levels to
look at and reflect where they are
on their career path and identify
growth areas to move up the
ladder.
25
Subex Annual Report 2020-21
IDcentral:
The Platform for
Identity Analytics,
Verification-
as-a-Service and
On-boarding
A conversation with
Shiva Shankar Naga Roddam,
Whole-Time Director &
Chief Operating Officer
Safeguarding Digital Journeys
Even as COVID -19 slammed the brakes on
in-person interactions across the globe, it
simultaneously accelerated the virtualization of
working models. Everything that was online was
accessible; anything that was not, lagged behind.
In response, companies have raced to support and
retain their customers by providing digital
capabilities and online experience at a speed that
was previously unimaginable. As the digital
economy amplifies on a global level, seamless
online transactions are penetrating communities
all over the world. But with this, there is a growing
threat of probable frauds too. To combat this,
online businesses realize they must build
meaningful digital relationships with their
customers based on trust. With tools like digital
identity authentication, businesses can foster
more transactions, build brand loyalty, and
improve company reputations with their
customers.
Shankar Roddam, the WTD & COO of Subex,
explains how IDcentral is part of the new age API
economy, and how it can strengthen the digital
ecosystems of telcos, e-commerce, fintech, and
other industries.
Imagine a world where two or three companies, in
completely different fields, work together to
benefit the consumer. A decade or so ago these
were novel partnerships, done mostly for the
optics than for the impact. But, with Application
Programming Interface (API), two companies, and
their applications, connect with each other to use
data for common services and benefits for their
customers. This technology-led economy is real,
everything from ecommerce to telecom to fintech
to food delivery uses APIs to work with each other.
Subex is betting on this economy with its internal
startup IDcentral, which will help telcos to
monetize data without compromising on
regulations or privacy. The platform (IDcentral) will
usher in an era of new revenue streams for the
telco and their partners. IDcentral will helps its
customers verify and onboard users by using
disparate data sets.
“We believe verification, validation will continue to
grow as businesses as the world needs such
services. For us, the opportunity is big because
telcos are custodians of the largest data sets today
and when things go digital, verifying and validating
identity becomes even more critical. This means
every industry will require data. Startups in
ecommerce, retail and distribution
which has come together with a bank
have shot up like anything and
to roll out a few products. By using
everyone starts their engagement by
data together both parties win
onboarding a customer. All of this
customers and make margins on the
means that there are more and more
products. “We can help them with
requirements for the identity to be
KYC, liveliness detection, anti-money
verified,” says Shankar Roddam, the
laundering, onboarding and bring in a
WTD & COO of Subex.
database for identifying customers
faster. So we can solve multiple
IDcentral is a platform that aggregates
problems for multiple companies. We
data from government, telcos and
other sources. It uses this data to
are like a lego block where we can
add value to our customers by
power identity verification, identity
bringing in various solutions like
analytics, and credit verifications,
IDcentral in combination with our IoT
which are important for things like
solutions,’’ says Shankar.
information can be used to solve a
solutions faster.
financial inclusion too. Identity
analytics can also be used to
determine the credit score of the
person. These however is just one
such example of how identity
large problem like financial inclusion
or enabling trusted commerce.
“The clear path in all the use cases
with our clients was onboarding. It
came out as a significant problem
That’s why Subex believes in moving
faster with the API economy.
IDcentral provides APIs to customers
and it has enabled them to work on
“It is the way forward and I strongly
endorse this future. Subex will talk
about platforms and APIs going
forward. When we launched IDcentral
we thought we had to evangelize the
statement for clients. There are two
concept first, and we thought we
problem statements here for our
would have to create awareness
clients: firstly they want to know if the
about its benefits. However, all
person they are talking to, as a
new-age tech companies today
potential client, is actually the same
already use the platform and API
person and a legitimate customer.
approach. We were pleasantly
Secondly, the client wants to influence
surprised with the readiness of the
the customer journey where they can
market for such a service. The cloud
leverage identity analytics.
is a game-changer. It opens up so
Onboarding is a key challenge and
many possibilities. Our customers can
relevant across industries including
get the accuracy, efficiency, and
e-commerce, and fintech,” says
quick response time they are seeking.
Shankar.
The API revolution
According to Deloitte, the API
revolution is upon us, public APIs have
doubled making the revolution
pervasive. From telecommunications,
media to finance, travel and tourism,
and real estate, everything is defined
by APIs. States and Nations are making
budget, public works, crime, legal, and
other agency data and services
available through initiatives such as
the US Food and Drug Administration’s
open FDA API program.
Today platforms and APIs are table
stakes,” says Shankar.
With APIs, Subex is going after
identity and on-boarding which is a
$1 billion dollar market and growing
at 30 percent every year. Subex’s
clients are coming back to the
company with several new use cases,
on the API economy model, and they
want Subex to solve several
problems.
“The IDcentral team works as a lean
startup, and we have brought in
people from domains such as identity
and credit lending to manage the
business into the new era,” says
Let us substantiate this with an
example. Subex has a client, a telco,
Shankar.
Subex is going after
identity and
on-boarding which
is a $1 billion dollar
market and
growing at 30
percent every year
Subex Annual Report 2020-21
26
ecommerce, retail and distribution
have shot up like anything and
everyone starts their engagement by
onboarding a customer. All of this
means that there are more and more
requirements for the identity to be
verified,” says Shankar Roddam, the
WTD & COO of Subex.
IDcentral is a platform that aggregates
data from government, telcos and
other sources. It uses this data to
power identity verification, identity
analytics, and credit verifications,
which are important for things like
financial inclusion too. Identity
analytics can also be used to
determine the credit score of the
person. These however is just one
such example of how identity
information can be used to solve a
large problem like financial inclusion
or enabling trusted commerce.
“The clear path in all the use cases
with our clients was onboarding. It
came out as a significant problem
statement for clients. There are two
problem statements here for our
clients: firstly they want to know if the
person they are talking to, as a
potential client, is actually the same
person and a legitimate customer.
Secondly, the client wants to influence
the customer journey where they can
leverage identity analytics.
Onboarding is a key challenge and
relevant across industries including
e-commerce, and fintech,” says
Shankar.
The API revolution
According to Deloitte, the API
revolution is upon us, public APIs have
doubled making the revolution
pervasive. From telecommunications,
media to finance, travel and tourism,
and real estate, everything is defined
by APIs. States and Nations are making
budget, public works, crime, legal, and
other agency data and services
available through initiatives such as
the US Food and Drug Administration’s
open FDA API program.
Let us substantiate this with an
example. Subex has a client, a telco,
which has come together with a bank
to roll out a few products. By using
data together both parties win
customers and make margins on the
products. “We can help them with
KYC, liveliness detection, anti-money
laundering, onboarding and bring in a
database for identifying customers
faster. So we can solve multiple
problems for multiple companies. We
are like a lego block where we can
add value to our customers by
bringing in various solutions like
IDcentral in combination with our IoT
solutions,’’ says Shankar.
That’s why Subex believes in moving
faster with the API economy.
IDcentral provides APIs to customers
and it has enabled them to work on
solutions faster.
“It is the way forward and I strongly
endorse this future. Subex will talk
about platforms and APIs going
forward. When we launched IDcentral
we thought we had to evangelize the
concept first, and we thought we
would have to create awareness
about its benefits. However, all
new-age tech companies today
already use the platform and API
approach. We were pleasantly
surprised with the readiness of the
market for such a service. The cloud
is a game-changer. It opens up so
many possibilities. Our customers can
get the accuracy, efficiency, and
quick response time they are seeking.
Today platforms and APIs are table
stakes,” says Shankar.
With APIs, Subex is going after
identity and on-boarding which is a
$1 billion dollar market and growing
at 30 percent every year. Subex’s
clients are coming back to the
company with several new use cases,
on the API economy model, and they
want Subex to solve several
problems.
“The IDcentral team works as a lean
startup, and we have brought in
people from domains such as identity
and credit lending to manage the
business into the new era,” says
Shankar.
Safeguarding Digital Journeys
Even as COVID -19 slammed the brakes on
in-person interactions across the globe, it
simultaneously accelerated the virtualization of
working models. Everything that was online was
accessible; anything that was not, lagged behind.
In response, companies have raced to support and
retain their customers by providing digital
capabilities and online experience at a speed that
was previously unimaginable. As the digital
economy amplifies on a global level, seamless
online transactions are penetrating communities
all over the world. But with this, there is a growing
threat of probable frauds too. To combat this,
online businesses realize they must build
meaningful digital relationships with their
customers based on trust. With tools like digital
identity authentication, businesses can foster
more transactions, build brand loyalty, and
improve company reputations with their
customers.
Shankar Roddam, the WTD & COO of Subex,
explains how IDcentral is part of the new age API
economy, and how it can strengthen the digital
ecosystems of telcos, e-commerce, fintech, and
other industries.
Imagine a world where two or three companies, in
completely different fields, work together to
benefit the consumer. A decade or so ago these
were novel partnerships, done mostly for the
optics than for the impact. But, with Application
Programming Interface (API), two companies, and
their applications, connect with each other to use
data for common services and benefits for their
customers. This technology-led economy is real,
everything from ecommerce to telecom to fintech
to food delivery uses APIs to work with each other.
Subex is betting on this economy with its internal
startup IDcentral, which will help telcos to
monetize data without compromising on
regulations or privacy. The platform (IDcentral) will
usher in an era of new revenue streams for the
telco and their partners. IDcentral will helps its
customers verify and onboard users by using
disparate data sets.
“We believe verification, validation will continue to
grow as businesses as the world needs such
services. For us, the opportunity is big because
telcos are custodians of the largest data sets today
and when things go digital, verifying and validating
identity becomes even more critical. This means
every industry will require data. Startups in
27
Subex Annual Report 2020-21
Cutting Through
the Murkiness of
Data Becomes
Important for an
Organization
Transforming Itself
A conversation with
Rohit Maheshwari
Head of Strategy & Products
Rohit Maheshwari, is the head of product
management at Subex, and a old hand. He has
been in Subex for over 20 years. He takes great
pride on how the company is ready for the future.
He believes, like everyone in Subex’s top brass,
that the future is in platforms and not niche
products. He talks about how the transformation is
happening and lays down why Subex and its
platforms approach is well poised to transform
customers. Here are the excerpts of the interview:
Subex: What has the pandemic done to businesses
across the world?
The year gone by represents a massive strategic
shift both for Subex and its customers. Let me
explain how.
The pandemic has increased digitization around
the world. There is far greater amount of data
moving between the physical and digital world.
Today data is collected from sensors and our
digital activity, both these sources are merging.
There is an anticipated explosion of data thanks to
5G. All of this means that Business Leaders and
C-Suite leaders are now able to make decisions
based on data and insights. They no longer have
to be taking decisions on gut feeling. However
cutting through the murkiness of data becomes
important for any business. Data science is
capable of producing, including algorithms and
models, a plethora of information, however, data
needs business critical thinking from business
analysts and others working on it to make or
create an impact.
Subex: How has this data explosion helped Subex?
For us at Subex this represents a massive strategic
shift. With our platform HyperSense we are able to
help business leaders with data led thinking and at
the same time help operations teams supercharge
their decisions using data. We were a company
that started as a niche products company and
have now evolved to becoming a platform player.
HyperSense is a platform that enables a complete
journey of creating AI, operationalizing AI and
consuming AI. It is a platform that navigates the
data to insights to actions. All that a business has
to do is bring business critical thinking to the
platform and they have the autonomy (from being
dependent on external IT and SI companies) that
they have so far dreamt about. It is comprehensive
in addressing every end of the value chain. It
comes with a number of pre-built use cases such
as product performance, fraud, business
assurance, campaign intelligence and churn
management. These use cases are adoption
accelerators was well as references to inspire
businesses to further build their own
regulatory reasons, therefore, we
applications and. A lot of effort has
can mix and match public cloud
gone on to build this platform. The
and deploy on-premise too.
future for Subex and especially its
In Subex we have nurtured AI and
products and engineering groups will
Innovation Labs and we have built
be in adding more and more such use
strong engineering capabilities on a
cases and transforming Subex in to an
modern tech stack. AI will be on all
eco-system player.
on our applications and products.
HyperSense is cloud native, Kuberne-
As I have mentioned earlier, Subex’s
tes native, micro-services driven
flagship products in fraud
platform, which helps us to leverage a
management and revenue
modern technology stack. It leverages
assurance are immediately available
ML, AI and DL to build services and use
on HyperSense. We are going to
cases which our customers want.
Subex: How will Subex customers
benefit from this era of no code?
We will have the opportunity of
creating a community at large
move our other products such as
partner ecosystem management,
capacity management and anomaly
detection on to HyperSense. The
products will evolve benefit from
HyperSense data and its AI
capabilities. We will also be building
including customers and partners to
and launching a number of new
build and monetize use cases. We can
solutions on HyperSense based on
deploy HyperSense on a on-premise
our customer’s needs. That is why I
model and on the public cloud to
am reiterating that a platform is the
balance the current data realities of
future and Subex is going to be a
customers. They are constrained by
platform and eco-system player in
legacy systems, data sovereignty and
this era of data explosion.
Rohit Maheshwari, is the head of product
management at Subex, and a old hand. He has
been in Subex for over 20 years. He takes great
pride on how the company is ready for the future.
He believes, like everyone in Subex’s top brass,
that the future is in platforms and not niche
products. He talks about how the transformation is
happening and lays down why Subex and its
platforms approach is well poised to transform
customers. Here are the excerpts of the interview:
Subex: What has the pandemic done to businesses
across the world?
The year gone by represents a massive strategic
shift both for Subex and its customers. Let me
explain how.
The pandemic has increased digitization around
the world. There is far greater amount of data
moving between the physical and digital world.
Today data is collected from sensors and our
digital activity, both these sources are merging.
There is an anticipated explosion of data thanks to
5G. All of this means that Business Leaders and
C-Suite leaders are now able to make decisions
based on data and insights. They no longer have
to be taking decisions on gut feeling. However
cutting through the murkiness of data becomes
important for any business. Data science is
capable of producing, including algorithms and
models, a plethora of information, however, data
needs business critical thinking from business
analysts and others working on it to make or
create an impact.
Subex: How has this data explosion helped Subex?
For us at Subex this represents a massive strategic
shift. With our platform HyperSense we are able to
help business leaders with data led thinking and at
the same time help operations teams supercharge
their decisions using data. We were a company
that started as a niche products company and
have now evolved to becoming a platform player.
HyperSense is a platform that enables a complete
journey of creating AI, operationalizing AI and
consuming AI. It is a platform that navigates the
data to insights to actions. All that a business has
to do is bring business critical thinking to the
platform and they have the autonomy (from being
dependent on external IT and SI companies) that
they have so far dreamt about. It is comprehensive
in addressing every end of the value chain. It
comes with a number of pre-built use cases such
as product performance, fraud, business
assurance, campaign intelligence and churn
management. These use cases are adoption
accelerators was well as references to inspire
Subex Annual Report 2020-21
28
businesses to further build their own
applications and. A lot of effort has
gone on to build this platform. The
future for Subex and especially its
products and engineering groups will
be in adding more and more such use
cases and transforming Subex in to an
eco-system player.
HyperSense is cloud native, Kuberne-
tes native, micro-services driven
platform, which helps us to leverage a
modern technology stack. It leverages
ML, AI and DL to build services and use
cases which our customers want.
Subex: How will Subex customers
benefit from this era of no code?
We will have the opportunity of
creating a community at large
including customers and partners to
build and monetize use cases. We can
deploy HyperSense on a on-premise
model and on the public cloud to
balance the current data realities of
customers. They are constrained by
legacy systems, data sovereignty and
regulatory reasons, therefore, we
can mix and match public cloud
and deploy on-premise too.
In Subex we have nurtured AI and
Innovation Labs and we have built
strong engineering capabilities on a
modern tech stack. AI will be on all
on our applications and products.
As I have mentioned earlier, Subex’s
flagship products in fraud
management and revenue
assurance are immediately available
on HyperSense. We are going to
move our other products such as
partner ecosystem management,
capacity management and anomaly
detection on to HyperSense. The
products will evolve benefit from
HyperSense data and its AI
capabilities. We will also be building
and launching a number of new
solutions on HyperSense based on
our customer’s needs. That is why I
am reiterating that a platform is the
future and Subex is going to be a
platform and eco-system player in
this era of data explosion.
In Subex we have
nurtured AI and
Innovation Labs
and we have built
strong engineering
capabilities on a
modern tech stack.
29
Subex Annual Report 2020-21
The World
Shifted
But So Did We
A conversation with
Kiran Zachariah, Head of IoT Security
Subex’s cybersecurity business today focuses on
securing enterprises embarking on digitalization.
These enterprises fall in verticals such as Smart
Cities, Telecommunications, Manufacturing,
Transportation and Oil and Gas. Digitalization
typically involves the adoption of IoT or the
convergence of their legacy infrastructure or
operational technologies (OT) with their newer
technologies such as IT, cloud and IoT . In
isolation these technologies are largely secure,
however the convergence, driven by superior
value and new business models, create attack
surfaces ripe to be exploited by cyber criminals.
Subex Secure, our security product focused on
converged infrastructure, is built to secure
environments such as large plants to cars and
ships. The ongoing R&D backing our product
focuses on securing these deployments from a
range of cross-spectrum threats. Our offerings
help address the unique cybersecurity challenges
that come with digital transformation and other
automation efforts while refining and hardening
the security posture of our customers to improve
cyber resilience.
As of today, we run one of the largest cyber
threat intelligence gathering infrastructure in the
world focused on OT and IoT, and the quality
and volume of intelligence gathered by us is not
just current and relevant but also essential for
protecting the deployments we are securing. This
threat intelligence is what lies at the heart of our
solution. Our involvement in complex and
diverse projects has also helped us evolve faster
to address emerging threats in addition to our
R&D efforts. We offer threat intelligence as a
service to businesses that wish to broad-base
their threat detection efforts.
At the beginning of last year, the cybersecurity
business in Subex that was largely focused on
Securing IoT was gaining traction. We had a
good number of orders and some very large
substantial deals. Our confidence was brimming
and 2021 was going to be our growth year. The
year we witnessed the hockey stick on our
revenue graph.
The onset of the pandemic, however, changed a
lot in our world. IoT projects were viewed as
sunrise projects and customers began putting
the brakes on their new and innovative projects.
The deals we had secured or the ones selected
for and on the verge of securing began to be put
on hold. The increased volatility and uncertainty
in the market had an adverse impact on our
business in the first two quarters as customers
focused more on keeping the lights on and less
typically the laggards when it comes
comprehensive and compelling
to the new technology was being
forced to adopt technologies that
allowed remote controlling and
monitoring of their plants at a much
proposition for any customer looking
for a converged network security
product.
higher rate than others. Plants have
We began actively engaging with
mission-critical infrastructure that has
customers in the third quarter of the
been largely disconnected from the
year with our new offering. We
internet and was manually managed.
competed on deals across different
With the advent of the pandemic
geographies and industries against
manning them became a problem and
established competition. By the fourth
they had to be connected to the
quarter, we had succeeded in winning
internet to allow remote management.
all those opportunities, primarily
To exacerbate the problem, because
because of our ability to
these plants contain custom
infrastructure, they had not been
updated with the latest security
comprehensively secure converged
networks that have OT and IoT
deployments. Subex today secures
patches due to possible compatibility
maritime, appliance manufacturers,
issues, thus creating an attack surface
automotive manufacturers, and the
that is ripe for exploitation by hackers.
O&G sector.
Securing these manufacturing
networks also called operational
The larger addressable market for our
solution needs a different approach to
technology (OT) networks were the
sales and marketing and we have
highest priority in the market.
Subex was well-positioned to pivot
into the OT security space because
embarked on adopting a two-tier sales
model in line with the cybersecurity
industry. We have specific geographies
of focus and are in the process of
when we began securing IoT devices
signing up distributors and resellers to
very often those devices spoke to the
take the solution to market. This
OT infrastructure and our threat
structure will help us address a larger
detection capabilities encompassed
market and with the help of these
such equipment.
partners open up new opportunities.
We quickly made product changes and
Apart from OT security, our signaling
added new features such as
Vulnerability Management and
security product line focused on
Telcos has gained substantial traction
Micro-segmentation into the product.
this year. We have made significant
Vulnerability management lets the
customer know what devices are on
the network, the vulnerabilities they
have, and the security patches that
need to be applied to secure them.
inroads with customers across
geographies and use cases. The ability
to stop an attack before it occurs is
the key proposition that is driving
traction in this product line. This line
With most of the customers unaware
of products will also see substantial
of this information, our competitors
adoption in the 5G world.
are focused on providing this
functionality. Subex’s products are
superior because not only do we
provide visibility, but our
This has been a trying year, but as a
team, we have responded as well as
we could hope for. We are very
Micro-segmentation feature allows
confident that today we have built a
the customer to instrument
resilient organization that will deliver
partitioning of the network to reduce
results even as the pandemic rages on
the attack surface and to prevent
threats from spreading across the
and more so as we see the global
economy open. Our focus continues
network in a non-intrusive manner.
to be on offering superior value for
These features coupled with our
superior threat hunting using our
proprietary threat intelligence offer a
stakeholders.
our stakeholders. As we move forward,
we will continue to innovate and work
tirelessly for our customers and
on adopting new technologies. Most
of them did not want to add an
additional level of risk to their existing
business models. Budgets were
diverted to meet the new challenges
arising from the COVID-19 crisis.
However, what did not change was the
number of cyberattacks and the fact
that security was becoming a priority
for customers. While there was
increased spend in the cybersecurity
space by customers, their priorities
had shifted to meet the new working
models that were being implemented
to keep their business functioning.
Subex was at an important crossroads
and we had to quickly adapt to meet
the new objectives that our customers
were focused on. We had to reevaluate
our product, market positioning, and
go-to-market approach. We had to go
back to the field and listen to our
customers and partners.
Our key takeaways were that there was
an increased rate of digitization across
all verticals, but the manufacturing and
critical infrastructure verticals that are
Subex’s cybersecurity business today focuses on
securing enterprises embarking on digitalization.
These enterprises fall in verticals such as Smart
Cities, Telecommunications, Manufacturing,
Transportation and Oil and Gas. Digitalization
typically involves the adoption of IoT or the
convergence of their legacy infrastructure or
operational technologies (OT) with their newer
technologies such as IT, cloud and IoT . In
isolation these technologies are largely secure,
however the convergence, driven by superior
value and new business models, create attack
surfaces ripe to be exploited by cyber criminals.
Subex Secure, our security product focused on
converged infrastructure, is built to secure
environments such as large plants to cars and
ships. The ongoing R&D backing our product
focuses on securing these deployments from a
range of cross-spectrum threats. Our offerings
help address the unique cybersecurity challenges
that come with digital transformation and other
automation efforts while refining and hardening
the security posture of our customers to improve
cyber resilience.
As of today, we run one of the largest cyber
threat intelligence gathering infrastructure in the
world focused on OT and IoT, and the quality
and volume of intelligence gathered by us is not
just current and relevant but also essential for
protecting the deployments we are securing. This
threat intelligence is what lies at the heart of our
solution. Our involvement in complex and
diverse projects has also helped us evolve faster
to address emerging threats in addition to our
R&D efforts. We offer threat intelligence as a
service to businesses that wish to broad-base
their threat detection efforts.
At the beginning of last year, the cybersecurity
business in Subex that was largely focused on
Securing IoT was gaining traction. We had a
good number of orders and some very large
substantial deals. Our confidence was brimming
and 2021 was going to be our growth year. The
year we witnessed the hockey stick on our
revenue graph.
The onset of the pandemic, however, changed a
lot in our world. IoT projects were viewed as
sunrise projects and customers began putting
the brakes on their new and innovative projects.
The deals we had secured or the ones selected
for and on the verge of securing began to be put
on hold. The increased volatility and uncertainty
in the market had an adverse impact on our
business in the first two quarters as customers
focused more on keeping the lights on and less
Subex Annual Report 2020-21
30
comprehensive and compelling
proposition for any customer looking
for a converged network security
product.
We began actively engaging with
customers in the third quarter of the
year with our new offering. We
competed on deals across different
geographies and industries against
established competition. By the fourth
quarter, we had succeeded in winning
all those opportunities, primarily
because of our ability to
comprehensively secure converged
networks that have OT and IoT
deployments. Subex today secures
maritime, appliance manufacturers,
automotive manufacturers, and the
O&G sector.
The larger addressable market for our
solution needs a different approach to
sales and marketing and we have
embarked on adopting a two-tier sales
model in line with the cybersecurity
industry. We have specific geographies
of focus and are in the process of
signing up distributors and resellers to
take the solution to market. This
structure will help us address a larger
market and with the help of these
partners open up new opportunities.
Apart from OT security, our signaling
security product line focused on
Telcos has gained substantial traction
this year. We have made significant
inroads with customers across
geographies and use cases. The ability
to stop an attack before it occurs is
the key proposition that is driving
traction in this product line. This line
of products will also see substantial
adoption in the 5G world.
This has been a trying year, but as a
team, we have responded as well as
we could hope for. We are very
confident that today we have built a
resilient organization that will deliver
results even as the pandemic rages on
and more so as we see the global
economy open. Our focus continues
to be on offering superior value for
our stakeholders. As we move forward,
we will continue to innovate and work
tirelessly for our customers and
stakeholders.
We are very
confident that
today we have built
a resilient
organization that
will deliver results
even as the
pandemic rages on
and more so as we
see the global
economy open.
on adopting new technologies. Most
of them did not want to add an
additional level of risk to their existing
business models. Budgets were
diverted to meet the new challenges
arising from the COVID-19 crisis.
However, what did not change was the
number of cyberattacks and the fact
that security was becoming a priority
for customers. While there was
increased spend in the cybersecurity
space by customers, their priorities
had shifted to meet the new working
models that were being implemented
to keep their business functioning.
Subex was at an important crossroads
and we had to quickly adapt to meet
the new objectives that our customers
were focused on. We had to reevaluate
our product, market positioning, and
go-to-market approach. We had to go
back to the field and listen to our
customers and partners.
Our key takeaways were that there was
an increased rate of digitization across
all verticals, but the manufacturing and
critical infrastructure verticals that are
typically the laggards when it comes
to the new technology was being
forced to adopt technologies that
allowed remote controlling and
monitoring of their plants at a much
higher rate than others. Plants have
mission-critical infrastructure that has
been largely disconnected from the
internet and was manually managed.
With the advent of the pandemic
manning them became a problem and
they had to be connected to the
internet to allow remote management.
To exacerbate the problem, because
these plants contain custom
infrastructure, they had not been
updated with the latest security
patches due to possible compatibility
issues, thus creating an attack surface
that is ripe for exploitation by hackers.
Securing these manufacturing
networks also called operational
technology (OT) networks were the
highest priority in the market.
Subex was well-positioned to pivot
into the OT security space because
when we began securing IoT devices
very often those devices spoke to the
OT infrastructure and our threat
detection capabilities encompassed
such equipment.
We quickly made product changes and
added new features such as
Vulnerability Management and
Micro-segmentation into the product.
Vulnerability management lets the
customer know what devices are on
the network, the vulnerabilities they
have, and the security patches that
need to be applied to secure them.
With most of the customers unaware
of this information, our competitors
are focused on providing this
functionality. Subex’s products are
superior because not only do we
provide visibility, but our
Micro-segmentation feature allows
the customer to instrument
partitioning of the network to reduce
the attack surface and to prevent
threats from spreading across the
network in a non-intrusive manner.
These features coupled with our
superior threat hunting using our
proprietary threat intelligence offer a
31
Subex Annual Report 2020-21
SUBEX CHARITABLE TRUST
The Subex Charitable Trust (SCT) extends the outlook of Subex as a corporate entity into community service. SCT was set up to provide for
welfare activities for the under privileged and the needy in the society. SCT is managed by trustees elected from among the employees of the
Company, out of the funds contributed by the employees.
The SCT has been undeterred in its efforts towards bringing about a positive change in the lives of the under- privileged in the society, even in
the midst of the global pandemic. The activities undertaken during the year are stated below:
Activities covered during the year
Supports SAMPARC, an NGO working for
underprivileged children, through its efforts
which include education, rehabilitation and
skill development. It contributed towards
supporting 10 children under the ‘Bal Asha
Ghar’ project ,which is part of the SAMPARC
Management.
Has made a donation to the Madhavam
Balika Sadhanam to held them set up a
library that supports the academic interests
of the female residents of the Madhava Seva
Samithi, Kerala. The library would also serve
the local community.
Has contributed to the Sangati Foundation,
which works for persons with disabilities,
improving accessibility, mobility, inclusivity
and visibility. The SCT contributed towards
employment generation under the project
‘Sangati Shoppe’.
Has supported the Samarthanam Trust
for the disabled by donating towards
procurement of kits which contain daily
essentials.
Supports the Panchajanya Foundation,
Bengaluru, that aims to commence
Montessori education in Government
schools for the benefit of
underprivileged children and has been
contributed towards this endeavor.
Has sponsored the vocational training
programs of Prerana Resource Centre.
The Centre is an organization for visually
impaired and disabled orphan teenage
girls, aiming to make them self-reliant
through training.
Subex Annual Report 2020-21
32
FINANCIAL HIGHLIGHTS
2
7
3
5
6
3
8
4
3
8
5
8
5
0
6
7
2
6
2
5
1
FY19 FY20 FY21
FY19 FY20 FY21
FY19 FY20 FY21
Revenues ( ₹ Cr)
Gross Margin (%)
EBITDA Margin (%)
33
Subex Annual Report 2020-21
BOARD OF DIRECTORS
ANIL SINGHVI
Chairman, Non-Executive &
Non-Independent Director
NISHA DUTT
Independent Director
POORNIMA PRABHU
Independent Director
GEORGE ZACHARIAS
Independent Director
VINOD KUMAR
PADMANABHAN
Managing Director &
Chief Executive Officer
SHIVA SHANKAR
NAGA RODDAM
Whole-Time Director &
Chief Operating Officer
Subex Annual Report 2020-21
34
LEADERSHIP TEAM
VINOD KUMAR
PADMANABHAN
Managing Director &
Chief Executive Officer
SHIVA SHANKAR
NAGA RODDAM
Whole-Time Director &
Chief Operating Officer
SURESH CHINTADA
Chief Technology Officer
VENKATRAMAN G S
Chief Financial Officer &
Senior Vice President
MOHAN SITHARAM
Chief People Officer
ROHIT MAHESHWARI
Head of Strategy & Products
KIRAN ZACHARIAH
Head of IoT Security
SURAJ BALACHANDRAN
Head of Sales – EMEA & APAC
VENKATESH KRISHNAN
RVP - North America
BHAVNA SINGH
General Counsel
35
BOARD'S REPORT
Dear Members,
Your Directors take pleasure in presenting the 27th Annual Report of the Company on the business and operations together with the
audited results for the year ended March 31, 2021.
1.
FINANCIAL RESULTS
The Company’s financial performance for the year ended March 31, 2021 is summarized as below:
(` in lakhs)
Particulars
Total Revenue
Share of Profit/ (Loss) before exceptional items, net
Other Income
Finance Cost
Profit/ (Loss) before exceptional items and tax expense
Exceptional Items
Profit/ (Loss) before tax
Tax expenses
Profit/ (Loss) after tax
Other comprehensive income/(Loss)
a) to be reclassified to profit or loss in subsequent
periods
b) not to be reclassified to profit or loss in subsequent
periods
Consolidated
Standalone
2020-21
37,203
-
474
296
8,650
287
8,937
3,765
5,172
624
636
(12)
2019-20
36,498
-
563
477
7,996
(31,766)
(23,770)
3,145
(26,915)
(29)
5
(34)
2020-21
2019-20
2,916
2,585
9
14
2,882
(231)
2,651
29
2,622
-
-
-
1,079
1,889
202
28
891
(21,361)
(20,470)
118
(20,588)
(21)
-
(21)
Total comprehensive income/(Loss) for the year
5,796
(26,944)
2,622
(20,609)
2. OVERVIEW AND RESULTS OF OPERATIONS
The outbreak of the COVID-19 pandemic was an unprecedented
shock to the Indian Economy, resulting in a sweeping slowdown
in the overall economy. Phased lock-downs, disruptions in
transportation, travel bans, quarantines, social distancing and
other emergency measures, along with the growing uncertainty,
has led to the hampering of regular business operations.
The Company has considered internal and certain external
sources of information including economic forecasts, budgets
required to meet performance obligations and likely delays on
contractual commitments, up to the date of approval of these
financial statements, in determining the possible impact from
the COVID-19 pandemic. The Company has taken immediate
steps to navigate through the crisis and its pro-activeness and
business continuity processes ensured that the Company
provided uninterrupted services to the customers while
maintaining the health and safety of our employees.
The impact of the global pandemic may be different from that
estimated as at the date of approval of it's financial statements
and the Company will continue to closely monitor any
material changes to its assessment of economic impact of the
COVID- 19 pandemic. We have received multiple customer
accolades for the smooth and seamless business continuity.
Our customers were delighted with the way the Company
steered through the current pandemic situation to ensure
business continuity, while keeping the health and safety of the
employees, a priority.
During the financial year ended March 31, 2021, the total
income on a standalone basis was ` 5,510 lakhs as against the
total income for the previous year which was ` 3,170 lakhs. The
Company has during the year under review earned a profit of
` 2,622 lakhs as against a loss of ` 20,588 lakhs in the previous
year. On a consolidated basis, the total income stood at
` 37,677 lakhs as against ` 37,061 lakhs during the previous year.
The profit earned for the financial year 2020-21 is ` 5,172 lakhs
as against a loss of ` 26,915 lakhs in the previous year.
3. DIVIDEND
The details of dividend declared/recommended for the FY 2020-
21 were as follows:
i)
The Board at its meeting held on February 01, 2021, declared
an interim dividend of ` 0.50 (10%) per share. The dividend
was paid to the shareholders on February 25, 2021.
ii) The Board at
its meeting held on May 17, 2021,
recommended a final dividend of ` 0.25 (5%) per share,
subject to the approval of the members at the 27th Annual
General Meeting to be held on July 09, 2021.
Pursuant to Regulation 43A of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (‘SEBI Listing Regulations’), the dividend
distribution policy of the Company was approved and adopted
by the Board of Directors at their meeting held on May 17, 2021
Subex Annual Report 2020-21 36
and is available under the following link https://www.subex.
com/investors/shareholder-services/.
4. RESERVES
The Company does not propose to transfer any amounts to the
general reserve out of the amount available for appropriation.
The total profit of ` 5,796 lakhs available with the Company on
a consolidated basis is proposed to be retained in the profit and
loss account.
5. SHARE CAPITAL
As at March 31, 2021, the authorized share capital of the
Company was ` 5,90,00,00,000 (Rupees Five hundred and
ninety crores only) divided into 1,17,60,80,000 (One hundred
and seventeen crores, sixty lakhs and eighty thousand only)
equity shares of ` 5 (Rupees Five only) each and 2,00,000 (Two
lakhs only) preference shares of ` 98 (Rupees Ninety-eight only)
each.
As at March 31, 2021, the issued, subscribed and paid-up share
capital of the Company was ` 2,81,00,14,675 (Rupees Two
hundred and eighty one crores, fourteen thousand, six hundred
and seventy five only) divided into 56,20,02,935 (Fifty six crores,
twenty lakhs, two thousand nine hundred and thirty five only)
equity shares of ` 5 (Rupees Five only) each.
6. SCHEME OF REDUCTION OF SHARE CAPITAL
The Board of Directors at their meeting held on February 07,
2020, approved the Scheme for Reduction of Capital under
Section 66 & Section 52 of the Companies Act, 2013. The
Scheme was subject to approval of the shareholders, the
Hon’ble National Company Law Tribunal ("NCLT"), Bengaluru
Bench, and all other regulatory approvals.
Considering the future prospects of growth and value addition
to the Company and its shareholders, it was proposed to re-align
the relationship between its capital and assets in accordance
with Section 52 & Section 66 of the Companies Act, 2013
read with the National Company Law Tribunal (Procedure for
reduction of share capital of Company) Rules, 2016 and other
applicable provisions of the Companies Act, 2013 (to the extent
applicable), and subject to the consent of the shareholders, the
NCLT and other statutory authorities as applicable, by writing-
off the accumulated losses of ` 3,84,01,09,702 reflecting in
the unaudited financial statements of the Company as on
December 31, 2019, against the paid-up share capital and
securities premium account balance of the Company, to have a
rational structure which was commensurate with its remaining
business and assets.
Hence the proposed Scheme which was approved by the Board
of Directors of the Company provided for Reduction of equity
share capital and securities premium account of the Company
in accordance with Section 66 & 52 of the Companies Act, 2013.
The capital structure of the Company pre and post-scheme is reflected in the table below:
Particulars
No. of shares
Amount (`) Particulars
No. of shares
Amount (`)
Pre-reduction
Post-reduction
Authorised Share Capital
Equity shares of face value ` 10
58,80,40,000
5,88,04,00,000 Equity shares of face
1,17,60,80,000
5,88,04,00,000
each
Preference shares of face value
2,00,000
`98 each
Issued, subscribed and paid-up Share Capital
value ` 5 each
1,96,00,000 Preference shares of
face value ` 98 each
2,00,000
1,96,00,000
Equity shares of face value `10
56,20,02,935
5,62,00,29,350 Equity shares of face
56,20,02,935
2,81,00,14,675
each
value ` 5 each
The below table reflects the pre-capital reduction and post-capital reduction balances of Securities premium account and accumulated
loss of the Company as at December 31, 2019:
Particulars
Securities Premium Account
Pre-reduction (`) Proposed reduction (`)
Post-reduction (`)
2,67,04,28,364
1,03,00,95,027
1,64,03,33,337
Profit and Loss (Dr) i.e. Accumulated Losses
3,84,01,09,702
3,84,01,09,702
NIL
In terms of the MCA General Circular No 14/2020 dated
April 08, 2020 and 17/2020 dated April 13, 2020, (“MCA
Circulars”), in view of the extraordinary circumstances due to
the COVID-19 pandemic requiring social distancing, Companies
were advised to take all decisions requiring members’ approval,
other than items of ordinary business or business where any
person has a right to be heard, through the mechanism of Postal
Ballot/ e-voting in accordance with the provisions of the Act
and Rules made thereunder, without holding a general meeting
that required the physical presence of members at a common
venue.
Pursuant to Section 110 of the Companies Act, 2013 and the
Rules provided thereunder, the Company proposed to obtain
the consent of the shareholders for the Scheme for reduction of
Capital, by passing of the resolutions by Postal Ballot.
In accordance with the requirements of the Companies Act
and the MCA Circulars, the Company sent the Postal Ballot
Notice dated May 22, 2020 by email to all its members who
had registered their email addresses with the Company or
depository/ depository participants and the communication
of assent/ dissent of the members took place through remote
e-voting system only.
Subex Annual Report 2020-21 The e-voting period for the Postal Ballot commenced on
Wednesday, May 27, 2020 from 9.00 a.m. (IST) and ended
on Thursday, June 25, 2020 at 5.00 p.m. (IST). The Company
appointed Mr. Pramod S.M. (Membership No. 7834 and
Certificate of Practice No. 13784), Partner, BMP & Co., LLP,
Practicing Company Secretaries as
the Scrutinizer and
Mr. Biswajit Ghosh, (FCS Membership No. 8750 and Certificate
of Practice No. 8239), Partner, BMP & Co., LLP, Practicing
Company Secretaries, as an alternate scrutinizer to Mr. Pramod
S.M., for conducting the meeting only through the electronic
voting process, in a fair and transparent manner. Please refer
the following
link https://www.subex.com/investors/capital-
reduction/ for the Postal Ballot notice and related documents.
The Resolution for reduction of the share capital of the Company
was approved with requisite majority and the results were
displayed on the website of the Company under the following
link https://www.subex.com/investors/capital-reduction/ and
necessary disclosures were made to the Stock Exchanges.
Subsequently, the Company had made an application before
the Hon’ble National Company Law Tribunal, ‘NCLT’ Bengaluru
Bench, Bengaluru, seeking their approval to the Scheme and the
NCLT, vide its Order dated September 23, 2020, approved the
Scheme of Reduction of Equity share capital of the Company
from ` 562 Crores to ` 281 Crores, by reducing the face value
of the equity shares from ` 10 to ` 5 per share. The certified
copy of the Scheme was filed with the Registrar of Companies,
Bengaluru, Karnataka, on September 29, 2020 (effective date of
the Scheme). Post the receipt of the approval from the NCLT,
the Company filed listing applications before the BSE Ltd and the
National Stock Exchange of India Ltd and the trading approval
for equity shares bearing face value of ` 5/- each was received,
effective November 05, 2020.
7.
SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial
Standards as amended from time to time.
8. BUSINESS
Subex is a pioneer in the space of Digital Trust, providing
solutions for 75% of the world’s top 50 telcos. Founded around
the time when video telephony was launched, Subex has been
witnessing the evolution of mobile technology ever since. Today,
we are consultants to global telecom carriers for operational
excellence and business transformation by driving new revenue
models, enhancing the customer experience and optimizing the
enterprise. Subex leverages its award-winning analytics solutions
in areas such as Revenue Assurance, Fraud Management,
Network Asset Management Capacity Management, Partner
Management, and Analytics (Revenue Management Services/
RMS business) and complements them through its newer
solutions such as IoT Security, Digital Identity Management and
Anomaly Detection (Digital Business). Subex also offers scalable
Managed Services and Business Consulting services.
Through HyperSense, an end-to-end augmented analytics
platform, Subex empowers communications service providers
and enterprise customers to make faster, better decisions by
leveraging Artificial Intelligence (AI) analytics across the data
37
value chain. The solution allows users without a knowledge of
coding to easily aggregate data from disparate sources, turn
data into insights by building, interpreting and tuning AI models,
and effortlessly share their findings across the organisation, all
on a no-code platform.
Being truly a global company, it has more than 300 installations
across 90+ countries. There has been no change in the nature
of business in FY21.
Key Announcements in FY20-21
Telefónica partners with Subex for next-gen fraud prevention
Subex announced a partnership with Telefónica, one of the
largest mobile network providers in the world, to provide the
latest version of Subex Fraud Management Solution. As part
of the engagement, the operator will be deploying Subex’s
Fraud Management, to all opcos in Telefónica’s Hispam unit:
Argentina, Chile, Venezuela, Ecuador, Mexico, Peru, Uruguay,
and Colombia.
Subex selected by stc for its integrated Revenue Assurance
and Fraud Management solution
Subex announced that it has been selected by Saudi Telecom
Company (“stc”) to deploy an integrated Revenue Assurance and
Fraud Management (iRAFM) solution. This deal marks another
chapter in the long-standing partnership between Subex and stc,
through the earlier deployments of Subex’s Revenue Assurance
and an award-winning Fraud Management engagement, which
began in 2003. By virtue of this decision, stc will be aiming to
consolidate their technology stack with the latest solution from
Subex, including replacement of other legacy systems.
Subex and SkyLab team up to secure the shipping industry
Subex and SkyLab, a leader in 5G Multi-Access Edge Computing
(MEC) and Industrial IoT have announced a partnership to offer
IoT and OT cybersecurity solutions and services to the maritime
sector. These solutions offered jointly by Subex and SkyLab
have been successfully deployed and are already securing ships
and maritime infrastructure across oceans. The industry can
look up to this partnership to protect their critical assets from
cyberattacks and cybercrime.
Subex joins O-RAN Alliance to help accelerate the adoption
of open radio access networks
Subex announced that it has become a member of the O-RAN
Alliance to support the development and standardisation
of Open RAN (radio access networks). With its expertise in
advanced network analytics based on machine
learning,
Subex joins the alliance to help drive innovation in the radio
access network domain – ultimately facilitating Open RAN
that leverages embedded artificial intelligence (AI) to maximise
network performance.
Tech Mahindra and Subex Partner to Drive Scale Adoption of
Blockchain-based Solutions for Telecom Operators Globally
Tech Mahindra, a leading provider of digital transformation,
consulting, business re-engineering services and solutions,
and Subex, an industry leader in providing services based on
Subex Annual Report 2020-21 38
Digital Trust, have announced strategic partnership to roll-out
blockchain based solutions for telecom operators globally.
These solutions will enable fraud mitigation and drive operational
efficiencies for Communication Service Providers (CSP) by
reducing compliance complexities and faster time-to-market.
Subex launched Partner Ecosystem Management platform
Subex announced the
its Partner Ecosystem
launch of
Management platform that will allow CSPs to accelerate their
digital services portfolio expansion. The platform will allow CSPs
to create a value driven partner ecosystem and significantly
improve time to market for new services by identifying and
quickly onboarding diverse partners. It will also enable digital
trust among CSPs and their partners by creating a transparent
partner ecosystem.
Subex Bangladesh Private Limited, is a wholly owned
subsidiary of Subex Assurance LLP. For the year ended
March 31, 2021, the standalone net income of Subex
Bangladesh Private Limited was ` 266 lakhs as against
` 382 lakhs and a net loss of ` 57 lakhs as against a net profit of
` 11 lakhs.
SUBEX DIGITAL LLP
For the year ended March 31, 2021, Subex Digital LLP earned a
net income of ` 1,429 lakhs as against ` 882 lakhs in the previous
year, and a net loss of ` 2,043 lakhs as against a net loss of
` 1,989 lakhs in the previous year.
As at March 31, 2021, Subex Limited held more than 99.99% of
the capital in Subex Digital LLP and the balance is held by Subex
Assurance LLP.
9. SUBSIDIARIES (WHOLLY OWNED AND OTHER SUBSIDIARIES)
As on March 31, 2021, the Company has 10 subsidiaries.
SUBEX TECHNOLOGIES LIMITED
SUBEX ASSURANCE LLP AND ITS SUBSIDIARIES
For the year ended March 31, 2021, Subex Assurance LLP
earned a net income of ` 33,268 lakhs as against net income of
` 33,006 lakhs in the previous year and a net profit of
` 4,628 lakhs, as against a net loss of ` 12,930 lakhs in the
previous year.
As at March 31, 2021, Subex Limited held 99.99 % of the capital
in Subex Assurance LLP and the balance is held by Subex Digital
LLP.
Subex (UK) Limited is a wholly owned subsidiary of Subex
Assurance LLP. For the year ended March 31, 2021,
the Standalone net income of Subex (UK) Limited was
` 20,974 lakhs as against ` 21,309 lakhs in the previous year,
and a net profit of ` 2,487 lakhs as against ` 1,113 lakhs in
the previous year.
Subex (Asia Pacific) Pte. Limited is a wholly owned
subsidiary of Subex (UK) Limited. For the year ended
March 31, 2021, the Standalone net income of Subex
(Asia Pacific) Pte. Limited was` 3,898 lakhs as against
` 3,064 lakhs in the previous year, and a net loss of
` 347 lakhs as against a net profit of ` 19 lakhs in the
previous year.
Subex Inc. is a wholly owned subsidiary of Subex (UK)
Limited. For the year ended March 31, 2021, the Standalone
net income of Subex Inc. was ` 9,547 lakhs as against
` 10,290 lakhs in the previous year, and the net profit of
` 534 lakhs as against a net gain of ` 1,074 lakhs in the
previous year.
As on March 31, 2021, Subex (UK) Limited holds 8 common
shares (7.41%) in the capital of Subex Americas Inc.
Subex Middle East (FZE) is a wholly owned subsidiary of
Subex Assurance LLP. For the year ended March 31, 2021,
the standalone net income of Subex Middle East (FZE) was
` 2,374 lakhs as against ` 2,433 lakhs in the previous year
and net loss of ` 67 lakhs as against a net profit of ` 15 lakhs
in the previous year.
Subex Technologies Limited is a wholly owned subsidiary of
Subex Limited. For the year ended March 31, 2021, Subex
Technologies Limited incurred a net loss of ` 4 lakhs similar to
net loss of ` 4 lakhs in the previous year.
SUBEX AMERICAS INC.
For the year ended March 31, 2021, the standalone net income
of Subex Americas Inc. was ` 1,024 lakhs as against ` 2,459 lakhs
in the previous year, and a net loss was ` 10 lakhs as against a net
profit of ` 664 lakhs in the previous year.
Subex Azure Holding Inc., is a wholly owned subsidiary of Subex
Americas Inc. There were no transactions during the year under
review.
As on March 31, 2021, Subex Limited holds 100 common shares
(92.59%) in the capital of Subex Americas Inc.
The above-mentioned numbers are as per the audited financial
statements of respective subsidiaries.
In accordance with Section 129(3) of the Companies Act, 2013,
the Company has prepared consolidated financial statements of
the Company and all its subsidiary companies, which forms part
of the Annual Report. A statement containing salient features
of the financial statements of the subsidiaries of the Company
in Form AOC 1 forms part of the annexure to the Standalone
Financial Statements.
In accordance with third proviso of Section 136(1) of the
Companies Act, 2013, the Annual Report of the Company,
containing therein its standalone and the consolidated financial
statements has been placed on the website of the Company
under the following link https://www.subex.com/investors/
shareholder-services/.
Further, as per the fourth proviso to the said Section, audited
Annual Accounts of each of the subsidiary companies have
also been placed on the website of the Company under the
following link https://www.subex.com/investors/shareholder-
services/. Owing to the restrictions placed due to COVID-19,
members are encouraged to inspect the same electronically.
Subex Annual Report 2020-21 39
10. DEPOSITS
14. CORPORATE GOVERNANCE
Your Company has not accepted any deposits from the public
during the year and there are no deposits which are remaining
unclaimed or unpaid as at the end of the year and, as such, no
amount of principal or interest was outstanding as on the date
of the Balance sheet.
11. EMPLOYEE STOCK OPTIONS SCHEMES
The Employee Stock Option schemes of the Company endeavor
to provide incentives and retain employees who contribute to
the growth of the Company. During the year under review, there
has been no variation in the terms of the existing ESOP schemes.
Additional details have also been disclosed under Note 33 to the
standalone financial statements which forms part of the Annual
Report.
Details of the Company’s Employee Stock Option Plans and
a summary disclosure in compliance with Companies (Share
Capital and Debentures) Rules, 2014 forms part of this report
as “Annexure A”. The details as required under the Securities
& Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014, are available on the Company’s website
under the following link https://www.subex.com/investors/
announcement-filing/ (click on Other Intimations).
EMPLOYEE STOCK OPTION PLAN-2018
The Company, pursuant to resolutions passed by the Board
and the Shareholders dated June 26, 2018 and July 31, 2018,
respectively, had adopted the Subex Employees Stock Option
Scheme-2018 (“ESOP – 2018” or “Plan”). This scheme was
formulated in accordance with the Securities & Exchange Board
of India (Share Based Employee Benefits) Regulations, 2014.
The Board authorized
the Nomination & Remuneration
Committee, or such other person(s) as may be authorized
by the Nomination & Remuneration Committee for the
superintendence and administration of the Plan. The ESOP Plan
has been implemented through the Subex Employee Welfare &
ESOP Benefit Trust “ESOP Trust”, which is authorized to acquire
shares of the Company through secondary market for providing
such share based payments to its employees. Total number
of Options granted/to be granted under the Scheme shall not
exceed 5% (Five percent) of the paid- up equity capital as on
March 31, 2018. The Nomination & Remuneration Committee of
the Company in their meeting held on February 01, 2021 granted
12,40,500 options approved under ESOP – 2018 scheme to the
eligible employees.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
UNDER SECTION 186
Details of Loans, Guarantees or Investments covered under
Section 186 of the Companies Act 2013, are given in note
numbers 30 & 31 to the Standalone Financial Statements.
13. MATERIAL CHANGES AND COMMITMENTS, EFFECTING THE
FINANCIAL POSITION OF THE COMPANY BETWEEN THE END
OF FINANCIAL YEAR AND DATE OF THE REPORT
There have been no material changes for the period between
end of the financial year 2020-21 and the date of this report,
affecting the financial position of the Company.
Your Company strongly believes that the spirit of Corporate
Governance goes beyond the statutory form. Sound Corporate
Governance is a key driver of continuous corporate growth and
long-term value creation for the stakeholders and protection of
their interests. It endeavors to meet the growing aspirations of
all stakeholders including shareholders, employees, customers,
vendors and is committed to maintaining the highest level of
transparency, accountability, and equity in its operations. It
always strives to follow the path of good governance through a
broad framework of various processes.
Your Company has complied with the conditions of Corporate
Governance as stipulated under the SEBI (LODR) Regulations,
2015, as amended from time to time. The Auditor’s certificate
on compliance with respect to the same is annexed herewith as
“Annexure B”. In addition, it has documented its internal policies
in line with the Corporate Governance guidelines.
15. MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion & Analysis as stipulated under
Regulation 34 of the SEBI (LODR) Regulations, 2015 is presented
in a separate section forming part of this Annual Report.
16. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per Section 152 of the Companies Act, 2013, at least two-
thirds of the Directors shall be subject to retirement by rotation.
One-third of such Directors must retire from office at each
Annual General Meeting “AGM” of the shareholders and a
retiring Director is eligible for re-election. Accordingly, Mr. Shiva
Shankar Naga Roddam, Whole-Time Director & COO, retires by
rotation and being eligible, has offered to be re-appointed at the
27th AGM.
APPOINTMENT/ RE-APPOINTMENT
Pursuant to the recommendations of the Nomination &
Remuneration Committee, the Board,
a) At its meeting held on May 11, 2020, approved the
re-appointment of Mr. Anil Singhvi, in the capacity of a
Non-Executive & Non-Independent Director with effect
from June 18, 2020. His re-appointment was approved
by the members at the 26th AGM of the Company held
on September 25, 2020. Mr. Singhvi continues to be
the Chairman of the Company, in the capacity of a
Non-Executive & Non-Independent Director.
b) At its meeting held on February 07, 2020, appointed
Mr. Shiva Shankar Naga Roddam as the Whole-Time
Director & Chief Operating Officer for a term of three years,
subject to the approval of the members at the 26th AGM
and the members approved the said appointment at the
26th AGM of the Company . Further, the Board at its meeting
held on February 01, 2021, changed the employment
agreement of Mr. Shiva Shankar Naga Roddam from Subex
Assurance LLP to Subex Limited and subject to the approval
of the members at the 27th AGM revised the remuneration
of Mr. Shiva Shankar Naga Roddam with effect from
April 01, 2021.
Subex Annual Report 2020-21 40
c) At its meeting held on March 01, 2021, subject to the
approval of the members at the 27th AGM approved the
re-appointment of Mr. Vinod Kumar Padmanabhan as the
Managing Director & CEO of the Company for a period of
3 years with effect from April 01, 2021.
The details regarding the familiarization program for Independent
Directors is available on the website of the Company under the
link https://www.subex.com/investors/shareholder-services/.
The role, terms of reference, authority and power of the
Audit Committee are in conformity with the provisions of the
Companies Act, 2013 and Regulation 18 of the SEBI (LODR)
Regulations, 2015 (including amendments thereto). Further
details of the Audit Committee, including its reconstitution, post
the re-appointment of Mr. Anil Singhvi as a Non-Executive &
Non-Independent Director, have been provided in the report on
Corporate Governance.
17. BOARD MEETINGS
21. AUDITORS
During the year, seven Board Meetings were convened and
held. The intervening gap between the meetings was within the
period prescribed under the Companies Act, 2013 and the SEBI
(LODR), Regulations, 2015. The dates on which meetings were
held are as follows:
Board Meeting Number
1/2020-21
2/2020-21
3/2020-21
4/2020-21
5/2020-21
6/2020-21
7/2020-21
Date of Meeting
May 11, 2020
July 15, 2020
August 10, 2020
September 24, 2020
November 09, 2020
February 01, 2021
March 01, 2021
The details of the attendance of the Directors are provided in the
Report on Corporate Governance.
18. PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and
Regulation 17 (10) of the SEBI (LODR) Regulations, 2015, the
Board at its meeting held on February 01, 2021 carried out an
annual performance evaluation of its own performance, the
Chairman and the Directors individually, as well as the evaluation
of the working of its committees. The manner of evaluation has
been explained in the Report on Corporate Governance.
19. POLICY ON DIRECTORS APPOINTMENT AND
REMUNERATION POLICY OF THE COMPANY
The Policy on Appointment of Directors and the Remuneration
Policy of the Company has been uploaded on the website of
the Company https://www.subex.com/investors/shareholder-
services/. The Details/Disclosures of Ratio of Remuneration
to each Director to the median employee’s remuneration is
enclosed herewith as “Annexure F”.
20. AUDIT COMMITTEE
As on March 31, 2021, the Audit Committee consisted of 4
(four) Directors as its members.
Composition
Category
Ms. Nisha Dutt (Chairperson)
Independent Director
Mr. Anil Singhvi
Non-Executive &
Non-Independent Director
Ms. Poornima Prabhu
Independent Director
Mr. George Zacharias
Independent Director
* Mr. Vinod Kumar Padmanabhan stepped down as a member of the
Committee w.e.f. June 18, 2020.
There are no instances of frauds reported by auditors pursuant
to sub-section (12) of Section 143 which are reportable to the
Central Government.
STATUTORY AUDITORS
M/s. S. R. Batliboi & Associates LLP, Chartered Accountants,
Bengaluru (FRN 101049W/E300004), were appointed as the
Statutory Auditors of the Company for a term of 5 years at the
21st AGM of the Company held on June 19, 2015. Based on the
recommendations of the Audit Committee, the Board at its
meeting held on May 11, 2020, approved the re-appointment of
M/s. S. R. Batliboi & Associates LLP for a term of 5 years, from the
conclusion of the 26th AGM upto the conclusion of the 31st AGM
and the said appointment was approved by the members at the
26th AGM of the Company.
There are no qualifications, reservations, adverse remarks or
disclaimers made by Statutory Auditors of the Company in the
Audit Report.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act,
2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014, the Company has appointed
M/s. V Sreedharan & Associates, a firm of Company Secretaries in
practice to undertake the Secretarial Audit of the Company. The
Secretarial Audit Report and the Annual Secretarial Compliance
Report are annexed herewith as “Annexure C”.
The Secretarial Audit Report for the year ended March 31, 2021
does not contain any qualifications, reservations, or adverse
remarks.
22. PARTICULARS OF EMPLOYEES
The particulars of employees required under Section 197 of the
Companies Act, 2013 read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is
enclosed as “Annexure D” to this report.
23. BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report as stipulated under
Regulation 34 of the SEBI (LODR) Regulations, 2015 is presented
in a separate section forming part of this Annual Report.
24. CONSERVATION OF ENERGY
Your Company is committed to the continual development of
its products in a sustained environment, helping its customers to
operate their businesses more efficiently and enabling them to
reduce their use of sparse resources and minimize waste.
Subex Annual Report 2020-21
41
As a software product Company, the impact that the Company
has on the environment from its own operations is relatively low
when compared to companies in other industries. However, the
Company recognizes that it still has a role to play in reducing
the impact that global business has on the environment.
Subex is committed to following the best practices to reduce
utilization of power, natural resources like water and limited
E-Waste disposal, executed through government recognized
agencies. Though Subex does not fall under the category
the
of manufacturing products and services
environment, we implement few of the best practices with
minimal investments through a five-year plan - agreement with
an industry stalwart having expertise in energy conservation.
This investment thereby results in monetary benefits / savings
month on month, helping us recover the invested amount in
few months, ensuring continued savings through this initiative.
impacting
As a result of the change in the address of the Registered
office of the Company (addressed in point 39 of this report),
the Company has reduced its energy consumption and has
added to its efforts of being eco-friendly. Suppliers delivering the
products to Subex like lighting, diesel generators etc, abide by
the guidelines laid out by the government.
26. FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year 2020-21, total foreign exchange inflow and
outflow of the Company is as follows:
i)
ii)
Foreign Exchange inflow ` 1,482 lakhs (Previous Year
` 1,082 lakhs)
Foreign Exchange outflow ` 576 lakhs (Previous Year
` 366 lakhs)
27. CORPORATE SOCIAL RESPONSIBILITY
To enable contribution to the society and other stakeholders, the
Company has constituted the Corporate Social Responsibility
Committee (CSR Committee). As on March 31, 2021 the CSR
Committee comprises of the following Directors as it members:
Composition
Category
Mr. Anil Singhvi (Chairman)
Non-Executive &
Non-Independent Director
Ms. Nisha Dutt
Independent Director
Mr. Vinod Kumar Padmanabhan
Managing Director & CEO
Mr. Shiva Shankar Naga Roddam Whole-Time Director &
Subex aims to reduce its impact on the environment by:
COO
i. Monitoring the level of water and energy used along with
the waste produced.
ii.
Targeting a reduction in the use of plastics, electricity and
water, along with an increase in amount of waste that is
recycled/ reused etc.
iii.
Increasing the awareness on environment safety and
engagement of employees in such measures.
iv. Adopting sustainable practices designed to ensure the
health and safety of Subex’s employees, stakeholders, and
the environment.
v. Operating
its business
environmental laws and regulations.
in compliance of applicable
25. TECHNOLOGY ABSORPTION, ADOPTION, INNOVATION AND
PRODUCT DEVELOPMENT
Subex is one of the first Product companies from India and is the
first Product company from India in the Telecom domain.
Pursuant to the CSR Policy adopted by the Board, the Company
proposes to undertake such activities as may be useful and
contributive in nature.
Particulars required to be disclosed pursuant to the Companies
(Corporate Social Responsibility Policy) Rules, 2014, (including
amendments, if any) are given in “Annexure G” to this report.
The CSR Committee charter and the CSR Policy of the
Company are available on the website at the below link
https://www.subex.com/investors/shareholder-services/.
SUBEX CHARITABLE TRUST
The Subex Charitable Trust ("SCT") extends the outlook of Subex
as a corporate entity into community service. SCT was set up
to provide for welfare activities for the under privileged and the
needy in the society. SCT is managed by trustees elected from
among the employees of the Company. Please refer page 31 of
the Annual Report for details of the activities conducted during
the year.
The portfolio of products has contributed to the success in
this domain and has also built a strong foundation to add
value to our Customers, independent of the economic and
market conditions. The last few years have seen a rapid
change in technologies being leveraged and this has been
further influenced by the Digital Transformation of services
and portfolio within our Customer base. Subex has a dedicated
team to explore these new technologies which then contribute
to innovations on the existing Portfolio as well as creation of
new Product Intellectual Property. The Products developed and
released by this team influence our ability to compete and win,
while also delivering value to our Customers. Please refer the
Management Discussion & Analysis for further details on our
products.
28. RISK MANAGEMENT POLICY & IMPLEMENTATION
The Risk Management Committee as required under Regulation
21 of the SEBI (LODR) Regulations, 2015 has been constituted
voluntarily by the Company. According to Regulation 21 (5) of
the said Regulations, as on March 31, 2021, the provisions of Risk
Management Committee shall be applicable to top 500 listed
entities, determined based on market capitalization.
The Company has developed and adopted a Risk Management
Policy. This policy identifies all perceived risks which might
impact the operations and on a more serious level also threaten
the existence of the Company. Risks are assessed department
wise such as financial risks, information technology related risks,
legal risks, accounting fraud, etc. The Management also ensures
Subex Annual Report 2020-21
42
that the Company is taking appropriate measures to achieve
prudent balance between risk and reward in both ongoing and
new business activities.
29. HUMAN RESOURCE MANAGEMENT
Detailed report on Human Resource management is given in
the Management Discussion and Analysis, forming part of the
Annual Report.
30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
In accordance with the provision of Section 134(5)(e) of the
Companies Act, 2013 and as per the provisions of the SEBI
(LODR), Regulations, 2015, the Company has an Internal Control
System, commensurate with the size, scale and complexity of
its operations.
Such Internal Financial Controls were found to be adequate
for a Company of this size. The controls are largely operating
effectively since there has not been identification of any material
weakness in the Company. The Directors have in the Directors
Responsibility Statement under paragraph (e) of the Section
confirmed the same to this effect. The Company has policies and
procedures in place for ensuring proper and efficient conduct of
its business, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness
of the accounting records and timely preparations, reliable
financial information. The Company has adopted accounting
policies which are in line with Indian Accounting Standards
(“Ind AS”).
Pursuant to the provisions of the Section 134(5)(f) of the Act,
the Company during the year devised proper systems to ensure
compliance with the provisions of all applicable laws. In effect,
such compliance system was largely found to be adequate
and operating effectively. The Directors have in the Directors
Responsibility Statement under paragraph (f) of the Section also
confirmed the same to this effect.
The Internal Auditors monitor and evaluate the effectiveness
and adequacy of internal control system in the Company, its
compliance with operating systems, accounting procedures
and policies at all locations of the Company and its subsidiaries.
Based on the report of Internal Auditors, process owners
undertake corrective action in their respective areas and
thereby strengthen the controls. Significant audit observations
and corrective actions thereon are presented to the Audit
Committee of the Board
Subex is certified for ISO 9001:2015 (Quality Management
System) and ISO 27001:2013 (Information Security Management
System). Internal audits are conducted periodically for projects
and support functions to adhere to these international standards.
These audits are conducted across Bengaluru, UK and US
locations to ensure processes are followed to provide a better
customer experience. Summary of the audits are shared across
organization to help understand strengths and weaknesses in the
system. People involvement in organization process initiatives
is one that approaches towards achieving better compliance,
standardizing activities to consistently achieve better customer
satisfaction.
This year Subex focused on additional security awareness
programs and improve the existing business continuity controls
owing to the pandemic. Additionally, we continued to identify
and involve relevant stakeholders to review and align the
processes to Subex’s Business objectives.
31. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has implemented a vigil mechanism policy
to deal with instances of fraud, leakage of unpublished price
sensitive information and mismanagement, if any. The policy
also provides for adequate safeguards against victimization of
persons who use such mechanism and makes provision for
direct access to the Chairperson of the Audit Committee in all
cases. The details of the policy are posted on the website of
the Company under the link https://www.subex.com/investors/
shareholder-services/. There were no complaints received
during the year 2020-21.
32. POLICY ON SEXUAL HARRASSMENT OF WOMEN AT
WORKPLACE
The Company has zero tolerance towards sexual harassment
at the workplace and towards this end, has adopted a policy in
line with the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and
the Rules thereunder. All employees (permanent, contractual,
temporary, trainees) are covered under the said policy. An
Internal Complaints Committee (ICC) chaired by a senior
female employee of the Company, has been set up to redress
complaints received under this Act.
During the financial year under review under review, no
complaints have been received by the Company.
33. DECLARATION FROM INDEPENDENT DIRECTORS
All
Independent Directors have given declarations under
Section 149 (7) to the effect that they meet the criteria of
Independence as laid down under Section 149(6) of the
Companies Act, 2013.
34. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during
the financial year were on an arm’s length basis and were in
the ordinary course of business. There were no materially
significant related party transactions made by the Company
with its Promoters, Directors, Key Managerial Personnel or other
designated persons which may have a potential conflict with the
interest of the Company at large. Further, none of the Directors
had any pecuniary relationships of transactions vis-à-vis the
Company.
All related party transactions are placed before the Audit
Committee and the Board for approval. Prior omnibus approval
of the Audit committee is obtained for transactions which are
of a foreseen and repetitive nature. A statement giving details of
all related party transactions entered pursuant to the omnibus
approval so granted, is placed before the Audit Committee and
the Board of Directors for their review on a quarterly basis.
The Company has entered into sub-contracting arrangements
with its subsidiaries, based on transfer pricing methodology,
Subex Annual Report 2020-21 43
for development and enhancement of its products as well as
marketing of its products by the subsidiaries across locations.
The Company has also entered into marketing arrangements
with its subsidiaries wherein there is a cross-charge done by the
subsidiaries towards its efforts for the same. The company has
also entered into an arrangement with its Indian group entities
wherein common costs pertaining to sales and business support
functions are cross charged.
The Policy on Related party transactions as approved by the
Board is uploaded on the Company’s website under the link
https://www.subex.com/investors/shareholder-services/.
Particulars of Contracts or Arrangements with Related parties
referred to in Section 188(1) in Form AOC 2 is enclosed to this
report as “Annexure E”.
35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS
a) Pursuant to the approval of the Board of Directors at their
meeting held on February 07, 2020 and the approval of
the shareholders through Postal Ballot dated June 25,
2020, the NCLT, Bengaluru Bench, vide its Order dated
September 23, 2020, approved the Scheme of Reduction
of Capital of the Company, by reducing the Face Value per
equity share from ` 10 to ` 5.
for
b) Registrar of Companies ‘ROC’-, vide its Order dated
August 10, 2020, imposed a penalty of ` 4,00,000 under
Section 203 (5) of the Companies Act, 2013, on the Company
(` 2,00,000) and the officers in default (CEO & MD -
` 1,00,000, erstwhile CFO - ` 1,00,000), for delay in
appointment of Company Secretary
the period
from June 15, 2017- July 09, 2018 (resulting in a delay in
appointment by 216 days). The Company filed its adjudication
application before the ROC, Bengaluru, Karnataka, on
October 09, 2019, pleading that the delay was purely by
inadvertence and without any malafide intention. The penalty
was paid by the Company and the officers and the details
of the same were filed with the ROC in Form INC-28 on
September 25, 2020 vide SRN R60492253. Apart from the
aforesaid, there were no significant and material orders
passed by the Regulators/ Courts which would impact
the going concern status of the Company and its future
operations.
38. MAINTENANCE OF COST RECORDS
Maintenance of cost records as specified by the Central
Government under sub-section (1) of Section 148 of the
Companies Act, 2013, is not applicable to the Company as the
Company operates out of a Special Economic Zone (SEZ).
39. SIGNIFICANT DEVELOPMENTS DURING THE YEAR
a) Change in address of Registered Office within local limits
of Bengaluru City
The Board of Directors had on December 30, 2020
approved the change in address of the Registered Office
of the Company within local limits of Bengaluru City i.e.
from RMZ Ecoworld, Outer Ring Road, Devarabisanahalli,
Bengaluru-560103 to Pritech Park-SEZ, Block-09, 4th floor,
B Wing, Survey No. 51 to 64/4, Outer Ring Road, Bellandur
Village, Varthur Hobli, Bengaluru-560 103. This change was
with effect from January 04, 2021.
b) Receipt of request letters from persons belonging to
the Promoter/Promoter Group for reclassification of the
category of their shareholding from ‘Promoter/Promoter
Group’ to ‘Public’
The Board at its meeting held on February 01, 2021 took
note of the request letters cum undertakings received
from the below persons and approved the same, subject
to the approval of the members of the Company and the
regulatory authorities
Sl. No
Particulars
Request for reclassification
1
2
3
Subash Menon (Promoter)
Sudeesh Yezhuvath (Promoter
Group)
Kivar Holdings Private Limited
(Promoter Group)
Reclassification
to
the
category of ‘Public’
Pursuant to the amendment in Regulation 31A of the
SEBI
(LODR) Regulations, 2015, owing to the SEBI
(LODR) (Second Amendment) Regulations, 2021 dated
May 05, 2021, the Company has to receive revised request
letters from the members of the 'Promoter/Promoter
Group', for considering the request for re-classification.
36. ANNUAL RETURN
A copy of the Annual Return of the Company for the Financial
year 2020-21, as required under Section 92 (3) of the Companies
Act, 2013 and Rule 12 of the Companies (Management
and Administration) Rules, 2014 shall be placed on the Company’s
websitehttps://www.subex.com/investors/announcement-filing/
(click on Disclosures).
37. LISTING WITH STOCK EXCHANGES
The Company has paid the Annual Listing Fees for the year
2020-21 to the Exchanges’ where the Company’s shares are
listed i.e., the National Stock Exchange of India Ltd (‘NSE’) and
the BSE Ltd (‘BSE’).
40. DIRECTORS’ RESPONSIBILITY STATEMENT
In accordance with the provision of Section 134(3)(c) of the
Companies Act, 2013, the Board of Directors affirms:
a)
In the preparation of the annual accounts for the financial
year ended March 31, 2021, the applicable accounting
standards have been followed along with proper explanation
relating to material departures;
b) That the accounting policies have been selected and
applied consistently and it has made judgments and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company as
at March 31, 2021 and of the profit of the Company for the
year ended on that date;
Subex Annual Report 2020-21 44
c) That proper and sufficient care has been taken for
the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) That the accounts for the year ended March 31, 2021 have
been prepared on a going concern basis;
e) That internal financial controls have been laid down to
be followed by the Company and such internal financial
controls were adequate and were operating effectively;
f)
That systems to ensure compliance with the provisions of
all applicable laws were in place and such systems were
adequate and operating effectively;
41. APPRECIATION/ACKNOWLEDGEMENTS
Your Directors
investors,
shareholders’ and bankers for their continued support during
the customers, vendors,
thank
the year. We place on record our appreciation for the support /
co-operation extended by
the various departments of
Government of India, Government of Karnataka, Central and State
Government authorities particularly SEZ authorities, Ministry of
Corporate Affairs, Central Board of Direct Taxes, Central Board
of Indirect Taxes and Customs, Banks, the Ministry of Commerce
and Industry, Ministry of Labour and Employment, Reserve Bank
of India, the Securities and Exchange Board of India, the BSE
Limited, the National Stock Exchange of India Ltd, the National
Securities Depository Limited, the Central Depository Services
(India) Limited, the National Company Law Tribunal, Bengaluru
Bench and other State Government authorities and look forward
to their support in all future endeavors.
Your Directors also wish to place on record their deep
appreciation to Subexians at all levels for their hard work,
solidarity, co-operation, and support, as they are instrumental in
your Company scaling new heights, year after year.
For Subex Limited
Anil Singhvi
Chairman, Non-Executive & Non-Independent Director
DIN:00239589
Place: Mumbai
Date: May 17, 2021
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 ANNEXURE A
Information as at March 31, 2021 pertaining to the Employee Stock Option Schemes of the Company.
Particulars
Sl.
No
1
2
3
4
5
6
7
8
9
a) Options granted as on March 31, 2021
b) Options granted during the year
Options vested as on March 31, 2021
Options exercised as on March 31, 2021
No. of shares arising as a result of exercise of options as on March 31, 2021
Options Lapsed as on March 31, 2021
Exercise Price
Variation of terms of options
Money realized by exercise of options upto March 31, 2021
Total number of options in force
10
Employee wise details of options granted during the year under review to:
(i) Key managerial personnel
45
ESOP 2018
2,46,90,500
12,40,500
1,49,18,750
27,78,500
NIL#
20,40,500**
` 6 - ` 18
None
` 1,66,71,000
1,98,71,500
-
(ii) other employee receiving a grant in the year of option amounting to 5% or more of options granted during
Rajkumar Esetty Tirumala - 75,000
that year
(iii) identified employees who were granted option, during the year, equal to or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) of the Company at the time of grant.
11
Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with
Indian Accounting Standard (Ind AS) 33 ‘Earnings per share’
12
Where the Company has calculated the employee compensation cost using the intrinsic value of the stock
options, the difference between the employee compensation cost so computed and the employee compensation
cost that shall have been recognized if it had used the fair value of the options.
The impact of this difference on profits and on EPS of the Company is:
Vibin Mathew - 75,000
Suresh Chintada - 7,40,000
Gautam Sarkar - 2,00,500
-
` 0.48
N.A.
13
Weighted-average exercise prices and weighted-average fair values of options separately for options whose
Weighted average exercise price: ` 6.75
exercise price either equals or exceeds or is less than the market price of the stock. (As per note 33 of the
Weighted average fair value: ` 12.64
Standalone financials)
14
Description of the method used during the year to estimate the fair values of options, including the following
Black Scholes model
weighted-average information:
i. risk-free interest rate
ii. expected life
iii. expected volatility
iv. expected dividends
v. market price on grant date
6.12%
2 years
72.08%
1.88%
` 26.55
**In accordance with the provisions of the ESOP Scheme 2018, lapsed options are reissued.
# There are no fresh equity shares arising because of exercise of options during the year ended March 31, 2021. Shares were transferred
from the ESOP Trust against the exercise of options.
For Subex Limited
Anil Singhvi
Chairman, Non-Executive & Non-Independent Director
DIN:00239589
Place: Mumbai
Date: May 17, 2021
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 46
ANNEXURE B
To,
Members of Subex Limited
CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE
We have examined the compliance of conditions of Corporate Governance by Subex Limited ("the Company"), for the purpose of
certifying of the Corporate Governance under Regulation 17 to 27, clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E of
Schedule V of the of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from the period April 01, 2020 to
March 31, 2021. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary
for the purposes of certification.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to
procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of
Regulation 46 and paragraphs C, D and E of Schedule V of the Listing Regulations, as applicable of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness
with which the management has conducted the affairs of the Company.
Date: May 17, 2021
Place: Bengaluru
For BMP & Co. LLP
Company Secretaries
Pramod S M
Partner
FCS: 7834 / CP No. 13784
UDIN: F007834C000337341
Subex Annual Report 2020-21
47
ANNEXURE C
Form No. MR-3
SECRETARIAL AUDIT REPORT
[Pursuant to Sub Section (1) of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014]
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2021
To,
The Members,
SUBEX LIMITED
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by Subex Limited (hereinafter called the company). Secretarial Audit was conducted in a manner that provided us a reasonable
basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on our verification of the Company’s Books, Papers, Minute Books, Forms and Returns filed and other Records maintained by the
company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of
secretarial audit, we hereby report that in our opinion, the company has, during the financial year ended on March 31, 2021 (the audit
period) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-
mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed, and other records maintained by the Company during the
audit period according to the provisions of:
i)
The Companies Act, 2013 (the Act) and the rules made thereunder;
ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
iii) The Depositories Act, 1996 and the Regulations and Byelaws framed thereunder;
iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment,
Overseas Direct Investment and External Commercial Borrowings;
v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not Applicable to the
Company during the Audit Period);
f.
The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the
Companies Act and dealing with client;
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not Applicable to the Company
during the Audit Period);
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not Applicable to the Company during
the Audit Period); and
i.
The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
vi) Other Laws Applicable Specifically to the Company namely:
a.
Information Technology Act, 2000 and the rules made thereunder.
b. Special Economic Zones Act, 2005 and the rules made thereunder.
c. Copy Right Act, 1957.
Subex Annual Report 2020-21 48
We have also examined the compliance with the applicable clauses of the following:
a.
Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General
Meeting.
b.
Listing Agreements entered into by the Company with the BSE Limited and the National Stock Exchange of India Limited.
We have not examined compliance by the Company with applicable financial laws, like direct and indirect tax laws, since the same have
been subject to review by statutory financial audit and other designated professionals.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc.,
mentioned above subject to the following observation:
Pursuant to the provisions of sub-rule (4A) of rule 5 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016, Form No. IEPF-1A is yet to be filed by the Company.
WE FURTHER REPORT THAT:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, and
Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were
carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven
days in advance except with respect to those agenda items which the company deemed to be unpublished price sensitive information
(UPSI), and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and
for meaningful participation at the meeting.
As per the minutes of the meetings duly recorded and signed by the Chairman, the decisions of the Board were unanimous, and no
dissenting views have been recorded.
We further report that based on the review of compliance mechanism adopted by the Company i.e., of providing adequate presentations
by the heads of concerned departments at the Board Meetings, regarding compliance with the applicable laws and its adherence, there
are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure
compliance with applicable laws, rules, regulations, and guidelines.
We further report that during the audit period, except for the following events, there was no event / action having a major bearing on the
Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines etc.,
The Board at its meeting held on February 07, 2020 had approved the Scheme of Reduction of Equity share capital of the Company
by reducing the face value per equity share from ` 10 to ` 5 per share. The Scheme was subject to the approval of the shareholders
and the Honorable National Company Law Tribunal. The Special Resolution for the reduction of share capital of the Company from
` 5,62,00,29,350/- divided into 56,20,02,935 equity shares of ` 10/- each to ` 2,81,00,14,675/- divided into 56,20,02,935 equity shares of
`5/- each by reducing face value of each equity share from ` 10/- to ` 5/-, along with a reduction to the Securities Premium Account of
the Company from ` 2,67,04,28,364/- to ` 1,64,03,33,337/- and such cumulative reduction was effected by writing off of the Accumulated
Losses of ` 3,84,01,09,702/-.was passed by way of Postal Ballot on June 25, 2020.
Further, the company had filed an application before the Hon’ble National Company Law Tribunal (NCLT) , Bengaluru under section
66 & section 52 for seeking its approval for the reduction of share capital vide C.P. No. 88/BB/2020 and had received the approval
from Hon’ble NCLT vide its order dated September 23, 2020 and the same was filed with the Registrar of Companies, Karnataka on
September 29, 2020 (effective date of the Scheme)
Consequent to the reduction of share capital, the Company has altered its clause V of Memorandum of Association by way of reducing
the face value of equity shares from ` 10/- each to ` 5/- each.
For V. SREEDHARAN & ASSOCIATES
(Pradeep B. Kulkarni)
Partner
FCS: 7260; CP No. 7835
UDIN Number F007260C000335082
Peer Review Certificate No. 589/2019
Place: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21
This report (i.e., Form No. MR-3) is to be read with our letter of even date which is annexed as Annexure and forms an integral part of this
report.
49
‘Annexure’
To,
The Members,
Subex Limited
Pritech Park - SEZ
Block -09, 4th Floor, B Wing
Survey No. 51 to 64/4
Outer Ring Road, Bellandur Village
Varthur Hobli, Bengaluru – 560 103
Our report of even date is to be read along with this letter:
1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion
on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of
the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial
records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and
happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the company.
7. Due to COVID-19 pandemic situation, we have conducted online verification and examination of records, as facilitated by the
Company for the purpose of issuing Secretarial Audit Report (Form No. MR-3).
For V. SREEDHARAN & ASSOCIATES
(Pradeep B. Kulkarni)
Partner
FCS: 7260; CP No. 7835
UDIN Number F007260C000335082
Peer Review Certificate No. 589/2019
Bengaluru
May 17, 2021
Subex Annual Report 2020-21
50
SECRETARIAL COMPLIANCE REPORT OF SUBEX LIMITED FOR THE YEAR ENDED MARCH 31, 2021.
We have examined:
(a) all the documents and records made available to us and explanation provided by Subex Limited (“the listed entity”);
(b)
the filings/ submissions made by the listed entity to the stock exchanges;
(c) website of the listed entity;
(d) any other document/ filing, as may be relevant, which has been relied upon to make this certification;
for the year ended March 31, 2021 (“Review Period”) in respect of compliance with the provisions of:
(a)
the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Regulations, circulars, guidelines issued thereunder; and
(b)
the Securities Contracts (Regulation) Act, 1956 (“SCRA”), rules made thereunder and the Regulations, circulars, guidelines issued
thereunder by the Securities and Exchange Board of India (“SEBI”);
The specific Regulations, whose provisions and the circulars / guidelines issued thereunder, have been examined, include: -
(a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
(c) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(d) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not Applicable to the Company during the
Review Period).
(e) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008. (Not Applicable to the Company
during the Review Period).
(g) The Securities and Exchange Board of India (Issue and Listing of Non- Convertible and Redeemable Preference Shares) Regulations,
2013. (Not Applicable to the Company during the Review Period).
(h) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
and based on the above examination, we hereby report that, during the Review Period:
(a) The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder.
(b) The listed entity has maintained proper records under the provisions of the above Regulations and circulars/ guidelines issued
thereunder in so far as it appears from our examination of those records.
(c) The following are the details of actions taken against listed entity by National Stock Exchange (NSE) under aforesaid Acts/Regulations
and circulars/guidelines issued thereunder:
Sl.
No.
1
Action taken by SEBI / Stock
Exchanges
Details of violation
Details of action taken E.g. fines,
warning letter, debarment etc.,
Observations/ remarks of the Practicing
Company Secretary if any
The Company had received Letter
bearing reference no. NSE/LIST/
SOP/0449 dated June 23, 2020 from
the National Stock Exchange (NSE)
conveying its decision of rejecting
the waiver request submitted by
the Company through its various
letters seeking additional time for
appointment of 6th Director on the
Board pursuant to the provisions of
Regulation 17(1)(c) of LODR.
company
had
The
compliance
delayed
(1)
with Regulation 17
(c) of the SEBI (LODR)
Regulations, 2015
i.e.,
delayed in appointing the
6th Director on the Board
of the Company, and the
NSE had imposed fine of
` 6,45,000 for the said
delay.
The Company has
remitted
an amount of ` 6,45,000 on
July 08, 2020 towards the fine
imposed by the NSE for the said
reason.
Since the Company has paid the requisite
fine no further remarks required in this
regard.
There was no action taken against the listed entity’s promoters/ directors / material subsidiaries either by SEBI (including under the
Standard Operating Procedures issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/ guidelines
issued thereunder during the period under review.
Subex Annual Report 2020-21 51
(d) The listed entity has taken the following action to comply with the observation made in previous reports:
Observations made in the
secretarial compliance
report for the year ended.
Actions taken by the listed entity
if any
Comments of the Practicing Company Secretary
on the actions taken by the listed entity
31.03.2020
The Company has appointed 6th
Director w.e.f 07.02.2020.
No remarks since it has been complied.
Sl.
No.
1
Observations of the
Practicing Company
Secretary in the previous
reports
Pursuant to Regulation
17(1)(c) of LODR, there
was a delay in appointing
the 6th Director on the
Board of the Company.
The Company has
appointed 6th Director
w.e.f 07.02.2020.
NOTE: Due to Covid-19 pandemic situation, we have conducted online verification and examination of records, as facilitated by the Company for the
purpose of issuing this Report.
For V. SREEDHARAN & ASSOCIATES
(Pradeep B. Kulkarni)
Partner
FCS: 7260; CP No. 7835
Bengaluru
May 17, 2021
UDIN Number F007260C000335291
Peer Review Certificate No. 589/2019
Subex Annual Report 2020-21 52
ANNEXURE D
PARTICULARS OF EMPLOYEES
Particulars
Mr. Venkatraman G S
Mr. Shiva Shankar Naga Roddam *
Designation of the employee
Chief Financial Officer & Senior Vice President Whole-Time Director & Chief Operating Officer
Remuneration received
` 113 lakhs &
Nature of employment, whether contractual or
Permanent
otherwise
` 17 lakhs
Permanent
Qualifications of the employee
B.Com (honours) -Delhi University, MBA
Bachelor’s in Engineering in Electronics &
(Finance)- IGNOU, New Delhi, Graduate of
Telecommunications, from the Institution of
Advanced Corporate Finance Program,
Electronics & Telecommunication Engineers,
IIM Ahmedabad.
No. of years of experience
29 Years
Date of commencement of employment
October 29, 2018
The age of such employee
51
The last employment held by such employee before
Mindtree Ltd
joining the Company
New Delhi (IETE), Bachelor’s in Triple Maths,
Osmania University, Hyderabad Master’s in
Business Administration from the Institute of
Management Development and Research,
Pune, Maharashtra (IMDR).
25 Years
December 05, 2018
47
Plivo
The percentage of equity shares held by the
2,75,000 (0.05%)
2,50,000 (0.04%)
employee in the Company within the meaning
of clause (iii) of sub-rule (2) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014 (including any amendments
thereto)
Whether any such employee is a relative of any
N.A.
Director or manager of the Company and if so, name
of such Director or manager
& Inclusive of the perquisite arising on account of exercise of options.
N.A.
* The Board at its meeting held on February 01, 2021, changed the employment agreement of Mr. Shiva Shankar Naga Roddam from Subex Assurance LLP
to Subex Limited and subject to the approval of the members at the 27th AGM, revised the remuneration of Mr. Shiva Shankar Naga Roddam with effect
from April 01, 2021. The remuneration stated herein was drawn by Mr. Shiva Shankar Naga Roddam from the Company for the period February 01, 2021 to
March 31, 2021.
Subex Annual Report 2020-21 53
ANNEXURE E
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the
FORM AOC 2
Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section
(1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm's length basis
1. Name(s) of the related party and nature of relationship
2. Nature of contracts/ arrangements/ transactions
3. Duration of the contracts/ arrangements/ transactions
4. Salient terms of the contracts or arrangements or transactions including the value, if any
5. Justification for entering into such contracts or arrangements or transactions
NOT APPLICABLE
6. Date(s) of approval by the Board
7. Amount paid as advances, if any:
8. Date on which the special resolution was passed in general meeting as required under
first proviso to section 188
2. Details of material contracts or arrangement or transactions at arm's length basis
(a) Name(s) of the related party and nature of relationship
(b) Nature of contracts/ arrangements/ transactions
(a) Subex Technologies Limited
(b) Subex (UK) Limited
(c) Subex Americas Inc.
(d) Subex (Asia Pacific) Pte Limited
(e) Subex Inc.
(f) Subex Middle East (FZE)
(g) Subex Azure Holdings Inc.
(h) Subex Assurance LLP
(i) Subex Digital LLP
(j) Subex Bangladesh Private Limited
(All the aforementioned entities are subsidiaries of Subex
Limited)
A. Sub-Contracting and Support Services Transactions
• Subex (Asia Pacific) Pte. Ltd
• Subex Inc.
• Subex Assurance LLP
• Subex Digital LLP
B. Marketing & Support Services Expense Transactions
• Subex (Asia Pacific) Pte. Ltd
• Subex Inc.
• Subex Assurance LLP
• Subex Digital LLP
C. Reimbursement of expenses
• Subex (UK) Limited
• Subex (Asia Pacific) Pte Ltd
• Subex Assurance LLP
• Subex Digital LLP
• Subex Inc.
D. Allocation of Employee Stock option expenses
• Subex Assurance LLP
• Subex Digital LLP
E. Share of profit/ (loss)
• Subex Assurance LLP
• Subex Digital LLP
F. Net liabilities transferred from:
• Subex Assurance LLP
• Subex Digital LLP
Subex Annual Report 2020-21 54
(c) Duration of the contracts/ arrangements/ transactions
(d) Salient terms of the contracts or arrangements or transactions including the value, if
any:
(e) Date(s) of approval by the Board, if any:
(f) Amount paid as advances, if any:
The transactions mentioned in 2(b) above are continuing
contracts.
A. Sub-Contracting and Support Services Transactions
The subsidiary transfers a portion of the revenue generated
by them to the ultimate holding Company. Common
costs pertaining to sales and business support function are
recovered by the Company from other group entities.
B. Marketing & Support Services Expense Transactions
The subsidiary transfers the cost incurred in earning the
revenue to the ultimate holding Company. Common
costs pertaining to sales and business support function are
recovered by other group entities from the Company.
C. Reimbursement of expenses
Group entities incur cost on behalf of other entities for
administrative convenience, which is then cross charged to
respective entity on cost-to-cost basis.
D. Reimbursement of ESOP expenses
The holding company transfers the ESOP expense incurred
on pertaining to ESOPs held by the employees of respective
subsidiaries.
E. Share of Profit/ (Loss)
Subex Assurance LLP and Subex Digital LLP transfers share
of profit/ (loss) incurred during the year to the respective
partners as per the partnership deed.
The details pertaining to the value of transactions, form part
of the Related Party Schedule to the Standalone Financial
Statements (Note 30).
May 11, 2020 and May 17, 2021
N.A.
Additional Note for point no. 2 : The Company had granted an interest free loan to the Subex Employee Welfare and ESOP Benefit Trust
during the financial year.
For Subex Limited
Anil Singhvi
Chairman, Non-Executive & Non-Independent Director
DIN:00239589
Place: Mumbai
Date: May 17, 2021
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 55
ANNEXURE F
Details / Disclosures of Ratio of Remuneration
Particulars
(i) the ratio of the remuneration of each Director to the median
Vinod Kumar Padmanabhan (MD & CEO)
remuneration of the employees of the Company for the financial year;*
3.04 : 1.00
Shiva Shankar Naga Roddam (WTD & COO): Incomparable as Mr. Shiva
Shankar Naga Roddam drew his remuneration from Subex Assurance LLP
for the period from April 2020-January 2021.
(ii) the percentage increase in remuneration of each Director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or Manager,
if any, in the financial year;
(iii) the percentage increase in the median remuneration of employees in
the financial year; #
(iv) the number of permanent employees on the rolls of Company;
MD & CEO: NIL
CFO & SVP: 15.62%, CS: 11.90%
WTD & COO:6.82%.
Incomparable.
As on March 31, 2021 - 173
As on December 31, 2020 - 22
(v) average percentile increase already made in the salaries of employees
There was an average increase of 5.95% in the salaries of employees other
other than the managerial personnel in the last financial year and its
than managerial personnel. There was no increase in the remuneration
comparison with the percentile increase in the managerial remuneration
paid to the Managing Director & CEO during the period under review.
and justification thereof and point out if there are any exceptional
There was an increase of 6.82%, 15.62 % and 11.90 % in the remuneration
circumstances for increase in the managerial remuneration;
paid to the Whole-Time Director & COO, the Chief Financial Officer & SVP
& the Company Secretary, respectively, during the period under review.
The remuneration of Directors, Senior Management and Employees is as
per the Remuneration Policy of the Company.
(vi) Affirmation that the remuneration is as per the remuneration policy of
The remuneration of Directors, Senior Management and Employees is as
the Company.
per the Remuneration Policy of the Company.
* Compared for a period of nine months ended December 31, 2020.
# With effect from January 01, 2021, the Company has carried out strategic re-organization and decided to centralize certain key Sales and Business support
functions, to drive better efficiency of scale and overall operations. Accordingly, all such employees in sales and business support functions from
other group entities in India have been transferred to the Company. Due to the same, the details pertaining to increase in median remuneration of
employees in the financial year, cannot be compared.
Subex Annual Report 2020-21 56
ANNEXURE G
ANNUAL REPORT ON CSR ACTIVITIES
Sustainable practices have always been an integral part of Subex Limited. Corporate Social Responsibility is a large part of our overall
sustainability policy encompassing social action. The Subex Charitable Trust is our primary social responsibility trust. The objectives are
enabling education of eligible students from financially weaker sections of society, vocational training for women, amongst others.
OBJECTIVE AND SCOPE
The objective of the Corporate Social Responsibility (“CSR”) policy of Subex Limited (“the Company”) is to lay down guidelines to
enable the Company to take the required measures to make a meaningful contribution to the society and other stakeholders. The
Policy is available on https://www.subex.com/investors/shareholder-services/.
The CSR Activities of the Company will be focused on :
a)
eradicating extreme hunger and poverty; b) promotion of education; c) promoting gender equality and empowering women; d)
reducing child mortality and improving maternal health; e) combating human immunodeficiency virus, acquired immune deficiency
syndrome, malaria and other diseases; f) ensuring environmental sustainability; g) employment enhancing vocational skills; h) social
business projects; i) contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government
or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the
Scheduled Tribes, other backward classes, minorities and women; and j) such other matters as may be prescribed.
For more detail visit https://www.subex.com/social-responsibility/
1. CSR COMMITTEE & ITS COMPOSITION
To enable the Company to take required measures to make a meaningful contribution to society and other stakeholders, it has constituted
the Corporate Social Responsibility Committee (CSR Committee) comprising of the following Directors as on March 31, 2021 and the
Committee meets as and when required. The details of the composition of the Committee and the CSR Policy of the Company are
available under https://www.subex.com/investors/shareholder-services/.
Sl. No.
Name of Director
Designation / Nature of
Number of meetings of CSR
Number of meetings of CSR
Directorship
Committee held during the year
Committee attended during the
1
2
3
4
Mr. Anil Singhvi (Chairman)
Non-Executive &
Non-Independent Director
Ms. Nisha Dutt
Independent Director
Mr. Vinod Kumar Padmanabhan Managing Director & CEO
Mr. Shiva Shankar Naga
Whole-Time Director & COO
Roddam
year
0
0
0
0
N.A.
N.A.
N.A.
N.A.
1.
Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies
(Corporate Social responsibility Policy) Rules, 2014, if applicable:
Not applicable
2. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social responsibility
Policy) Rules, 2014 and amount required for set off for the financial year, if any:
Not applicable
3.
Average net profit of the Company as per section 135(5): Not applicable, as the Company has incurred a loss during the preceding 3
financial years.
4.
(a) Two percent of average net profit of the Company as per section 135(5): Not Applicable
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: NIL
Subex Annual Report 2020-21 57
(c) Amount required to be set off for the financial year, if any: NIL
(d) Total CSR obligation for the financial year (4a+4b+4c): NIL for FY 2020-21
5.
(a) CSR amount spent or unspent for the financial year: Nil
Total Amount Spent for
Amount Unspent (in `)
the Financial Year. (in `)
Total Amount transferred to Unspent CSR Account
Amount transferred to any fund specified under Schedule VII
Nil
as per section 135(6).
as per second proviso to section 135(5).
Amount
Date of transfer
Name of the Fund
Amount
Date of transfer
(b) Details of CSR amount spent against ongoing projects for the financial year:
Not applicable
1
2
3
4
5
6
7
8
9
10
11
Sl. No Name
Item
Local
Location of the
Project
Amount
Amount
Amount
Mode of
Mode of Implementation
of the
from the
area
project.
duration
allocated
spent
transferred
Implementation
- Through Implementing
Project
list of
(Yes
for the
in the
to Unspent
- Direct (Yes/No
Agency
/No).
activities
in
schedule
VII to the
Act
project
current
CSR
(in ` ).
financial
Account
Year (in `)
for the
project as
per Section
135(6)
(in `).
State
District
Not applicable
CSR
Name
Registration
no
(c) Details of CSR amount spent against other than ongoing projects for the financial year: NIL
(d) Amount spent in Administrative Overheads: Nil
(e) Amount spent on Impact Assessment, if applicable: Not applicable
(f) Total amount spent for the Financial Year (5b+5c+5d+5e): Not applicable
(g) Excess amount for set off, if any,: Nil
Sl. No.
Particular
Amount (in ` )
(i)
Two percent of average net profit of the company as per section 135(5)
applicable,
Not
Company has
loss during
3 financial years
as
the
incurred a
the preceding
(ii)
(iii)
Total amount spent for the Financial Year
Excess amount spent for the financial year [(ii)-(i)]
Not applicable
Not applicable
Subex Annual Report 2020-21 58
(iv)
(v)
Surplus arising out of the CSR projects or programs or activities of the previous financial
years, if any
Not applicable
Amount available for set off in succeeding financial years [(iii)-(iv)]
Not applicable
6.
(a) Details of Unspent CSR amount for the preceding three financial years:
Sl. No
Preceding
Amount transferred
Amount spent
Amount transferred to any fund specified under
Amount remaining to
F i n a n c i a l
to Unspent CSR
in the reporting
Schedule VII as per section 135(6), if any.
be spent in succeeding
Year.
Account under
Financial Year
Name of the Fund
Amount (in `).
Date of
financial.
section 135(6) (in `).
(in `.).
transfer
1
2
3
4
Not applicable
(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): N.A.
1
2
3
4
5
6
7
8
9
Sl. No Project
Name
Financial Year
Project duration.
Total amount
Amount spent on
Cumulative amount
Status of
ID.
of the
in which the
allocated for
the project in the
spent at the end of
the project -
Project.
project was
the project
reporting Financial
reporting Financial
Completed /
commenced.
(in `).
Year (in `).
Year. (in `).
Ongoing.
1
2
3
TOTAL
Not applicable
7.
In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in
the financial year.
(asset-wise details).
(a) Date of creation or acquisition of the capital asset(s).: Not applicable
(b) Amount of CSR spent for creation or acquisition of capital asset.: NIL
(c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc.: N.A.
(d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset).: N.A.
8.
Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5).
The Company has incurred losses during the preceding 3 financial years; hence it is not mandatory to incur an expenditure on CSR
activities.
For Subex Limited
Anil Singhvi
Chairman CSR Committee
DIN:00239589
Place: Mumbai
May 17, 2021
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
May 17, 2021
Note: The Company has incurred losses during the preceding 3 financial years. Though it is not mandatory to incur any expenditure on
CSR activities, the SCT has undertaken and contributed towards certain activities. Please refer Page 31 of the Annual Report for details.
Subex Annual Report 2020-21 59
REPORT ON CORPORATE GOVERNANCE
I. COMPANY’S PHILOSOPHY ON CODE OF
II. BOARD OF DIRECTORS
CORPORATE GOVERNANCE
The Ideology of Corporate Governance is based on fairness,
openness, professionalism, accountability and focus on the
sustainable success of the Company and building confidence
of its various stakeholders, thereby paving a way for long
term growth. The Company believes that good Corporate
Governance emerges from the application of the best and sound
management practices and compliance with the laws coupled
with adherence to the highest standards of transparency and
business ethics. Therefore, situation, performance, ownership
and governance of the Company are equally important with
respect to the structure, activities and policies of the organization.
Subex Limited’s (“Subex / the Company”) compliance with the
Corporate Governance guidelines as stipulated by the Stock
Exchanges and the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations,
2015 [“SEBI (LODR), Regulations, 2015”] is described in this
section.
For the success of the organisation, we believe it requires highest
standards of corporate behaviour towards everyone we work
with, the communities we touch and the environment on which
we have an impact. This is our road to consistent, competitive,
profitable and responsible growth and creating long-term value
for our stakeholders, our people and our business partners.
These principles have been the guiding force for our operations
which we will endeavor in years to come.
The Company’s Corporate Governance philosophy is based
on the following principles:
•
•
•
•
Satisfy the spirit of the law and not just the letter of the law
Be transparent and maintain high degree of disclosure
levels
Communicate externally, in a truthful manner, about how
the Company is run internally
Comply with the laws in all the countries in which the
Company operates
Subex is committed to good Corporate Governance practices.
Consistent with this commitment, Subex seeks to achieve a
high level of responsibility and accountability in its internal
systems and policies. Subex respects the inalienable rights
of the shareholders to information on the performance of
the Company. The Company ensures, among others, the
accountability of the Board of Directors and the importance of
its decisions to all its participants viz., customers, employees,
investors, regulatory bodies etc.
All details mentioned in this Report are as at March 31, 2021,
unless otherwise stated. Material changes and events between
the end of the financial year and date of the report are provided
wherever required.
As on March 31, 2021, the Board of Directors of Subex
Limited comprises of six directors out of which two are
Executive Directors, three are Independent Directors and one
Non- Executive Director. The Independent Directors satisfy the
criteria of independence specified in the Act and as laid down
under Regulation 16 (1) (b) of the SEBI (LODR) Regulations, 2015.
They also meet the criteria for their appointment formulated
by the Nomination & Remuneration Committee (“NRC”) as
approved by the Board.
Details of appointments / re-appointments:
i.
ii.
The Board at its meeting held on March 01, 2021, subject to
the approval of the members at the 27th AGM approved the
re-appointment of Mr. Vinod Kumar Padmanabhan as the
Managing Director & CEO of the Company for a period of
3 years with effect from April 01, 2021.
The Board at its meeting held on February 01, 2021,
changed the employment agreement of Mr. Shiva Shankar
Naga Roddam from Subex Assurance LLP to Subex
Limited and subject to the approval of the members at the
27th AGM revised the remuneration of Mr. Shiva Shankar
Naga Roddam with effect from April 01, 2021.
iii. Based on the recommendation s of the Nomination
& Remuneration Committee, the Board at its meeting
held on May 11, 2020 approved the re-appointment of
Mr. Anil Singhvi (DIN: 00239589) as Non- Executive &
Non-Independent Director of the Company with effect
from June 18, 2020 and the same has been approved by
the members at the 26th AGM of the Company held on
September 25, 2020.
A. Board Process:
The Board meets at regular intervals or atleast once in each
quarter to discuss and decide on Company / Business policy
and strategy apart from other Board business specifically
reserved for its attention to ensure that it exercises full control
over significant strategic, financial, operational and compliance
matters. The Board / Committee Meetings are pre-scheduled
and informed to the Directors well in advance to facilitate them
to plan their schedule and to ensure meaningful participation in
the meetings. However, in case of a special and urgent business
need, the Board’s approval is taken by passing resolutions by
circulation, as permitted by law, which are noted and confirmed
in the subsequent Board Meeting.
The agenda items along with notes and information thereto
(except for the price sensitive information, which is either
placed at the meeting or sent just before meeting) as provided in
Secretarial Standard (SS-1) on “Meeting of the Board of Directors”
read with SEBI (LODR) Regulations, 2015 and Companies Act,
2013, are circulated to all Board Members well in advance before
the Board Meetings. Additional agenda in the form of ‘Other
Business” are included with the permission of the Chairman and
with the consent of the majority of the Independent Directors
present at the meeting.
Subex Annual Report 2020-21 60
B. Details of Board of Directors and their attendance is as follows:
Director
Position & Category
No. of
No. of Board
Last AGM
No. of
No. of
No. of Board/
No. of Board /
Board
Meetings
Attended
Directorships
Directorships
Committees
Committees
Meetings
Attended
in Private
in Public
in Which the
in Which the
Held
Companies#
Companies *
Director is
Director Is
Chairman &
Member &
Mr. Anil Singhvi$
Chairman, Non-Executive
& Non-Independent
Director
Mr. Vinod Kumar
Managing Director &
Padmanabhan%
Chief Executive Officer
[Executive Director]
Ms. Nisha Dutt
Independent Director
Ms. Poornima
Independent Director
Prabhu
Mr. George
Independent Director
Zacharias
Mr. Shiva
Whole-Time Director &
Shankar Naga
COO [Executive Director]
Roddam**
7
7
7
7
7
7
7
7
7
7
7
7
Yes
Yes
Yes
Yes
Yes
Yes
4
-
1
-
-
-
5
2
1
1
2
1
1
-
1
-
-
-
4
1
1
2
2
-
Details of Directorships along with category held by Directors in other Listed Entities:
Name of the Director
Name of the Listed Entity
Category of Directorship
Mr. Vinod Kumar Padmanabhan%
Nil
Nil
Mr. Anil Singhvi$
Hindustan Construction Company Limited
Independent Director
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. George Zacharias
Shree Digvijay Cement Co Limited
Executive, Non-Independent Director
Nil
Nil
Nil
Nil
Matrimony.com Limited
Non-Executive, Independent Director
Mr. Shiva Shankar Naga Roddam**
Nil
Nil
Notes:
* Includes both Listed and Unlisted Public Companies and includes the Directorship details held in Subex Limited.
& Memberships/Chairmanships of only Audit Committee and Stakeholders Relationship Committee in public companies (listed and unlisted) including
Subex Limited is considered as per the requirements of Regulation 26 (1) (b) of SEBI (LODR) Regulations. Membership details mentioned above includes
chairmanship positions held.
** The Board at its meeting held on February 01, 2021, changed the employment agreement of Mr. Shiva Shankar Naga Roddam from Subex Assurance LLP
to Subex Limited and subject to the approval of the members at the 27th AGM revised the remuneration of Mr. Shiva Shankar Naga Roddam with effect from
April 1, 2021.
$ Mr. Anil Singhvi (DIN: 00239589) has been re-appointed as Non-Executive & Non-Independent Director of the Company with effect from June 18, 2020.
% The Board at its meeting held on March 01, 2021, subject to the approval of the members at the 27th AGM approved the re-appointment of Mr. Vinod Kumar
Padmanabhan as the Managing Director & CEO of the Company for a period of 3 years with effect from April 01, 2021.
# No. of Directorships in Private Companies’ includes count of section 8 companies as well.
Subex Annual Report 2020-21 61
C. Number and Dates of Board Meetings
Details of meetings of the Board held during the financial year
2020-21 are as follows:
Sl. No Board Meeting Number
Date of the Board Meeting
1.
2.
3.
4.
5.
6.
7.
No. 1/2020-21
No. 2/2020-21
No. 3/2020-21
May 11, 2020
July 15, 2020
August 10, 2020
No. 4/2020-21
September 24, 2020
No. 5/2020-21
November 09, 2020
No. 6/2020-21
February 01, 2021
No. 7/2020-21
March 01, 2021
member on the Board. When such a need becomes apparent,
the NRC reviews potential candidates in terms of their expertise,
attributes, personal and professional backgrounds, and their
ability to attend meetings in India. It then places the details of
shortlisted candidates to the Board for its consideration. If the
Board approves, the person is appointed as an Additional Director
of the Company and subject to the approval of Shareholders at
the next general meeting they are appointed as a Director of
the Company either as Independent Director / Non-Executive
& Non-Independent Director / Executive Director as the case
may be.
G. Familiarization Programme for Independent Directors
D. Disclosure of relationships between directors inter-se:
There are no inter- se relationships between the Board members.
E. Details of Shareholding of Executive and Non- Executive
Directors:
Name of the Director
No. of Shares Held as
% of equity
at March 31, 2021
Mr. Anil Singhvi
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. Vinod Kumar
Padmanabhan
Mr. George Zacharias
Mr. Shiva Shankar Naga
Roddam
60,000
NIL
NIL
4,44,095
NIL
2,50,000
0.011
NA
NA
0.079
NA
0.044
There are no convertible instruments held by the Executive and
Non-Executive directors of the Company.
F. Term of Board Membership and Selection process
The Board, on recommendations of the Nomination &
Remuneration Committee of the Board [“NRC”], considers the
appointment and reappointment of Directors. Section 149(10)
of the Companies Act, 2013, provides that an Independent
Director shall hold office up to five consecutive years on the
Board of a Company, not liable to retire by rotation, and shall be
eligible for re-appointment for a further term at a maximum of
five years on passing of a special resolution by the Shareholders.
Section 152 of the Companies Act, 2013, states that one-third of
the Board members other than Independent Directors who are
subject to retire by rotation, shall retire every year and are eligible
for re-appointment, if approved by the Shareholders. The Non-
Executive & Non-Independent Directors including Managing
Director & Chief Executive Officer of the Company are liable to
retire by rotation and eligible for re-appointment, if approved by
the Shareholders.
Recommending any new member on the Board is the
responsibility of the NRC which consists of a majority of
Independent Directors. Given the existing composition of
the Board, the tenure as well as the years left of the existing
members to serve on the Board, and the need for new domain
expertise is reviewed by the NRC for the appointment of new
the
Pursuant to Regulation 25(7) of the SEBI (LODR) Regulations,
2015,
to provide
familiarization programme aims
independent directors with the industry scenario, the socio-
economic environment in which the Company operates, the
business model, the operational and financial performance of
the Company, significant developments to enable them to take
well informed decisions in a timely manner. The familiarization
programme also seeks to update the directors on the roles,
responsibilities, rights and duties under the Companies Act, 2013
and other statutes. Details of the familiarization programme
imparted to independent directors is available on the following
link https://www.subex.com/shareholder-services/.
Core Skills/Expertise/Competencies of the Board of
Directors.
The Board of Directors comprises of highly renowned
professionals drawn from diverse fields. They bring with them
a wide range of skills and experience to the Board, which
enhances the quality of the Board’s decision-making process.
The following are the core skills, expertise and competencies
for effective functioning of the Company which are currently
available with the Board:
Competencies
Description
/ Skills
Finance and
Financial management, Capital
allocation,
Governance
accounting, financial reporting, Compliance, best
practices in governance, ethics and values to
enhance the value of the stakeholders.
Strategy
Management decisions, branding, operational
integration, understanding diverse business
environments, economic conditions and regulatory
framework.
Sales and
marketing
Developing strategies for increasing market share,
Sales growth, expanding global markets and
enhance reputation of the organisation.
Personnel and
People practices and policies, geographic, cultural
Leadership
and economic conditions and driving strengths
and talent, succession planning, risk management
and long term growth.
Subex Annual Report 2020-21 62
Mr. Anil Singhvi, Chairman & Non-Independent Director
(Non-Executive & Non-Independent Director of the Company
with effect from June 18, 2020) is a Chartered Accountant, and
has over three decades of experience in the corporate sector
and has rich expertise in financial, strategic planning for business
and related aspects. Apart from Subex Limited he is also on the
board of reputed companies.
Mr. Vinod Kumar Padmanabhan, Managing Director & CEO has
over two decades of experience in the corporate world and
has spearheaded several initiatives that helped the Company
engage with its customer as a long-term strategic partner. He
is also involved in the field of Sales, customer interaction and
negotiation wherever needed. Since April 01, 2018 he has been
instrumental in ramping up Subex’s operations in Africa, Eastern
Europe and the Middle East. He has been successful in meeting
the top industry heads and has been a part of several discussion
forums which has added value to the company in attracting the
business talents and major business dealings.
Ms. Poornima Prabhu, Independent Director holds a Bachelor
of Arts and a Law degree and provides her valuable advice to
the Board and assists in the decision making related to the Legal
and Governance aspects. She has served at Lodha Ventures
Holdings Pvt., Ltd., as Head–Legal and as of Counsel at J. Sagar
Associates. She has rich experience in corporate law, including
mergers and acquisitions, divestment and litigation settlement.
Ms. Nisha Dutt, Independent Director holds a Master’s in Business
Administration and provides her expertise to the management
in devising the business management, strategic plans and adds
value towards solving the management related queries. She has
played a vital role as a CEO of Intellecap and was responsible for
front ending the conceptualization programmes.
Mr. George Zacharias has over three decades of diverse and
successful work experience. He holds a graduate degree
in Chemical Engineering and a PG Diploma in Business
Management. He has worked with reputed companies across
and assists the management in decision making process
concerning with the business strategy and operational matters.
Mr. Shiva Shankar Naga Roddam is the Whole-Time Director
& Chief Operating Officer responsible for Sales, Marketing,
Engineering & Delivery of Subex Group who has over two
decades of experience in Telecommunications, Cloud and PaaS.
He comes with extensive international experience and ability
to scale businesses in competitive environments, particularly
around the SaaS space. He holds a degree in Business
Management with specialization in Sales & Marketing.
H.
Independent Directors
As on date, the Company has three Independent Directors
including two Women Independent Directors on the Board. All
the Independent Directors satisfy the criteria of Independence
as laid down in the Companies Act, 2013 and the SEBI (LODR)
Regulation, 2015.
Considering the requirement of skill sets on the Board, eminent
people having an independent standing in their respective
profession, and who can effectively contribute to the Company’s
business and policy decisions are considered by the NRC of
the Company, for appointment as Independent Director on
the Board. The NRC, inter alia, considers skills, qualifications,
positive attributes, area of expertise, number of Directorship(s)
and Membership(s) held in other companies by such persons, in
accordance with Company’s policies on selection of Directors.
As required under the Companies Act, 2013, one meeting
of the Independent Directors of the Company was held on
February 01, 2021.
All Independent Directors have given declarations that they
meet the criteria of Independence as laid down under section
149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the
Listing Regulations. In the opinion of the Board, the Independent
directors, fulfil the conditions of Independence specified in
section 149(6) of the Companies Act, 2013 and Regulation
16(1) (b) of the Listing Regulations.
I. Directors Remuneration
The Company has a policy for the remuneration of Directors
including Independent Directors. The remuneration policy lays
down principles and parameters to ensure that remunerations
are competitive, reasonable, and in line with corporate and
individual performance. The Executive Director is appointed by
Shareholders’ resolution which includes their remuneration to be
paid to them which is in line with the statutory requirements and
Company’s policies. The annual remuneration is recommended
by the Nomination & Remuneration Committee to the Board
for its consideration. While recommending the remuneration,
the committee also takes into account corporate performance
in a given year and individual performance parameters. The
remuneration is within the limits approved by Shareholders.
Perquisites and retirement benefits are paid in accordance
with the Company’s compensation policies, as applicable to all
employees. Independent Directors are entitled to receive sitting
fees and reimbursement of any expenses for attending meetings
of the Board and its Committees. The Remuneration paid by the
Company is in conformity with the provisions of the Companies
Act, 2013, and has been considered and approved by the Board
and the Shareholders. The Company has not granted any stock
options to Independent Directors.
Subject to the approval of the shareholders at the 27th AGM of
the Company, the Board at its meeting held on May 17, 2021
approved the proposal for payment of remuneration by way of
commission to Independent and Non-Executive Directors, at
a sum not exceeding 1% per annum of the net profits of the
Company, calculated in accordance with the provisions of
Section 198 of the Companies Act, 2013. In any financial year,
if the Company has no profits or its profits are inadequate, the
Company may pay remuneration to its Independent Directors
and Non-Executive Directors, in accordance with the terms of
Section II of Part II of Schedule V of the Companies Act, 2013.
Details of the remuneration paid/payable to the Directors
(Executive/Non-Executive/Independent Directors) as required
under the SEBI (LODR) Regulation, 2015 as well as under the
Companies Act, 2013 are provided as part of this report.
Subex Annual Report 2020-21 III. AUDIT COMMITTEE
The constitution of the Audit Committee complies with the
requirement under Section 177 of the Companies Act, 2013
and Regulation 18 of SEBI (LODR) Regulations. Ms. Nisha
Dutt, Chairperson of the Audit Committee was present at the
26th Annual General Meeting. The Company Secretary acts as
the Secretary to the Committee. The Chief Financial Officer,
the Senior Management, the Statutory Auditors and the Internal
Auditors are invited to attend all the meetings of the Committee.
A. Terms of Reference
The Audit Committee has inter alia, the following mandate
as prescribed under Part C of Schedule II of The SEBI (LODR)
Regulations, 2015 and Section 177 of the Companies Act, 2013
some of which are:
1. Overseeing of the Company’s financial reporting process
and the disclosure of its financial information to ensure that
the financial statement is correct, sufficient and credible.
2. Recommending
to
the appointment,
the Board,
re- appointment, terms of appointment or reappointment
and, if required, the replacement or removal of the statutory
auditor and their remuneration.
3. Approving the payment to be made to the statutory auditors
for any other services rendered by the statutory auditors.
4. Reviewing, with the management, the annual financial
statements and auditor's report thereon before submission
to the board for approval, with particular reference to:
a) Matters required to be included in the Director’s
Responsibility Statement to be included in the Board's
Report in terms of clause (c) of sub-section 3 of
section 134 of the Companies Act, 2013.
b) Changes, if any, in accounting policies and practices
and reasons for the same.
c) Major accounting entries involving estimates based on
the exercise of judgment by management.
d) Significant adjustments made
in
the financial
statements arising out of audit findings.
e) Compliance with listing and other legal requirements
relating to financial statements.
f) Disclosure of any related party transactions.
g) Modified opinions in the draft audit report.
5. Reviewing, with the management, the quarterly financial
statements before submission to the board for approval.
6. Reviewing, with the management, the statement of uses /
application of funds raised through an issue (public issue,
rights issue, preferential issue, etc.), the statement of funds
utilized for purposes other than those stated in the offer
document / prospectus / notice and the report submitted
by the monitoring agency monitoring the utilization of
proceeds of a public or rights issue, and making appropriate
recommendations to the board to take up steps in this
matter.
63
7. Reviewing and monitoring the auditor’s independence and
performance, and effectiveness of audit process.
8. Reviewing, with the management, performance of statutory
and internal auditor’s adequacy of the internal control
systems.
9. Reviewing the adequacy of internal audit function, if any,
including the structure of the internal audit department,
staffing and seniority of the official heading the department,
reporting structure coverage and frequency of internal
audit.
10. Discussing with internal auditors any significant findings
and follow up there on.
11. Reviewing the findings of any internal investigations by
the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems
of a material nature and reporting the matter to the board.
12. Discussing with statutory auditors before
the audit
commences, about the nature and scope of audit as well
as post-audit discussion to ascertain any area of concern.
13. Looking into the reasons for substantial defaults in the
payment to the depositors, debenture holders, shareholders
(in case of nonpayment of declared dividends) and creditors.
14. Overseeing the functioning of the whistle blower/ vigil
mechanism which shall provide for adequate safeguards
against victimization of employees and directors who avail
of the vigil mechanism and to take action against repeated
frivolous complaints filed by director or employee.
15. Powers to investigate any activity within its terms of
reference or referred to it by the Board, have full access
to information contained in the books of accounts, seek
information from any employee, obtain outside legal
or other professional advice and secure attendance of
outsiders with relevant expertise, if it considers necessary.
16. Carrying out any other function as mentioned in the terms
of reference of the Audit Committee and as prescribed
under the SEBI (LODR) Regulations, 2015, the Companies
Act, 2013 and the Rules made thereunder and any other
statutory/regulatory body from time to time.
17. Examination of the financial statement and the auditor's
report thereon.
18. Scrutinizing the inter-corporate loans and investments.
19. Valuation of undertakings or assets of the Company,
wherever it is necessary.
20. Evaluating
the
internal financial controls and
risk
management systems.
21. Monitoring the end use of funds raised through public
offers and related matters.
22. Approving the appointment of CFO (i.e., the Whole-Time
Finance Director or any other person heading the finance
function or discharging that function) after assessing the
Subex Annual Report 2020-21 64
qualifications, experience and background, etc. of the
candidate.
The Attendance of the directors at the Audit Committee
Meetings during the Financial Year 2020-21 were as follows:
23. Calling for comments of the auditors about internal control
systems, the scope of audit, including the observations
of the auditors and review of financial statement before
their submission to the Board and discussing any related
issues with the internal and statutory auditors and the
management of the Company, if any.
24. Approval or any subsequent modification of transactions of
the Company with related parties.
25. Approval / recommendation to the Board of the transactions
other than transactions referred to in Section 188.
26. Omnibus approval of the related party transactions
proposed to be entered into by the Company subject to
the provisions of the Companies Act 2013.
27. Ratification of the transactions upto ` 1 crore entered into
by a director or officer of the Company without obtaining
prior approval of the Audit Committee.
28. Reviewing the utilization of loans and/ or advances from/
investment by the holding company in the subsidiary
exceeding ` 100 crore or 10% of the asset size of the
subsidiary, whichever is lower including existing loans /
advances / investments.
The Audit Committee charter containing terms of
reference is also available on the Company’s website at
https://www.subex.com/investors/shareholder-services/.
B. Composition of the Audit Committee as on March 31, 2021
The Board at its meeting held on May 11, 2020 re-constituted
the committee as mentioned below w.e.f June 18, 2020:
Sl.
No
1.
2.
3.
4.
Name of the Director
Category
Ms. Nisha Dutt (Chairperson)
Independent Director
Mr. Anil Singhvi
Non-Executive &
Non-Independent Director
Ms. Poornima Prabhu
Independent Director
Mr. George Zacharias
Independent Director
Name of the Director
No. of Audit
No. of Audit
Committee
Committee
Meetings Held
Meetings Attended
Ms. Nisha Dutt (Chairperson)
Mr. Anil Singhvi
Ms. Poornima Prabhu
Mr. Vinod Kumar
Padmanabhan**
Mr. George Zacharias
4
4
4
1
4
4
4
4
1
4
** Mr. Vinod Kumar Padmanabhan stepped down as Member of the Audit
Committee w.e.f. June 18, 2020
IV. NOMINATION & REMUNERATION COMMITTEE
The Nomination & Remuneration Committee has been
constituted as required under Section 178 of the Act and
Regulation 19 of SEBI (LODR) Regulations. The Nomination &
Remuneration Committee comprises of three directors out of
which two are Independent directors including chairperson and
one is Non- Executive & Non- Independent director.
The Nomination & Remuneration Committee has, inter alia,
the following mandate as prescribed under Part C of Schedule
II of The SEBI (LODR) Regulations, 2015 and Section 17 of the
Companies Act, 2013 some of which are:
A. Terms of Reference
1.
2.
Formulation of the criteria for determining qualifications,
positive attributes and independence of a director, KMP or
other employees and recommend to the Board of Directors
a policy relating to the appointment & remuneration of the
directors, key managerial personnel and other employees;
Formulation of criteria for evaluation of performance
of independent directors and the board of directors
and specifying the manner for effective evaluation of
performance of Board, its committees and individual
directors to be carried out either by the Board, the
Committee or by an independent external agency and
review its implementation and compliance.
C. Meetings and Attendance of the Committee during the Year
3. Devising a policy on diversity of board of directors;
2020-21:
During the financial year 2020-21, the following meetings of the
Audit Committee were held:
Sl.
No
1.
2.
3.
4.
Meeting No.
Date of the meeting
No. 1/ 2020-21
No. 2/ 2020-21
No. 3/ 2020-21
No. 4/ 2020-21
May 11, 2020*
August 10, 2020*
November 09, 2020*
February 01, 2021*
*dates on which the Quarterly/Half Yearly/Year ended results for the
financial year 2020-21 were considered.
4.
Identifying persons who are qualified to become directors
and who may be appointed in senior management in
accordance with the criteria laid down and recommend to
the board of directors their appointment, remuneration and
removal.
5. Develop and recommend to the Board succession plan
for the key positions in the Company (the “Succession
Plan”), to review the Succession Plan periodically, develop
and evaluate potential candidates for executive positions
and recommend to the Board any changes to, and any
candidates for succession under, the Succession Plan
and to perform a consultative and advisory role for
any appointment requiring Board approval for the top
management positions of the Company.
Subex Annual Report 2020-21 6. Administer the Company’s equity incentive plans, including
the review and grant of options to eligible employees under
the plans and the terms and conditions applicable to such
options, subject to the provisions of each plan.
7. Deciding on whether to extend or continue the term of
appointment of the independent director, on the basis
of the report of performance evaluation of independent
directors.
8. Recommend to the Board, all remuneration, in whatever
form, payable to senior management.
9. Carrying out any other function as prescribed under the
SEBI Listing Regulations, the Companies Act, 2013 and the
Rules made thereunder and any other statutory/regulatory
body from time to time.
The Nomination & Remuneration Committee charter containing
terms of reference is also available on the Company’s website at
https://www.subex.com/investors/shareholder-services/.
B. Composition of the Nomination & Remuneration Committee
as on March 31, 2021 is as follows:
The Board at its meeting held on May 11, 2020 re-constituted
the committee as mentioned below w.e.f June 18, 2020:
Sl.
No
1
2
Name of the Director
Category
Ms. Poornima Prabhu
Independent Director
(Chairperson)
Mr. Anil Singhvi
Non-Executive &
Non-Independent Director
3.
Ms. Nisha Dutt
Independent Director
C. Meetings and Attendance of the Committee during the Year
2020-21:
During the financial year 2020-21, the following meetings of the
Nomination & Remuneration Committee were held:
Sl.
No
1.
2.
3.
4.
Meeting No.
Date of the meeting
No. 1/2020-21
No. 2/2020-21
No. 3/2020-21
No. 4/2020-21
May 11, 2020
September 17, 2020
February 01, 2021
March 01, 2021
Ms. Poornima Prabhu, Chairperson of the Nomination &
Remuneration Committee was present at the 26th Annual
General Meeting.
65
Attendance of the members of the Nomination & Remuneration
Committee meetings during the Financial Year 2020-21 were as
follows:
Name of the Director
No. of
Nomination &
Remuneration
Committee
Meetings Held
No. of Nomination
& Remuneration
Committee
Meetings Attended
Ms. Nisha Dutt
Mr. Anil Singhvi
Ms. Poornima Prabhu
4
4
4
4
4
4
D. Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and
Regulation 25 of the SEBI (LODR) Regulations, 2015, the Board
has carried out the annual performance evaluation of its own
performance, the directors individually, as well as the evaluation
of all the Committees of the Board. The Committee formulated
the criteria for evaluation of the Chairman, Board of Directors,
Members of the Committee and Individual Directors and the
evaluation is conducted accordingly. The evaluation criteria
included aspects related to competency of directors, strategy
independence,
and performance evaluation, governance,
effectiveness, structure of the board/committee, level of
engagement and contribution, independence of judgement etc.
The performance evaluation of the independent directors was
carried out by the entire Board. The performance evaluation of
the Chairman and non-independent directors was carried out
by the independent directors. The directors expressed their
satisfaction with the evaluation process and its results, which
reflected in the overall management of the Board and its
committees with the Company.
V. Remuneration Policy
The Remuneration Policy provides the framework to attract,
motivate and retain qualified and expert individuals that
the Company needs in order to achieve its strategic and
operational objectives. The Remuneration policy is devised in
accordance with Section 178(3) and (4) of the Companies Act,
2013 and is available on the website of the Company under
https://www.subex.com/investors/shareholder-services/. The
Company follows a compensation mix of fixed pay, benefits
and performance-based variable pay and sharing of wealth
through the Company’s stock options. Individual performance
pay is determined by combination of individual and business
performance of the Company. The Company pays remuneration
by way of salary, benefits, perquisites and allowances (fixed
component) and performance incentives (variable component)
to its Executive Directors and Key Managerial Personnel.
Subex Annual Report 2020-21 66
A. Details of remuneration paid to all the Directors during the
year 2020-21 are as follows:
The Nomination & Remuneration Committee determines and
recommends to the Board, the compensation payable to the
Executive Directors. All Board level compensation is approved by
the shareholders, where necessary, and is separately disclosed
in the financial statements. The compensation, however, is
within the parameters set by the provisions of the Companies
Act, 2013 and rules made thereunder.
Details of remuneration paid/payable to the directors during
the year 2020-21 are as follows:
Name
Sitting fees
Mr. Anil Singhvi
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. Vinod Kumar Padmanabhan
Mr. George Zacharias
Mr. Shiva Shankar Naga Roddam
20.00
16.00
19.00
-
11.00
-
(` in lakhs)
Salary and
perquisites
-
-
-
56.97
-
17.40#
# Remuneration drawn by Mr. Shiva Shankar Naga Roddam from the
Company for the period February 01, 2021 to March 31, 2021.
Note: Subject to the approval of the shareholders at the 27th AGM of the
Company, the Board at its meeting held on May 17, 2021 approved an
amount of ` 12 lakhs be paid to each of the Independent Director and
Non- Executive Director as Commission for the Financial year 2021.
Remuneration of Executive Directors:
The compensation paid to the Executive Directors were
within the limits approved by the Shareholders. The elements
of the total compensation are approved by the Nomination &
Remuneration Committee within the overall limits specified
under the Companies Act, 2013. The elements of compensation
of the Executive Directors include the fixed compensation,
variable compensation in the form of annual incentive, benefits,
work related facilities and perquisites. The Nomination &
Remuneration Committee determines the annual variable
pay compensation in the form of annual incentive and annual
increment for the Executive Directors based on Company’s and
individual’s performance as against the pre agreed objectives for
the year.
Details of Remuneration of Executive Directors during the
year are given below:
Mr. Vinod Kumar Padmanabhan, Managing Director & CEO
(April 01, 2018 to March 31, 2021)
a) Tenure: 3 years (April 01, 2018 to March 31, 2021).
b) Remuneration: ` 60,00,000 per annum for a period of
3 years from April 01, 2018.
d) Expenses: The Company shall reimburse all reasonable
travelling and other similar out of pocket expenses
necessarily and reasonably incurred by him wholly in
proper performance of his duties and responsibilities.
e) Other terms and conditions including notice period and
severance fees: As per the employment agreement between
Subex Limited and Mr. Vinod Kumar Padmanabhan.
The Board at its meeting held on March 01, 2021, subject to
the approval of the members at the 27th AGM approved the
re-appointment of Mr. Vinod Kumar Padmanabhan as the
Managing Director & CEO of the Company for a period of
3 years with effect from April 01, 2021.
The brief terms of appointment were:
a)
Fixed Pay: ` 240 lakhs per annum (comprising primarily of
basic pay, house rent allowance, conveyance allowance,
medical allowance,
travel allowance, special
allowance, company’s contribution to provident fund,
gratuity and others) to be paid periodically in accordance
with the Company’s normal payroll practices and subject
to deduction of tax.
leave
b) Variable Pay: ` 160 lakhs per annum payable on performance
basis and parameters as decided by the Nomination &
Remuneration Committee and the Board from time to
time.
c) Stock Options (existing) 25,00,000 allocated during his
previous tenure and entire value of perquisites arising out
of exercise of stock options granted.
d) Any future Stock Options granted by the Nomination &
Remuneration Committee from time to time and entire
value of perquisites arising out of exercise of stock options
granted.
e) Taxes: Mr. Vinod Kumar Padmanabhan will be solely
responsible for all personal and other taxes relevant
including the preparation and filing of such tax returns with
appropriate authority.
f)
All other terms and conditions including notice period and
severance fees will be as per the employment agreement
between the Company and Mr. Vinod Kumar Padmanabhan.
Mr. Shiva Shankar Naga Roddam, Whole-Time Executive
Director & Chief Operating Officer
a) Tenure: 3 Years commencing from February 07, 2020 to
February 06, 2023 (subject to the approval of the members
at the ensuing Annual General Meeting.)
b)
#Remuneration: NIL.
c) Taxes: Mr. Shiva Shankar Naga Roddam will be solely
responsible for all personal and other taxes relevant
including the preparation and filing of such tax returns with
appropriate authority.
c) Taxes: Mr. Vinod Kumar Padmanabhan will be solely
responsible for all personal and other taxes relevant
including the preparation and filing of such tax returns with
appropriate authority.
d) Expenses: The Company shall reimburse all reasonable
travelling and other similar out of pocket expenses
necessarily and reasonably incurred by him wholly in
proper performance of his duties and responsibilities.
Subex Annual Report 2020-21 67
e) All other terms and conditions including notice period and
severance fees will be as per the employment agreement
of Mr. Shiva Shankar Naga Roddam.
# Mr. Shiva Shankar Naga Roddam is paid remuneration from the
subsidiary company of Subex Limited i.e Subex Assurance LLP as per his
employment agreement with the LLP
The Board at its meeting held on February 01, 2021, changed
the employment agreement of Mr. Shiva Shankar Naga Roddam
from Subex Assurance LLP to Subex Limited and subject to
the approval of the members at the 27th AGM revised the
remuneration of Mr. Shiva Shankar Naga Roddam with effect
from February 01, 2021.
The brief terms of appointment were:
i)
Tenure: Term commencing from February 01, 2021, till
February 06, 2023.
ii)
Fixed Pay: ` 1,10,00,000 per annum (comprising primarily
of basic pay, house rent allowance, conveyance allowance,
medical allowance,
travel allowance, special
allowance, company’s contribution to provident fund,
gratuity and others) to be paid periodically in accordance
with the Company’s normal payroll practices and subject
to tax withholding.
leave
iii) Variable Pay: Mr. Shiva Shankar Naga Roddam will be
eligible for variable pay of ` 1,25,00,000 on performance
basis as per the employment agreement.
iv) Stock Options (existing) 15,00,000 allocated during his
previous tenure as employee of Subex Assurance LLP
(wholly owned subsidiary) and entire value of perquisites
arising out of exercise of stock options granted.
v) Any Stock Options granted by
the Nomination &
Remuneration Committee from time to time and entire
value of perquisites arising out of exercise of stock options
granted.
vi) Taxes: Mr. Shiva Shankar Naga Roddam will be solely
responsible for all personal and other taxes relevant
including the preparation and filing of such tax returns with
appropriate authority.
vii) Expenses: The Company shall reimburse all reasonable
travelling and other similar out of pocket expenses
necessarily and reasonably incurred by him wholly in
proper performance of his duties and responsibilities.
viii) All other terms and conditions including notice period and
severance fees will be as per the employment agreement
between the Company and Mr. Shiva Shankar Naga
Roddam.
In the event of any loss, absence or inadequacy of the profits of
the Company in any financial year, during the term of office the
Executive Directors the above said remuneration shall be paid to
them as minimum remuneration in terms of Section II of Part II
of Schedule V of the Companies Act, 2013.
Details of the remuneration paid to the Directors (Executive/
Non-Executive/Independent Directors) as required under the
SEBI (LODR) Regulation, 2015 as well as under the Companies
Act, 2013 are provided as part of this report.
V. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee
is responsible
for addressing the investor complaints and grievances. The
Committee meets on a periodic basis to address the investor
complaints like transfer of shares, non-receipt of balance sheet,
non-receipt of other documents etc. Details of grievances of the
investors are provided in the “Shareholders’ Information” section
of this Annual Report. The committee has been constituted
in accordance with Section 178 of the Companies Act, 2013
and Regulation 20 of the SEBI (LODR) Regulations, 2015. The
Company Secretary is the compliance officer of the Committee.
A. Composition of the Stakeholders Relationship Committee as
on March 31, 2021
The Board at its meeting held on May 11, 2020 re-constituted
the committee as mentioned below w.e.f June 18, 2020:
Sl.
No
1
2
3.
Name of the Director
Category
Mr. Anil Singhvi (Chairman)
Non-Executive &
Ms. Poornima Prabhu
Independent Director
Non-Independent Director
Mr. Vinod Kumar
Padmanabhan
Managing Director & CEO
B. Meetings and Attendance of the Committee during the Year
2020-21:
During the financial year 2020-21, the following meetings of the
Stakeholders Relationship Committee were held:
Sl.
No
1.
2.
3.
4.
Meeting No.
Date of the meeting
No. 1/2020-21
No. 2/2020-21
No. 3/2020-21
No. 4/2020-21
May 11, 2020
August 10, 2020
November 09, 2020
February 01, 2021
Attendance of the Directors at the Stakeholders Relationship
Committee Meetings for the Financial Year 2020-21 were as
follows:
Name of the Director
No. of
No. of
Stakeholders
Stakeholders
Relationship
Committee
Relationship
Committee
Meetings Held
Meetings Attended
4
4
4
4
4
3
Mr. Anil Singhvi
Ms. Poornima Prabhu
Mr. Vinod Kumar
Padmanabhan
The committee expresses satisfaction with the Company’s
performance in dealing with investor grievances and its share
transfer system. The details of the complaints received and
resolved during the fiscal ended March 31, 2021 are as follows:
Subex Annual Report 2020-21 68
Name of the Non-Executive Director
heading the Committee
Mr. Anil Singhvi,
Chairman,
Non-Executive &
Non-Independent
Director (w.e.f June 18,
2020)
Name and designation of the Compliance
Mr. G V Krishnakanth,
Officer
Company Secretary
Number of shareholders complaints
pending at the beginning of the year
Number of shareholders complaints
received during the year
Number of shareholders complaints
redressed during the year
Number of shareholders complaints
not solved to the satisfaction of the
shareholders
0
13
10
0
Number of shareholders complaints
3*
pending at end of the year
*Pending complaints were addressed post the end of the
financial year.
VII. ESOP COMMITTEE (Compensation Committee)
During the financial year 2018-19, the ESOP Committee
(Compensation Committee) of the Board was dissolved and
all powers of the Committee were vested in the Nomination &
Remuneration Committee of the Board of Directors.
The Company has instituted Employee Stock Option Schemes
in line with the Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations, 2014. The Committee
grants and administers options under the stock options schemes
to eligible employees. Details of the Employee Stock Options
are available as 'Annexure A' to the Board's Report.
VIII. CORPORATE SOCIAL RESPONSIBILITY
COMMITTEE
To enable the Company to take required measures to make a
meaningful contribution to society and other stakeholders, it
has constituted the Corporate Social Responsibility Committee
(“CSR Committee”). The CSR Committee has, inter alia, the
following mandate:
i.
formulate and recommend to the Board of Directors
of the Company, a Corporate Social Responsibility Policy
which shall indicate the activities to be undertaken by the
Company as specified in Schedule VII of The Companies
Act, 2013;
ii.
recommend the amount of expenditure to be incurred on
the activities referred to in clause (i); and
iii. monitor the Corporate Social Responsibility Policy of the
Company from time to time.
A. Composition of the CSR Committee as on March 31, 2021
Sl.
No
1.
2.
3.
Name of the Director
Category
Mr. Anil Singhvi (Chairman)
Non-Executive &
Ms. Nisha Dutt
Mr. Vinod Kumar
Padmanabhan
Non-Independent
Independent Director
Managing Director & CEO
4.
Mr. Shiva Shankar Naga
Whole Time Director & COO
Roddam
B. Meetings and Attendance of the Committee during the
Year 2020-21:
There were no meetings of the Committee held during the
financial year under consideration.
Pursuant to the provisions of Section 198 of the Companies Act,
2013, the Company has incurred losses during the preceding
three financial years and hence no amounts were required to be
allocated / contributed for undertaking CSR activities.
Though it is not mandatory to incur any expenditure on CSR
activities, the Subex Charitable Trust (SCT) was voluntarily set
up to undertake welfare activities for the under privileged and
the needy in the society. SCT is managed by trustees elected
amongst the employees of the Company. 'The details of the
activities conducted during the year ,have been provided in
Page 31 of the Annual Report.
The CSR Charter and
are available on
https://www.subex.com/ investors/shareholder-services/.
the Company
the Company at
the website of
the Policy of
IX. RISK MANAGEMENT COMMITTEE
To ensure that the Company is taking appropriate measures
to achieve prudent balance between risk and reward in both
ongoing and new business activities, it has constituted a Risk
internal financial
Management Committee to review the
controls amongst other matters. The said Committee has also
within its scope, the evaluation of significant risk exposures of
the Company and to assess Management’s actions to mitigate
the exposures in a timely manner. The Company considers
activities at all levels of the organization, i.e. Enterprise level,
Division level, Business Unit level and Subsidiary level in the risk
management framework. All these components are interrelated
and drive the Enterprise Wide Risk Management with focus
on three key elements i.e. Risk Assessment, Risk Management
and Risk Monitoring. As on March 31, 2021, the Company has
constituted a Risk Management Committee, though it is not
a mandatory requirement under the SEBI (LODR) Regulations,
2015.
Subex Annual Report 2020-21 69
A. Composition of the Risk Management Committee as on March 31, 2021
Sl.
No
1.
2.
3.
Name of the Director
Category
Mr. Anil Singhvi (Chairman)
Ms. Nisha Dutt
Mr. Vinod Kumar Padmanabhan
Non-Executive & Non-Independent Director
Independent Director
Managing Director & CEO
B. Meetings and Attendance of the Committee during the Year 2020-21:
The committee met once during the financial year 2020-21 at its meeting held on February 01, 2021 to identify the risks which could be
foreseen and mitigate the same.
Name of the Director
Mr. Anil Singhvi
Ms. Nisha Dutt
Mr. Vinod Kumar Padmanabhan
X. INDEPENDENT DIRECTOR
No. of Risk
No. of Risk
Management
Management
Committee Meetings
Committee
Held
Meetings attended
1
1
1
1
1
1
During the year under review, the Independent Directors met once on February 01, 2021, inter alia, to:
•
Review the performance of the Non-Independent Directors and the Board of Directors as a whole;
Assess the quality, quantity and timeliness of flow of information between the Management of the listed entity and the Board of
•
Directors that is necessary for the Board to effectively and reasonably perform their duties.
XI. GENERAL BODY MEETINGS
A. Location and Time of the Last Three AGMs
Year
Date of AGM Venue
2017-18
July 31, 2018
“The Grand Ball Room”, Hotel Lalit Ashok, Kumara Krupa High Grounds, Bengaluru-560 001
2018-19
July 04, 2019
“The Grand Ball Room”, Hotel Lalit Ashok, Kumara Krupa High Grounds, Bengaluru-560 001
2019-20
September
Video Conference/Other Audio Visual Means
25, 2020
Details of the Special Resolutions passed at the Last Three AGMs:
Date of Annual
No. of special
Details of Resolutions pertaining to
General Meeting
resolutions passed
Time
2:00 P.M.
2:00 P.M.
3:00 P.M.
July 31, 2018
4
1. Approval of the Employee Stock Option Scheme 2018 of the Company and Grant of Employee Stock
Options to the employees of the Company thereunder.
July 04, 2019
September 25, 2020
1
2
2. Approval of the Employee Stock Option Scheme 2018 and grant of Employee Stock Options to the
employees of the Company’s subsidiaries under the Scheme.
3. Authorization to the ‘Subex Employee Welfare and ESOP Benefit Trust’ for Secondary Acquisition.
4. Provision of interest free loan by the Company for purchase of its own shares by the Trust /Trustees for the
benefit of Employees and Employees of Subsidiaries under the Subex Stock Option Scheme 2018.
Provision of interest free loan by the Company for purchase of its own shares by the Trust/Trustees for the
benefit of Employees under the Subex Stock Option Scheme 2018.
1. Appointment of Ms. Nisha Dutt as an Independent Director of the Company.
2. Appointment of Mr. Shiva Shankar Naga Roddam as a Whole-Time Director of the Company.
Subex Annual Report 2020-21 70
B. Location and Time of the Last Three EGMs
During the last three years, there were no Extra – Ordinary General Meetings held. However, the details of the latest Extra- Ordinary
General Meetings (EGM's) held have been stated.
Year
Date of EGM
Venue
2011-12 December 28, 2011
Registered office of the Company
2012-13
June 28, 2012
2012-13
August 17, 2012
Registered office of the Company
Registered office of the Company
C. Postal Ballot during year 2020-21
Time
11:30 A.M.
11:30 A.M.
11:30 A.M.
The Company had sought approval of shareholders through Postal Ballot pursuant to Section 110 of the Companies Act, 2013, read with
Rules 20 and 22 of the Companies (Management and Administration) Rules, 2014 during the financial year 2019-20 for the following
businesses:
Resolution No. 1: Reduction of Share Capital of the Company – Special Resolution
The Notice of Postal Ballot was approved by the Board of Directors on May 22, 2020.
The Company has appointed Mr. Pramod S.M. (Membership No. 7834 and Certificate of Practice No. 13784), Partner, BMP & Co., LLP,
Practicing Company Secretaries as the Scrutinizer and Mr. Biswajit Ghosh, (FCS Membership No. 8750 and Certificate of Practice No.
8239), Partner, BMP & Co., LLP, Practicing Company Secretaries, as an alternate scrutinizer to Mr. Pramod S.M., for conducting the
meeting only through the electronic voting process, in a fair and transparent manner.
The Company proposed to have the special resolution passed through Postal Ballot for the purpose of Reduction of Share Capital of the
Company through e-voting procedure, which commenced on May 27, 2020 and concluded on June 25, 2020, in accordance with the
MCA General Circular No. 14/2020 dated April 08, 2020 and Circular No. 17/2020 dated April 13, 2020 (“MCA Circulars”), in view of the
current extraordinary circumstances due to the COVID-19 pandemic requiring social distancing.
In compliance with the requirements of the MCA Circulars, hard copies of the Postal Ballot Notice along with Postal Ballot
Forms and pre-paid business envelope were not sent to the members for this Postal Ballot and members were required to
communicate their assent or dissent through the remote e-voting system only. Please refer notice of the postal ballot under
https://www.subex.com/ investors/capital-reduction/ for the Postal ballot notice and the procedure for e-voting.
The results of the Postal Ballot, including the E-voting are as follows:
Resolution No.
Particulars
Total Number of shares voted
Voted in favour
Voted against
Percentage (in favour)
Result
1.
Reduction of Share
150827099
150163793
663306
99.56%
Approved
Capital of the
Company
All the Resolutions were approved with requisite majority, the results were displayed on the website of the Company and necessary
disclosures were made to the Stock Exchanges.
XII. MEANS OF COMMUNICATION
A. Annual/Half Yearly and Quarterly Results
https://www.subex.com/
The annual audited /half yearly & quarterly un-audited results
are generally published in all editions of Financial Express/
Business Standard (English) and Vishwavani (Kannada). The
complete financial statements are posted on the Company’s
website
investors/
announcement- filing/statutory-advertisement). Subex also
regularly provides information to the Stock Exchanges as per
the requirements of the SEBI (LODR) Regulations, 2015 and
updates the website periodically to include information on new
developments, press release and business opportunities and
the same is displayed on the website of the Company under
https://www.subex.com/newsroom/.
(click on
Being a Company with strong focus on green initiatives, Subex
proposes to send all the shareholder communications such as
the notice of General Meetings, Audited Financial Statements,
Board's Report, Auditor's Report, etc., as done in the past, to
its shareholders in electronic form by sending the said reports
to the email addresses provided by them and made available
to us by the Depositories. The Company during the said
financial year 2020-21, had scheduled the Investor calls to
discuss on the Earnings of the Company for relevant quarters
which were scheduled on May 12, 2020, August 11, 2020,
November 10, 2020 and February 02, 2021 respectively. The
Company did not have any Institutional investors during
the financial year and hence there were no presentations
made to the institutional investors. The transcripts pertaining
to the Earning’s call held during the year are uploaded on
the Company’s website under the link https://www.subex.
investors/announcement-filing/investor-
com/
(click on
Subex Annual Report 2020-21 71
analyst-call).In view of the COVID-19 pandemic, the Ministry
of Corporate Affairs (“MCA”) vide General circular No 02/2021
dated January 13, 2021 read with General circular No. 39/2020
dated December 31, 2020, No. 33/2020 dated September 28,
2020, No. 22/2020 dated June 15, 2020, No. 20/2020 dated
May 05, 2020, No. 17/2020 dated April 13, 2020 and
No. 14/2020 dated April 08, 2020 (the ‘MCA Circulars’), provided
certain relaxations for companies, including conducting of the
Annual General Meeting (AGM) through Video Conferencing
(VC) or through Other Audio-Visual Means (OAVM) (‘VC/OAVM’),
if AGMs of such companies are conducted during the calendar
year 2021. The said MCA Circulars have also dispensed with the
printing and dispatch of annual reports to shareholders. In line
with the above MCA Circulars, SEBI vide its circular no. SEBI/
HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 dispensed
with the requirement of Regulation 36 (1)(b) and (c) of the SEBI
(LODR) Regulations, 2015, for listed entities, who conduct
their AGMs during the calendar year 2020, which otherwise
prescribes that a listed entity shall send a hard copy of the
statement containing salient features of all the documents, as
prescribed in Section 136 of the Companies Act, 2013 to the
shareholders who have not registered their email addresses and
hard copies of full annual reports to those shareholders, who
request for the same, respectively.
Accordingly, this year, in view of spread of the COVID-19
pandemic and also to support the “Green Initiative in Corporate
Governance”, an initiative taken by the MCA, the Company has
decided to send soft copies of Annual Report 2020-21 (including
AGM Notice) to those shareholders whose email addresses are
registered with the Depository Participants and / or with the
Company’s Registrars & Transfer Agents.
In terms of above MCA Circulars and in view of the current
extraordinary circumstances due to the COVID-19 pandemic
requiring social distancing, the Company is taking measures to
allow Members to vote through the mechanism of e-voting or
other electronic modes in accordance with the provisions of
the Companies Act, 2013 and rules made thereunder, without
holding a AGM that requires physical presence of Members at a
common venue.
With respect to detailed procedure for Remote e-voting or
voting through electronic mode and attending the AGM through
VC/OAVM, please refer the Notes and instructions annexed to
Notice of 27th AGM.
XIII.DISCLOSURES
A. RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under
The Companies Act, 2013 and Regulation 23 of the SEBI (LODR)
Regulations, 2015 during the financial year were in the ordinary
course of business and on an arms’ length pricing basis and
do not attract the provisions of Section 188 of the Companies
Act, 2013. There were no materially significant transactions with
related parties during the financial year which were in conflict
with the interest of the Company. Suitable disclosures as
required by Ind AS has been made in note 30 to the Standalone
and Note 31 to the Consolidated Financial Statements.
The Board has approved a policy for related party transactions
which has been uploaded on the Company’s website under the
link at https://www.subex.com/investors/shareholder-services/.
None of the Independent Directors have any material pecuniary
relationship or transactions with its Promoters, its Directors,
its Senior Management or its subsidiaries which may affect
their independence. The Company has received the relevant
declarations in this regard from its Independent Directors of the
Company.
B.
INSIDER TRADING
The company has adopted a Code of Conduct for prevention
of Insider Trading with a view to regulate trading in securities
by the Directors and designated persons of the Company.
The code requires pre-clearance for dealing in the Company’s
shares and prohibits the purchase or sale of Company’s shares
by the Directors and the designated persons while in possession
of unpublished price sensitive information in relation to the
Company and during the period when the Trading Window
is closed. The Company Secretary & Compliance Officer is
responsible for implementation of the Code.
C. FINES
During the year 2020-21, the National Stock Exchange of
India Limited [“NSE”] had sent letters to the Company for non-
compliance with respect to Regulation 17 (1) (c) of the SEBI
(LODR) Regulations for the delay in appointment of the 6th
Director. The Company has submitted its responses against
the Letters received by NSE enumerating the reasons for delay
in compliance with respect to Regulation 17 (1) (c) of the SEBI
LODR Regulations and sought additional time for complying
with the requirement. Further, the NSE imposed a total amount
as fine of ` 6,45,000 (` 4,60,000 & ` 1,85,000 respectively)
for the delay in appointing the 6th Director on the Board. The
Company submitted its response to NSE stating the reasons for
non-compliance and urged NSE to waive the fine imposed and
sought further time till March 31, 2020, to enable it to comply
with the Regulation 17 (1) (c) of the SEBI (LODR) Regulations,
2015. The NSE vide its letter dated June 23, 2020 intimated the
Company that its request for waiver of fine was not considered
favorably and the Company remitted the fine to NSE on
July 08, 2020.
D. VIGIL MECHANISM AND WHISTLE BLOWER MECHANISM
With the rapid expansion of business in terms of volume, value
and geography, various risks associated with the business have
also increased considerably. One such risk identified is the risk
of fraud & misconduct. The Companies Act, 2013 and the SEBI
(LODR) Regulations, 2015 require all the listed companies to
institutionalize the vigil mechanism and whistle blower policy.
The Company since its inception believes in honest and ethical
conduct from all the employees and others who are associated
directly and indirectly with the Company. The Audit Committee
is also committed to ensure a fraud-free work environment. The
policy provides a platform to all the employees, vendors and
customers to report any suspected or confirmed incident of
fraud/misconduct.
Subex Annual Report 2020-21 72
Adequate safeguards have been provided in the policy to
prevent victimization of anyone who is using this platform and
direct access to the Chairperson of the Audit Committee at
whistleblower@subex.com is also available in exceptional cases
and no personnel has been denied access to the audit committee
during the said financial year. This policy is applicable to all the
directors, employees, vendors and customers of the Company.
The policy is also available on the website of the Company at
https://www.subex.com/investors/shareholder-services/.
E. POLICY ON ‘MATERIAL’ SUBSIDIARY COMPANIES
A policy on materiality of subsidiaries has been formulated and
the same has been posted on the website of the Company
under the link https://www.subex.com/investors/shareholder-
services/.
The Annual Financial Statements of material subsidiaries are
tabled before the Audit committee and the Board.
F. DISCLOSURE OF COMMODITY PRICE RISKS AND
COMMODITY HEDGING ACTIVITIES/LIQUIDITY
The Company does not deal in commodity and hence
disclosure relating to commodity price risks and commodity
hedging activities is not applicable. The Company is exposed
to foreign exchange risk on account of import and export
transactions entered. There is a natural hedge between exports
and imports. However, the Company has initiated hedging from
May 2020 for FY20-21 and holds derivative financial instruments
such as foreign currency forward contracts to mitigate the risk
of changes in exchange rates on foreign currency exposures.
The liquidity position of the Company was not impacted during
the said financial year
G. DETAILS OF UTILIZATION OF FUNDS RAISED THROUGH
PREFERENTIAL ALLOTMENT OR QUALIFIED INSTITUTIONS
PLACEMENT AS SPECIFIED UNDER REGULATION 32 (7A).
There were no funds raised by the Company through Preferential
allotment or qualified institutional placement as specified
under the above mentioned regulation during the financial
year 2020-21.
H. CEO/CFO CERTIFICATION
The Company has obtained a certificate from the CEO/CFO
as required by Regulation 17 (8) (Part B of Schedule II) of the
SEBI (LODR) Regulations, 2015 and the same forms a part of this
report as Annexure 1.
I.
A CERTIFICATE FROM A COMPANY SECRETARY IN PRACTICE
THAT NONE OF THE DIRECTORS ON THE BOARD OF THE
COMPANY HAVE BEEN DEBARRED OR DISQUALIFIED FROM
BEING APPOINTED OR CONTINUING AS DIRECTORS OF
COMPANIES BY THE BOARD/MINISTRY OF CORPORATE
AFFAIRS OR ANY SUCH STATUTORY AUTHORITY.
A Certificate from the Practicing Company Secretary is received
by the Company stating that none of the directors on the board
of the Company have been debarred or disqualified from being
appointed or continuing as directors of companies by the board/
ministry of corporate affairs or any such statutory authority and
the same is annexed to this report as Annexure 2.
J. DETAILS OF FEES PAID BY THE LISTED ENTITY AND ITS
SUBSIDIARIES, ON A CONSOLIDATED BASIS, TO THE
STATUTORY AUDITOR AND ALL ENTITIES IN THE NETWORK
FIRM/NETWORK ENTITY OF WHICH THE STATUTORY
AUDITOR IS A PART.
Fee disclosures as required by Clause 10(k), Part C, Schedule V of
the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015. The total
fees for all services paid by Subex Limited and its subsidiaries,
on a consolidated basis, to M/s. S.R. Batliboi & Associates LLP,
Statutory Auditors and other firms in the network entity of which
the statutory auditor is a part, as included in the consolidated
financial statements of the Company for the year ended
March 31, 2021, is as follows:
(` in lakhs)
Fees for audit and related services paid to S.R.
100
Batliboi & Associates LLP
Other fees paid to S.R. Batliboi & Associates LLP
NIL
and Affiliate firms and to entities of the network of
which the statutory auditor is a part
Total fees
100
K. DISCLOSURES IN RELATION TO THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has an Internal Complaints Committee (“the
ICC”) which meets regularly to discuss and monitor if there is
any sexual harassment in the work place and resolves the issues
if any. During the financial year under consideration, the ICC did
not receive any complaints.
L. CODE OF CONDUCT
In compliance with Regulation 17(5) of the SEBI (LODR)
Regulations, 2015, the Company has adopted a Code of
Conduct (the ‘Code’). This Code is applicable to the Members
of the Board, Senior Management Personnel and all employees
of the Company and Subsidiaries. The Code lays down the
standard of conduct which is expected to be followed by
the Board of Directors and the designated employees in their
business dealings particularly on matters relating to integrity
in the workplace, in business practices and in dealing with
stakeholders. The Code gives guidance through examples on
the expected behavior from an employee in a given situation
and the reporting structure.
During the said Financial year there were no changes made
to the Code. All the members of the Board and the Senior
Management Personnel have affirmed compliance to the
Code, as at March 31, 2021. A declaration to this effect, signed
by the Managing Director & CEO forms part of this report as
Annexure 3. The Code has been posted on the Company’s
link https://www.subex.com/investors/
the
website under
shareholder-services/ .
Subex Annual Report 2020-21
M. RECOMMENDATION OF THE COMMITTEES
There were no instances in the financial year 2020-21, where
the Board had not accepted any recommendations of any
Committees of the Board which is mandatorily required.
XVII. COMPLIANCE WITH DISCRETIONARY
REQUIREMENTS PROVIDED UNDER
PART E OF SCHEDULE II OF THE SEBI (LODR)
REGULATIONS, 2015
73
XIV. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis is presented in a
separate section forming part of the Annual Report.
XV. GENERAL SHAREHOLDER INFORMATION
General shareholder information is provided in the “Shareholders'
Information” Section of the Annual Report.
XVI. COMPLIANCE WITH CORPORATE
GOVERNANCE REQUIREMENTS AND
PRACTISING COMPANY SECRETARIES
CERTIFICATE
The Company has complied with disclosure requirements,
wherever applicable, as specified in clauses (b) to (i) of sub
regulation (2) of Regulation 46 of SEBI (LODR) Regulations, 2015
and Regulation 17 to 27 of SEBI (LODR) Regulations, 2015, except
for the delay in appointing the 6th Director on the Board of the
Company pursuant to Regulation 17(1)(c) of the said Regulations.
The Company has appointed the 6th Director with effect from
February 07, 2020.
The certificate with regard to compliance of conditions on
Corporate Governance as per Clause E of Schedule V of the
SEBI (LODR) Regulations, 2015 forms part of the Board's Report.
For Subex Limited
Anil Singhvi
Chairman, Non-Executive &
Non-Independent Director
DIN: 00239589
Place: Mumbai
Date: May 17, 2021
Part E of Schedule II of the SEBI (LODR) Regulations, 2015 states
that the discretionary requirements provided therein may be
implemented as per the Company’s discretion. However, the
disclosures of compliance with mandatory requirements and
adoption (and compliance)/non-adoption of non-mandatory
requirements shall be made in the section on Corporate
Governance in the Annual Report. The Company has complied
with the following non-mandatory requirements.
A. The Board
The Company appointed Mr. Anil Singhvi, Independent Director
(Non-Executive & Non-Independent Director w.e.f. June 18,
2020) as the Non-Executive Chairman of the Company at its
meeting held on May 25, 2017. The Company reimburses the
expenses incurred by the Chairman for discharge of his duties
that are attributable to the Company on a regular basis pursuant
to the provisions of Regulation 27(1) of SEBI (LODR) Regulation,
2015.
B. Shareholders’ Rights
The Company communicates with investors regularly through
emails, telephone calls and face to face meetings. The Company
publishes the quarterly/half-yearly/annual financial results in
leading business newspaper(s) as well as on the Company’s
website.
C. Modified opinion(s) in Audit Report
The Company did not receive any Modified Opinion in the Audit
Report of the Financial Statements during the financial year.
D. Reporting of Internal Auditor
The Internal Auditor's report to the Audit Committee of the
Board of Directors and are requested to be present as invitees at
the Audit Committee meetings held every quarter.
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN: 06563872
Place: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21
74
ANNEXURE 1
CEO and CFO certification in terms of Regulation 17 (8) of the SEBI (LODR) Regulations, 2015
To,
The Board of Directors
Subex Limited
Dear Sirs,
CEO/CFO Certification in terms of Regulation 17 (8) of the SEBI (LODR) Regulations, 2015
In terms of Regulation 17 (8) of the SEBI (LODR) Regulations, 2015, we hereby certify to the Board of Directors that:
A) We have reviewed the financial statements and the cash flow statement of the Company for the year ended March 31, 2021 and to
the best of our knowledge and belief:
i)
These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be
misleading;
ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
B) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent,
illegal or violative of the Company’s Code of Conduct.
C) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the
effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the Auditors and
the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps
we have taken or propose to take to rectify these deficiencies.
D) We have indicated to the auditors and the Audit Committee
i)
ii)
iii)
Significant changes in internal control, if any, over financial reporting during the year;
Significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the
financial statements; and
Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an
employee having a significant role in the Company’s internal control system over financial reporting wherever needed.
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN: 06563872
Date: May 17, 2021
Place: Bengaluru
For Subex Limited
Venkatraman G S
Chief Financial Officer & Senior Vice President
Date: May 17, 2021
Place: Bengaluru
Subex Annual Report 2020-21 75
ANNEXURE 2
(As per item 10(i) of clause C of Schedule V of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015 read with regulation 34(3) of the said Listing Regulations)
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
To
The Members,
Subex Limited
CIN L85110KA1994PLC016663
Pritech Park – SEZ, Block-09,
4th Floor, B Wing, Survey No. 51 to 64/4,
Outer Ring Road, Bellandur Village, Varthur Hobli,
Bengaluru, Karnataka-560 103
We have examined the status of debarring or disqualification from being appointed or continuing as directors of companies by the SEBI/
Ministry of Corporate Affairs or any such statutory authority for the year ended on March 31, 2021, as stipulated in item 10(i) of clause C
of Schedule V of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 read with
regulation 34(3) of the said Listing Regulations.
In our opinion and to the best of our information and according to the verifications [including Directors Identification Number (DIN) status
at the portal https://www.mca.gov.in/ as considered necessary and explanations furnished to us by the Company & its officers, we hereby
certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March 2021 have
been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of
India, Ministry of Corporate Affairs, or any such other Statutory Authority.
Sl No. Name of the Director
1.
2.
3.
4.
5.
6.
Anil Chandanmal Singhvi
Poornima Kamalaksh Prabhu
Nisha Dutt
Vinod Kumar Padmanabhan
George Zacharias
Shiva Shankar Naga Roddam
DIN
00239589
03114937
06465957
06563872
00162570
07212118
Designation
Chairman, Non-Executive &
Non-Independent Director
Independent Director
Independent Director
Managing Director & CEO
Independent Director
Whole-Time Director & COO
Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the
Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to
the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the
Company.
For BMP & Co. LLP Company Secretaries
Pramod S M
Partner
FCS: 7834 / CP No. 13784
UDIN: F007834C000337372
Date: May 17, 2021
Place: Bengaluru
Subex Annual Report 2020-21
76
Annexure
List of Documents/records/websites verified for issuance of Certificate as per item 10(i) of clause C of Schedule V of the Securities
Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 read with regulation 34(3) of the said Listing
Regulations.
Sr. No
Documents/records/website
Reference
i.
ii.
iii.
iv.
v.
vi.
Minutes of Nomination & remuneration
Circular No. LIST/COMP/14/2018-19 dated June 20, 2018 issued by BSE & NSE/
Committee
CML/2018/02 dated June 20, 2018
Corporate announcements made by Company for
appointment of Directors
Corporate announcements made by Company for
cessation/resignation/vacation of Directors
Declaration made by directors in form DIR-8
Section 164(2) of the Companies Act, 2013 read with Rule 14(2) of the Companies
(Appointment and Qualifications of Directors) Rules, 2014
DIR-9 filed by the Company regarding default
Section 164(2) of the Companies Act, 2013 read with Rule 14(2) of the Companies
under section 164(2)
(Appointment and Qualifications of Directors) Rules, 2014
List of disqualified directors placed on website of
Section 164(2)
Ministry of Corporate Affairs at http://mca.gov.in/
MinistryV2/disqualifieddirectorslist.html
vii.
Directors debarred/disqualified through SEBI order
Section 11B of the SEBI Act, 1992
as per list placed at the BSE Limited and the NSE
Limited at https://www.bseindia.com/investors/
debent.aspx
https://www1.nseindia.com/invest/content/
regulatory_actions.htm
Subex Annual Report 2020-21 77
ANNEXURE 3
DECLARATION BY THE CEO UNDER CLAUSE D OF SCHEDULE V OF THE SEBI (LODR) REGULATIONS, 2015 REGARDING
ADHERENCE TO THE CODE OF CONDUCT
To,
The Members of Subex Limited
In accordance with Clause D of Schedule V of the SEBI (LODR) Regulations, 2015, I hereby confirm that, all the Directors and the Senior
Management personnel including me, have affirmed compliance to their respective Codes of Conduct, as applicable for the Financial
Year ended March 31, 2021.
Place: Bengaluru
Date: May 17, 2021
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN: 06563872
Subex Annual Report 2020-21
78
BUSINESS RESPONSIBILITY REPORT
Introduction
This report is in accordance with the requirements of the
Securities & Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015
(“SEBI LODR
Regulations”), which includes our responses to questions on
practices covering the initiatives taken by the Company from an
Environmental, Social and Governance perspective.
Subex is a pioneer in enabling Digital Trust for businesses across
the globe.
We build industry leading software products and solutions to
help businesses infuse trust in their digital ecosystems. With
Digital Trust at the core, Subex is now helping Communications
Services Providers ("CSP") in their transformation journey
to become truly digital enterprises. Our strength lies in
understanding the dynamic needs of the telco market and
leveraging emerging technologies like AI, ML, Blockchain, and
Augmented Analytics to build scalable solutions to help telcos
thrive in a competitive environment. Towards this, we have
created state-of-the-art solutions covering the areas of privacy,
Section A – General Information about the Company
security, identity, intelligence, and risk mitigation, all helping
CSPs build a robust ecosystem of trust.
Through HyperSense, an end-to-end augmented analytics
platform, Subex empowers communications service providers
and enterprise customers to make faster, better decisions by
leveraging Artificial Intelligence (AI) analytics across the data
value chain. The solution allows users without a knowledge of
coding to easily aggregate data from disparate sources, turn
data into insights by building, interpreting and tuning AI models,
and effortlessly share their findings across the organisation, all
on a no-code platform.
Subex has spent over 25 years in enabling 3/4th of the largest 50
Communications Service Providers globally achieve competitive
advantage. Being truly a global Company, we have more than
300 installations across 90+ countries.
We have a global presence, employing 1000+ people, with
headquarters in Bengaluru, India and offices in Singapore, UK,
US, UAE, Canada and Bangladesh.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Corporate Identity Number (CIN)
L85110KA1994PLC016663
Name of the Company
Registered address
Website
E-mail Id
SUBEX LIMITED
Pritech Park-SEZ, Block-9, 4th floor, B Wing, Survey No. 51-64/4, Outer Ring Road,
Bellandur Village, Varthur Hobli, Bengaluru, Karnataka-560 103, India
https://www.subex.com/
investorrelations@subex.com
Financial Year reported
April 01, 2020 to March 31, 2021
Sector(s) that the Company is engaged in (industrial
IT Software, Services, and related activities. NIC Codes – 62011, 62013
activity code-wise)
List three key products / services that the Company
Please refer page 92 of the Annual Report (forming part of the Management Discussion
manufacture / provides (as in Balance Sheet)
and Analysis)
Total number of locations where business activity is undertaken by the Company
i) Number of International Locations (major 5 only)
United Kingdom
United States of America
Singapore
United Arab Emirates
Canada
ii) Number of National Locations: 1 (One), the Registered Office of the Company located at Bengaluru, India.
10.
Markets served by the Company - Local / State /
India, Americas, EMEA, Asia Pacific and rest of the world
National / International
Section B – Financial Details of the Company (on a Consolidated basis) (as on 31.03.2021)
1.
2.
3.
Paid up Capital (INR)
As on March 31, 2021, the paid-up capital of the Company stood at
` 2,81,00,14,675 consisting of 56,20,02,935 equity shares of ` 5 each.
Total turnover (INR in Lakhs)
Total Profit/ (loss) after Taxes (INR in Lakhs)
` 37,203
` 5,172
Subex Annual Report 2020-21 79
4.
5.
Total spending on Corporate Social Responsibility (CSR) as
NIL (See point no. 5)
percentage of profit after tax (%)
List of activities in which expenditure in point no. 4 has been incurred
Pursuant to the provisions of Section 198 of the Companies Act, 2013, the Company has incurred losses during the preceding three financial years,
hence no amounts were required to be allocated / contributed for undertaking CSR activities.
Though it is not mandatory to incur any expenditure on CSR activities, the Subex Charitable Trust ("SCT") is a non-profit Trust that mobilizes
employee participation in community projects and was voluntarily set up to undertake welfare activities for the under privileged in the society.
SCT is managed by trustees elected from among the employees of the Company. Please refer page 31 of the Annual Report for details of the
activities conducted during the year.
Further details on the activities undertaken by the SCT are contained under Principles 4 & 8.
Section C – Other Details
1.
Does the Company have any Subsidiary Company / Companies?
Yes, the Company has Ten subsidiaries, namely:
1.
Subex Assurance LLP
2.
3.
4.
5.
6.
7.
8.
9.
Subex Digital LLP
Subex Technologies Limited
Subex Americas Inc.
Subex (UK) Limited
Subex Middle East (FZE)
Subex Bangladesh Private Limited
Subex Inc.
Subex (Asia Pacific) Pte Limited
10.
Subex Azure Holdings Inc.
2.
Do the Subsidiary Company / Companies participate in the BR initiatives of the parent Company? If yes, then indicate the number of such
subsidiary Company(s).
Yes. As the business responsibility initiatives are run at a group level, all subsidiaries participate in the initiatives, to the extent relevant.
3.
Do any other entity / entities (e.g. suppliers, distributors etc) that the Company does business with participate in the BR initiatives of the
Company ? If yes, then indicate the percentage of such entity / entities? (Less than 30%, 30-60%, more than 60%).
We do not mandate that our suppliers and partners participate in the Company’s BR initiatives. However, they are encouraged to do so.
Section D – BR Information
1. Details of Director / Directors responsible for BR
a) Details of the Director / Director responsible for implementation of the BR policy / policies
Sl.
No
1.
Name
Designation
DIN
Mr. Vinod Kumar Padmanabhan
Managing Director & CEO
06563872
b) Details of the BR Head
Sl.
No.
1.
2.
3.
4.
5.
Particulars
DIN
Name
Designation
Telephone No.
E-mail ID
Details
06563872
Mr. Vinod Kumar Padmanabhan
Managing Director & CEO
080-37451377
investorrelations@subex.com
Subex Annual Report 2020-21
80
2. Principle-wise (as per NVGs) BR policy / policies
As per Regulation 34 of the SEBI (LODR) Regulations, read with SEBI Circular No CIR/CFD/CMD/10/2015 dated November 04, 2015, the
nine areas of Business Responsibilities are as follows:
Principle 1 (P1)
Principle 2 (P2)
Principle 3 (P3)
Principle 4 (P4)
Principle 5 (P5)
Principle 6 (P6)
Principle 7 (P7)
Principle 8 (P8)
Principle 9 (P9)
Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.
Businesses should provide goods and services that are safe and contribute to sustainability throughout their life
cycle.
Businesses should promote the well-being of all employees.
Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized.
Businesses should respect and promote human rights.
Businesses should respect, protect, and make efforts to restore the environment.
Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner.
Businesses should support inclusive growth and equitable development.
Businesses should engage with and provide value to their customers and consumers in a responsible manner.
Questions
P1
P2
P3
P4
P5
P6
P7
P8
P9
Sl.
No
1.
2.
3.
4.
6.
7.
8.
9.
Do you have a policy / policies for
Has the policy being formulated in
consultation with the relevant stakeholders?
Does the policy conform to any national /
international standards?
Has the policy been approved by the Board?
If yes, has it been signed by MD / Owner /
CEO / appropriate Board Director?
5.
Does the Company have a specified
committee of the Board / Director / Official
to oversee the implementation of the
policy?
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Indicate the link for the policy to be viewed
The policies are available on the Company’s website –
on line?
https://www.subex.com/investors/shareholder-services/
Has the policy been formally communicated
to all relevant internal and external
stakeholders?
Does the Company have in-house structure
to implement the policy / policies?
Does the Company have a grievance
redressal mechanism related to the policy /
policies to address stakeholders’ grievances
related to the policy / policies?
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
10.
Has the Company carried out independent
audit / evaluation of the working of this
policy by an internal or external agency?
Y = Yes
3. Governance related to BR
a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO meet to assess the BR performance of the Company.
Within 3 months, 3-6 months, Annually, More than 1 year
3 to 6 months.
b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?
Yes, Annual. The report is available as part of the Annual Report at https://www.subex.com/investors/shareholder-services/.
Subex Annual Report 2020-21 SECTION E – Principle-wise performance
c. HyperSense Augmented Analytics Platform:
81
Principle 1 : Businesses should conduct and govern
themselves with Ethics, Transparency and Accountability
1. Does the policy relating to ethics, bribery and corruption
cover only the Company? Yes / No. Does it extend to the
Group / Joint Ventures / Suppliers / Contractors / NGOs /
Others?
Subex has zero tolerance towards non-conformity with the
Code of Conduct, which is applicable to our employees
across all locations. Our Code of Conduct and Whistle
Blower policy covers our employees, contractors, suppliers,
and other stakeholders.
2. How many stakeholder complaints have been received
in the past financial year and what percentage was
satisfactorily resolved by the management? If so, provide
details thereof, in about 50 words or so
No complaints have been received in FY 2020-21 under our
Whistleblower policy.
Principle 2 : Businesses should provide goods and services
that are safe and contribute to sustainability throughout their
life cycle
1.
List upto 3 of your products or services whose design has
incorporated social or environmental concerns, risks and /
or opportunities.
Subex is a provider of solutions that help build trust in the
digital ecosystem to telecom operators around the world.
Subex views digital trust as a multi-dimensional matrix that
covers privacy, security and risk mitigation.
Following are 3 solutions which Subex delivers to its clients that
have a significant impact on social risks:
a.
IoT/OT Security:
Cyber security risks continue to pose a significant challenge
to the increasingly connected world we live in. Subex
Secure is a scalable and comprehensive threat detection,
mitigation, and management solution for assets, data
and networks connected to the IoT and OT eco-system.
Subex Secure is aimed at securing smart cities, critical
infrastructure, manufacturing plants, oil and gas.
b. Fraud Management:
their wings
Digital transformation has resulted in telecom operators
spreading
far and wide beyond basic
connectivity services. Fraudsters exploit these digitally
enabled services for theft from citizens and for criminal
activity such as terrorism. Subex’s Fraud Management
solution enables telecom operators to prevent, detect
and mitigate the impact of fraud on its customers and
thus makes a significant contribution towards making our
societies safer.
Transparency and AI Ethics are becoming topics of
societal importance. HyperSense Augmented Analytics
Platform with its Explainable AI capabilities provides a set of
techniques that:
Produce more explainable models, while maintaining a
high level of performance accuracy; and also enables users
to understand, appropriately trust, and effectively manage
the output of AI models in business.
2.
For each such product, provide the following details in
respect of resource use (energy, water, raw material etc)
per unit of product
Subex is committed to and targets towards following
the best practices to reduce utilization of power, natural
resources like water and limited E-Waste disposal, executed
through government recognized agencies. However, given
the nature of our business, it is difficult to quantify.
3. Does the Company have procedure in place for sustainable
sourcing (including transportation)?
(a)
If yes, what percentage of your inputs was sourced
sustainably? Also provide details thereof, in about 50
words or so
We have a Responsible Purchase Procedure and a Supplier
Code of Conduct. Our suppliers are categorized into three
broad categories - People, Services and Products. Our
contracts have appropriate clauses and checks to prevent
the employment of child labor or forced labor in any form.
We engage with local suppliers for our People and Services
categories.
Our suppliers sign the code of conduct, agreeing towards
reduction of environmental footprint. Suppliers delivering
products to Subex abide by the guidelines laid down by the
government.
4. Has the Company taken any steps to procure goods
and services from local & small producers, including
communities surrounding their place of work?
Yes, while the criteria for selection of goods and services
is quality, reliability, and price, we give preference to
small organizations / MSME vendors. Procurement of
materials from local sources is a strategy adopted by us
since it reduces time, cost, and efforts in procurement,
provides local employment opportunities and a reduced
environmental footprint in sourcing.
5. Does the Company have a mechanism to recycle products
and waste? If yes, what is the percentage of recycling of
products and waste. Also provide details thereof, in about
50 words or so
Yes, all types of waste which are generated in-house are
handed over to the authorized vendor for recycling. Subex
is based in a technology park and the all environment
related reports are submitted to the prescribed authority by
Subex Annual Report 2020-21
82
the Owner of the park. Subex co-operates with the owner
and the vendors towards ensuring the timely recycling of
waste.
Principle 4 - Businesses should respect the interests of, and be
responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalised.
Being environmentally cautious and waste sensitive, over
93% of the waste is managed, with less than 7% going into
landfills.
Principle 3: Businesses should promote the wellbeing of all
employees
Creating a positive, relevant, and meaningful experience for
its employees ("Subexians"), is one of the key focus areas for
Subex. With this in mind, their well-being becomes a very critical
component that Human Resources works on. We conduct
regular medical check-ups, mental and physical health-
workshops like yoga sessions, for all employees including our
support staff. Other benefits such as group medical insurance
for Subexians and their families and personnel accident policy
for Subexians are provided to all. We also have an active POSH
(Prevention of Sexual Harassment) Committee that functions
with zero-tolerance towards any kind of harassment.
1. Please
indicate
employees - 1023
the
total number of permanent
1. Has the Company mapped its internal and external
stakeholders?
Yes, the Company has identified and mapped its internal
and external stakeholders. Internal Stakeholders of the
Company include its employees, support staff, senior
leaders, and Board of Directors. The external stakeholders
include customers, vendors, investors, regulatory bodies,
and media. The external stakeholders also include the
communities the Company engages with, during its social
responsibilities.
2. Out of the above, has the Company identified the
disadvantaged, vulnerable and marginalized stakeholders?
Yes.
3. Are there any special initiatives taken by the Company
to engage with the disadvantaged, vulnerable and
marginalized stakeholders? If so, provide details thereof,
in about 50 words or so.
2. Please indicate the total number of employees hired on
temporary / contractual / casual basis - 79
Yes, please refer page 31 of the Annual Report for details of
the activities conducted by SCT during the year.
3. Please
indicate
employees - 267
the Number of permanent women
Principle 5 – Businesses should respect and promote
human rights
4. Please indicate the Number of permanent employees with
disabilities – Nil
5. Do you have an employee association that is recognised by
management – No
6. What percentage of your permanent employees are
members of this recognised employee association? – Not
applicable
7. Please indicate the Number of complaints relating to child
labour, forced labour, involuntary labour, sexual harassment
in the last financial year and pending as on the end of the
financial year – None.
8. What percentage of your under mentioned employees
were given safety & skill up-gradation training, in the last
year?
Safety training is provided to 100% of the employees.
Details of the skill up-gradation training:
A.
B.
Permanent Employees – 66.18%
Permanent Women Employees – 68.19%
C. Casual / Temporary / Contractual Employees – 51.90%
D.
Employees with disabilities – Not Applicable
* Mandatory trainings are undertaken by all employees.
1. Does the policy of the Company on human rights cover
only the Company or extend to the Group / Joint Ventures/
Suppliers / Contractors / NGOs / Others?
Subex has policies in place which covers its employees
against inhuman practices. Few policies which are in place
include Prevention of Sexual Harassment at Workplace,
Grievance policy, Equal Employment etc. These policies
are applicable to our employees across all locations and all
our affiliates.
The Company encourages its suppliers, contractors and
others to follow the principles laid down in the Supplier
Code of Conduct. All employees, suppliers and contractors
are required to respect the human rights of fellow workers
and communities where we operate. The Company
encourages its vendors to comply with the relevant laws
safeguarding labour rights and human rights.
2. How many stakeholder complaints have been received in
the past financial year and what percent were satisfactorily
resolved by the Management?
Please refer point no. 2 under Principle 1 and page 210
of the Annual Report (forming part of the Shareholders'
Information section, for details pertaining to investor
complains received during the year).
Subex Annual Report 2020-21
83
Principle 6 – Business should respect, protect and make
efforts to restore the environment
Principle 7 – Business, when engaged in influencing public
and regulatory policy, should do so in a responsible manner
1. Does the policy related to Principle 6 cover only the
Company or extends to the Group / Joint Ventures /
Suppliers / Contractors / NGOs / Others?
1.
Is your Company a member of any trade and chamber or
association? If yes, Name only those major ones that your
business deals with.
The Company has a dedicated Policy/Standard Operating
Procedure (SOP) for its environmental requirements. The
Company encourages all its external stakeholders to strictly
adhere to safety and restoration of the environment. Subex
is based in a technology park and co-operates with the
owner and vendors in following the required procedures
for protection and restoration of the environment.
2. Does the Company have strategies / initiatives to address
global environmental issues such as climate change,
global warming etc.
taken
initiatives
the Company has
Yes,
to control
environmental impact or influence considering a life cycle
perspective. During the year, the Company has changed
the address of its Registered Office within local limits
and owing to this move, the energy consumption has
reduced due to a significant reduction in electricity bills.
Additionally, the Company also adapts itself to the changes
in environmental laws and has adapted measures such as
minimizing the usage of single use plastics within the office
premises.
3. Does
the Company
identify and assess potential
environmental risks?
Yes.
4. Does the Company have any project related to Clean
Development Mechanism? If so, provide details thereof,
in about 50 words or so. Also, if yes, whether any
environmental compliance report is filed?
No.
5. Has the Company undertaken any other initiatives on –
clean technology, energy efficiency, renewable energy
etc.
Yes, the Company has increased its energy efficiency by
reduction in its electricity consumption.
6. Are the Emission / Waste generated by the Company
within the permissible limits given by CPCB / SPCB for the
financial year being reported?
Yes.
7. Number of show cause / legal notices received from
CPCB/ SPCB which are pending (i.e. not resolved to
satisfaction) as on end of financial year
No.
Yes, the Company is a member of FKCCI (Federation
of Karnataka Chambers of Commerce and Industry),
Confederation of Indian Industry (CII), Karnataka and DSCI
(Data Security Council of India).
2. Have you advocated / lobbied through above associations
for the advancement or improvement of public good?
Yes / No. If yes, specify the broad areas (drop box:
Governance and Administration, Economic Reforms,
inclusive Development Policies, Energy security, Water,
Food Security, sustainable Business Principles, others)
Yes, others. We co-operate with governments and industry
bodies by providing them threat reports, malware reports
and related
the
prevailing threat environment.
information on demand, regarding
Principle 8 – Business should support inclusive growth and
equitable development
1. Does
the Company have specified programmes /
initiatives/ projects in pursuit of the policy related to
Principle 8? If yes, details thereof
Yes, please refer page 31 of the Annual Report for details of
the activities conducted by SCT during the year.
2. Are the programmes / projects undertaken through
in-house team / own foundation / external NGO /
Government structures / any other organization?
In-house team. The Subex Charitable Trust is a non-profit
Trust that mobilizes employee participation in community
projects and was voluntarily set up to undertake welfare
activities for the under privileged in the society. SCT is
managed by trustees elected from among the employees
of the Company.
3. Have you done any impact assessment of your initiative?
The project activities are periodically reviewed by the
Board of Directors. Reports and feedback are sought to
understand the impact of the initiatives.
4. What is your Company’s direct contribution to community
development projects. Amount in INR and the details the
projects undertaken
The Company has incurred losses during the preceding
3 financial years. Hence it is not mandatory to incur any
expenditure on CSR activities. For details of the voluntary
activities undertaken by the SCT, please refer page 31 of the
Annual Report for details of the activities conducted during
the year.
Subex Annual Report 2020-21
84
5. Have you taken steps to ensure that this Community
development initiative is successfully adopted by the
Community? Please explain in 50 words or so
The objective of the social initiatives undertaken by the
Company through SCT is to create a positive and sustainable
impact in the community that we belong to. The SCT has
received positive feedback from the institutions that it
supports and looks to continue to provide greater support
towards community development.
Principle 9 – Business should engage with and provide value
to their customers and consumers in a responsible manner
1. What percentage of customer complaints / consumer
cases are pending as on the end of financial year?
None.
2. Does the Company display product information on the
product label, over and above what is mandated as per
local laws?
Not applicable to the Company, since it is Technology
based.
3.
Is there any case filed by any stakeholder against the
Company regarding unfair trade practices, irresponsible
advertising and / or anti-competitive behavior during the
last five years and pending as on end of financial year? If
so, provide details thereof, in about 50 words or so
None, there have been no cases filed against Subex with
regards to unfair trade practices, irresponsible advertising,
and / or anti-competitive behavior during the last five years.
4. Did your Company carry out any consumer survey /
consumer satisfaction trends?
Yes, Subex conducted an NPS survey for FY21 as it conducts
the same annually. The NPS (Net Promoters Score) is
a measure of the customer satisfaction that gives the
customers & Subex a platform to understand the customer
experience & overall satisfaction to enable quality delivery
and customer engagement.
Subex Annual Report 2020-21
85
MANAGEMENT DISCUSSION AND ANALYSIS
OVERVIEW
Subex Limited (“Subex” or “the Company”) has its Equity Shares
listed on the National Stock Exchange of India Limited ("NSE") and
the BSE Limited ("BSE").
The management of Subex is committed to transparency and
disclosure. In keeping with that commitment, we are pleased to
disclose hereunder information about the Company, its business,
operations, outlook, risks and financial condition.
The financial statements of the Company have been prepared in
compliance with the requirements of the Companies Act, 2013 and the
Indian Accounting Standards (Ind AS) notified under the Companies
(Indian Accounting Standards) Rules, 2015 (including amendments
thereto). The management of Subex accepts responsibility for the
integrity and objectivity of these financial statements, as well as for
various estimates and judgments used therein. The estimates and
judgments relating to the financial statements have been made on a
prudent and reasonable basis, in order that the financial statements
reflect the form and substance of transactions in a true and fair
manner, and reasonably present the state of affairs and profits for the
year under review.
In addition to the historical information contained herein, the
following discussion may include forward looking statements which
involve risks and uncertainties, including but not limited to the risks
inherent in the Company’s growth strategy, dependency on certain
clients, dependency on availability of qualified technical personnel
and other factors discussed in this report.
COMPANY OVERVIEW
We build industry leading software products and solutions to help
businesses infuse trust in their digital ecosystems. With Digital
Trust at the core, Subex is now helping Communication Service
Providers ("CSP") in their transformation journey to become truly
digital enterprises. Our strength lies in understanding the dynamic
needs of the telco market and leveraging emerging technologies
like AI, ML, Blockchain, and Augmented Analytics to build scalable
solutions to help telcos thrive in a competitive environment. Towards
this, we have created state-of-the-art solutions covering the areas of
privacy, security, identity, intelligence, and risk mitigation, all helping
CSPs build a robust ecosystem of trust. Our revenue contributing
pie consists of licensing, professional services related to installations
and configuration activity, annual support contracts and managed
services.
Through HyperSense, an end-to-end augmented analytics platform,
Subex empowers communications service providers and enterprise
customers to make faster, better decisions by leveraging Artificial
Intelligence (AI) analytics across the data value chain. The solution
allows users without a knowledge of coding to easily aggregate data
from disparate sources, turn data into insights by building, interpreting
and tuning AI models, and effortlessly share their findings across the
organisation, all on a no-code platform.
Subex has spent over 25 years in enabling 3/4th of the largest 50
Communications Service Providers globally achieve competitive
advantage. Being truly a global company, we have more than 300
installations across 90+ countries.
We have a global presence, employing 1000+ people, with
headquarters in Bengaluru, India and offices in Singapore, UK, US,
UAE and Bangladesh.
More information on (a) an overview of the telecom industry (b) our
products (c) Opportunities and challenges and (d) our revenue model
is discussed below.
TELECOMS IN THE GLOBAL MACRO CONTEXT
The year 2020 was one marred by the global pandemic which led
to losses, both economic and in the terms of lives. The uncertainty
caused by COVID-19 was felt by the telecom sector as well, however
the effects were not as severe as seen across the broader economy.
As per the latest GSMA Mobile Trends, among the five most affected
countries (in terms of deaths), the hit on mobile revenue has been
about half that on GDP in high-income countries.
•
The pandemic also led to the change as to how consumers
now use communication technologies.
• With work-from-home and social distancing norms gaining
prevalence, there has been a marked rise in data traffic,
mostly from fibre, but also mobile networks.
• Network performance has risen to be a key priority for
telco operators, towards ensuring connectivity to not
only consumers, but also to aid hospitals and medical
professionals.
This increased demand for data and connectivity services, coupled
with the increasing adoption of digital services and mobile money has
enabled telcos to remain resilient, where revenues are concerned.
•
•
This has only been supplemented with the strong mobile
traffic growth.
People are now doing much more online, and this bodes
well for telecom operators provided they are able to meet
the demand.
Mobile Internet: Getting to 100% Global Coverage
•
Almost 50% of the world’s population were on the mobile
internet in 2019, equating to 3.8 billion users – an increase
of 250 million since the end of 2018.
• With 4G and 3G covering the globe, the question is towards
moving the remaining 50% to the mobile internet.
•
•
Today there are almost six times more people living within
the footprint of a mobile broadband network but not using
mobile internet.
There remains a significant rural and gender deficit in
mobile internet use.
Subex Annual Report 2020-21 86
5G sees steady growth
operations and lower acquisition costs.
Despite the global pandemic, new 5G deployments continue to take
shape.
•
•
•
•
•
Post March 2020, the number of new 5G networks has
grown at a steady rate at 8 new 5G networks per month.
This is up from fewer than six per month for the same
period in 2019.
There are now 113 operators with 5G networks across
48 countries, accounting for 40% of the global mobile
subscriber base.
The launches so far have been within the more mature
markets: China, South Korea and the US. However,
developing markets such as South Africa (MTN and
Vodacom) and Brazil (Claro) have begun to make in-roads
as well.
As 5G moves towards becoming mainstream, new
networks and declining handset prices will drive adoption
over the next year and beyond.
From an investment perspective, forecasts estimate 80% of
capex ($890 billion) to be spend towards 5G over the next
five years, reaching 45% population coverage. This is largely
being driven by the North American markets.
Revenue Generation and Cost Management Even
More Important
With 5G on the horizon, and even in the case of other operators,
there will be a need for judicious network investment planning.
Objectives which operators will need to bear in mind will be to keep
a check of Capex and Opex costs, improve customer experience and
generate new revenues.
•
•
Across most regions, revenue generation has become the
key driver, especially with the need for renewed growth to
pay back 5G investments.
As a means to lower costs, operators will lay focus on Open
network technologies – including open RAN; to lower
• Open RAN in particular has opened up the possibilities for
operators to source network technologies and services
from a broader.
•
Set of suppliers, thereby helping to reduce costs.
• Open RAN can be a force in helping operators unlock new
business opportunities by enabling new ways of building
networks.
IoT: a forgotten aspect of 2020
Total IoT connections will double between 2019 and 2025, reaching
24 billion. However, GSMA has cut 2020 off from the forecast as a
result of the pandemic and cost pressures in the SME and corporate
markets.
• While global IoT revenues will triple by 2025, this is 20%
lower.
•
•
IoT revenue was to touch the $1.1 trillion mark by 2025,
however this has now been reduced to $906bn.
Security concerns, cost, and integration with existing
technologies will persist as the main challenges in deploying
IoT based solutions.
• Cost Saving and revenue generation are the two main
motivators for installing IoT devices.
Conclusion:
Subex, as a leader in the space of Digital Trust, is uniquely positioned
to help telcos to embrace digital transformation. To take advantage
of the infinite possibilities that 5G unlocks will require a robust
ecosystem of partners, making collaboration the baseline for
success. While 5G rollout will create an unfathomable number of use
cases allowing services providers to significantly expand the number
of services they offer to both businesses and consumers, it also
presents new challenges. From sales and marketing to operations,
IT, network management, pricing, and billing, there will be enormous
changes that service providers must plan for. Subex is well placed to
support this transformation and can help service providers plan for
the strategic evolution of their value chain. Subex can help catalyze
the transformation process of traditional network developers into
service enablers for 5G and IoT, and ultimately to service creators,
with the ability to collaborate beyond telecoms.
OUR PRODUCTS
Subex offers a Suite of products and solutions that enable Digital
Trust for our customers. To this end, Subex’s core products around
Revenue Assurance and Fraud Management have been enhanced
with the power of Artificial Intelligence and Machine Learning.
Subex also provides network analytics through its Network Asset
Management, Data Integrity Management and Capacity Management
solutions.
Subex Annual Report 2020-21 87
In a digital world, where multiple partnerships will need to be managed, Subex provides CSPs with a Partner Ecosystem Management solution.
To help drive confidence in data, Analytics Center of Trust (ACT) - a solution framework built to help organisations transform from a
traditional business to a digital one through the power of data analytics. Subex also provides organisations with confidence in the growing
connected world, through its IoT Security solution, Subex secure, which is a multivertical solution focused towards the telecom, government,
automotive, and defense segment, to name a few. Subex also helps in transforming the way the business verifies users, through its recently
launched product called IDcentral. IDcentral provides a one- stop solution for digital identity, verification and validation services.
All solutions come together to help CSPs prevent fraud losses, collect all revenues, reduce defaulted payments, reduce wasteful expenditure,
manage inter-carrier and partner expenses and optimize CAPEX.
PRODUCT PORTFOLIO
Digital transformation has enabled telcos to expand their scope
with new and innovative services, while also increasing the size of
the ecosystem with new age partners. To realize the full potential,
telcos need to create mechanisms that build trust in their offerings,
processes and information systems. In other words, Digital Trust
is the key to success for telos today. Subex with its 25+ years of
experience in helping telcos optimize their business, is now at a
forefront of enabling Digital Trust for the telco ecosystem. Focusing
on five key tenets of Security, Privacy, Risk Mitigation, Identity and
Intelligence, Subex helps businesses thrive by leveraging Digital Trust
as a competitive advantage.
etc.), the comprehensive AI/ML capabilities in the solution will help
our telecom partners identify unknown unknowns, for meaningful
course corrections. Furthermore, as operators keep expanding their
portfolio to cater to the demands of today’s customers, the ARI
suite enables AI-driven predictive and prescriptive business insights
for CxOs (Opco & group) across verticals (Marketing, finance, sales,
network, etc).
With a product history spanning over two decades, Subex’s Business
Assurance is the culmination of the operational experience of being
deployed in over 80+ sites globally.
Foundation Layer:
The foundation layer is Risk Mitigation and is the non-negotiable layer
required to prevent any undesirable outcomes for the business.
Business Assurance
Subex’s Business Assurance solution plays a significant role as a
business enabler in this evolving digital ecosystem by providing better
visibility into risks surrounding operations, revenue and margins.
With Active Risk Intelligence, our re- imagined assurance product
stack, operators can assess and address impacts in near real-time
or, in some cases, proactively. In today’s reality of multi-service,
multi-disciplinary offerings (e.g. Banking, Retail, Digital Content
Fraud Management
Built on 25+ years of domain expertise, Subex’s Fraud Management
provides 360-degree fraud protection across digital services by
leveraging advanced machine-learning and signaling-intelligence.
The solution-combines-a-traditional-rules engine with advanced
artificial intelligence/ machine learning capabilities to provide
increased coverage across all telco services and minimize fraud run-
time in the network with real-time blocking capabilities. With Subex’s
comprehensive fraud management system, operators can detect
more than 350 types of fraud in all telecom environments
Subex Annual Report 2020-21 88
Partner Ecosystem Management
Subex Partner Lifecycle Management allows CSPs to significantly
reduce time to market for new services and enhance existing services
by quickly onboarding new partners to the ecosystem. The solution
optimizes OPEX through workflow-based onboarding process
interfaces with configurable KPIs to allow quick partner onboarding.
CSPs can assess partner health by scoring them on different
parameters and monitor their performance to ensure a value-
driven partner ecosystem. The partner portal empowers partners
with complete business visibility through access to dashboards and
reports and make informed decisions.
Digital Services Billing
Subex offers a domain agnostic digital services billing solution that
can bill and settle any event irrespective of the source and cater
to Data, Content, IoT, M2M, and Utility billing requirements. Utilize
configurable modeling capabilities that allow the creation of new
revenue streams through configurations, thus allowing quicker
settlements and bill roll outs.
Wholesale Billing and Routing
Get a holistic view of your entire range of partner relationships,
covering services such as voice, SMS, and data- manage roaming,
routing, content settlements, as well as MVNO and other B2B
relationships with our wholesale billing solution. We drive efficiencies
into your businesses via process automation to gain operational
insight to support critical decision-making activities and enable you
to achieve a competitive advantage. It covers Interconnect Billing &
Settlement, Reconciliation and Dispute Management, OBR, Route
Optimization, Contract Lifecycle Management, Route Optimization.
Enterprise Billing
Subex offers a next-gen end-to-end enterprise billing system
that provides unmatched rating and billing capabilities for CSPs.
It’s a converged billing platform that covers partner onboarding,
subscription management, service agnostic rating, and billing to
financial reporting.
Roaming Settlements
Subex Roaming solution offers a 360-degree view of the roaming
services and revenue management to improve profitability. It reduces
the fraud possibility by removing the likelihood of paying high-cost
traffic cost or lose inbound roaming revenue by supporting NRTRDE
(Near Real-Time Roaming Data Exchange) and HUR (High Usage
Report). Enhance customer experience and reduce churn by offering
personalized services using customer information.
Network Analytics
Network Asset Management
Subex’s Network Asset Management is a Telecom Asset Lifecycle
Management solution that provides framework and controls to help
CSPs make the best use of their assets, thereby helpingmanage
network Capex efficiently. The solution ties the assets’ financial
parameters to its current utilization and location, creates a 360-degree
view of the asset, generates accurate reports for audits, and calculates
the return on assets. Also, it simplifies field audits, provides near
real-time capacity views, recommendations to optimize network
utilization and optimizes P2R (Plan-to-retire) and cash-to-cash cycle
for assets and improves overall operational efficiency.
Data Integrity Management
Subex is the pioneer of data integrity management, with over a
decade of experience in data integrity transformations with the
world’s leading service providers. Data Integrity Management is the
industry’s first solution for improving the quality of data that drives
critical service provider processes, resulting in lower costs and higher
service profitability.
Capacity Management
Subex’s Capacity Management is an innovative solution that helps
CSPs to strategize and plan their network expansion & capacity
augment investments keeping Customer Experience & Return
on Investments at the center. This helps CSPs improve Customer
Experience, increase ROI, optimize Capex, reduce Churn, and
increase Net Promoter Scores.
Binding Layer
Binding layer in Digital Trust is the one that is necessary for the
sustenance of a healthy business and includes areas like Security and
Identity.
Subex Secure (Digital Security)
•
Subex Secure is an IoT and OT security solution designed to
secure connected and constrained devices and networks.
It is an agentless product, enabling networks to introduce
multitudinous types of devices securely. Subex Secure
offers a way for business to scale IoT deployments without
compromising on security or taking on additional risk.
It is capable of monitoring billions of devices and their
data transmissions. Using a three-tier detection strategy,
it identifies threats as they occur on the network. These
three strategies are signature-based detection, heuristics
and anomaly-based detection. Risks are identified and
flagged across these three security layers, thereby allowing
seamless movement and allowing the integrity of data.
•
Subex Secure’s threat database is updated in real-time with
signatures gathered from our 60 honeypots located in key
cities around the world. Threat intelligence is also gathered
from other credible sources.
IDcentral (Digital Identity)
Today, each individual has multiple digital interactions which give
rise to something known as a digital footprint. This digital footprint
is a combination of various attributes like phone number, email ID,
device info, social network data etc. that when put together form
the digital identity of that individual. IDcentral specializes in bringing
together these different attributes to create verifiable digital identities
leveraging alternate sources of data. IDcentral is the next-generation
digital identity analytics platform, that helps businesses across various
domains to increase their profitability and reduce risk. It is one of the
largest repositories of data in the world with access to 200 plus data
points of 700 million individuals. IDcentral’s wide range of solutions
include:
Subex Annual Report 2020-21 89
• Onboarding solutions: Enables document-less, presence-
less, and secure online customer onboarding
for
enterprises. This includes solutions like locality verification
using telecom CDR data, name/age/gender verification
with government and telecom data, low touch verification,
and risk prediction of MSISDN and email IDs using telecom
and consortium data, AML + PEP + Sanctions lists.
• Credit solutions: Enables credit processing for underserved
population and provide early default warning. This includes
solutions like income range prediction with telecom data,
locality verification with telecom data, alternate data
credit scores, and early default vectors using telecom and
consortium data.
•
•
Fraud solutions: Enables E-com, M-wallet, Fintechs in
preventing various kinds of identity and transactional frauds
by using advanced analytics on usage, device, behavioral,
Network, and telecom data. This includes addressing
linked account abuse/frauds, ATO frauds, CNP frauds, Card
present frauds.
It acts as a one-stop shop for identity analytics solutions by
harvesting data from multiple sources and adding layers of
intelligence to enable the creation of a real-time frictionless
digital identity.
Strategic Layer:
The strategic layer is the one that helps business in creating
competitive advantage and brand reputation. Privacy, Real time
insights, intelligence form the part of this layer.
HyperSense
is a cloud-native and SaaS-based platform that
HyperSense
democratizes AI across the entire data value chain providing agility,
elasticity, and scalability. It is a cohesive augmented analytics platform
that enables business users to easily unify data from disparate
sources, automate tedious and complex data science processes, and
turn the data into insights through auto visualization. It leverages AI-
driven decision analytics and widens access to data, data science,
artificial intelligence (AI), and machine learning (ML) by anyone in an
organization.
HyperSense has dedicated studios designed for enterprise-scale AI
adoption.
Data Management Studio
Gives a bird's eye view of every metric that matters. Collect, structure,
and gives a 360-degree view of all the data from multiple sources and
business functions in one place. One can manage, view and access
complex enterprise data with ease.
AI Studio
Helps to build, test, deploy, and manage complex AI models in
minutes. Gives access an end-to-end data science studio that
provides AI automation capabilities across the entire data science
cycle and become a citizen data scientist with no-code AI.
Business Intelligence Studio
Helps enterprises make quick and better decisions by visualizing the
data. Visualize, analyze, and share complex business data insights.
Leverage AI augmentation to auto-visualizes business data and gain
actionable insights.
Process Automation Studio
Automates resolution workflows to seamlessly manage complex
business case. Creates a visual representation of business cases and
investigate the business case over a period to resolve a problem,
claim, or request with an AI-enabled resolution workflow.
Analytics Center of Trust (Advanced Analytics)
Subex Analytics Center of Trust (ACT) is an end-to-end advanced
analytics framework that helps CSPs truly leverage their data to
drive business outcomes. Subex ACT enables CSPs to get the most
from their Analytics program from the very start, i.e., strategizing the
analytics roadmap, to setting up a trusted business intelligence layer,
till the end, i.e., generating analytics driven business outcomes. ACT
comprises of three components.
•
•
•
Strategy: Leveraging over 25 years of expertise in telecom
analytics, Subex helps to create the right analytics strategy
by establishing CSPs current maturity, define the business
vision and identifying the required roadmap.
Trusted DataLake & BI: Subex’s ACT is powered by an
intelligent Information Infrastructure, which acts as the
brain of the system delivering real-time insights on the shifts
in trends across the spectrum. Subex’s BI is built around
Hadoop and big data capabilities, powered by machine
learning (ML) and artificial intelligence (AI).
Insights: Insights advanced analytics service, powers the
ACT infrastructure, delivering next-generation Analytics-
as- a-Service to Telcos across the globe. The solution
leverages Subex’s expertise in BSS/OSS and Telecom
Analytics to provide actionable business intelligence to
relevant business users at the right time. By combining the
best in both machine and human intelligence, the solution
transcends traditional approaches, accelerating the digital
journey of organisations.
Insights provide actionable
insights around key focus areas: Product, Customer, Risk
and Revenue.
Business Modelling Studio
Consulting & Assessment Services
Runs rules in real-time and generate actionable intelligence from
data. Create complex business rules and chain them together into
workflows to simulate business environments and processes with a
no-code AI-enabled rule engine system.
Subex with its more than 25 years of experience in telecom domain,
end-to-end encounter in defining strategy to execution and use of
relevant tools that are compliant with global forums such as TM
Forum and CFCA; is the right partner of choice in consulting and
assessment services for global telcos.
Subex offers consulting and assessment services in the following
domains:
Subex Annual Report 2020-21 90
• Maturity assessment: Benchmarking of their revenue
assurance and fraud management processes concerning
global standards and provide metrics across people skills,
processes, technology usage and measurement strategies.
•
BSS / OSS Domains: Drawing from Subex’s established
expertise on various BSS / OSS domains.
• On-Site Support: High caliber, experienced resources to
ensure functional continuity and high resource efficiency.
•
•
•
•
•
•
Business operations assessments: Gap analysis of existing
processes and provide the roadmap to close these
gaps using “analyse, evaluate, assess and recommend”
framework.
Risk management: Identify the risks in the revenue chain
and plug leakages promptly, through regular end to end
assessment of the existing business and revenue streams.
Subex’s custom framework is based on a thorough
understanding of risks, creating a Risk Control Matrix utilising
TM Forum standards, and developing comprehensive
standard operating procedures.
Business process re-engineering: Review of the existing
business processes and then design and implement the
new business process after considering the best industry
practices.
legacy OSS/BSS
System integration and IT support operations: While
infrastructure, Subex
migrating from
provides extensive checklists and exhaustive test cases,
making sure that migration cost is reduced. Subex can also
help in carrying out customised health-check of RA and FM
IT operations of telcos.
Product and service margin assurance: Assessment of the
target market and holistic margin and profitability check for
the entire service and product catalogue.
Portfolio optimisation: Optimising offering portfolio by
holistic assessment of products and offerings considering
subscriber base, price points, usage patterns, revenue share
and benefit comparison with other offerings.
Managed Services
Our Managed Services offerings are designed to drive outcome and
protect revenues by enhancing customer experience. Pillared on
four main aspects, i.e. Cost, Quality, Time-to-market and Capability,
the engagement is aimed to provide rapid ROI, increase efficiency,
and in-turn deliver maximum value. Driven by robust technology-led
capabilities, Subex Managed Services offers a variety of engagement
models providing complete flexibility to operators based on their
business needs.
Subex Managed Services program is designed to add both strategic
and tactical value to service providers’ operations and enable
better customer experience while also enhancing their operational
efficiency, service agility and profitability. With Subex at the helm of
its operations, service providers can redirect critical resources at core
business functions generating more revenue and saving costs.
Subex understands that no two service provider requirements are
alike and hence offers the flexibility to pick and choose services
based on:
•
Scope of Operations: Ranging from standard operations to
large scale transformational programs.
OPPORTUNITIES
With digital transformation all around us, Digital Trust has become
a key priority for Telecom Operators. Our portfolio with its focus
on AI for Privacy, Security, Identity, Predictability, and Risk Mitigation
is well suited to help telecom operators build and deliver Digital Trust.
In aftermath of COVID-19 we are witnessing a dramatic
increase in enterprise digital intensification. As most
businesses are driven towards digital transformation, Cyber
Crime, Fraud and Business risks have seen a dramatic
increase. This is likely to result in stronger demand for risk
assurance, security and fraud management solutions.
We are also seeing a step up in 5G roll outs across the globe
and as a consequence we are witnessing a number of new
use cases especially in the B2B2x space. This is likely to
result in telco revenue shifting from being consumer heavy
to B2B2x enterprise heavy. Subex with Partner Ecosystem is
well placed to benefit from this shift.
Telcos are targeting enterprise services with 4G and
5G applications in manufacturing, health care, distance
learning and transportation. Increasingly these services will
rely on IoT and MEC networks. Subex is well positioned to
help carriers in the areas of Capacity Management, Partner
Management, Asset Assurance, Business Assurance, Partner
Management, IoT Security and AI driven Augmented
Analytics.
We continue to see demand for data bandwidth increase
relentlessly. At the same time revenues for telecom
operators are likely to stay flat over the next 5 years period.
Operators who do efficient network spends which
combines capacity with customer experience and
ROI will succeed. We see an opportunity to use our
deep understanding of network performance KPIs and
our capabilities in artificial intelligence in delivering cutting
edge Network Capacity Management solutions to telecom
operators.
Telcom Operators are transforming to platform players with new
lines of businesses focused on entertainment, ecommerce, Industrial
Automation, autonomous transportation, smart utility and cities.
To succeed telecom operators are turning to increasing use of data
for operational and strategic decision making. However, there are
challenges. The journey from data to insights has several manual
steps which are prone to errors and biases, it has a high dependency
on skilled data scientists, data itself continues to reside in silos in
the telco world. To address this latent need Subex has launched
HyperSense an augmented analytics platform which uses AI to the
journey from data preparation to insight generation and insight
explanation. Subex’s new platform enables citizen data scientists by
automating many aspects of data science, machine learning, and AI
model development, management and deployment. We see a strong
demand for this platform among the Telecom Operators.
Subex Annual Report 2020-21 91
THREATS
COVID-19 crisis continues to create uncertainty over
economic recovery. Barring a handful of industries, this
statement is probably applicable to all other businesses for
the next few months. While the telecom industry is resilient
to the COVID-19 crisis, it is not spared of uncertainty.
And this uncertainty does impact opex and capex spend
priorities.
Telcom operators today offer a variety of products and
services to its customers. Order management, provisioning,
fulfillment, billing and customer care are becoming
increasingly complex. Thus, demand on decision support
solutions like Fraud Management and Revenue Assurance,
to handle very complex use cases continue to grow. We
at Subex have invested in technology upgrades and have
invested in advanced AI labs to address these growing
expectations of our customers.
As Telcos turn into platform players and grow multiple
lines of new businesses, there is increased decentralization
of purchasing power and decision making among these
lines of businesses. We at Subex recognize this challenge
and have doubled down on ensuring greater relevance of
our portfolio and visibility to our portfolio among these
decentralized centers within telcos.
As cloud computing makes further inroads into telecom
service providers, so do a number of new cloud-based SaaS
software vendors each offering niche capabilities in the
area of decision analytics. We at Subex recognize these as
new competitions and are transforming our entire portfolio
to cloud native stack. HyperSense Augmented analytics
platform is cloud and Kubernetes native platform capable
of supporting cloud, hybrid and on-premise deployments
balancing the realities of our customers and prospects,
COVID-19 has resulted in multiple lockdowns and in
general difficult in working from office. In response Subex
has shifted to flexi working norms whereby Subexians are
able to work and deliver from any where in the world.
Necessary technology to support work from anywhere has
been made available to all Subexians.
Key Announcements in FY20
Telefónica partners with Subex for next-gen fraud prevention
Subex announced a partnership with Telefónica, one of the largest
mobile network providers in the world, to provide the latest version of
Subex Fraud Management Solution. As part of the engagement, the
operator will be deploying Subex’s Fraud Management, to all opcos
in Telefónica’s Hispam unit: Argentina, Chile, Venezuela, Ecuador,
Mexico, Peru, Uruguay, and Colombia.
Subex selected by Saudi Telecom Company for its integrated
Revenue Assurance and Fraud Management solution
Subex announced that it has been selected by Saudi Telecom
Company (“stc”) to deploy an integrated Revenue Assurance and
Fraud Management (iRAFM) solution. This deal marks another
chapter in the long-standing partnership between Subex and stc,
through the earlier deployments of Subex’s Revenue Assurance and
an award-winning Fraud Management engagement, which began
in 2003. By virtue of this decision, stc will be aiming to consolidate
their technology stack with the latest solution from Subex, including
replacement of other legacy systems.
Subex and SkyLab team up to secure the shipping industry
Subex and SkyLab, a leader in 5G Multi-Access Edge Computing
(MEC) and Industrial IoT have announced a partnership to offer IoT
and OT cybersecurity solutions and services to the maritime sector.
These solutions offered jointly by Subex and SkyLab have been
successfully deployed and are already securing ships and maritime
infrastructure across oceans. The industry can look up to this
partnership to protect their critical assets from cyberattacks and
cybercrime.
Subex joins O-RAN Alliance to help accelerate the adoption of open
radio access networks
Subex announced that it has become a member of the O-RAN
Alliance to support the development and standardisation of Open
RAN (radio access networks). With its expertise in advanced network
analytics based on machine learning, Subex joins the alliance to help
drive innovation in the radio access network domain – ultimately
facilitating Open RAN that leverages embedded artificial intelligence
(AI) to maximise network performance.
Tech Mahindra and Subex Partner to Drive Scale Adoption of
Blockchain-based Solutions for Telecom Operators Globally
Tech Mahindra, a
leading provider of digital transformation,
consulting, and business re-engineering services and solutions, and
Subex, an industry leader in providing services based on Digital Trust,
have announced strategic partnership to roll-out blockchain based
solutions for telecom operators globally. These solutions will enable
fraud mitigation and drive operational efficiencies for Communication
Service Providers by reducing compliance complexities and faster
time-to-market.
Subex launched Partner Ecosystem Management platform.
Subex announced the launch of its Partner Ecosystem Management
platform that will allow CSPs to accelerate their digital services
portfolio expansion. The platform will allow CSPs to create a value
driven partner ecosystem and significantly improve time to market for
new services by identifying and quickly onboarding diverse partners.
It will also enable digital trust among CSPs and their partners by
creating a transparent partner ecosystem.
REVENUE MODEL
Our revenue generally comes from four streams: (1) licensing;
(2) professional services related to installations and configuration
activity; (3) annual support contracts; and (4) managed services.
We generally license our software products on per subscriber or per
transaction basis. This means that when our customers experience
growth, we can also expect to benefit from that growth. Typically,
there are significant professional services revenues associated with
each new software installation as well as with upgrades.
Our annual support contracts are generally priced as a function
of the total license fees paid by the customer. Thus, our annual
Subex Annual Report 2020-21 92
support contracts would also tend to experience growth when our
customers experience growth. Importantly, annual support contract
revenue tends to be recurring revenue.
Finally, we have been experiencing increasing success with managed
service revenue. Like annual support contracts, managed services
provides a relatively predictable recurring revenue stream. At
the same time, our managed service offering provides us with an
opportunity to maintain a continuous touch point with the customer
so we can better understand their needs and we have opportunity to
educate them on our offerings and skills.
RISKS AND CONCERNS
As our valued investor, we are certain you understand our business
environment, prevailing economic conditions, geo-political
circumstances, and other specific risks that may affect our future
business decisions and financial performance. It is not possible to
detail out every risk since we operate in a very competitive and rapidly
changing global environment . New risk factors emerge from time to
time, the year 2020 was one of our most challenging years in recent
times, just as it was for any other business since the global COVID-19
pandemic lead to uncertainty and ambiguity across the globe. There
could still be dramatic changes in the business however due to lack
of precedents, and the fact that the pandemic is still ongoing, we are
unable to provide specific details on how this could impact Subex’s
business. We are providing some information on several risks which
we are aware of and they are stated herein: (a) reduction in consumer
and business purchasing; (b) consolidation of our customer base;
(c) dependence on communications, service providers as our major
customers; (d) security; (e) improper disclosure of personal data
could result in liability and harm to our reputation; (f) technology
changes and obsolescence may impact our business; (g) recruiting
and retention of personnel is challenging; (h) adequately protecting
our intellectual property may not be possible; (i) allegations of
infringement of third-party intellectual property poses risks; (j)
variability of our quarterly operating results makes comparisons
difficult; (k) non-compliance with statutory obligations may result
in fines and penalties; (l) non-compliance with environmental
regulations may lead to fines and penalties; (m) foreign exchange
fluctuations may lead to variability in our revenue; (n) SEZ related
taxation benefits may be uncertain; (o) failure to fulfill contractual
obligation may lead to claims; and (p) debt obligations. Below, we will
discuss each of these risks in some more detail. There are, of course,
additional risks faced by us, which are not specified here.
Reduction in Consumer and Business Purchasing.
We depend on our customers – primarily CSPs. If our primary
customers face reduced revenue, we will also face reduced revenue.
CSPs primary customers are consumers and businesses. Of course,
reductions in spending by consumers or businesses will reduce
revenue of CSPs and this will result in decreased spending by the
CSPs which means reduced revenue for us.
Consolidation in our customer base
CSPs have gone
through considerable consolidation. The
consolidation, or merger, of one CSP with another can have at
several impacts on us. First, it will simply reduce the overall size
of the market; each consolidation effectively reduces the number
of potential customers for our products. Secondly, it can and
does happen that one of our existing customers can undergo a
consolidation. In that event, the other party to the consolidation may
already have competing products and the combined company may
choose to continue with the use of the competing product rather
than use our products/services. Of course, it can also happen that
the two companies, when combined, choose to use our products
which may have a positive impact on our revenue. Another
possibility is that two existing customer merge. The consolidation of
two customers will have an adverse effect on our revenue as the
combined company attempts to reduce their consolidated spending.
Finally, larger customers simply have more negotiating power leading
to reduced prices for our products. The Company strives to have a
deep penetration within the accounts that it serves so as to provide
an edge over competitors and be a preferred choice during such
consolidations.
Dependence on the Communications Service Providers as our
major customers
We mentioned above our customers are primarily CSPs. We are
fully dependent on CSPs as our major customer base. As a result,
we are fully susceptible to any downturns or negative changes in the
CSP industry.
Security
You must be well aware that security threats are prevalent
everywhere today. This is, perhaps, especially true in the technology
industry where we participate. The security vulnerabilities take many
forms. Hackers may attempt to compromise computer systems
and networks. Fraudsters may attempt to steal the identity of our
personnel to gain access to our computer systems, networks and
even banking systems. Terror activity could have an adverse impact
on our business. We may fail to adequately design our products
leaving our customers exposed to hacking and other network
vulnerabilities. Perhaps this concern – of failure to adequately design
our products leading to exposure of our customer’s information is
one of the largest concerns. If one of our customers faced a security
breach allegedly as a result of use of our products, it would cause
significant reputational risk to us and may lead to claims against us.
Subex Annual Report 2020-21 93
We devote significant resources to mitigate security threats including
threats to our internal IT systems, with respect to our products and
with respect to physical security of our buildings. But there cannot be
any guarantee that these efforts will avoid security breaches.
Improper disclosure of personal data could result in liability and
harm our reputation
You are probably aware of the global trend towards more sensitivity
regarding improper disclosure of personal data. This global trend has
a number of impacts on us. There are additional laws and regulations
in many jurisdictions. This not only leads to increased administrative
costs of compliance and increased difficulties in doing business but
violations of these laws and regulations involve higher and higher
fines and penalties. At the same time, we are storing and processing
increasingly large amounts of personal data which leads to increased
potential exposure.
We take what we consider to be appropriate steps to provide for
the security and protection of all data including personal data. But,
despite these efforts, it is possible our practices may not prevent the
improper disclosure of personal data. Improper disclosure of this
information could harm our reputation, lead to legal exposure, lead to
claims against us by customers including claims for indemnification
or subject us to liability under laws that protect personal data,
resulting in increased costs or loss of revenue.
It is important to note that our potential liability for customer financial
damages associated with losses of personal data is generally not
limited by limitation of liability provisions in customer contracts.
In addition to risks related to improper disclosure of personal data,
new laws and regulations are being implemented. One significant
new regulation is the European General Data Protection Regulation
(“GDPR”) which went into full effect in May 2018. Compliance efforts
related to these laws and regulations is significant and could be a
distraction from other activities. Further, even without any actual
improper disclosure of personal data, non-compliance could result in
large fines. Still further, customer focus on these laws and regulations
could delay or jeopardize sales and installations of Subex products.
Technology changes and obsolescence may impact our business
We experience rapid technological changes which could make
our technology and services obsolete, less marketable or less
competitive. These changes result in our need to continually improve
the features, functionality, reliability and capability of our products
which poses development challenges and expenses. We may not
be able to adapt to these changes successfully or in a cost-effective
way which may adversely affect our ability to compete and retain
customers or market share.
While the rapid technological changes require us to change our
products, launching new products is also a key element of our
growth. An inability to bring new products with high demand to the
market in a timely manner will reduce our growth and profitability.
We make strong efforts to put in place processes and methodologies
to address these issues and to turn it into a strategic advantage
by being in the forefront of technological evolution. For example,
regular skill upgradation programs and training sessions that include
attending global conferences and employing specialized consultants
etc. are undertaken.
Recruiting and Retention of Personnel is challenging
Subex’s talent acquisition strategy is to hire candidates with the right
competencies required by the business at the right time, a judicious
mix of lateral hires and fresh graduates. We are an equal opportunity
employer and focus on meritocracy at all stages of hiring, strictly
based on role-mapping career architecture. We have a robust
process to source and select the best talent, both for entry-level roles
as well as lateral hires through our website, channel partners, referral
campaigns, campus placements, and internal job postings. Given the
difficult situation arising from the pandemic in FY22, a lot of our hiring
was done virtually, and we hired close to 574 Subexians.
Adequately Protecting Our Intellectual Property may not be
possible
We operate in a global environment; protecting our proprietary
technology in the many different jurisdictions we operate in, which is
challenging. We depend on a combination of technical innovations, as
well as copyrights and trade secrets for protection of our technology.
We also maintain patent and trademark protection, as and where
applicable and required. However, some jurisdictions have limited
laws protecting technologies and other jurisdictions, even if they
have laws protecting technology related innovations, are curtailed
by limited or difficult enforcement systems. Even in jurisdictions
which are equipped with adequate laws and enforcement systems,
detection of infringement of our rights may be difficult and even
if detected, engaging in litigation to enforce our rights would be
expensive.
Departure of our personnel, especially to a competitor, is a particular
risk to our technology and intellectual property rights. We generally
require all employees and advisors to sign agreements which require
that our information be maintained as confidential during and after
their employment/engagement. These agreements also assign or
otherwise vest rights in the intellectual property developed by these
employees and advisors to the company. Even so, these agreements
may not effectively prevent disclosure of our information or
effectively assign rights to us. Further, detection of violation of these
agreements may be difficult and it may be difficult to enforce these
agreements even when such violations are detected. Any exposure
of our information by former employees or any failure to adequately
have rights assigned to us, may have a material adverse effect on our
business, financial condition, the results of our operations and our
reputation.
Allegations of Infringement of Third- Party Intellectual Property
poses Risks.
We may face claims by third parties that our products infringe their
intellectual property rights. Whether or not we ultimately prevail
in any intellectual property dispute, defending the dispute may be
expensive, it may distract our management and other key personnel
and its outcome is uncertain. Further, if any of our products are
found to infringe the intellectual property rights of others, or if we
settle a claim in an adverse manner, it may restrict or prohibit further
development, manufacture, and sale of our products. A loss or
adverse settlement may require us to pay substantial sums of money
in terms of damages. We may also be forced to seek licenses to
continue to use the product that contains the specific intellectual
property. These licenses may not be available on commercially
acceptable terms or may not be available at all.
Subex Annual Report 2020-21 94
Furthermore, we are required to indemnify our customers against
third-party claims of infringement of intellectual property arising out
of our customers’ use of our products and services. Typically, our
liability for such indemnification is not limited by limitation of liability
provisions in our customer contracts.
Further, we are often in possession of proprietary information of our
customers. This information may be wrongly used or disclosed or
may be misappropriated by employees of the Company or others.
This would result in a breach of our contractual obligations to our
customers. Any such breach may subject us to a significant claim(s)
from the customer for damages and may also significantly damage
our reputation.
We have a consistent protocol of requiring NDAs before disclosure of
our trade secrets/confidential information to third parties. Employees
sign confidentiality terms as a part of their employment agreement.
Historically, we have not received any allegation of infringement of
third-party intellectual property against our products nor our services.
However, especially since we invest in and introduce new product
lines, allegations of infringement of third-party intellectual property
rights, against us or our customers with respect to our products or
services, or any allegation of breach of our confidentiality obligations
to our customers could arise and this could have a materially
adverse impact on our business, financial condition the results of our
operations and our reputation.
Variability of Our Quarterly Operating Results Makes Comparisons
Difficult
Our quarterly operating results have varied in the past due to reasons
like seasonal pattern of hardware and software capital spending by
customers, information technology investment trends, achievement
of milestones in the execution of projects, hiring of additional staff
and timing and integration of acquired businesses. Hence, the past
operating results and period to period comparisons may not indicate
future performance. Our management is attempting to mitigate this
risk through expansion of our client base geographically, increasing
annuity revenue such as through managed services and also looking
to grow revenues from Horizon 2 areas of IOT Security, ROC Insights
etc.
Non-compliance with statutory obligations may result in fines and
penalties
We face certain statutory obligations. Some of these obligations arise
from the fact that we have registered with Special Economic Zone
for software development activities and have availed Customs Duties
and Goods and Service Tax exemptions. The non-fulfillment of export
obligations or other non-compliance with statutory obligations may
result in penalties as stipulated by the Government and this may
have an impact on future profitability. The Company has team of
in-house attorneys and engages outside counsel/consultants on a
need basis. An ongoing monitoring mechanism has been established
with respect to applicable laws.
Certifications and compliance
Subex is certified for both Information Security and Quality
Management System Periodic reviews and internal audits are carried
out based on a defined program. These audits cover the Delivery
and Corporate functions based on the scope of certification
for management systems which is currently defined as per the
requirements of ISO 27001:2013, GDPR and ISO 9001:2015. A system
is in place to identify and manage process changes methodically.
There is people involvement across organization in the activities
of process development, implementation and reviews, there by
achieving continual improvement. A centralized repository is in
place to cover all policies, processes and controls, which is easily
accessible to all employees to ensure strict process adherence.
Non-compliance with Environmental Regulations may lead to fines
and Penalties
Software development, being generally a pollution free industry,
means we are not subject to significant environmental regulations.
Nonetheless, non-compliance with applicable environment
regulations may lead to significant fines and penalties. We do adhere
to the guidelines for disposing of E-wastes as stipulated by the
E-Waste (Management and Handling) Rules.
Foreign Exchange Fluctuations May Lead to Variability in Our
Revenue
We have substantial exposure to foreign exchange related risks
on account of revenue from export of software and outstanding
liabilities. There is a natural hedge to the extent of expense incurred
in same currency. Despite this, particularly given the volatility in the
foreign exchange market, there could be significant variations. Our
management is attempting to mitigate this risk through hedging by
obtaining forward contracts against its revenue and receivables.
Failure to Fulfill Contractual Obligation May Lead to Claims
We enter into contracts with our customers in the ordinary course of
business, under which we are obligated to perform and act according
to the contractual terms enumerated under them. Any failure to fulfill
these contractual obligations may expose us to financial, reputational
and other risks.
We are confident we have taken sufficient measures to assure it
meets the contractual obligations under the customer contract.
Nonetheless, there cannot be any assurance that a customer will not
allege a breach by us of our obligations.
Debt Obligation
The Company did not have any debt obligation as on March 31, 2021.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
In accordance with the provision of Section 134(5)(e) of the
Companies Act, 2013, and as per the provisions of the SEBI (LODR),
Regulations, 2015, the Company has an Internal Control System,
commensurate with the size, scale and complexity of its operations.
Such Internal Financial Controls were found to be adequate for a
Company of this size. The controls are largely operating effectively
since there has not been identification of any material weakness
in the Company. The Directors have in the Directors Responsibility
Statement under paragraph (e) confirmed the same to this effect. The
Company has policies and procedures in place for ensuring proper
and efficient conduct of its business, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records and timely preparations,
reliable financial information. The Company has adopted accounting
policies which are in line with Indian Accounting Standards (“Ind AS”).
Subex Annual Report 2020-21 95
Pursuant to the provisions of the Section 134(5)(f) of the Act, the
Company during the year devised proper systems and continued
to ensure compliance with the provisions of all applicable laws.
Any matter that required attention was immediately dealt with. The
compliance system was largely found to be adequate and operating
effectively. The Directors have in the Directors Responsibility
Statement under paragraph (f) confirmed the same to this effect.
The Internal Auditors monitor and evaluate the effectiveness and
adequacy of internal control system in the Company, its compliance
with operating systems, accounting procedures and policies at all
locations of the Company and its subsidiaries. Based on the report
of Internal Auditors, process owners undertake corrective action in
their respective areas and thereby strengthen the controls. Significant
audit observations and corrective actions thereon are presented to
the Audit Committee of the Board.
Subex is certified for ISO 9001:2015 (Quality Management System)
and ISO 27001:2013 (Information Security Management System).
Internal audits are conducted periodically for projects and support
functions to adhere to these international standards. These
audits are conducted across Bengaluru, UK and US locations
to ensure processes are followed to provide a better customer
experience. Summary of the audits are shared across organization
to help understand strengths and weaknesses in the system. People
involvement in organization process initiatives is one that approaches
towards achieving better compliance, standardizing activities to
consistently achieve better customer satisfaction.
This year Subex focused on additional security awareness programs
and improve the existing business continuity controls owing to the
pandemic. Additionally, we continued to identify and involve relevant
stakeholders to review and align the processes to Subex’s Business
objectives.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Financial Highlights/ Year Ended March 31
2020-21
2019-20
Consolidated
Standalone
Consolidated
Standalone
Revenue from operations
Total Income
Earnings Before Interest, Exceptional Items & Taxes (EBIT)
Profit/(Loss) before Exceptional items & tax
Exceptional Items
Profit/(Loss) before tax
Tax expenses
Profit/ (Loss) after tax
Other comprehensive income/(loss)
Equity dividend %
Share Capital
Reserves & Surplus
Net worth
Gross Property, Plant & equipment, right-of-use asset and other
intangible assets
37,203
37,677
8,472
8,650
287
8,937
3,765
5,172
624
10%
28,100
26,755
54,855
5,786
2,916
5,510
302
2,882
(231)
2,651
29
2,622
-
10%
28,100
22,066
50,166
6,259
36,498
37,061
7,910
7,996
(31,766)
(23,770)
3,145
(26,915)
(29)
Nil
56,200
(4,661)
51,539
8,215
1,079
3,170
(1,172)
891
(21,361)
(20,470)
118
(20,588)
(21)
Nil
56,200
(6,176)
50,024
6,599
Net Property, Plant & equipment, right-of-use asset and other
3,139
874
4,861
1,157
intangible assets
Total Assets
72,666
57,919
68,098
55,128
Ratios where there has been a significant change from fiscal 2020 to fiscal 2021
Key Indicators
2020-21
2019-20
Debtor Turnover Ratio
Current Ratio
Debt/Equity Ratio
Net Profit Margin %
Return on year end Net Worth (excluding exceptional items) %
Return on year end capital employed% (EBIT/CapitalEmployed)
Consolidated
Standalone
Consolidated
Standalone
4.0
3.2
0.05
13.9
10.4
14.8
1.9
0.9
-
89.9
5.7
0.6
4.1
2.7
0.09
(73.7)
7.4
14
1.2
0.6
0.01
(1,908.0)
1.2
(2.3)
Debtors turnover ratio is computed as turnover divided by average debtors. On consolidated basis, decrease in debtor’s turnover
ratio is on account of increase average debtors in FY20-21. On standalone basis, increase is on account of increase in revenue from
` 1,079 lakhs in FY 2019-20 to ` 2,916 lakhs in FY 2020-21 .
Subex Annual Report 2020-21 96
Current ratio is computed as current assets by current liabilities. Increase in ratio is due to increase in current assets on both
standalone and consolidated basis as compared to previous year.
Debt equity ratio is computed as total of borrowings and lease liabilities divided by net worth. Decrease in debt equity ratio is on
account of decrease in the lease liabilities.
Return on net worth on consolidated basis is computed as net profit or loss attributable to equity shareholders (excluding exceptional
gains of ` 287 lakhs and exceptional loss of ` 31,766 lakhs for 2020-21 and 2019-20 respectively) by average shareholders equity.
Return on net worth on standalone basis is computed as net profit or loss attributable to equity shareholders (excluding exceptional
loss of ` 231 lakhs and ` 21,361 lakhs for 2020-21 and 2019-20 respectively) by average shareholders equity.
Net profit margin is computed as net profit or loss by turnover of the company. Variation in ratios has been explained in the below
commentary.
Return on year end capital employed is computed as earnings before interest and tax by capital employed. There has been increase
in EBIT from ` 7,910 lakhs in 2019-20 to ` 8,472 lakhs in 2020-21 on consolidated basis and from negative EBIT of ` 1,172 lakhs in
2019-20 to positive EBIT of ` 302 lakhs in 2020-21 on standalone basis.
COMMENTARY ON FINANCIAL STATEMENTS
Share Capital
As at March 31, 2021, the issued, subscribed and paid-up share
capital of the Company was ` 2,81,00,14,675 (Rupees Two hundred
and eighty one crores, fourteen thousand, six hundred and seventy
five only) divided into 56,20,02,935 (Fifty six crores, twenty lakhs,
two thousand nine hundred and thirty five only) equity shares of
` 5 (Rupees five only) each. The National Company Law Tribunal,
Bengaluru Bench, vide its Order dated September 23, 2020 approved
the Scheme of Reduction of Equity Share Capital of the Company
from ` 562 Crores to ` 281 Crores by reducing the face value of the
equity shares from ` 10/- each to ` 5/- each. The Company has not
allotted equity shares in FY 2020-21.
Reserves and Surplus
Securities premium
On standalone and consolidated basis, the balance of security
premium as at March 31, 2020 amounted to ` 26,712 lakhs. During the
year 2020-21, ` 33 lakhs has been transferred to securities premium
on exercise of share options by employees. Also, an amount of
` 10,301 lakhs has been utilized to write-off the accumulated losses,
in accordance with the scheme of Capital reduction approved by the
NCLT on September 23, 2021. As at March 31, 2021, the balance of
security premium was ` 16,444 lakhs..
Retained earnings
On a standalone basis, as at March 31, 2020, there was
deficit balance in retained earnings amounting ` 36,325
lakhs. During the year, 2020-21, the Company has written-
off the accumulated losses of ` 38,401 lakhs by utilizing
` 10,301 lakhs from securities premium and ` 28,100 lakhs
from the paid-up share capital of the Company, in accordance
with the scheme of Capital reduction approved by the NCLT
on September 23, 2021. Also, the Company has earned a
profit of ` 2,622 lakhs and distributed interim dividend of
` 2,746 lakhs. As at March 31, 2021, there was a surplus in
the retained earnings amounting to ` 1,952 lakhs.
On a consolidated basis, as at March 31, 2020, there
was deficit balance
in retained earnings amounting
` 19,828 lakhs. During the year, 2020-21, the Company
has written-off the accumulated losses of ` 38,401 lakhs
by utilizing ` 10,301 lakhs from securities premium and
` 28,100 lakhs from the paid-up share capital of the
Company, in accordance with the scheme of Capital
reduction approved by the NCLT on September 23, 2021.
Also, the Company has earned a profit of ` 5,172 lakhs
and distributed interim dividend of ` 2,746 lakhs. As at
March 31, 2021, there was a surplus in the retained earnings
amounting to ` 20,987 lakhs.
Exchange differences on translating the financial statements of a
foreign operation.
During the year 2019-20, the balance of Foreign Currency
Translation Reserve of ` 12,206 lakhs has been included in
the Reserves and Surplus to bring it in line with Schedule III
of the Act.
During the year 2020-21, the balance of Foreign Currency
Translation Reserve of ` 11,570 lakhs has been included in
the Reserves and Surplus to bring it in line with Schedule III
of the Act.
Total equity attributable to equity holders of the company.
On a standalone basis, the total equity attributable to equity
holders of the Company has increased to ` 50,166 lakhs
as at March 31, 2021, as compared to ` 50,024 lakhs as at
March 31, 2020.
On a consolidated basis, the total equity attributable
to equity holders of the Company has increased to
` 54,855 lakhs as at March 31, 2021 from ` 51,539 lakhs as at
March 31, 2020. The movement was primarily on account
of profits earned during the year, interim dividend paid to
the share holders and exchange gain on foreign currency
translation.
Employee Stock Options Plan
Under
the Subex Employees Stock Option Scheme-2018
Company has granted 12,40,500 options during the year ended
March 31, 2021 as compared to 1,28,00,000 options during March 31,
2020. The net amount carried in respect of stock options outstanding at
March 31, 2021 amounts to ` 232 lakhs (Previous year : ` 114 lakhs).
Subex Annual Report 2020-21 97
The management believes that the overall composition and
condition of trade receivables is satisfactory post assessment
of doubtful receivables. As at March 31, 2021, on a standalone
basis trade receivable amounted to ` 2,184 lakhs (previous year;
` 915 lakhs) net of provision for doubtful debts of ` 2,239 lakhs
(previous year; ` 2,262 lakhs).
On a consolidated basis trade receivable amounted to ` 9,215 lakhs
(previous year ` 9,206 lakhs) net of provision for doubtful debts of
` 2,088 lakhs (previous year ` 2,178 lakhs).
Cash and Cash Equivalents
On a standalone basis, balance in current and deposit accounts
stood at ` 397 lakhs as at March 31, 2021, as compared to ` 392 lakhs
as at March 31, 2020.
On a consolidated basis, balance in current, EEFC and deposit
accounts stood at ` 14,294 lakhs as at March 31,2021 as compared to
` 9,043 lakhs as at March 31, 2020.
Long-terms Loans and Advances
It represents rent deposit, electricity deposit, telephone deposits and
employee advances of like nature.
Borrowings
On a consolidated basis, short-term borrowings as at March 31, 2021
stood at ` 584 lakhs (Previous year Nil).
Income
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 are considered to
constitute one segment and hence the Company has not made any
additional segment disclosures.
Geographically, the Company earns income from export of software
products and related services to USA, EMEA & Asia Pacific region.
With effect from January 01, 2021, the Company has carried out
strategic re-organization and decided to centralize certain key Sales
and Business support functions, to drive better efficiency of scale
and overall operations. Accordingly, all such employees in sales and
business support functions from other group entities in India have
been transferred to the Company.
Pursuant to the above re-organization, common costs pertaining
to sales and business support function amounting to ` 1,406 lakhs
(including ` 422 lakhs up for the period from April 01, 2020 to
December 31, 2020) has been recovered by the Company with an
agreed mark-up from other group entities and is reflected under
revenue from operations.
Other Income
Other income consists of income derived by the Company from
interest on deposits from banks , refund of research and development
expense.
Property, plant, equipment, right-of-use asset and other intangible
assets
During the year, the Company added ` 1,084 lakhs on consolidated
basis and ` 55 lakhs on standalone basis, to its gross block. The
Company disposed-off certain assets no longer required. Also,
the Company has classified land use-rights related net block to
right- of-use assets on account of adoption of Ind AS 116 – Leases.
As at March 31, 2021, the balance in right-of-use asset stands at
` 1,962 lakhs on consolidated basis and ` 46 lakhs on standalone
basis. Refer note 28 of consolidated financial statement and 27 of
standalone financial statement for further details.
The Company’s net block of property, plant and equipment, right-of-
use asset and other intangible assets was ` 3,139 lakhs (Previous year
` 4,861 lakhs) on consolidated basis and ` 874 lakhs (Previous year
` 1,157 lakhs) on standalone basis.
Goodwill
On a consolidated basis, carrying value of goodwill as at
March 31, 2021 and March 31, 2020 stood at ` 34,409 lakhs .
During the previous year 2019-20, considering the challenges and
significant investment requirements of telecom operators which had
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 had
made an impairment provision of ` 31,473 lakhs towards carrying
value of goodwill. During the year 2020-21, there is no change in the
carrying value of goodwill.
Investments
On a standalone basis,
the
March 31, 2021 and as at March 31, 2020 stood at ` 47,561 lakhs.
investment value as at
total
During the previous year 2019-20, 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 its investment in Subex Assurance
LLP and had made an impairment provision of ` 16,808 lakhs towards
its carrying value. As at March 31, 2021, there is no change in the
carrying value of the investment in Subex Assurance LLP and it
remained at ` 44,756 lakhs.
During the year 2020-21 and previous year 2019-20, there is no
diminution in the carrying value of investment in Subex Digital LLP
and Subex Americas Inc. The carrying value of these investments
remains at ` 1,869 lakhs and ` 936 lakhs respectively.
Trade Receivables
The major customers of the Company are the telecom and cellular
operators overseas and in India. The receivables are spread over a
large customer base. There is no significant concentration of credit
risk on a single customer.
All the debtors are generally considered good and realizable and
necessary provision has been made for debts considered to be bad
and doubtful. The level of sundry debtors is normal and is in tune with
business trends requirements.
Subex Annual Report 2020-21 98
Expenditure
Tax Expense
The employee benefits expenses Increased to ` 19,720 lakhs
compared to previous year at ` 17,454 lakhs on consolidated basis.
Increase on consolidated is majorly on account of new additions to
the headcount and increase in the sales commission expense.
With effect from January 01, 2021, the Company has carried out
strategic re-organization and decided to centralize certain key Sales
and Business support functions, to drive better efficiency of scale
and overall operations. Accordingly, all such employees in sales and
business support functions from other group entities in India have
been transferred to the Company resulting in increase of employee
benefits expense on standalone basis from ` 616 lakhs during
previous year to ` 1,361 lakhs during year ended March 31, 2021.
Pursuant to above re-organization an amount of ` 135 lakhs (including
` 117 lakhs for the period from April 01, 2020 to December 31, 2020)
has been charged to the Company by other group entities and is
reflected under marketing and support charges.
Operating Profits
During the year, on consolidated basis, the Company earned an
operating profit before interest, depreciation, tax, amortization and
exceptional items of ` 9,850 lakhs being 26.5% of total revenue
(excluding other income) as against ` 9,418 lakhs at 25.8% total
revenue (excluding other income) during the previous year. Increase
is majorly on account of growth in revenue by 2%, i.e. ` 705 lakhs
compensated by increase in expense by ` 273 lakhs.
On a standalone basis, the Company incurred operating profit before
Interest, depreciation, tax and exceptional items of ` 495 lakhs
(excluding other income and share of profit/loss from LLP’s) being
17% of total income (excluding other income and share of profit/loss
from LLP’s ) as against operating loss of ` 610 lakhs at 57% during
the previous year. Increase in profit is majorly on account of increase
in revenue by ` 1,837 lakhs, compensated by increase in employee
cost by ` 745 lakhs.
For the year ended March 31, 2021, there was a tax expense of
` 29 lakhs (Previous year: tax expense charge of ` 118 lakhs) on a
standalone basis.
During the year ended March 31,2021 tax expense includes current
tax charge of ` 35 lakhs and reversal of foreign WHT of ` 6 lakhs.
tax expense
the previous year 2019-20,
During
includes
the provision of MAT credit entitlement of ` 425 lakhs for
considering the uncertainty as regards to its utilization, offset
by reversal of provision on foreign withholding tax amounting
` 307 lakhs on account of favorable assessment order received
during the year ended March 31, 2020 allowing foreign tax credit in
respect of AY 2016-17.
On a consolidated basis, tax expense was ` 3,765 lakhs (previous
year; ` 3,145 lakhs).
Tax expense for the year March 31, 2021 includes tax charge of ` 696
lakhs (Previous year ` 117 lakhs), provision of MAT credit entitlement
of ` NIL (Previous year ` 425 lakhs), deferred tax of ` 2,670 lakhs
(Previous year ` 1,849 lakhs) and provision on Foreign tax credit of
` 399 (Previous year ` 754 lakhs net of reversal of ` 308 lakhs on
account of favorable assessment order received during the year
ended March 31, 2020 allowing foreign tax credit in respect of
AY 2016-17).
Net Profit
On consolidated basis, the net profit of the Company amounted to
` 5,172 lakhs as against a net loss of ` 26,915 lakhs during the previous
year. Total Comprehensive profit for the year is ` 5,796 lakhs as
compared to the loss of ` 26,944 lakhs during previous year.
On standalone basis, the net profit of the Company amounted to
` 2,622 lakhs as against a net loss of ` 20,588 lakhs during the
previous year. Total Comprehensive profit for the year is ` 2,622 lakhs
as compared to loss of ` 20,609 lakhs during previous year.
Interest
Earnings per Share
During the year ended March 31,2021, Company recognized interest
expense totaling to ` 296 lakhs (Previous year: ` 477 lakhs) on a
consolidated basis and ` 14 lakhs (Previous year: ` 28 lakhs) on a
standalone basis.
For the year ended March 31, 2021, expenditure includes interest
on Lease liability recognized as per Ind AS 116, Leases amounting
` 269 lakhs (Previous year ` 452 lakhs) and ` 14 lakhs (Previous year
` 28 lakhs) on a consolidated and standalone basis respectively.
Basic Earnings per share computed based on number of common
stock outstanding, as on the Balance Sheet date is ` 0.96 per share
(Previous year: Loss of ` 4.94 per share) on a consolidated basis
and ` 0.49 per share [Previous year: Loss of ` 3.78 per share] on a
standalone basis.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL
RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
Subexians
Depreciation
During the year ended March 31, 2021, depreciation expense
amounted to ` 1,378 lakhs (Previous year: ` 1,508 lakhs) on
consolidated basis and ` 193 lakhs (Previous year: ` 562 lakhs) on
standalone basis.
For the year ended March 31, 2021, depreciation and amortization
include depreciation on right of use asset recognized as per Ind AS
116- Leases, amounting ` 1,028 lakhs (Previous year ` 1,116 lakhs)
and ` 54 lakhs (Previous year ` 66 lakhs) on a consolidated and
standalone basis respectively.
FY21 turned out to be a year of experimentation as the overall
corporate environment was impacted due to the pandemic. Remote
working became the norm and we tried to enable all Subexians to
work as effectively and productively as possible through this year.
The focus on the key areas or themes around which a Subexian’s
lifecycle
is built- Leadership, Empowerment, Appreciation &
Recognition and Career Development & Learning continued. Our
endeavor was to enhance the Subexian experience throughout
his/her lifecycle spanning recruitment, onboarding, performance,
learning & growth and offboarding. As an organization, we take
Subex Annual Report 2020-21 99
pride in ensuring the experience of each Subexian is positive and
meaningful.
Our employees are spread across the globe and the larger centers
are our offices located in Bengaluru, London, Denver, Dubai and
Singapore. As of March 31, 2021, we had 1000+ full time Subexians
on our rolls globally.
Human Resources at Subex
is centralized at our corporate
headquarters in Bengaluru, with regional HR teams providing local
support aligned to the global HR strategy. The function is a key
enabler in the Company’s growth path by driving focused initiatives
for talent development.
Our existing HR policies continue. Work from home, Sabbatical,
Certification, Team Outing are examples of a few policies which are
employee focused. We recognized that remote working is a reality
and the new way of working. With that premise, we have introduced a
Work from Anywhere (WFA) policy that prima facie, allows Subexians
to work from anywhere, with guidelines on how to have that enabled.
The Subex Handbook
As we grow, it is imperative that we document the vast amount of
information about Subex as an organization, and the work we do.
We needed a central repository about Subex and its functions for
the easy access and consumption of any Subexian, new or old.
Addressing this need, we have put together a Subex Handbook, a
ready reckoner for everything one needs to know about Subex.
This Subex Handbook is a living repository and will undergo
continuous updations.
Key hires for the year
Over the period of the last twelve months, we have hired senior
executives from the industry to fuel our growth strategy and
help take Subex to the next frontier of growth. Our current Chief
Technology Officer (CTO), Suresh Chintada, was hired during FY21.
Some of the other senior executives we hired include Damon Acton,
Regional Vice President of IoT Sales for Americas, Vivek Anand, Head
– IoT Sales, APAC and Gautam Sarkar, Vice President and Head of
Technology Solutions.
Recruitment
A lot of our recruitment was executed remotely given the pandemic
environment. To add to the rigour and efficacy of the recruitment
process, we initiated steps that would enable us to show measurable
impact on the growth and quality of the workforce.
The well-established processes like Coffee with the Hiring Manager,
Post- offer feedback, Subexian referral program, partner feedback,
interviewer feedback, Buddy Programme etc., continue. The focus
last year was also on hiring key global talent to fuel our growth
objectives. Our campus hires and internship programmes were
successfully conducted as we are cognizant of the need to bring on
board fresh, young minds to infuse innovation within Subex.
Subexian Onboarding
Most of our onboarding last year was carried out remotely.
Our onboarding process has always been well recognized and
appreciated. Our robust and comprehensive onboarding process
with a clear goal of creating a great day-one experience continued.
All paperwork is typically done online before the joining date and
this has helped save tremendous amount of time for new joiners
when they join Subex. The process does not limit to only day one.
Quantifiable processes to cover the new joiner’s 30-60-90 training
plan, regular polls and interventions take place to assess employee
engagement. The new joiner training is then followed up with an on-
the-job training to strengthen the knowledge and skills learnt during
the training period.
Performance Management
This year the focus continued on encouraging and developing high
performance with the aim of driving meritocracy. The HR team
in consultation with business drove multiple high performance
programs in the form of rewarding high performers with enhanced
roles and incentive benefits. We introduced and established two key
initiatives to support the performance of Subexians – Leadership
Performance Expectation
(LPE) centered around performance
evaluation for certain grades and above and Career Architecture
to help each Subexians in their learning and growth journey. These
together with other interventions we are working on, aim to provide a
360 degrees experience for all Subexians in their growth and learning
journey.
Learning & Growth
Learning & development analysis is a continuous process to align
people skills with business goals. We have attempted to bring all
learning at Subex together, under one roof, in order for Subexians to
provide a consistent and robust learning experience. In continuation
with the programmes and initiatives of last year, like the skill /
competency matrix, we have also brought in a streamlined focus on
curated learning, with a mix of external and internal training focused
at specific groups and sections of Subexians.
Rewards & Recognition
We understand the importance of what appreciating and rewarding
good performance and talent is. We revamped our rewards and
recognition programme and have further automated
it with
additional features to help Subexians promote and establish a sound
recognition culture. Although a recognition program involves costs,
the outcome is significant. Some of the advantages are –
Increases the repetition of desired behaviors, thereby
aligning people with the desired organizational goals
Better employee job satisfaction
Enhances team spirit
Lowers employee turnover by acting as a retention tool.
Lowers
reduces
incidences of negative behavior,
absenteeism, increases productivity, and decreases stress
on the job
Maintains a strong employer brand
Acts as an allied HR process for meeting learning goals
In addition to the specific initiatives we launched last year,
like WoW, which continue, we also introduced Subexian
profiling platforms through the Internal Communications
channel that appreciate and communicate the work done
by Subexians to the entire organization
Subex Annual Report 2020-21 100
Compensation
One of the main cornerstones of an employee’s willingness to stay with an organization is compensation, and we recognize that. Subex
is committed to the growth and development of its employees and will continue to invest in mind, money and effort towards this. We
look at compensation holistically at Subex, and provide a suitable combination of fixed salary, variable salary, benefits, health and disability
insurance, etc.
We constantly keep abreast of industry trends and benchmarks and try to maintain a balanced approach to compensation. We also arrive
at the salary bands of Subexians by conducting comprehensive job matching, data validation and quality audits.
Subex Annual Report 2020-21 101
STANDALONE
F I N A N C I A L
STATEMENTS
Subex Annual Report 2020-21 102
INDEPENDENT AUDITOR’S REPORT
To the Members of Subex Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial
statements of Subex Limited (“the Company”), which comprise the
Standalone Balance Sheet as at March 31, 2021, the Standalone
Statement of Profit and Loss, including the statement of Other
Comprehensive Income/(Loss), the Standalone Cash Flow Statement
and the Standalone Statement of Changes in Equity for the year then
ended, and notes to the standalone Ind AS financial statements,
including a summary of significant accounting policies and other
explanatory information (hereinafter referred to as “the standalone
Ind AS Financial Statements”).
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone Ind AS financial
statements give the information required by the Companies Act, 2013,
as amended (“the Act”) in the manner so required and give a true
and fair view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as at March
31, 2021, its profit including other comprehensive income/(loss), its
cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements
in accordance with the Standards on Auditing (SAs), as specified
under section 143(10) of the Act. Our responsibilities under those
Standards are further described in the ‘Auditor’s Responsibilities for
the Audit of the standalone Ind AS financial statements’ section of
our report. We are independent of the Company in accordance with
the ‘Code of Ethics’ issued by the Institute of Chartered Accountants
of India together with the ethical requirements that are relevant to
our audit of the financial statements under the provisions of the Act
and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code
of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion on
the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone
Ind AS financial statements for the financial year ended March 31,
2021. These matters were addressed in the context of our audit of
the standalone Ind AS financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
We have determined the matters described below to be the key
audit matters to be communicated in our report. We have fulfilled
the responsibilities described in the Auditor’s responsibilities for the
audit of the standalone Ind AS financial statements section of our
report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the standalone
Ind AS financial statements. The results of our audit procedures,
including the procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying
standalone Ind AS financial statements.
Key audit matters
How our audit addressed the key audit matter
Impairment assessment of Investments in Subsidiaries (as described in note 5 of the standalone Ind AS financial statements)
As at March 31, 2021, the net carrying value of investment in wholly owned
Our audit procedures included the following:
subsidiaries in the standalone Ind AS balance sheet amounts to ` 47,561 lakhs.
(i) We evaluated the Company’s internal controls over its annual impairment
To assess if there is an impairment of the carrying value of investment,
assessment and key assumptions applied such as revenue growth, operating
management conducted impairment tests, annually or whenever changes in
margins, discount rates and terminal growth rates;
circumstances or events indicate that, the carrying amount of such investment
may not be recoverable. An impairment loss is recognized if the recoverable
amount is lower than the carrying value.
The recoverable amount is estimated by calculating the value in use by
discounting future cash flows based on future business plans which are
(ii) We have obtained the valuation assessment from the management and
assessed the key assumptions used;
(iii) We assessed the recoverable value headroom by performing sensitivity
testing of key assumptions used;
reviewed and approved by the Board of Directors of the Company.
(iv) We tested the arithmetical accuracy of the impairment models used;
This is a key audit matter as the testing of investment impairment is complex
(v) We discussed potential changes in key drivers as compared to previous
and involves significant judgement. The key assumptions involved in
year / actual performance with management in order to evaluate whether the
impairment tests are projected revenue growth, operating margins, discount
inputs and assumptions used in the cash flow forecasts were suitable; and
rates and terminal growth rate.
(vi) We assessed the disclosures made in the standalone Ind AS financial
statements.
Subex Annual Report 2020-21 103
Evaluation of key tax matters (as described in note 32 of the standalone Ind AS financial statements).
The Company operates in multiple jurisdictions and is subject to periodic
Our audit procedures included the following:
challenges by local tax authorities on a range of tax matters during the normal
course of business including transfer pricing and indirect tax matters. These
involve significant judgment by the Company to determine the possible
outcome of the uncertain tax positions, consequently having an impact on
(i) We obtained an understanding and tested the internal controls relating to
the identification, recognition and measurement of provisions for disputes and
disclosures of contingent liabilities in relation to tax;
related accounting and disclosures in the standalone financial statements,
(ii) We obtained confirmation from management’s expert on ongoing litigations
which have been a matter of significance during the audit and hence
along with risk assessment and assessed the independence, objectivity and
considered as a key audit matter.
competence of the management expert;
(iii) We obtained details of tax assessments, demands issued by tax authorities,
orders/notices received with respect to other litigations from the management;
(iv) We involved tax specialists to review the status of tax assessments and
management’s position in relation to on-going disputes regarding likelihood
assessment of exposure carried out by the management; and
(v) We assessed the adequacy disclosures made in the standalone Ind AS
financial statements.
safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation
of the standalone Ind AS financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud
or error.
In preparing the standalone Ind AS financial statements, management
is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those Charged with Governance are also responsible for overseeing
the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether
the standalone Ind AS financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted
in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these standalone Ind AS financial statements.
Other Information
The Company’s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Management Discussion and Analysis, Board’s report
including annexures, Business Responsibility Report and Report on
Corporate Governance (hereinafter together referred to as “reports”),
but does not include the standalone Ind AS financial statements and
our auditor’s report thereon.
Our opinion on the standalone Ind AS financial statements does not
cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial
statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider
whether such other information is materially inconsistent with the
standalone Ind AS financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged
with Governance for the Standalone Ind AS Financial
Statements
The Company’s Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation
of these standalone Ind AS financial statements that give a true and
fair view of the financial position, financial performance including
other comprehensive income/(loss), cash flows and changes in
equity of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting
Standards (Ind AS) specified under section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015, as
amended. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
Subex Annual Report 2020-21 104
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the
standalone Ind AS financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are
also responsible for expressing our opinion on whether the
Company has adequate internal financial controls with reference
to financial statements in place and the operating effectiveness
of such controls.
•
Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company
to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of
the standalone Ind AS financial statements, including the
disclosures, and whether the standalone Ind AS financial
statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
the matters communicated with
From
those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone Ind AS financial statements
for the financial year ended March 31, 2021 and are therefore the
key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016
(“the Order”), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give in the
“Annexure 1” a statement on the matters specified in paragraphs
3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and
explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(b)
In our opinion, proper books of account as required by law
have been kept by the Company so far as it appears from
our examination of those books;
(c) The Standalone Balance Sheet, the Standalone Statement
of Profit and Loss including the Statement of Other
Comprehensive Income/(Loss), the Standalone Cash Flow
Statement and Standalone Statement of Changes in Equity
dealt with by this Report are in agreement with the books of
account;
(d)
In our opinion, the aforesaid standalone Ind AS financial
statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from
the directors as on March 31, 2021 taken on record by the
Board of Directors, none of the directors is disqualified as
on March 31, 2021 from being appointed as a director in
terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial
controls of the Company with reference to these standalone
Ind AS financial statements and the operating effectiveness
of such controls, refer to our separate Report in “Annexure
2” to this report;
(g)
In our opinion, the managerial remuneration for the year
ended March 31, 2021 has been paid / provided by the
Company to its directors in accordance with the provisions
of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended
in our opinion and to the best of our information and
according to the explanations given to us:
i.
The Company has disclosed the impact of pending
Subex Annual Report 2020-21 105
litigations on its financial position in its standalone
Ind AS financial statements – Refer Note 32 to the
standalone Ind AS financial statements;
ii.
The Company did not have any long-term contracts
including derivative contracts for which there were any
material foreseeable losses; and
iii. There were no amounts which were required to be
transferred to the Investor Education and Protection
Fund by the Company.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 21213803AAAABQ2195
Place of Signature: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 106
Annexure 1 to the Independent Auditor’s Report of even date on the Standalone Ind AS Financial Statements
of Subex Limited
Statement on the matters specified in paragraph 3 and 4 of the
Companies (Auditor’s Report) Order, 2016 (“the Order”)
(i)
(a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
property, plant and equipment and intangible assets.
(b) Property, plant and equipment have been physically verified
by the management during the year and no material
discrepancies were identified on such verification.
(c) According to the information and explanations given by the
management, there are no immovable properties included
in property, plant and equipment of the Company and
accordingly, the requirements under paragraph 3(i)(c) of
the Order are not applicable to the Company. In respect of
immovable properties of building that have been taken on
lease and disclosed as Right of Use assets in the standalone
Ind AS financial statements, the lease agreements are in the
name of the Company.
(ii) The Company’s business does not involve inventories and
accordingly, the requirements under paragraph 3(ii) of the Order
are not applicable to the Company.
(iii) According to the information and explanations given by the
management, the Company has not granted any loans, secured
or unsecured to companies, firms, Limited Liability Partnerships
or other parties covered in the register maintained under section
189 of the Companies Act, 2013 (“the Act”). Accordingly, the
provisions of clause 3(iii) (a), (b) and (c) of the Order are not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given by the management, the Company has complied with the
Name of the Statute
Nature of the dues
Disputed amount *
(` in Lakhs)
Income Tax Act, 1961
Adjustment for
transfer pricing,
disallowances
under section
10A and other
disallowances
Finance Act, 1994
Service tax
151
1,397
379
1,004
3,608
* Excluding penalty and interest from the date of Order to March 31, 2021.
(viii) The Company did not have any outstanding loans or borrowing
dues in respect of a financial institution or bank or to government
or dues to debenture holders during the year.
(ix) According to the information and explanations given by the
management, the Company has not raised any money by the
provisions of section 185 and 186 of the Act in respect of grant of
loans to directors including entities in which they are interested
and in respect of loans and advances given, making investments
and providing guarantees and securities, as applicable.
(v) The Company has not accepted any deposits within the meaning
of Sections 73 to 76 of the Act and the Companies (Acceptance
of Deposits) Rules, 2014 (as amended). Accordingly, the
provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records
under Section 148(1) of the Act for the products/ services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including
provident fund, employees’ state insurance, income-tax,
duty of custom, goods and services tax, cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given by the
management, no undisputed amounts payable in respect
of provident fund, employees’ state insurance, income-tax,
duty of customs, goods and services tax, cess and other
material statutory dues were outstanding, at the year end,
for a period of more than six months from the date they
became payable.
(c) According to the records of the Company, there are no
dues of income-tax, sales-tax, service tax, duty of customs,
duty of excise, value added tax, goods and services tax and
cess, which have not been deposited on account of any
dispute, except the following:
Amount paid/
refund adjusted
under protest
(` in Lakhs)
Period to which
the amount
relates
(Financial Year)
Forum where dispute is pending
-
2014-15
Income Tax Appellate Tribunal (‘ITAT’),
Bangalore
1,397
2013-14 Income Tax Appellate Tribunal (‘ITAT’),
Bangalore
379
2010-11 Hon’ble High Court of Karnataka
924
April 2006 to
October 2007
Central Excise and Service Tax Appellate
Tribunal, Bangalore
- April 2006 to July
Commissioner of Service Tax, Bangalore
2009
way of initial public offer / further public offer (including debt
instruments) and term loans during the year. Hence, reporting
under paragraph 3(ix) of the Order is not applicable to the
Company.
Subex Annual Report 2020-21
107
(x) Based upon the audit procedures performed for the purpose
of reporting the true and fair view of the standalone Ind AS
financial statements and according to the information and
explanations given by the management, we report that no fraud
by the Company or no fraud on the Company by its officers or
employees has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, the managerial remuneration for the year ended
March 31, 2021 has been paid / provided by the Company to its
directors in accordance with the provisions of section 197 read
with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore,
the provisions of clause 3(xii) of the Order are not applicable to
the Company.
(xiii) According to the information and explanations given by
the management, transactions with the related parties are
in compliance with section 177 and 188 of the Act, where
applicable and the details have been disclosed in the notes to
the standalone Ind AS financial statements, as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us and
on an overall examination of the standalone balance sheet, the
Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures
during the year under review and hence, reporting requirements
under clause 3(xiv) are not applicable to the Company.
(xv) According to the information and explanations given by the
management, the Company has not entered into any non-cash
transactions with directors or persons connected with him as
referred to in section 192 of the Act.
(xvi) According to the information and explanations given by the
management, the provisions of section 45-IA of the Reserve
Bank of India Act, 1934 are not applicable to the Company.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 21213803AAAABQ2195
Place of Signature: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 108
Annexure 2 to the Independent Auditor’s Report of even date on the Standalone Ind AS Financial Statements
Of Subex Limited
Report on the Internal Financial Controls under Clause (i) of Sub-
section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls with reference
to standalone Ind AS financial statement of Subex Limited (“the
Company”) as of March 31, 2021 in conjunction with our audit of the
standalone Ind AS financial statements of the Company for the year
ended on that date.
Management’s Responsibility for Internal Financial
Controls
The Company’s Management is responsible for establishing and
maintaining internal financial controls based on the internal control
over financial reporting criteria established by the Company
considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India
(“ICAI”). These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient conduct
of its business, including adherence to the Company’s policies, the
safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s
internal financial controls with reference to these standalone Ind AS
financial statements based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the “Guidance Note”) and the
Standards on Auditing as specified under section 143(10) of the Act,
to the extent applicable to an audit of internal financial controls , both
issued by the ICAI. Those Standards and the Guidance Note require
that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate
internal financial controls with reference to these standalone Ind
AS financial statements was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence
about the adequacy of the internal financial controls with reference
to these standalone Ind AS financial statements and their operating
effectiveness. Our audit of internal financial controls with reference
to standalone Ind AS financial statements included obtaining an
understanding of internal financial controls with reference to these
standalone Ind AS financial statements, assessing the risk that a
material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
risk. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the internal
financial controls with reference to these standalone Ind AS financial
statements.
Meaning of Internal Financial Controls With
Reference to these Standalone Ind AS Financial
Statements
A Company’s internal financial control with reference to standalone
Ind AS financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles. A
Company’s internal financial control with reference to standalone
Ind AS financial statements includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions
of the assets of the Company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorisations
of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the Company’s assets
that could have a material effect on the financial statements.
Subex Annual Report 2020-21 109
Opinion
In our opinion, the Company has, in all material respects, adequate
internal financial controls with reference to standalone Ind AS
financial statements and such internal financial controls with
reference to standalone Ind AS financial statements were operating
effectively as at March 31, 2021, based on the internal control over
financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance
Note issued by ICAI.
Inherent Limitations of Internal Financial Controls
With Reference to Standalone Ind AS Financial
Statements
Because of the inherent limitations of internal financial controls with
reference to standalone Ind AS financial statements, including the
possibility of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial
controls with reference to standalone Ind AS financial statements to
future periods are subject to the risk that the internal financial control
with reference to standalone Ind AS financial statements may become
inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 21213803AAAABQ2195
Place of Signature: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 110
STANDALONE BALANCE SHEET
as at March 31, 2021
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Financial assets
Investments
Loans
Income tax assets (net)
Other non-current assets
Current assets
Financial assets
Loans
Trade receivables
Cash and cash equivalents
Other financial assets
Other current assets
Total assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Total equity
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities
Provisions
Notes
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
3
27
4
5
6
10
12
6
7
8
9
12
13
14
27
18
53
46
775
47,561
14
2,900
-
51,349
26
2,184
397
3,900
63
6,570
57,919
28,100
22,066
50,166
35
116
151
12
245
900
47,561
38
2,900
267
51,923
7
915
392
1,871
20
3,205
55,128
56,200
(6,176)
50,024
190
3
193
Subex Annual Report 2020-21
STANDALONE BALANCE SHEET (contd.)
as at March 31, 2021
Current liabilities
Financial liabilities
Lease liabilities
Trade payables
- total outstanding dues of micro enterprises and small enterprises
- total outstanding dues of creditors other than micro enterprises and small enterprises
Other financial liabilities
Other current liabilities
Provisions
Income tax liabilities (net)
Total liabilities
Total equity and liabilities
111
Notes
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
27
15
15
16
17
18
19
11
82
3
355
6,909
99
90
135
7,602
7,753
5
281
4,401
22
12
108
4,911
5,104
57,919
55,128
Corporate information and significant accounting policies
1 & 2
The accompanying notes are an integral part of the standalone financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
112
STANDALONE STATEMENT OF PROFIT AND LOSS
for the year ended March 31, 2021
Notes
Year ended
March 31, 2021
Year ended
March 31, 2020
(` in Lakhs)
1
Income
Revenue from operations
Share of profit from Limited Liability Partnerships before exceptional items (net)
Other income
Total income
2
Expenses
Employee benefits expense
Finance costs
Depreciation and amortization expense
Marketing and support charges
Exchange fluctuation gain (net)
Other expenses
Total expenses
Profit before exceptional items and tax expense (1-2)
Exceptional items
Gain on termination of lease agreement
Provision for service tax receivable
Provision no longer required written back
Impairment of intangible asset
Provision for claim settlement
Share of loss from Subex Assurance LLP
-Impairment of intangible assets and investment in subsidiary
Total exceptional items
Net profit/ (loss) before tax expense (3+4)
Tax expense (net):
Current tax charge
Provision for MAT credit
Reversal - foreign withholding taxes
Net profit/(loss) for the year (5-6)
Other comprehensive income/ (loss) ('OCI'), net of tax expense
Items that will not be reclassified subsequently to profit or loss
Re-measurement loss on defined benefit plans
Total comprehensive income/ (loss)
Total comprehensive income/ (loss) for the year attributable to equity holders of the
Company (7+8)
Earnings/(loss) per equity share [of ` 5/- each w.e.f September 29, 2020 and ` 10 upto
September 28, 2020) (March 31, 2020: ` 10)]
Basic (`)
Diluted (`)
3
4
5
6
7
8
9
10
20
21
22
23
24
25
26
27
12
4
40
5
19
11
19
34
28
2,916
2,585
9
5,510
1,361
14
193
651
(13)
422
2,628
2,882
36
(267)
-
-
-
-
(231)
2,651
35
-
(6)
29
1,079
1,889
202
3,170
616
28
562
530
(34)
577
2,279
891
-
-
100
(3,599)
(1,054)
(16,808)
(21,361)
(20,470)
-
425
(307)
118
2,622
(20,588)
-
-
(21)
(21)
2,622
(20,609)
0.49
0.48
(3.78)
(3.78)
Corporate information and significant accounting policies
1 & 2
The accompanying notes are an integral part of the standalone financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
STANDALONE STATEMENT OF CHANGES IN EQUITY
for the year ended March 31, 2021
A. Equity share capital (refer note 13):
113
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020, issued,
subscribed and fully paid-up
As at April 1, 2019
Issued during the year
As at March 31, 2020
Issued during the year
Adjustment pursuant to Capital reduction order
As at March 31, 2021
B. Other equity (refer note 14):
Particulars
As at April 1, 2019
Less: Loss for the year
Less: Effect of adoption of Ind AS-116 Leases
Less: Other comprehensive income/ (loss)
Less: Equity shares purchased by Subex Employee Welfare
and Employee Stock Option Plan ("ESOP") Benefit Trust
Add: Share based expenses (refer note 33)
Add/(less): On account of exercise of stock options
As at March 31, 2020
Add: Profit for the year
Less: Equity shares purchased by Subex Employee Welfare
and Employee Stock Option Plan ("ESOP") Benefit Trust
Less: Other comprehensive income/ (loss)
Add: Share based expenses (refer note 33)
Add/(less): On account of exercise of stock options
Add/(less): On account of vested options lapsed during
the year
Add/(less): Adjustment pursuant to Capital reduction order
(refer note 13)
Less: Interim dividend [refer note 14(a)]
As at March 31, 2021
No.
` in Lakhs
56,20,02,935
-
56,20,02,935
-
-
56,20,02,935
56,200
-
56,200
-
(28,100)
28,100
(` in Lakhs)
Attributable to equity holders of company
Reserves and surplus
Total
Capital
reserve
Securities
premium
General
reserve
Treasury
shares
Employee
stock
options
reserve
Surplus/
(deficit)
in the
statement
of profit
and loss
2,776
26,705
1,780
17
(15,684)
(645)
14,949
-
-
-
-
-
-
-
-
-
-
7
-
-
-
-
-
-
2,776
26,712
1,780
-
-
-
-
-
-
-
-
-
-
-
33
-
(10,301)
-
-
-
-
-
-
3
-
-
-
-
-
-
102
(5)
114
-
-
-
147
(26)
(3)
-
-
2,776
16,444
1,783
232
(20,588)
(32)
(21)
-
-
-
-
-
-
(611)
-
23
(20,588)
(32)
(21)
(611)
102
25
(36,325)
(1,233)
(6,176)
2,622
-
-
-
-
-
38,401
(2,746)
1,952
-
(22)
-
-
134
-
-
-
2,622
(22)
-
147
141
-
28,100
(2,746)
(1,121)
22,066
Corporate information and significant accounting policies (refer notes 1 & 2)
The accompanying notes are an integral part of the standalone financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
114
STANDALONE STATEMENT OF CASH FLOWS
for the year ended March 31, 2021
(A)
Operating activities
Profit/(loss) before tax expense
Adjustments to reconcile profit/ (loss) before tax expense to net cash flows:
Depreciation of property, plant and equipment and right-of-use assets
Amortization of intangible assets
Expense on employee share based payments
Interest income (including fair value changes)
Finance costs (including fair value changes)
Allowance for expected credit losses
Gain on termination of lease agreement
Provision for service tax receivable
Share of profit (net) from Limited Liability Partnerships
Impairment of intangibles and investment in subsidiary
Provision no longer required written-back
Advance recoverable written-off
Net foreign exchange differences
Operating profit/ (loss) before working capital changes
Working capital adjustments:
(Increase)/ decrease in loans
(Increase)/ decrease in trade receivables
(Increase)/ decrease in other financial assets
(Increase)/ decrease in other assets
Increase/ (decrease) in trade payables
Increase/ (decrease) in other financial liabilities
Increase/ (decrease) in other current liabilities
Increase/ (decrease) in provisions
Income tax paid (including TDS, net of refund)
Net cash flows from/(used) in operating activities
(B)
Investing activities
Purchase of property, plant and equipment
Drawings from Limited Liability Partnerships
Movement in margin money deposit (net)
Purchase of treasury shares by ESOP trust
Interest received
Net cash flows from investing activities
(` in Lakhs)
Year ended
March 31, 2021
Year ended
March 31, 2020
2,651
(20,470)
68
125
9
(9)
14
(23)
(36)
267
(2,585)
-
-
-
22
503
21
(1,139)
-
(43)
73
464
77
191
147
(2)
145
(55)
2,600
-
(22)
7
2,530
74
488
7
(29)
28
12
-
-
(1,889)
20,407
(100)
234
(34)
(1,272)
(3)
57
1
9
4
(9)
5
(19)
(1,227)
(29)
(1,256)
(3)
1,772
418
(611)
32
1,608
Subex Annual Report 2020-21
STANDALONE STATEMENT OF CASH FLOWS (contd.)
for the year ended March 31, 2021
(C)
Financing activities
Proceeds from exercise of ESOP
Interest paid
Repayment of Lease liability
Payment of dividend [refer note 14(a)]
Net cash flows used in financing activities
(D)
Net increase in cash and cash equivalents (A+B+C)
Cash and cash equivalents at the beginning of the year
(E)
Cash and cash equivalents at year end (refer note 8)
Corporate information and significant accounting policies (refer notes 1 & 2)
The accompanying notes are an integral part of the standalone financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
115
(` in Lakhs)
Year ended
March 31, 2021
Year ended
March 31, 2020
141
(14)
(51)
(2,746)
(2,670)
5
392
397
25
(28)
(54)
-
(57)
295
97
392
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
116
1. Corporate information
Subex Limited (“the Company” or “Subex”) a public limited
company incorporated in 1994, is a leading global provider
of Operations and Business Support Systems (“OSS/BSS”) to
communication service providers (“CSPs”) worldwide in the
Telecom industry.
transformation,
subscriber-centric
The Company pioneered the concept of a Revenue Operations
Centre (“ROC”) – a centralized approach that sustains profitable
growth and financial health for the CSPs through coordinated
operational control. Subex’s product portfolio powers the ROC
and its best-in-class solutions enable new service creation,
operational
fulfilment,
provisioning automation, data integrity management, revenue
assurance, cost management,
fraud management and
interconnect/ inter-party settlement. Subex also offers a scalable
Managed Services Program. The CSPs achieve competitive
advantage through Business Optimization and Service Agility and
improve their operational efficiency to deliver enhanced service
experiences to their subscribers. The Company has its registered
office in Bengaluru and operates through its wholly owned
subsidiaries in India, USA, UK, Singapore, Canada, Bangladesh
and UAE and branches in USA, UK, Canada, Australia, Italy, UAE
and Saudi Arabia.
Effective November 1, 2017, the Company has restructured
its business by way of transfer of its Revenue Maximisation
Solutions and related businesses (“RMS business”) and the Subex
Secure and Analytics solutions and related businesses (“Digital
business”) to its subsidiaries, Subex Assurance LLP (“SA LLP”)
and Subex Digital LLP (“SD LLP”) (together referred to as “LLPs”),
respectively, hereinafter referred to as the “Restructuring” 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.
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.
These standalone financial statements for the year ended March
31, 2021 are approved by the Board of Directors on May 17, 2021.
2. Significant accounting policies
a. Basis of preparation
The standalone financial statements of the Company have
been prepared and presented in accordance with accounting
principles generally accepted
Indian
Accounting Standards (Ind AS) specified under Section 133 of the
including
India
in
Companies Act, 2013 read with Companies (Indian Accounting
Standards) Rules, 2015 (as amended from time to time).
The standalone financial statements have been prepared on
a historical cost basis, except for certain financial instruments
which are measured at fair value at the end of each reporting
period, as explained further in the accounting policies below.
The standalone financial statements comprise the financial
statements of the Company and its controlled employee benefit
trust.
Subex Limited is the sponsoring entity of Employee Stock Option
Plan (‘ESOP’) trust. Management of the Company can appoint
and remove the trustees and provide funding to the trust for
buying the shares. Basis assessment by the management, it
believes that the ESOP trust is controlled by the Company and
accordingly Subex Employee Welfare and ESOP Benefit Trust is
consolidated [refer note 2(o) and note 33].
The standalone financial statements are presented in INR (“`”)
and all the values are rounded off to the nearest Lakhs (INR
00,000) except when otherwise indicated.
b. Use of estimates, assumptions and judgements
The preparation of the standalone financial statements in
conformity with Ind AS requires the management to make
estimates, judgements and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent
assets and liabilities on the date of the standalone financial
statements and the reported amounts of revenues and expenses
for the year reported. Actual results could differ from those
estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised and
future periods are affected.
The Company 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
standalone Ind AS financial statements, in determining the
possible impact from the COVID-19 pandemic. The Company
has used the principles of prudence in applying judgements,
estimates and assumptions and based on the current estimates,
the Company expects to fully recover the carrying amount
of its assets. The impact of the global health pandemic may
be different from that estimated as at the date of approval of
these standalone Ind AS financial statements and the Company
will continue to closely monitor any material changes to its
assessment of economic impact of COVID- 19 pandemic.
Key source of estimation of uncertainty as at the date of
standalone financial statements, which may cause a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, is in respect of the following:
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 117
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash
generating unit (“CGU”) exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value
in use. The fair value less costs of disposal calculation is based
on available data from binding sales transactions, conducted at
arm’s length, for similar assets or observable market prices less
incremental costs for disposing of the asset. The value in use
calculation is based on a discounted cash flow (“DCF”) model.
The cash flows are derived from the budget for future years
and do not include restructuring activities that the Company is
not yet committed to or significant future investments that will
enhance the asset’s performance of the CGU being tested. The
recoverable amount is sensitive to the discount rate used for
the DCF model as well as the expected future cash-inflows and
the growth rate used for extrapolation purposes. Also, refer note
2(h).
government bonds in currencies consistent with the currencies
of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality
tables. These mortality tables tend to change only at interval in
response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates.
Share-based payments
Estimating fair value for share-based payment transactions
requires determination of the most appropriate valuation
model, which is dependent on the terms and conditions of the
grant. This estimate also requires determination of the most
appropriate inputs to the valuation model including the expected
life of the share option, volatility and dividend yield and making
assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are
disclosed in note 33.
Impairment of financial assets
Taxes
In accordance with Ind AS 109, the Company assesses
impairment of financial assets (‘Financial instruments’) and
recognises expected credit losses, which are measured through
a loss allowance.
The Company provides for impairment of investment in
subsidiaries. Impairment exists when there is a diminution
in value of the investment and the recoverable value of such
investment is lower than the carrying value of such investment.
The Company provides for impairment of trade receivables
and unbilled revenue based on assumptions about risk of
default and expected timing of collection. The Company uses
judgement in making these assumptions and selecting inputs
to the impairment calculation, based on the Company’s past
history, customer’s creditworthiness, existing market conditions
as well as forward looking estimates at the end of each reporting
period. Also, refer note 2(h).
Defined benefit plans
The cost of the defined benefit gratuity plan and other post-
employment benefits and the present value of the gratuity
obligation is determined using actuarial valuation. An actuarial
valuation involves making various assumptions that may differ
from actual developments in the future. These include the
determination of the discount rate, future salary increases and
mortality rates. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are
reviewed at each reporting date (refer note 34).
The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated
in India, the management considers the interest rates of
The Company’s tax jurisdiction is India. Significant judgments are
involved in determining the provision for income taxes and tax
credits including the amount expected to be paid or refunded
for uncertain tax positions. Also refer note 2(r) and note 19.
Deferred tax assets are recognised for unused tax losses to
the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing
and the level of future taxable profits together with future tax
planning strategies.
Leases
Ind AS 116 requires lessees to determine the lease term as the
non-cancellable period of a lease adjusted with any option
to extend or terminate the lease, if the use of such option is
reasonably certain. The Company makes an assessment on
the expected lease term on a lease-by-lease basis and thereby
assesses whether it is reasonably certain that any options to
extend or terminate the contract will be exercised. In evaluating
the lease term, the Company considers factors such as any
significant leasehold improvements undertaken over the lease
term, costs relating to the termination of the lease and the
importance of the underlying asset to Company’s operations
taking into account the location of the underlying asset and
the availability of suitable alternatives. The lease term in future
periods is reassessed to ensure that the lease term reflects the
current economic circumstances. After considering current and
future economic conditions, the Company has concluded that
no changes are required to lease period relating to the existing
lease contracts [Refer to note 2(j)].
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 118
c. Current/ non-current classification
The Company presents assets and liabilities in the balance sheet
based on current/ non-current classification.
An asset is treated as current when it is:
•
Expected to be realised or intended to be sold or consumed
in normal operating cycle
• Held primarily for the purpose of trading
•
Expected to be realised within twelve months after the
reporting period, or
• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
A liability is current when:
•
•
•
•
It is expected to be settled in normal operating cycle
It holds the liability primarily for the purpose of trading
It is due to be settled within twelve months after the
reporting period, or
There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current
assets and liabilities, respectively.
The operating cycle is the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents. The Company has identified twelve months as its
operating cycle.
d. Revenue recognition
The Company derives its revenues primarily from sale and
implementation of its license and implementation of its
proprietary software and managed/ support services.
Revenue is recognized upon transfer of control of promised
products or services to customers in an amount that reflects the
consideration the Company expect to receive in exchange for
those products or services.
Revenue from Support Services to group entities/related
parties-Support Service income is recognized as services are
rendered, on the basis of an agreed mark up on costs incurred,
in accordance with the agreement entered into with group
entities.
The following specific recognition criteria must also be met
before revenue is recognized:
Revenues from licensing arrangements is recognized on
transfer of the title in user licenses, except those contracts
where transfer of title is dependent upon rendering of significant
implementation and other services by the Company, in which
case revenue is recognized over the implementation period in
accordance with the specific terms of the contracts with clients.
Revenue from implementation and customisation services
is recognised using the percentage of completion method.
Percentage of completion is determined based on completed
efforts against the total estimated efforts, which represent the
fair value of services rendered.
Revenue from managed/ support services comprise income
from fixed price contracts, time-and-material contracts and
annual maintenance contracts. Revenue from fixed price
contracts is recognized over the period of the contracts using
the percentage of completion method. Revenue from time and
material contracts is recognized when the services are rendered
in accordance with the terms of contracts. Revenue from annual
maintenance contracts is recognised rateably over the period of
the contracts.
Revenue from sale of hardware under reseller arrangements
is recognized when all the significant risks and rewards of
ownership of the goods have been passed to the buyer, usually
on delivery of goods to customers.
In case of multiple element arrangements for sale of software
license, related implementation and maintenance services, the
Company has applied the guidance in Ind AS 115, by applying
the revenue recognition criteria for each distinct performance
obligation. The arrangements generally meet the criteria for
considering the sale of software license, related implementation
and maintain services as distinct performance obligation. For
allocating the consideration, the Company has measured the
revenue in respect of each distinct performance obligation of
a transaction at its standalone selling price, in accordance with
principles given in Ind AS 115. The price that is regularly charged
for an item when sold separately is the best evidence of its
standalone selling price. In cases where the Company is unable
to determine the standalone selling price, the Company has used
a residual method to allocate the arrangement consideration. In
these cases, the balance of the consideration, after allocating
the standalone selling price of undelivered components of a
transaction has been allocated to the delivered components for
which specific standalone selling price do not exist.
The Company collects Goods and Services tax and other
taxes as applicable in the respective tax jurisdictions where the
Company operates, on behalf of the government and therefore
it is not an economic benefit flowing to the Company. Hence it
is excluded from revenue.
Provisions for estimated losses on contracts are recorded in the
period in which such losses become probable based on the
current contract estimates. ‘Unbilled revenue’ included in other
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 119
f.
Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization
Internally generated
and accumulated
intangibles, excluding capitalised development costs, are
not capitalised and the related expenditure is reflected in the
standalone statement of profit and loss in the period in which
the expenditure is incurred.
impairment
losses.
Intangible assets with finite lives are amortized over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least at the
end of each reporting period. Changes in the expected useful
life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the
amortization period or method, as appropriate, and are treated
as changes in accounting estimates.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognised in the standalone statement of profit and loss when
the asset is derecognised.
g. Depreciation and amortization
Depreciation of property, plant and equipment and amortization
of intangible assets with finite useful lives is calculated on a
straight-line basis over the useful lives of the assets estimated by
the management, basis technical assessment:
The Company has used the following useful lives to provide
depreciation on plant and equipment and amortization of
intangible assets:
Assets
Computer equipment
Furniture and fixtures
Vehicles
Office equipment
Leasehold improvements
Computer software
Intellectual property rights
Useful life
3 years
5 years
5 years
5 years
5 years
4 years
10 years
The residual values, useful lives and methods of depreciation
of property, plant and equipment and amortization of
intangibles are reviewed at each financial year end and adjusted
prospectively, if appropriate.
h.
Impairment
Impairment of financial assets
The Company assesses at each date of balance sheet whether
financial assets represent revenues recognized in excess of
amounts billed to clients as at the balance sheet date. ‘Unearned
revenue’ included in other current liabilities represent billings in
excess of revenues recognized as at the balance sheet date.
Performance obligations and
remaining performance
obligations
The remaining performance obligation disclosure provides the
aggregate amount of the transaction price yet to be recognized
as at the end of the reporting period and an explanation as to
when the Company expects to recognize these amounts in
revenue.
Applying the practical expedient as given in Ind AS 115, the
Company has not disclosed the remaining performance
obligation related disclosures for contracts where the revenue
recognized corresponds directly with the value to the customer
of the entity’s performance completed to date, typically those
contracts where invoicing is on time and material basis.
Remaining performance obligation estimates are subject
to change and are affected by several factors, including
terminations, changes in the scope of contracts, periodic
revalidations, adjustment for revenue that has not materialized
and adjustments for currency.
Interest
Interest income is recognized as it accrues in the standalone
statement of profit and loss using effective interest rate method.
e. Property, plant and equipment
Property, Plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment losses,
if any. The cost comprises purchase price, borrowing costs
if capitalization criteria are met, directly attributable cost of
bringing the plant and equipment to its working condition for
the intended use and cost of replacing part of the plant and
equipment. When significant parts of plant and equipment are
required to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives. Likewise,
when a major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognised in the standalone
statement of profit and loss as incurred. The present value of the
expected cost for the decommissioning of an asset after its use
is included in the cost of the respective asset if the recognition
criteria for a provision are met.
Gains or losses arising from derecognition of the assets are
measured as the difference between the net disposal proceeds
and the carrying amounts of the assets and are recognized in
the standalone statement of profit and loss when the assets are
derecognized.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 120
a financial asset or a Group of financial assets is impaired. Ind AS
109 (‘Financial instruments’) requires expected credit losses to be
measured through a loss allowance. The Company recognises
lifetime expected losses for all contract assets and/ or all trade
receivables that do not constitute a financing transaction. For all
other financial assets, expected credit losses are measured at an
amount equal to the 12-month expected credit losses or at an
amount equal to the life time expected credit losses if the credit
risk on the financial asset has increased significantly since initial
recognition.
Impairment of non-financial assets
Non-financial assets including Property, plant and equipment,
intangible assets and right-of-use asset with finite life are
evaluated for recoverability whenever there is any indication
that their carrying amounts may not be recoverable. If any such
indication exists, the recoverable amount (i.e. higher of the fair
value less cost to sell and the value-in-use) is determined on an
individual asset basis unless the asset does not generate cash
flows that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the CGU
to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be
less than its carrying amount, the carrying amount of the asset
(or CGU) is reduced to its recoverable amount. An impairment
loss is recognised in the standalone statement of profit and loss.
impairment
For assets an assessment is made at each reporting date
to determine whether there is an indication that previously
recognised
longer exist or have
losses no
decreased. If such indication exists, the Company estimates the
asset’s or CGU’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change
in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset does
not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the standalone statement of
profit and loss unless the asset is carried at a revalued amount,
in which case, the reversal is treated as a revaluation increase.
i.
Equity investments in subsidiaries
Investments
in subsidiaries are classified as non-current
investments. Impairment recognized, if any, is reduced from the
carrying value.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
standalone statement of profit and loss.
loss in LLPs is recognised as income/expense in the standalone
statement of profit and loss and is recorded under other current
financial asset/liabilities as the right to share the profit/loss
is established as per the LLP’s agreement. The Company has
presented share of profit and share of loss from Limited Liability
Partnerships (‘LLP’) on net basis as the management considers
the net income/expense to be its return on investment in LLP.
j.
Leases
The Company assesses at contract inception whether a contract
is/ contains a lease. That is, if the contract conveys the right
to control the use of an identified asset for a period of time in
exchange for consideration.
Company as a lessee:
The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and leases
of low-value assets. The Company recognises lease liabilities to
make lease payments and right-of-use assets representing the
right to use the underlying assets.
i)
Right-of-use assets
recognises
right-of-use assets at
the
The Company
commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment losses,
and adjusted for any re-measurement of lease liabilities. The
cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a
straight-line basis over the lease term.
If ownership of the leased asset transfers to the Company at
the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated
useful life of the asset.
The right-of-use assets are also subject to impairment. Refer
note 2(h) Impairment of non-financial assets.
ii)
Lease Liabilities
At the commencement date of the lease, the Company
recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. In calculating
the present value of lease payments, the Company uses its
incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made.
Investment in Limited Liability Partnership (LLP) firms is carried
at cost in the separate financial statements. The share in profit/
iii) Short-term leases and leases of low-value assets
The Company applies
the short-term
lease recognition
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 121
exemption to its short-term leased assets (i.e., those leases that
have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leased assets
that are considered to be low value. Lease payments on short-
term leases and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.
The Company has adopted Ind AS 116, effective annual reporting
period beginning April 1, 2019 and applied the standard to
its leases using the modified retrospective method with the
cumulative effect of initially applying the Standard, recognised
on the date of initial application (April 1, 2019). The cumulative
effect of initially applying this standard has been recognised as
an adjustment to the opening balance of retained earnings as
on April 1, 2019.
k.
Financial instruments
A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument
of another entity.
Financial assets and liabilities are recognised when the Company
becomes a party to the contract that gives rise to financial assets
and liabilities. Financial assets and liabilities are initially measured
at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the
fair value measured on initial recognition of financial asset or
financial liability.
Cash and cash equivalents
The Company considers all highly liquid financial instruments,
which are readily convertible into known amounts of cash
that are subject to an insignificant risk of change in value and
having original maturities of three months or less from the date
of purchase, to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted for
withdrawal and usage.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized
cost if these financial assets are held within a business whose
objective is to hold these assets in order to collect contractual
cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive
income
Financial assets are measured at fair value through other
comprehensive income if these financial assets are held within
a business whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or
loss unless it is measured at amortized cost or at fair value
through other comprehensive income on initial recognition.
The transaction costs directly attributable to the acquisition of
financial assets at fair value through profit or loss are immediately
recognised in standalone statement of profit and loss.
Financial liabilities
Financial liabilities are subsequently carried at amortized cost
using the effective interest method, except for contingent
consideration recognized in a business combination which is
subsequently measured at fair value through profit or loss. For
trade and other payables maturing within one year from the
balance sheet date, the carrying amounts approximate fair value
due to the short maturity of these instruments.
Derecognition of financial assets and liabilities
The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial asset
expire or it transfers the financial asset and the transfer qualifies
for derecognition under Ind AS 109. A financial liability (or a
part of a financial liability) is derecognized when the obligation
specified in the contract is discharged or cancelled or expires.
When an existing financial asset/ liability is replaced by another
from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in
the standalone statement of profit and loss.
Reclassification of financial assets
The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition, no
reclassification is made for financial assets which are equity
instruments and financial liabilities. For financial assets which
are debt instruments, a reclassification is made only if there
is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent.
The Company’s senior management determines change in the
business model as a result of external or internal changes which
are significant to the Company’s operations. Such changes are
evident to external parties. A change in the business model
occurs when the Company either begins or ceases to perform
an activity that is significant to its operations. If the Company
reclassifies financial assets,
it applies the reclassification
prospectively from the reclassification date which is the first
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 122
day of the immediately next reporting period following the
change in business model. The Company does not restate any
previously recognised gains, losses (including impairment gains
or losses) or interest.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net
amount is reported in the standalone balance sheet if there
is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
Fair value of financial instruments
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
•
•
In the principal market for the asset or liability, or
In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be
accessible by the Company.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.
In determining the fair value of its financial instruments, the
Company uses following hierarchy and assumptions that are
based on market conditions and risks existing at each reporting
date.
Fair value hierarchy
All assets and liabilities for which fair value is measured or
disclosed in the standalone financial statements are categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 — Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the standalone
financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in
the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
l.
Borrowing cost
to
the acquisition,
Borrowing costs directly attributable
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or
sale are capitalised as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.
m. Standalone statement of cash flows
Cash flows are reported using the indirect method, whereby
profit/ (loss) for the period is adjusted for the effects of
transactions of a non-cash nature or any deferrals or accruals of
past or future operating cash receipts or payments and item of
income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing
activities of the Company are segregated.
n. Employee share based payments
The Company measures compensation cost relating to
employee stock options plans using the fair valuation method
in accordance with
Ind AS 102, Share-Based Payment.
Compensation expense is amortized over the vesting period
of the option on a straight-line basis. The cost of equity-settled
transactions is determined by the fair value at the date when
the grant is made using an appropriate valuation model (Black-
Scholes valuation model). That cost is recognised, together with
a corresponding increase in employee stock options reserves in
other equity, over the period in which the performance and/or
service conditions are fulfilled in employee benefits expense. The
cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent
to which the vesting period has expired and the Company’s best
estimate of the number of equity instruments that will ultimately
vest.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share.
o. Treasury shares
The Company has formed Subex Employee Welfare and ESOP
Benefit Trust (ESOP Trust) for providing share-based payment to
its employees. The Company treats ESOP Trust as its extension
and shares held by ESOP Trust are treated as treasury shares.
Own equity instruments that are purchased (treasury shares)
are recognised at cost and deducted from equity. No gain or
loss is recognised in profit or loss on the purchase, sale, issue
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 123
or cancellation of the Company’s own equity instruments. Any
difference between the carrying amount and the consideration,
if reissued, is recognised in reserve. Share options exercised
during the reporting period are adjusted with treasury shares.
end, less the fair value of the plan assets out of which the
obligations are expected to be settled. Actuarial gains/ losses
are immediately taken to the standalone statement of profit and
loss and are not deferred.
p. Employee benefits
Employee benefits
compensated absences.
include provident
fund, gratuity and
The Company presents the entire compensated absences
balance as a current liability in the balance sheet, since it does
not have an unconditional right to defer its settlement for twelve
months after the reporting date.
Defined contribution plans
q. Foreign currencies
Contributions payable to recognized provident funds, which are
defined contribution schemes, are charged to the standalone
statement of profit and loss.
Defined benefit plans
Gratuity, which is a defined benefit plan, is accrued based on
an independent actuarial valuation, which is done based on
projected unit credit method as at the balance sheet date.
The Company recognizes the net obligation of a defined
benefit plan in its balance sheet as an asset or liability. Gains
and losses through re-measurements of the net defined benefit
liability/ (asset) are recognized in other comprehensive income.
In accordance with Ind AS, re-measurement gains and losses
on defined benefit plans recognised in OCI are not to be
subsequently reclassified to the standalone statement of profit
and loss. As required under Ind AS compliant Schedule III, the
Company transfers it immediately to ‘Surplus/ (deficit) in the
statement of profit and loss’.
The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated
in India, the management considers the interest rates of
government bonds where remaining maturity of such bond
correspond to expected term of defined benefit obligation.
Short-term employee benefits
Short-term employee benefits expected to be paid in exchange
for the services rendered by employees are recognised during
the year when the employees render the service. Compensated
absences, which are expected to be utilised within the next
12 months, are treated as short-term employee benefits. The
Company measures the expected cost of such absences as the
additional amount that it expects to pay as a result of the unused
entitlement that has accumulated at the reporting date.
Long-term employee benefits
Compensated absences which are not expected to occur
within twelve months after the end of the period in which the
employees render the related services are treated as long-term
employee benefits for measurement purpose. Such long-term
compensated absences are provided for based on the actuarial
valuation using the projected unit credit method at the year
Foreign currency transactions are initially recorded in the
functional currency of the Company by applying exchange rates
prevailing on the date of the transaction. For practical reasons,
the Company uses an average rate if the average approximates
the actual rate at the date of the transaction. Foreign currency
denominated monetary assets and liabilities are restated into
the functional currency using exchange rates prevailing on the
balance sheet date.
Gains and losses arising on settlement and restatement of
foreign currency denominated monetary assets and liabilities
are included in the standalone statement of profit and loss.
The Company’s standalone financial statements are presented
in INR ( ` ). The Company determines the functional currency
as INR on the basis of primary economic environment in which
the entity operates.
r.
Taxes on income
Income tax expense comprises current tax expense and the
net change in the deferred tax asset or liability during the
year. Current and deferred tax are recognised in standalone
statement of profit and loss, except when they relate to items
that are recognised in other comprehensive income or directly
in other equity, in which case, the current and deferred tax are
also recognised in other comprehensive income or directly in
other equity, respectively.
Current income tax
Current income tax for the current and prior periods are
measured at the amount expected to be recovered from or
paid to the taxation authorities based on the taxable income
for that period. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted by
the balance sheet date. Management periodically evaluates
positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation
and considers whether it is probable that a taxation authority
will accept an uncertain tax treatment. The Company shall
reflect the effect of uncertainty for each uncertain tax treatment
by using either most likely method or expected value method,
depending on which method predicts better resolution of the
treatment.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 124
Deferred income tax
Deferred income tax is recognised using the balance sheet
approach, deferred tax is recognized on temporary differences
at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes, except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and affects
neither accounting nor taxable profit or loss at the time of the
transaction.
Deferred income tax assets are recognized for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and
unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed
at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilized.
Deferred income taxes are not provided on the undistributed
earnings of branches where it is expected that the earnings of
the branch will not be distributed in the foreseeable future.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the balance
sheet date.
Deferred tax assets include Minimum Alternative Tax (“MAT”)
paid in accordance with the tax laws in India, which is likely
to give future economic benefits in the form of availability of
set off against future income tax liability. Accordingly, MAT is
recognized as deferred tax asset in the balance sheet when the
asset can be measured reliably and it is probable that the future
economic benefit associated with the asset will be realized. The
company reviews the “MAT credit entitlement” asset at each
reporting date and writes down the asset to the extent that
it is no longer probable that it will pay normal tax during the
specified period.
s. Provision and contingencies
A provision is recognized when an enterprise has a present
obligation (legal or constructive) as a result of past event and it
is probable that an outflow of resources will be required to settle
the obligation, in respect of which a reliable estimate can be
made of the amount of the obligation. If the effect of time value
of money is material, provision is discounted using a current pre-
tax rate that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
Provisions for onerous contracts, i.e. contracts where the
expected unavoidable costs of meeting obligations under
a contract exceed the economic benefits expected to be
received, are recognized when it is probable that an outflow
of resources embodying economic benefits will be required
to settle a present obligation as a result of an obligating event,
based on a reliable estimate of such obligation.
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events
beyond the control of the Company or a present obligation that
is not recognized because it is not probable that an outflow of
resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability
that cannot be recognized because it cannot be measured
reliably. The Company does not recognize a contingent liability
but discloses its existence in the standalone financial statements.
t. Cash dividend to the equity holders of the Company
The Company recognises a liability to make cash distributions
to equity holders of the Company when the distribution is
authorised, and the distribution is no longer at the discretion
of the Company. Final dividends on shares is recorded as a
liability on the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of declaration by
the Company’s Board of Directors.
u. Earnings/ (loss) per share
Basic earnings/ (loss) per share is computed by dividing the
profit/ (loss) after tax attributable to the equity holders of the
Company by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is
computed by dividing the profit/ (loss) after tax as adjusted for
dividend, interest (net of any attributable taxes) other charges to
expense or income relating to the dilutive potential equity shares,
by the weighted average number of equity shares considered
for deriving basic earnings per share and the weighted average
number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share or increase the
net loss per share. Potential dilutive equity shares are deemed
to be converted as at the beginning of the period, unless they
have been issued at a later date. The dilutive potential equity
shares are adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. average market value of
the outstanding shares). Dilutive potential equity shares are
determined independently for each period presented.
v.
Segment reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision
maker.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 125
The Company identifies primary segments based on the dominant
source, nature of risks and returns and the internal organization
and management structure. The operating segments are the
segments for which separate financial information is available
and for which operating profit/ loss amounts are evaluated
regularly by the Executive Management in deciding how to
allocate resources and in assessing performance. The analysis
of geographical segments is based on the areas in which major
operating divisions of the Company operate.
The accounting policies adopted for segment reporting are in
line with the accounting policies of the Company. Segment
revenue, segment expenses, segment assets and segment
liabilities have been identified to the segments on the basis of
their relationship to the operating activities of the segment.
Common allocable costs are allocated to each segment
according to the relative contribution of each segment to the
total common costs.
Revenue, expenses, assets and liabilities which relate to the
Company as a whole and are not allocable to segments on
a reasonable basis have been included under ‘unallocated
revenue/ expenses/ assets/ liabilities’.
3. Property, plant and equipment
Computer
equipment
Furniture and
fixtures
Vehicles
Leasehold
improvement
Office equipment
(` in Lakhs)
Total
Cost
As at April 1, 2019
Additions
Disposals
As at March 31, 2020
Additions
Disposals
As at March 31, 2021
Depreciation
As at April 1, 2019
Charge for the year
Disposals
As at March 31, 2020
Charge for the year
Disposals
As at March 31, 2021
Net block
As at March 31, 2020
As at March 31, 2021
71
2
-
73
46
(4)
115
57
6
-
63
13
(4)
72
10
43
1
-
-
1
-
-
1
-
-
-
-
-
-
-
1
1
2
-
-
2
-
-
2
1
1
-
2
-
-
2
-
-
-
-
-
-
9
-
9
-
-
-
-
-
-
-
-
9
4
-
-
4
-
-
4
2
1
-
3
1
-
4
1
-
78
2
-
80
55
(4)
131
60
8
-
68
14
(4)
78
12
53
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 126
4. Intangible assets
Cost
As at April 1, 2019
Additions
Disposals
As at March 31, 2020
Additions
Disposals
As at March 31, 2021
Amortization
As at April 1, 2019
Amortization for the year
Disposals
Impairment *
As at March 31, 2020
Amortization for the year
Disposals
As at March 31, 2021
Net block
As at March 31, 2020
As at March 31, 2021
Computer
software
Intellectual
property rights
(` in Lakhs)
Total
130
-
-
130
-
(130)
-
130
-
-
-
130
-
(130)
-
-
-
6,078
6,208
-
-
6,078
-
-
6,078
1,091
488
-
3,599
5,178
125
-
5,303
900
775
-
-
6,208
-
(130)
6,078
1,221
488
-
3,599
5,308
125
(130)
5,303
900
775
*During the previous year ended March 31, 2020, considering the challenges and significant investment requirements of telecom operators which had resulted
in longer opportunity conversion cycle and lower spends towards IT solutions, the management carried out the annual impairment exercise as at December 31,
2019 in respect of its intangible assets and basis valuation carried out by an external expert had made an impairment provision of ` 3,599 Lakhs towards carrying
value of intangible asset. As at March 31, 2021, the management has reassessed its projections and assumptions and has concluded that, the carrying value of it’s
intangible asset is appropriate.
5. Investments
Non-current
Investments carried at cost
A. Investments in equity shares of wholly owned subsidiaries (unquoted equity instruments)
100 (March 31, 2020: 100) equity shares fully paid-up, no-par value, in Subex Americas Inc. [Impairment on
investment ` 76,560 Lakhs (March 31, 2020: ` 76,560 Lakhs)]*
4,999,991 (March 31, 2020: 4,999,991) equity shares of ` 10 each fully paid-up in Subex Technologies Limited
[Impairment on investment ` 500 Lakhs (March 31, 2020: ` 500 Lakhs)]
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
936
-
936
936
-
936
B. Investments in limited liability partnership firms (refer note 21 )
Investment in Subex Assurance LLP [Impairment on investment ` 16,808 Lakhs (March 31, 2020: ` 16,808
44,756
44,756
Lakhs)]*
Investment in Subex Digital LLP*
Total Investments carried at cost (A+B)
1,869
46,625
47,561
1,869
46,625
47,561
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
5. Investments (contd.)
Aggregate amount of unquoted investments in subsidiaries
Aggregate amount of impairment on investments
127
1,41,429
93,868
47,561
(` in Lakhs)
1,41,429
93,868
47,561
*During the previous year ended March 31, 2020, considering the challenges and significant investment requirements of telecom operators which had resulted in
longer opportunity conversion cycle and lower spends towards IT solutions, the management had carried out the annual impairment exercise as at December 31,
2019 in respect of its investment in subsidiary and basis valuation carried out by an external expert had made an impairment provision of ` 16,808 Lakhs towards
the carrying value of investment in subsidiary. As at March 31, 2021, the management has reassessed its projections and assumptions and has concluded that, the
carrying value of it’s investments in its subsidiaries is appropriate.
6. Loans
Carried at amortized cost
Non-current
Loan receivable
Unsecured, considered good
Security deposit
Loan receivable - credit impaired
Loans to related parties
Impairment Allowance for loan receivable
Loan Receivables - credit impaired
Loans to related parties
Total
Current
Unsecured, considered good
Loans and advances to employees
Total
7. Trade receivables*
Carried at amortized cost
Unsecured, considered good
Trade receivables from related parties
Trade receivables from other than related parties
Unsecured, credit impaired
Trade receivables from related parties
Trade receivables from other than related parties
Total (a)
Impairment allowance (allowance for expected credit loss)
Receivable from related parties, credit impaired
Receivables from other than related parties, credit impaired
Total (b)
Net Trade Receivables (a-b)
(` in Lakhs)
As at
March 31, 2021
As at
March 31, 2020
14
1,706
1,720
(1,706)
14
26
26
38
1,706
1,744
(1,706)
38
7
7
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
1,768
416
1,874
365
4,423
(1,874)
(365)
(2,239)
2,184
500
415
1,874
388
3,177
(1,874)
(388)
(2,262)
915
*Includes dues from related parties. Refer note 30.
No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person.
Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
128
8. Cash and cash equivalents
Current
Balance with banks
In current accounts
Deposits with original maturity of less than 3 months
Earmarked balances with banks being unpaid dividend accounts*^
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
137
260
-
397
72
320
-
392
^Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off.
* These balances are not available for use by the Company as they represent corresponding unclaimed dividend liabilities.
For the purpose of the standalone statement of cash flows, cash and cash equivalents comprises of current portion of cash and cash equivalents as above.
9. Other financial assets
Unsecured, considered good
Carried at amortized cost
Current
Share of profit in excess of drawings from Subex Assurance LLP
10. Income tax assets (net)
Non-current
Advance income-tax [net of provision for taxation ` 995 Lakhs (March 31, 2020: ` 995 Lakhs)]
11. Deferred tax asset
Non-Current
Minimum alternative tax ('MAT') credit entitlement
Less: Provision for MAT credit*
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
3,900
3,900
1,871
1,871
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,900
2,900
2,900
2,900
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
425
(425)
-
425
(425)
-
*During the previous year ended March 31, 2020, the MAT credit entitlement of ` 425 Lakhs has been provided for considering the uncertainty as regards to its
utilisation.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
12. Other assets
Non-current
Balance with statutory/ government authorities *
Less: Provision for service tax receivable
Current
Balance with statutory/ government authorities
Advance recoverable in cash or kind
Prepaid expenses
Advance to suppliers
129
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
267
(267)
-
9
6
48
63
267
-
267
8
4
8
20
* Balances represents service tax inadvertently paid by the Company during the financial years 2004 to 2008, under reverse charge mechanism, for which refund
application has been filed with the service tax department and the same was under dispute. During the year ended March 31, 2021, the Company has made
provision of ` 267 Lakhs considering the uncertainty as regards to its realisation.
13. Share capital
Authorised share capital
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020*
No.
` in Lakhs
As at April 1, 2019
Increase during the year
As at March 31, 2020
Increase during the year
Increase pursuant to Capital reduction order*
As at March 31, 2021
Preference shares of ` 98 each
As at April 1, 2019
Increase during the year
As at March 31, 2020
Increase during the year
As at March 31, 2021
Issued, subscribed and fully paid-up share capital
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020*^
As at April 1, 2019
Issued during the year
As at March 31, 2020
Issued during the year
Adjustment pursuant to Capital reduction order*
As at March 31, 2021
58,80,40,000
-
58,80,40,000
-
58,80,40,000
1,17,60,80,000
2,00,000
-
2,00,000
-
2,00,000
56,20,02,935
-
56,20,02,935
-
-
56,20,02,935
58,804
-
58,804
-
-
58,804
196
-
196
-
196
56,200
-
56,200
-
(28,100)
28,100
* The Board of Directors in its meeting held on February 07, 2020, 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. The Hon’ble NCLT approved the said Scheme vide its order dated September 23, 2020.
Consequently, the Company filed a certified copy of Order with Registrar of Companies (‘ROC’) on September 29, 2020 and utilized an amount of ` 28,100 Lakhs
from paid-up share capital of the Company by reducing the face value of the equity shares from ` 10/- to ` 5/- each and ` 10,301 Lakhs from securities premium
to write-off its accumulated losses of ` 38,401 Lakhs.
^ includes 243,207 (March 31, 2020: 243,207) shares in respect of which Global Depository Receipts of the Company are listed on London Stock Exchange.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
130
13. Share capital (contd.)
a) Terms/ rights attached to equity shares
The Company has only one class of equity shares having par value of ` 5 per share w.e.f September 29, 2020 and ` 10 per share upto
September 28, 2020. Each holder of equity shares is entitled to one vote per share and such amount of dividend per share as declared by
the Company. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
b) As at March 31, 2021 and as at March 31, 2020, there is no individual shareholder or shareholder (together with ‘Persons acting in
concert’) holding more than 5% shares of the Company.
c) Shares reserved for issue under options (No.)
Outstanding employee stock options under below schemes granted/ available for grant (refer note 33):
ESOP - V
d) Number of treasury shares outstanding
Balance as per last financial statements
Add: Additions during the year
Less: Exercise during the year
Closing balance
14. Other equity
Capital reserve
Balance as per last financial statements
Add: Additions during the year
Closing balance
Securities premium
Balance as per last financial statements
Less: Adjustment pursuant to Capital reduction order
Add: On account of exercise of stock options
Closing balance
General reserve
Balance as per last financial statements
Add: On account of vested options lapsed during the year
Closing balance
As at
As at
March 31, 2021
March 31, 2020
1,98,71,500
2,19,75,000
1,98,71,500
2,19,75,000
As at
As at
March 31, 2021
March 31, 2020
2,19,75,000
1,12,00,000
2,50,000
1,12,00,000
(23,53,500)
1,98,71,500
(4,25,000)
2,19,75,000
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,776
-
2,776
26,712
(10,301)
33
16,444
1,780
3
1,783
2,776
-
2,776
26,705
-
7
26,712
1,780
-
1,780
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
14. Other equity (contd.)
Employee stock options reserve
Balance as per last financial statements
Add: Share based expenses
Less: On account of exercise of stock options
Less: On account of vested options lapsed during the year
Closing balance
Surplus/ (deficit) in the statement of profit and loss
Balance as per last financial statements
Add: Profit for the year
Add: Adjustment pursuant to Capital reduction order
Less: Effect of adoption of Ind AS-116 Leases
Less: OCI - Re-measurement loss on defined benefit obligations
Less: Interim dividend [refer 14(a)]
Closing balance
Treasury Shares
Balance as per last financial statements
Less: Equity shares purchased by Subex Employee Welfare and ESOP Benefit Trust
Add: On account of exercise of stock options
Closing balance
131
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
114
147
(26)
(3)
232
(36,325)
2,622
38,401
-
-
(2,746)
1,952
(1,233)
(22)
134
(1,121)
17
102
(5)
-
114
(15,684)
(20,588)
-
(32)
(21)
-
(36,325)
(645)
(611)
23
(1,233)
Summary of other equity:
Capital Reserve
The Company recognises profit and loss on transfer of business on account of restructuring to capital reserve.
Securities premium account
Securities premium is used to record the premium on issue of shares and profit and loss on exercise of stock
options held as treasury shares (refer note 33). The reserve shall be utilised in accordance with the provisions of
section 52 of the Companies Act, 2013.
General reserve
2,776
2,776
16,444
26,712
1,783
1,780
This represents appropriation of profit by the Company. Also, the amounts recorded in share options outstanding
account are transferred to general reserve on account of lapse of vested stock options.
Employee stock options reserve
232
114
The employee stock option reserve is used to record the value of equity-settled share based payment
transactions with employees. The amounts recorded in this account are transferred to reserves upon exercise
of stock options by employees.
Surplus/ (deficit) in the statement of profit and loss
This represents surplus/ (deficit) arising from operations of the Company.
Treasury Shares
This represents own equity shares that are acquired from open market for issuance to employees under ESOP
scheme.
Total other equity
1,952
(36,325)
(1,121)
(1,233)
22,066
(6,176)
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
132
14(a) Distributions made and proposed
During the year ended March 31, 2021, the Board of Directors at its meeting held on February 01, 2021 had declared an interim dividend
of ` 0.50/- (10 %) per equity share on face value of ` 5/- each for the financial year 2020-2021. The interim dividend was paid during the
year that resulted in cash outflow of ` 2,746 Lakhs.
The Board of Directors has also recommended a final dividend of ` 0.25/-(5%) per equity share on face value of ` 5/- each for the financial
year 2020-2021. This payment is subject to the approval of shareholders at the Annual General Meeting of the Company and if approved,
would result in a cash outflow of approximately ` 1,373 Lakhs.
With effect from 1 April 2020, the Dividend Distribution Tax (‘DDT’) payable by the company under section 115O of Income Tax Act
was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of
the recipient.
15. Trade payables
Carried at amortized cost
Current
Trade payables
- total outstanding dues of micro enterprises and small enterprises*
- total outstanding dues of creditors other than micro enterprises and small enterprises**
*Payable to micro enterprises and small enterprises
Description
a)
b)
c)
the principal amount remaining unpaid to any supplier as at the end of accounting year;
interest due thereon remaining unpaid to any supplier as at the end of accounting year;
the amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium Enterprises
Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed
day during each accounting year;
d)
the amount of interest due and payable for the period of delay in making payment (which have been paid
but beyond the appointed day during the year) but without adding the interest specified under the Micro,
Small and Medium Enterprises Development Act, 2006;
e)
f)
the amount of interest accrued and remaining unpaid at the end of each accounting year; and
the amount of further interest remaining due and payable even in the succeeding years, until such date
when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of
a deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act,
2006
** includes dues to related parties. Refer note 30.
Terms and conditions of the above financial liabilities:
- trade payables are non-interest bearing and are normally settled on 30 - 45 days terms.
- for explanations on the Company’s credit risk management, refer note 37.
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
3
355
358
As at
5
281
286
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
3
-
-
-
-
-
5
-
-
-
-
-
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
16. Other current financial liabilities
Carried at amortized cost
Current
Share of Loss from Subex Digital LLP
Employee related liabilities
Payable to related parties
Unclaimed dividend^
^ Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off.
17. Other current liabilities
Unearned revenue
Statutory dues
18. Provisions
Non-current
Provisions for employee benefits
Gratuity [refer note 34(b) and 42]
Current
Provisions for employee benefits
Gratuity [refer note 34(b) and 42]
Leave benefits [refer note 42]
19. Income tax liabilities (net)
Current
Provision for tax [net of advance tax ` 3 Lakhs (March 31, 2020: ` Nil)]
Provision for foreign taxes
Provision for litigation [net of tax deducted at source ` 62 Lakhs (March 31, 2020: ` 62 Lakhs)]*
133
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
6,395
512
2
-
6,909
4,352
47
2
-
4,401
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
-
99
99
1
21
22
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
116
116
26
64
90
3
3
3
9
12
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
32
1
102
135
-
6
102
108
* Provision for litigations consists of matters which are sub-judice. There is no movement in the provision during the current and previous year. Refer note 32(i)
for further details.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
134
19. Income tax liabilities (net) (contd.)
Income tax expense in the standalone statement of profit and loss consist of the following:
Tax expense:
Provision for MAT credit
Reversal - foreign withholding taxes*
MAT liability
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
-
(6)
35
29
425
(307)
-
118
*Represents reversal of provision in respect of foreign withholding taxes deducted/ deductible by the overseas customers of the Company, no longer required.
Reconciliation of tax to the amount computed by applying the statutory income tax rate to the income before tax is summarized below:
Profit/ (loss) before tax expense
Applicable tax rates in India
Computed tax charge (A)
Components of tax expense:
Reversal for foreign withholding taxes (net)
Deferred tax asset not recognised on carry forward losses*
Exempt (income)/ expense - share of (profit)/ loss from LLP’s
Provision for MAT credit
Impact of disallowable income/ expense
Total adjustments (B)
Total tax expense (A+B)
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,651
34.94%
926
(6)
-
(903)
-
12
(897)
29
(20,470)
34.94%
(7,153)
(307)
1,940
5,213
425
-
7,271
118
*In respect of carry forward losses as at March 31, 2021 and March 31, 2020, no deferred tax asset has been recognized in absence of reasonable certainty
that future taxable profit will be available for utilisation since share of profit/loss from LLP is exempt in the hands of the Company.
20. Revenue from operations
Sale of services
Other operating income
Disaggregation of revenue:
Revenue by offering
Sub-contracting services (refer note 30)
Support services (refer note 42)
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
2,714
202
2,916
1,308
1,406
2,714
1,079
-
1,079
1,079
-
1,079
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
135
21. Share of profit/ (loss) from Limited Liability Partnerships before exceptional items (net)
Share of profit from Subex Assurance LLP
Share of loss from Subex Digital LLP
22. Other income
Insurance claim
Interest income on:
Security deposits
Bank deposits
Miscellaneous income
23. Employee benefits expense
Salaries,wages and bonus (refer note 42)
Contribution to provident and other funds
Employee share based payments
Gratuity expense [refer note 34(b)]
Staff welfare expenses
24. Finance cost
Interest expense on Lease liability
25. Depreciation and amortization expense
Depreciation of property, plant and equipment
Depreciation on right-of-use assets
Amortization of intangible assets
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
4,628
(2,043)
2,585
3,878
(1,989)
1,889
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
-
2
7
-
9
155
3
26
18
202
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
1,270
43
9
10
29
1,361
574
21
7
4
10
616
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
14
14
28
28
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
14
54
125
193
8
66
488
562
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
136
26. Other expenses
Cost of hardware, software and support charges
Sub-contract charges
Rent
Power and fuel
Repairs and maintenance
Building
Others
Insurance
Communication costs
Printing and stationery
Travelling and conveyance
Rates and taxes
Advertisement and business promotion
Consultancy charges
Commission to directors
Payments to auditors [refer note 26(i)]
Allowance for expected credit loss (net)
Directors sitting fees (refer note 30)
Bank Charges
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
11
36
13
8
2
23
1
14
-
-
72
19
92
48
39
(23)
66
1
422
8
8
11
15
6
24
8
16
10
79
91
26
164
-
45
12
50
4
577
26(i). Payments to auditors (excluding goods and services tax):
(` in Lakhs)
As auditor
Audit fee
Tax audit fee
In other capacity
Other services (certification services)
Reimbursement of expenses
27. Leases
Year ended
Year ended
March 31, 2021
March 31, 2020
35
1
2
1
39
35
1
7
2
45
During the year ended March 31, 2021, the Company had decided to shift from its earlier corporate office to a new premises in Bengaluru,
India. Consequently, on account of the termination of lease agreement and in accordance with Ind AS 116 – ‘Lease’, the Company had written-
off the amortized value of existing right-of-use asset of ` 195 Lakhs and Lease liability of ` 223 Lakhs determined till the completion of notice
period and vacation of existing premises, and has recognized a net gain of ` 36 Lakhs as Exceptional Item.
On account of entering into the new lease agreement, the Company recognised a right-of-use asset of ` 50 Lakhs and lease liability of ` 48
Lakhs. The average incremental borrowing rate of 8.35% has been applied to lease liabilities recognised in the balance sheet at the date of
commencement of the new lease.
On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-to-use
asset, and finance cost for interest accrued on lease liability.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
27. Leases (contd.)
The details of the right-of-use asset held by the Company is as follows:
Gross Carrying Value
As at April 1, 2019
Additions
Disposals
As at March 31, 2020
Additions
Disposals on termination of lease agreement
As at March 31, 2021
Accumulated Depreciation
As at April 1, 2019
Charge for the year
Disposals
As at March 31, 2020
Charge for the year
Disposals on termination of lease agreement
As at March 31, 2021
Net block
As at March 31, 2020
As at March 31, 2021
137
(` in Lakhs)
Total
311
-
-
311
50
(311)
50
66
-
66
54
(116)
4
245
46
Buildings
311
-
-
311
50
(311)
50
66
-
66
54
(116)
4
245
46
The Company incurred ` 13 Lakhs for the year ended March 31, 2021 (March 31, 2020: ` 11 Lakhs) towards expenses relating to short-term
leases and leases of low-value assets.
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Opening balance
Additions
Interest on lease liabilities
Payments
On account of lease modification
Closing balance
Current
Non-current
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
272
48
14
(65)
(223)
46
11
35
326
-
28
(82)
-
272
82
190
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
138
27. Leases (contd)
The following are the amounts recognised in statement of profit and loss:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases (included in other expenses)
Gain on termination of lease agreement *
Total amount recognised in statement of profit and loss
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
54
14
13
(36)
45
66
28
11
-
105
*Represents gain arising on termination of the lease agreement of existing office premises in India.
The Company had total cash outflows for leases of ` 65 Lakhs for the year ended March 31, 2021 (March 31, 2020: ` 82 Lakhs). There are no future cash outflows
relating to leases that have not yet commenced.
28. Earnings/ (loss) per share
Basic earnings/ (loss) per share (EPS) amounts are calculated by dividing the profit/ (loss) for the year attributable to equity holders of the
Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit/ (loss) attributable to equity holders of the Company by the weighted average
number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion
of all the dilutive potential equity shares into equity shares.
Computation of basic and diluted EPS:
Nominal value per equity share (` 5/- each w.e.f September 29, 2020 and ` 10 upto September
28, 2020)
Profit/(loss) attributable to equity shareholders (` in Lakhs)
Weighted average number of equity shares (No. in Lakhs)*
Basic
Diluted
Earnings/(loss) per share (` per share)**
Basic
Diluted
Year ended
March 31, 2021
Year ended
March 31, 2020
5
10
2,622
(20,588)
5,406
5,513
0.49
0.48
5,452
5,452
(3.78)
(3.78)
*The weighted average number of shares takes into account the weighted average effect of changes in treasury shares transactions during the year.
**Employee stock options outstanding as at March 31, 2021 are dilutive (March 31, 2020: anti-dilutive) and accordingly have been considered for the purpose of
computing dilutive EPS.
29. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board
of directors of the Company assesses the financial performance and position of the Company. The Chief Executive Officer has been identified
as the chief operating decision maker.
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
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
139
29. Segment reporting (contd)
are considered to constitute one segment and hence the Company has not made any additional segment disclosures.
The Company’s operations spans across the world and are categorized geographically as (a) Americas, (b) EMEA (c) India and
(d) APAC. ‘Americas’ comprises the Company’s operations in North America, South America and Canada. ‘EMEA’ comprises the Company’s
operations in Europe, Middle East and APAC comprises of the Company’s operations majorly in Singapore, Australia and Bangladesh. Customer
relationships are driven based on customer domicile.
Segment revenue by geographical location are as follows*:
Region
Americas
EMEA
India
APAC
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
430
202
1,406
878
2,916
424
-
-
655
1,079
* Revenues by geographic area are based on the geographical location of the customer.
No external customer individually accounted for more than 10% of the total revenue of the Company during the years ended March 31, 2021 and March 31, 2020.
Revenue from its subsidiaries accounts for more than 10% of the total revenues of the Company (refer note 30).
Non-current operating assets by geographical location are as follows**:
Region
India
Outside India
Total non-current operating assets
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
874
-
874
1,424
-
1,424
** Non-current operating assets includes Property, plant and equipment, Right-of-use assets, Other intangible assets and Balance with statutory/ government
authorities and Prepaid expenses.
30. Related party transactions
i.
Related parties where control exists
Wholly owned subsidiaries
Subex Americas Inc.
Subex (UK) Limited
Subex Technologies Limited
Subex Azure Holdings Inc.
Subex (Asia Pacific) Pte. Limited
Subex Inc.
Subex Middle East (FZE)
Subex Assurance LLP
Subex Digital LLP
Subex Bangladesh Private Limited
Trust which is consolidated
Subex Employee Welfare and ESOP Benefit Trust
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
140
30. Related party transactions (contd.)
ii. Related parties under Ind AS 24 and Companies Act, 2013
Key management personnel
Anil Singhvi
Nisha Dutt
Poornima Kamalaksh Prabhu
George Zacharias
Vinod Kumar Padmanabhan
Shiva Shankar Naga Roddam
Venkatraman G S
G V Krishnakanth
Chairman, Non-Executive & Non-Independent Director (w.e.f June 18, 2020)
Chairman & Independent Director (upto June 17, 2020)
Independent Director
Independent Director
Independent Director (w.e.f. May 13, 2019)
Managing Director & Chief Executive Officer
Whole-time Director & Chief Operating Officer (w.e.f February 7, 2020)
Chief Financial Officer & Senior Vice President
Company Secretary & Compliance Officer
iii. Details of the transactions with the related parties during the year ended March 31, 2021:
A. Transactions with wholly owned subsidiaries
Income from software development, subcontracting and support services:
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
Subex Inc.
Subex (Asia Pacific) Pte. Limited
Subex Assurance LLP (refer note 42)
Subex Digital LLP (refer note 42)
Marketing and support charges:
Subex Inc.
Subex (Asia Pacific) Pte. Limited
Subex Assurance LLP (refer note 42)
Subex Digital LLP (refer note 42)
Employee Stock Option expenses allocated to:
Subex Assurance LLP
Subex Digital LLP
Reimbursement of expenses incurred by Subex Limited on behalf of its subsidiaries:
Subex (UK) Limited
Subex Assurance LLP
Subex Digital LLP
Subex (Asia Pacific) Pte. Limited
Reimbursement of expenses incurred by the subsidiaries on behalf of Subex Limited:
Subex Assurance LLP
Subex (Asia Pacific) Pte. Limited
Subex (UK) Limited
Subex Inc.
430
878
1,331
75
2,714
516
-
131
4
651
121
17
138
1
56
3
18
78
48
3
-
1
52
424
655
-
-
1,079
528
2
-
-
530
84
10
94
-
106
10
16
132
17
15
1
1
34
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 30. Related party transactions (contd.)
Drawings during the year from Limited Liability Partnership:
Subex Assurance LLP
Advance repaid by Trust
Subex Assurance LLP
Share of profit/ (loss) from Limited Liability Partnerships before exceptional items :
Subex Assurance LLP
Subex Digital LLP
Share of profit/(loss) from Subex Assurance LLP on account of :
Impairment of intangible assets and Investment in subsidiary
Net liabilities transferred from (refer note 42):
Subex Assurance LLP
Subex Digital LLP
B. Transactions with key managerial personnel
Salary and perquisites*
Vinod Kumar Padmanabhan **
Venkatraman G S **
G V Krishnakanth **
Shiva Shankar Roddam**^
Dividend paid
Vinod Kumar Padmanabhan
Venkatraman G S
Shiva Shankar Roddam
Director sitting fees
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
141
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
2,600
2,600
2
2
4,628
(2,043)
2,585
-
-
445
21
466
1,772
1,772
-
-
3,878
(1,989)
1,889
(16,808)
(16,808)
-
-
-
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
57
113
46
17
233
2
2
1
5
20
16
19
11
66
57
67
50
-
174
-
-
-
-
19
10
17
4
50
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 142
30. Related party transactions (contd.)
Commission payable***
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
Year ended
Year ended
March 31, 2021
March 31, 2020
12
12
12
12
48
-
-
-
-
-
* The remuneration to the key managerial personnel does not include the provision/ accruals made on best estimate basis as they are determined for the Company
as a whole.
** During the year ended March 31, 2021, the Company has granted Nil ESOPs (March 31, 2020 : 4,00,000 ESOPs) to certain key management personnel under
ESOP 2018 scheme. Of the aforesaid ESOPs, 3,60,000 (March 31, 2020 : Nil) options has been exercised during the year ended March 31, 2021. Refer note 33.
^ The Board at its meeting held on February 01, 2021, changed the employment agreement of Mr. Shiva Shankar Naga Roddam from Subex Assurance LLP to
Subex Limited which is subject to the approval of the members at the Annual General Meeting of the Company.
*** Commission payable to Independent Directors and Non-Executive Director is subject to the approval of shareholders at the Annual General Meeting of the
Company.
iv. Details of balances receivable from and payable to related parties are as follows:
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
Balances receivable from and payable to wholly owned subsidiaries
Trade receivables
Subex Americas Inc. [Net of provision of ` 1,841 Lakhs (March 31, 2020: ` 1,841 Lakhs)]
Subex Inc.
Subex (Asia Pacific) Pte. Limited [Net of provision of ` 33 Lakhs (March 31, 2020: ` 33 Lakhs)]
Subex Assurance LLP
Subex UK Limited
Subex Digital LLP
Trade payables
Subex (UK) Limited
Subex Inc.
Subex (Asia Pacific) Pte. Limited
Subex Digital LLP
Subex Assurance LLP
Loans receivable
Subex Technologies Limited [Net of provision of ` 1,706 Lakhs (March 31, 2020: ` 1,706 Lakhs)]
Current financial assets
Share of profit from investment in Subex Assurance LLP
-
250
65
1,372
1
80
1,768
-
87
3
4
150
244
-
-
3,900
3,900
-
182
259
46
-
13
500
1
181
15
-
1
198
-
-
1,871
1,871
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 30. Related party transactions (contd.)
Current financial liabilities
Share of loss from investment in Subex Digital LLP
Payable to related party
Also, refer note 32(iii) for comfort letter given to subsidiaries.
143
As at
As at
March 31, 2021
March 31, 2020
6,395
2
6,397
4,352
2
4,354
31. Disclosure as per Regulation 34(3) and Regulation 53(f) read with Para A of Schedule V of the Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 of the listing
agreement with the Stock Exchanges
Loans and advances given to wholly owned subsidiaries:
(` in Lakhs)
Particulars
As at March 31, 2021
As at March 31, 2020
Subex Technologies Limited*
Outstanding
Maximum balance
Outstanding
Maximum balance
Amount
outstanding during
Amount
outstanding during
the year
1,706
1,706
1,706
the year
1,706
1,706
1,706
* Loans and advances to Subex Technologies Limited is provided for as at March 31, 2021: ` 1,706 Lakhs (March 31, 2020: ` 1,706 Lakhs).
32. Contingent liabilities
Income tax demands [refer note (i)]
Service tax demands [refer note (ii)]
i.
Income tax
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,307
3,687
2,317
3,687
The Company has received assessment orders in respect of each of the financial years 2010-11, 2013-14 and 2014-15, wherein certain
adjustments were made to the taxable income in relation to various matters including adjustments in respect of transfer pricing under
section 92CA of the Income Tax Act, 1961 and disallowances of certain expenditures. These demands are disputed by the management
and the Company has filed appeals against these orders with various appellate authorities. The management, including its tax experts/
advisors, are of the view that the prices determined by it are at arm’s length, expenditures are deductible based on outcome of previous
litigations, and is confident that its position will likely be upheld on ultimate resolution and will not have material adverse effect on the
Company’s financial position and results of operations. With respect to the demands of Subex Limited, the Company has paid ` 995
lakhs.
ii. Service tax
The Company has received demand order towards the service tax on import of certain services and equivalent amount of penalties
under the provisions of the Finance Act, 1994 along with the consequential interest during the period April 2006 to July 2009. These
demands are disputed by the management and the Company has filed appeals against these orders with various appellate authorities. The
management is of the view that the service tax is not applicable on those import of services, and is confident that the demands raised by
the Assessing Officers are not tenable under law.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
144
32. Contingent Liabilities (contd.)
iii. The Company has issued comfort letter to provide continued financial support to its subsidiaries viz., Subex Americas Inc. and Subex
Digital LLP.
33. Employee stock options plans (‘ESOPs’)
The Company during the year 2005-2006 had established equity settled ESOP schemes of ESOP III. As per the schemes, the Compensation
Committee grants the options to the employees deemed eligible by the Advisory Board constituted for the purpose. The options are granted at
a price, which is not less than 85% of the average market price of the underlying shares based on the quotation on the Stock Exchange where
the highest volume of shares are traded for 15 days prior to the date of grant. The shares granted vest over a period of 1 to 4 years and can be
exercised over a maximum period of 3 years from the date of vesting.
During the year 2018-2019, the Board of Directors and the shareholders of the Company approved “Subex Employees Stock Option Scheme
– 2018” (referred to as the “ESOP Scheme 2018” or “ESOP - V” ) to be administered through Subex Employee Welfare and ESOP Benefit Trust
(referred to as the “ESOP Trust”). The ESOP Trust is authorised to acquire shares of the Company through secondary market for providing such
share-based payments to its employees. The ESOP Trust is consolidated in the standalone financial results of the Company and the shares
reacquired and held by ESOP Trust are treated as treasury shares recognised at cost and deducted from other equity. The ESOP trust held
1,98,71,500 and 2,19,75,000 treasury shares as at March 31, 2021 and March 31, 2020, respectively.
The Nomination and Remuneration Committee of the Company in their meeting held on February 1, 2021 granted options 12,40,500 (March
31, 2020: 1,28,00,000) under approved ESOP V scheme to the eligible employees. The shares granted vest over a period of 1 to 2 years and
can be exercised over a maximum period of 2 years from the date of vesting.
Employees stock options details as on the balance sheet date are:
Options outstanding at the beginning of the year
ESOP – III
ESOP – V
Exercised during the year
ESOP – III
ESOP – V
Granted during the year
ESOP – III
ESOP – V
Forfeited and expired during the year
ESOP – III
ESOP – V
Options outstanding at the end of the year
ESOP – III
ESOP – V
Options exercisable at the end of the year
ESOP – III
ESOP – V
2020-21
2019-20
Options (no.)
Weighted average
exercise price per
stock option (`)
Options (no.)
Weighted average
exercise price per
stock option (`)
-
2,19,75,000
-
23,53,500
-
12,40,500
-
9,90,500
-
1,98,71,500
-
1,19,24,750
-
6.00
-
6.00
-
18.00
-
6.00
-
6.75
-
6.00
6,125
1,06,50,000
-
4,25,000
-
1,28,00,000
6,125
10,50,000
-
2,19,75,000
-
43,75,000
13.74
6.00
-
6.00
-
6.00
13.74
6.00
-
6.00
-
6.00
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
145
33. Employee stock options plans (‘ESOPs’) (contd.)
Details of weighted average remaining contractual life and range of exercise prices for the options outstanding at the balance sheet
date:
Particulars
ESOP – III
ESOP – V
* considering vesting and exercise period
Fair value methodology
Weighted average remaining contractual
Range of exercise prices (`)
life(years)*
2020-21
-
2.16
2019-20
-
2.94
2020-21
-
6.00-18.00
2019-20
-
6.00
The key assumptions used in Black-Scholes model for calculating fair value of ESOP V during the year is as below:
Particulars
Risk-free interest rate
Expected volatility of share
Expected life(years)
Dividend yield
Exercise Price
Weighted average fair value as on grant date (`)
March 31, 2021
March 31, 2020
6.12%
72.08%
2
1.88%
18.00
12.64
6.70%
41.00%
2
-
6.00
1.23
The expected life of stock options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The
expected volatility reflects assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not
necessarily be the actual outcome.
34. Employee benefit plans
a) Provident fund
The Company makes contributions for qualifying employees to Provident Fund which is defined contribution plan. Under the scheme, the
Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized ` 41 Lakhs
(March 31, 2020: ` 20 Lakhs) for Provident Fund contributions.
b) Gratuity
The Company offers Gratuity benefits to employees, a defined benefit plan. Gratuity plan is governed by the Payment of Gratuity Act,
1972. Under gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @15 days of last
drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance
policy.
The following tables set out the status of the gratuity plan:
Disclosure as per Ind AS 19
A.
Change in defined benefit obligation
Obligations at beginning of the year
Liability transfer [refer note 42]
Service cost
Interest cost
Benefits settled
Actuarial loss (through OCI)
Obligations at end of the year
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
25
151
10
1
(10)
1
178
20
-
4
1
(21)
21
25
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
146
34. Employee benefit plans (contd.)
B.
Change in plan assets
Plan assets at beginning of the year, at fair value
Expected return on plan assets
Actuarial gain (through OCI)
Contributions
Benefits settled
Plan assets at the end of the year
Present value of defined benefit obligation at the end of the year
Fair value of plan assets at the end of the year
C.
Net liability recognised in the standalone balance sheet
D.
Expenses recognised in the standalone statement of profit and loss:
Service cost
Net gratuity cost
E.
Re-measurement gains/ (losses) in OCI
Actuarial (loss)/ gain due to financial assumption changes
Actuarial (loss)/ gain due to experience adjustments
Actuarial (loss)/ gain - return on plan assets greater than discount rate
Total expenses recognised through OCI
F.
Assumptions
Discount rate
Expected return on plan assets
Salary escalation*
Attrition rate
Retirement age
19
1
1
25
(10)
36
(178)
36
(142)
19
1
-
20
(21)
19
(25)
19
(6)
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
10
10
2
(3)
1
-
5.79%
6.41%
6.00%
18.00%
60 years
4
4
-
(21)
-
(21)
6.41%
7.30%
7.00%
18.00%
60 years
Assumptions regarding future mortality experience are set in accordance with the published statistics by Indian Assured Lives Mortality (2012-14) [March 31, 2020:
Indian Assured Lives Mortality (2012-14)].
* The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors, benefit obligation
such as supply and demand in the employment market.
(` in Lakhs)
G.
Five years pay-outs
Year 1
Year 2
Year 3
Year 4
Year 5
After 5th Year
H.
Contribution likely to be made for the next one year
As at
As at
March 31, 2021
March 31, 2020
26
26
24
22
20
119
26
3
3
3
3
3
20
3
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
147
34. Employee benefit plans (contd.)
I.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Investment with insurer
J.
Sensitivity analysis
Particulars
As at
As at
March 31, 2021
March 31, 2020
100%
100%
(` in Lakhs)
Year ended March 31, 2021
Year ended March 31, 2020
Effect of change in discount rate
0.5% increase
0.5% decrease
0.5% increase
0.5% decrease
Impact on defined benefit obligation increase/ (decrease)
(3.74)
3.91
(0.57)
0.60
Effect of change in salary
1% increase
1% decrease
1% increase
1% decrease
Impact on defined benefit obligation increase/ (decrease)
7.02
(6.63)
1.19
(1.11)
Effect of change in withdrawal assumption
5% increase
5% decrease
5% increase
5% decrease
Impact on defined benefit obligation increase/ (decrease)
(3.29)
3.33
(0.84)
(1.01)
K.
The average duration of the defined benefit plan obligation at the end of the reporting period of gratuity is 5 years (March 31, 2020: 6 years).
35. Capital management
The Company’s objective for capital management is to maximize shareholder value, safeguard business continuity and support the growth
of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic
investment plans. The funding requirements are met through equity and operating cash flows generated. The Company does not have any
long term debts hence there is no capital gearing ratio. Surplus fund has been invested into risk free highly liquid financial instruments.
36. Fair value hierarchy
The carrying value of financial instruments by categories is as follows:
Particulars
Financial assets measured at amortized cost
Share of profit in excess of drawings from Subex Assurance LLP*
Trade receivables*
Security deposits^
Loans and advances to employees*
Cash and cash equivalents and other balances with banks
Balance with banks
Earmarked balances with banks being unpaid dividend accounts#
Financial liabilities measured at amortized cost
Employee related liabilities*
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
3,900
2,184
14
26
6,124
397
-
397
512
1,871
915
38
7
2,831
392
-
392
47
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
148
36. Fair value hierarchy (contd.)
Particulars
Trade payables*
Payable to related party*
Share of Loss from investment in Subex Digital LLP*
Lease Liabilities^
As at
As at
March 31, 2021
March 31, 2020
358
2
6,395
46
7,313
286
2
4,352
272
4,959
* The carrying value of these accounts are considered to be the same as their fair value, due to their short term nature. Accordingly, these are classified as level 3
of fair value hierarchy.
^ The fair value of these accounts was calculated based on cash flow discounted using a current lending/ borrowing rate, they are classified as level 3 fair value
hierarchy due to inclusion of unobservable inputs including counterparty credit risk.
# Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off.
37. Financial risk management
The Company’s activities expose it to the following risks:
i. Credit risk
ii. Interest rate risk
iii. Liquidity risk
iv. Market risk
i. Credit risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a
financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing
activities including deposits with banks, investments, foreign exchange transactions and other financial instruments.
a. Trade receivables
Credit risk is managed by each business unit as per the Company’s established policy, procedures and control relating to customer credit
risk management. Outstanding customer receivables are regularly monitored.
The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor
receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security.
b. Credit risk exposure
The Company’s credit period generally ranges from 30 - 180 days. The credit risk exposure of the Company is as below:
Particulars
Trade receivables
Total
The movement in credit loss allowance on customer balance is as follows :
Opening balance
Add/ (less): (Reversal)/ provision during the year
Less: Bad-debts written-off
Add/ (less): Translation difference
Closing balance
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
2,184
2,184
As at
915
915
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
2,262
(15)
-
(8)
2,239
2,255
12
(18)
13
2,262
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
149
37. Financial risk management (contd.)
c. Other financial assets and deposits with banks
Credit risk is limited, as the Company generally invests in deposits with banks with high credit ratings assigned by international and
domestic credit rating agencies. Counter-party credit limits are reviewed by the Company periodically and the limits are set to minimise
the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
ii.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest
rates. The Company does not have any debt outstanding as at March 31, 2021 and as at March 31, 2020. Also, the Company’s investments
are primarily in fixed rate interest bearing investments. Hence, the Company is not significantly exposed to interest rate risk.
iii. Liquidity risk
The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The
Company believes that the cash and cash equivalents is sufficient to meet its current requirements. Accordingly no liquidity risk is
perceived.
The break-up of cash and cash equivalents and deposits is as below:
Particulars
Cash and cash equivalents
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
397
397
392
392
The table below summarises the maturity profile of the Company’s financial liabilities at the reporting date. The amounts are based on
contractual undiscounted payments.
Particulars
As at March 31, 2021
Trade payables
Lease Liability*
Other financial liabilities
As at March 31, 2020
Trade payables
Lease Liability*
Other financial liabilities
On demand
0-180 Days
181-365 Days More than 365 Days
-
-
-
-
50
-
-
50
355
6
6,909
7,270
232
41
4,401
4,674
3
6
-
9
4
41
-
45
-
45
-
45
-
243
-
243
(` in Lakhs)
Total
358
57
6,909
7,324
286
325
4,401
5,012
*Includes future cash outflow toward estimated interest on lease liabilities.
iv. Market risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company’s exchange risk arises from its foreign operations, foreign currency revenues and expenses. The Company
has exposures to United States Dollars (‘USD’), Singapore Dollars (‘SGD’), and other currencies. The Company’s exposure to the risk of
changes in foreign exchange rates relates primarily to the Company’s operating activities and financing activities.
March 31, 2021
Particulars
Financial assets
Trade receivables
Total financial assets
Financial liabilities
Trade payables
Total financial liabilities
Net financial assets/ (liabilities)
Denominated currency
SGD
Others
65
65
3
3
62
-
-
-
-
-
USD
463
463
87
87
376
(` in Lakhs)
Total
528
528
90
90
438
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
150
37. Financial risk management (contd.)
March 31, 2020
Particulars
Financial assets
Trade receivables
Total financial assets
Financial liabilities
Trade payables
Total financial liabilities
Net financial assets/ (liabilities)
Sensitivity analysis
Denominated currency
USD
392
392
182
182
210
SGD
259
259
15
15
244
Others
1
1
1
1
-
(` in Lakhs)
Total
652
652
198
198
454
Every 1% appreciation or depreciation in the respective foreign currencies against functional currency of the Company would cause the
profit before exceptional items in proportion to revenue of the Company to decrease or increase respectively by 0.15% (March 31, 2020:
0.42%).
38. As per section 135 of The Company’s Act, 2013, a Corporate Social Responsibility (‘CSR’) committee has been formed by Subex Limited.
The primary function of the Committee is to assist the Board of Directors in formulating the CSR policy and review the implementation
and progress of the same from time to time. The CSR Policy focuses on creating opportunities for the disadvantaged with emphasis on
persons with disabilities. During the year ended March 31, 2021, considering losses incurred in past years, the Company does not have
the obligation to incur expenses in relation to CSR.
39. The Company has entered into ‘International transactions’ with ‘Associated Enterprises’ which are subject to Transfer Pricing regulations in
India. The Company is in the process of carrying out transfer pricing study for the year ended March 31, 2021 in this regard, to comply with
the requirements of the Income Tax Act, 1961. The Management of the Company, is of the opinion that such transactions with Associated
Enterprises are at arm’s length and hence in compliance with the aforesaid legislation. Consequently, this will not have any impact on the
standalone financial statements, particularly on account of tax expense and that of provision for taxation.
40. During the previous year ended March 31, 2020, the Company 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 paid an amount of ` 820 Lakhs (net of ` 234 Lakhs recoverable from such ex-employees). Accordingly, the
aforesaid litigation is amicably settled.
41. The Company 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 standalone Ind
AS financial statements, in determining the possible impact from the COVID-19 pandemic. The Company has used the principles of
prudence in applying judgements, estimates and assumptions and based on the current estimates, the Company expects to fully recover
the carrying amount of its assets. The impact of the global health pandemic may be different from that estimated as at the date of
approval of these standalone Ind AS financial statements and the Company will continue to closely monitor any material changes to its
assessment of economic impact of COVID- 19 pandemic.
42. With effect from January 1, 2021, the Company has carried out strategic re-organization and decided to centralize certain key Sales
and Business support functions, to drive better efficiency of scale and overall operations. Accordingly, all such employees in sales and
business support functions from other group entities in India have been transferred to the Company.
Pursuant to the above re-organisation, common costs pertaining to sales and business support function amounting to ` 1,406 Lakhs
(including ` 422 Lakhs up for the period from April 01, 2020 to December 31, 2020) has been recovered by the Company with an agreed
mark-up from other group entities and is reflected under revenue from operations. Similarly, an amount of ` 135 Lakhs (including ` 117
Lakhs for the period from April 01, 2020 to December 31, 2020) has been charged to the Company by other group entities and is reflected
under marketing and support charges. Also, due to above re organisation, net liabilities of ` 445 Lakhs and ` 21 Lakhs has been transferred
to the Company from Subex Assurance LLP and Subex Digital LLP respectively.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
151
43. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received
Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will
come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of
the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
152
FORM AOC 1
(Information in respect of each Subsidiary to be presented with amounts in ` Lakhs)
Sl.No
1
2
3
4
5
6
7
8
9
Name of the Subsidiary
Subex (Asia
Subex (UK)
Subex
Subex Inc.
Subex
Subex
Subex
Subex
Subex
Pacific) Pte.
Ltd.
Americas
Technologies
Middle East
Bangladesh
Assurance
Digital LLP
Ltd.
Inc.
Ltd.***
(FZE)
Pvt Ltd.
LLP
Reporting Period of the
March 31,
March 31,
March 31,
March 31,
March 31,
March 31,
March 31,
March 31,
March 31,
Subsidiary Concerned
Reporting Curency
2021
SGD
2021
GBP
2021
USD
2021
USD
2021
INR
2021
AED
Exchange Rate as on the
54.35
100.75
73.11
73.11
1
19.91
2021
BDT
0.84
2021
INR
1
2021
INR
1
last date of relevant financial
year in the case of foreign
subsidiaries
Share Capital/ Partners Capital
3,986
41
49,806
-
Reserve & Surplus
(3,490)
7,898
(50,138)
(1,643)
Total Assets
Total Liabilities
Investments
Turnover*
Profit/ (loss) before Taxation
Profit/ (loss) after Taxation
Proposed Dividend
%of Shareholding**
2,276
1,780
-
12,773
4,834
4,482
704
1,037
-
2,548
4,190
-
3,892
20,881
1,024
9,346
(262)
(347)
-
2,835
2,487
-
33
(10)
-
597
534
-
500
(485)
79
64
-
-
(4)
(4)
-
27
42
2,934
2,865
-
-
48,655
(4,526)
(49)
867
917
-
59,269
10,614
-
20,691
-
1,639
6,165
-
2,374
266
32,697
1,401
120
(67)
-
8
(57)
-
6,675
(2,043)
4,628
(2,043)
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
Date of Acquisition/
"June 23,
"June 23,
"April 1,
"June 23,
"March 28,
"March 25,
"February
"April 05,
"April 05,
Incorporation
2006"
2006"
2007"
2006"
2005"
2015"
13, 2020"
2017"
2017"
* Turnover Includes Intercompany Transactions.
**Including % of holding either directly or indirectly through subsidiaries.
*** Represents non-operating Company.
For and on behalf of the Board of Directors
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21 153
CONSOLIDATED
F I N A N C I A L
S T A T E M E N T S
Subex Annual Report 2020-21 154
INDEPENDENT AUDITOR’S REPORT
To the Members of Subex Limited
Report on the Audit of the Consolidated Ind AS Financial Statements
Opinion
We have audited the accompanying consolidated Ind AS financial
statements of Subex Limited (hereinafter referred to as “the Holding
Company”), its subsidiaries (the Holding Company and its subsidiaries
together referred to as “the Group”), comprising of the Consolidated
Balance Sheet as at March 31, 2021, the Consolidated Statement of
Profit and Loss, including other comprehensive income/(loss), the
Consolidated Cash Flow Statement and the Consolidated Statement
of Changes in Equity for the year then ended, and notes to the
consolidated Ind AS financial statements, including a summary of
significant accounting policies and other explanatory information
(hereinafter referred to as “the consolidated Ind AS financial
statements”).
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid consolidated Ind AS
financial statements give the information required by the Companies
Act, 2013, as amended (“the Act”) in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India, of the consolidated state of affairs of the
Group as at March 31, 2021, their consolidated profit including other
comprehensive income/(loss), their consolidated cash flows and the
consolidated statement of changes in equity for the year ended on
that date.
Basis for Opinion
We conducted our audit of the consolidated Ind AS financial
statements in accordance with the Standards on Auditing (SAs),as
specified under section 143(10) of the Act. Our responsibilities under
those Standards are further described in the ‘Auditor’s Responsibilities
for the Audit of the Consolidated Ind AS Financial Statements’ section
of our report. We are independent of the Group in accordance with
the ‘Code of Ethics’ issued by the Institute of Chartered Accountants
of India together with the ethical requirements that are relevant to
our audit of the financial statements under the provisions of the Act
and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code
of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion on
the consolidated Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated Ind AS
financial statements for the financial year ended March 31, 2021.
These matters were addressed in the context of our audit of the
consolidated Ind AS financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
We have determined the matters described below to be the key
audit matters to be communicated in our report. We have fulfilled
the responsibilities described in the Auditor’s responsibilities for the
audit of the consolidated Ind AS financial statements section of our
report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the consolidated
Ind AS financial statements. The results of audit procedures performed
by us, including those procedures performed to address the matters
below, provide the basis for our audit opinion on the accompanying
consolidated Ind AS financial statements.
Key audit matters
How our audit addressed the key audit matter
Revenue recognition(as described in note 22 of the consolidated Ind AS financial statements)
The Group derives its revenue primarily from sale, implementation and
customization of its proprietary license and related managed/support services.
Our audit approach consisted of testing of the design and operating
effectiveness of the internal controls and substantive testing as follows:
Revenue from contracts with customers is recognized by the Group in
accordance with the requirements of Ind AS 115, Revenue from Contracts
with Customers (“Ind AS 115”), which involves certain key judgements relating
to identification of distinct performance obligations, determination of the
transaction price, allocation of transaction price to the identified performance
obligations especially to license fees, the appropriateness of the basis used
to measure revenue recognized over time or at a point in time.Accordingly,
revenue recognition has been identified as a key audit matter.
(i) We evaluated the design of internal controls and tested the operating
effectiveness of the internal control over revenue recognition;
(ii) We performed following procedures on a sample of revenue contracts,
selected on a test check basis:
Read and identified the distinct performance obligations in these contracts
and compared these performance obligations with those identified and
recorded;
Read the terms of the contracts and tested the determination of the transaction
price
including any variable consideration. Also, tested management’s
evaluation of the stand-alone selling price for each performance obligation;
Tested the basis used by the management to measure revenue recognized
over time or at a point in time as per the requirements of Ind AS 115;
Subex Annual Report 2020-21 155
(iii) Tested evidence of license delivery and customer acceptance and
performed cut-off procedures;
(iv) In respect of fixed price contracts, we assessed the efforts incurred with
estimated efforts to identify significant variations and reasons and to test
whether those variations have been considered in estimating the remaining
efforts to complete the contract; and
(v) We assessed the disclosures in the consolidated Ind AS financial statements.
Impairment assessment of Goodwill (as described in note 5 of the consolidated Ind AS financial statements)
As at March 31, 2021, the Group’s net goodwill balance amounts to
` 34,409 lakhs pertaining to two cash generating units (‘CGUs’) ie: Revenue
Management Solutions (‘RMS’) and Data Integrity Management (‘DIM’).
To assess if there is an impairment of the carrying value of goodwill,
management conducts impairment tests at CGU level to which the goodwill
is allocated, annually or whenever changes in circumstances or events
indicate that, the carrying amount of such goodwill may not be recoverable.
An impairment loss is recognized if the recoverable amount is lower than the
carrying value.
The recoverable amount of the CGU is estimated by calculating the value
in use of the CGU to which goodwill is allocated by discounting future cash
flows based on future business plans which are reviewed and approved by the
Board of Directors of the Holding Company.
This is a key audit matter as the testing of goodwill impairment is complex and
involves significant judgement. The key assumptions involved in impairment
tests are projected revenue growth, operating margins, discount rates and
terminal growth.
Our audit procedures include the following:
(i) We evaluated the Group’s internal controls over its annual impairment
assessment and key assumptions applied such as revenue growth, operating
margins, discount rates and terminal growth rates;
(ii) We obtained the valuation assessment from the management and assessed
the key assumptions used;
(iii) We assessed the recoverable value headroom by performing sensitivity
testing of key assumptions used;
(iv) We tested the arithmetical accuracy of the impairment models used;
(v) We discussed potential changes in key drivers as compared to previous year
/ actual performance with management in order to evaluate whether the inputs
and assumptions used in the cash flow forecasts were suitable; and
(vi) We assessed the disclosures made in the consolidated Ind AS financial
statements.
Evaluation of key tax matters(as described in note 32 of the consolidated Ind AS financial statements)
The Group operates in multiple jurisdictions and is subject to periodic
challenges by local tax authorities on a range of tax matters during the normal
course of business including transfer pricing and indirect tax matters. These
involve significant judgment by the Group to determine the possible outcome
of the uncertain tax positions, consequently having an impacton related
accounting and disclosures in the consolidated financial statements, which
have been a matter of significance during the audit and hence considered as
a key audit matter.
Our audit procedures include the following:
(i) We obtained an understanding and assessed the internal control environment
relating to the identification, recognition and measurement of provisions for
disputes and disclosures of contingent liabilities in relation to tax;
(ii) We obtained confirmation from management’s expert on ongoing litigations
along with risk assessment and assessed the independence, objectivity and
competence of the management expert;
(iii) We obtained details of tax assessments, demands issued by tax authorities,
orders/notices received with respect to other litigations from the management;
(iv) We evaluated and challenged assumptions made by the Group in estimating
the current and deferred tax balances;
(v) We involved tax specialists to review the status of tax assessments and
management’s position in relation to on-going disputes regarding likelihood
assessment of exposure carried out by the management; and
(vi) We assessed the adequacy disclosures in the consolidated Ind AS financial
statements.
Subex Annual Report 2020-21 156
Other Information
The Holding Company’s Board of Directors is responsible for the
other information. The other information comprises the information
included in the Management Discussion and Analysis, Board’s report
including annexures, Business Responsibility Report and Report on
Corporate Governance (hereinafter together referred to as “reports”),
but does not include the consolidated Ind AS financial statements
and our auditor’s report thereon.
Our opinion on the consolidated Ind AS financial statements does
not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated Ind AS financial
statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider
whether such other information is materially inconsistent with the
consolidated Ind AS financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated.If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with
Governance for the Consolidated Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible for the
preparation and presentation of these consolidated Ind AS financial
statements in terms of the requirements of the Act that give a true
and fair view of the consolidated financial position, consolidated
financial performance including other comprehensive income/(loss),
consolidated cash flows and consolidated statement of changes in
equity of the Group in accordance with the accounting principles
generally accepted in India, including the Indian Accounting
Standards (Ind AS) specified under section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015,
as amended. The respective Board of Directors of the companies
included in the Group are responsible for maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Group and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation
of the consolidated Ind AS financial statements that give a true and
fair view and are free from material misstatement, whether due to
fraud or error, which have been used for the purpose of preparation
of the consolidated Ind AS financial statements by the Directors of
the Holding Company, as aforesaid.
In preparing the consolidated Ind AS financial statements, the
respective Board of Directors of the Companies included in the Group
are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Those Charged with Governance are also responsible for overseeing
the financial reporting process of the Group.
Auditor’s Responsibilities for the Audit of the Consolidated Ind AS
Financial Statements
Our objectives are to obtain reasonable assurance about whether
the consolidatedInd AS financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated Ind AS
financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the
consolidated Ind AS financial statements, whether due to fraud
or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion,
forgery,
intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the Act, we are also
responsible for expressing our opinion on whether the Holding
Company has adequate internal financial controls with reference
to financial statements in place and the operating effectiveness
of such controls.
•
Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the ability of the Group to continue as a going concern.
If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related
disclosures in the consolidated Ind AS financial statements or,
if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of
the consolidatedInd AS financial statements, including the
disclosures, and whether the consolidated Ind AS financial
statements represent the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
Subex Annual Report 2020-21 157
(e) On the basis of the written representations received from the
directors of the Holding Company and its Subsidiary Company
incorporated in India as on March 31, 2021, taken on record by
the Board of Directors of the Holding Company and its Subsidiary
Company incorporated in India, none of the directors of the
Holding Company and its Subsidiary Company incorporated in
India, is disqualified as on March 31, 2021 from being appointed
as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy and the operating effectiveness
of the internal financial controls with reference to these
consolidated Ind AS financial statements of the Holding
Company and its Subsidiary Company incorporated in India,
refer to our separate Report in “Annexure 1” to this report;
(g)
In our opinion, the managerial remuneration for the year
ended March 31, 2021, has been paid / provided by the Holding
Company and its Subsidiary Company incorporated in India to
their directors in accordance with the provisions of section 197
read with Schedule V to the Act; and
(h) With respect to the other matters to be included in the Auditor’s
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended, in our opinion and to the
best of our information and according to the explanations given
to us:
i.
ii.
The consolidated Ind AS financial statements disclose the
impact of pending litigations on its consolidated financial
position of the Group in its consolidatedInd AS financial
statements – Refer Note 32 to the consolidatedInd AS
financial statements;
The Group did not have any material foreseeable losses in
long-term contracts including derivative contracts during
the year ended March 31, 2021; and
iii. There were no amounts which were required to be
transferred to the Investor Education and Protection Fund
by the Holding Company and its Subsidiary Company
incorporated in India during the year ended March 31, 2021.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 21213803AAAABR4289
Place of Signature: Bengaluru
Date: May 17, 2021
the Group of which we are the independent auditors, to express
an opinion on the consolidated Ind AS financial statements. We
are responsible for the direction, supervision and performance
of the audit of the financial statements of such entities included
in the consolidated Ind AS financial statements of which we are
the independent auditors.
We communicate with those charged with governance of the Holding
Company and such other entities included in the consolidated Ind
AS financial statements of which we are the independent auditors
regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the
audit of the consolidatedInd AS financial statements for the financial
year ended March 31, 2021and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, we report, to the extent
applicable, that:
(a) We have sought and obtained all the
information and
explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit of the aforesaid
consolidated Ind AS financial statements;
(b)
In our opinion, proper books of account as required by law
relating to preparation of the aforesaid consolidation of the
financial statements have been kept so far as it appears from our
examination of those books and reports of the other auditors;
(c) The Consolidated Balance Sheet, the Consolidated Statement of
Profit and Loss including the Statement of Other Comprehensive
Income/(Loss), the Consolidated Cash Flow Statement and
Consolidated Statement of Changes in Equity dealt with by this
Report are in agreement with the books of account maintained
for the purpose of preparation of the consolidated Ind AS
financial statements;
(d)
In our opinion, the aforesaid consolidated Ind AS financial
statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended;
Subex Annual Report 2020-21 158
Annexure to the Independent Auditor’s Report of even date on the Consolidated Ind AS Financial Statements
of Subex Limited
Report on the Internal Financial Controls under Clause (i) of Sub-
section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS financial
statements of Subex Limited
(hereinafter referred to as the
“Holding Company”)as of and for the year ended March 31, 2021,
we have audited the internal financial controls with reference to
consolidated Ind AS financial statements of the Holding Company
and its Subsidiary Company(the Holding Company and its Subsidiary
Company together referred to as “the Group”), which are companies
incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Holding Company and its
Subsidiary Company, which are companies incorporated in India,
are responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting
criteria established by the Holding Company and its Subsidiary
Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting issued by the Institute of Chartered
Accountants of India(‘ICAI’). These responsibilities include the design,
implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the orderly
and efficient conduct of its business, including adherence to the
respective Company’s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation
of reliable financial information, as required under the Companies
Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Holding Company’s
internal financial controls with reference to these consolidated Ind
AS financial statements based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the “Guidance Note”) and the
Standards on Auditing specified under section 143(10) of the Act, to
the extent applicable to an audit of internal financial controls, both,
issued by ICAI. Those Standards and the Guidance Note require
that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate
internal financial controls with reference to these consolidated Ind
AS financial statements was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence
about the adequacy of the internal financial controls with reference
to these consolidated Ind AS financial statements and their operating
effectiveness. Our audit of internal financial controls with reference
to consolidated Ind AS financial statements included obtaining an
understanding of internal financial controls with reference to these
consolidated Ind AS financial statements, assessing the risk that a
material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
risk. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the internal
financial controls with reference to these consolidated Ind AS
financial statements.
Meaning of Internal Financial Controls With Reference to these
Consolidated Ind AS Financial Statements
A Company’s internal financial control with reference to these
consolidated Ind AS financial statements is a process designed to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
in accordance with generally accepted accounting
purposes
principles. A Company’s internal financial control with reference to
these consolidated Ind AS financial statements includes those policies
and procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorisations
of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the Company’s assets
that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls With Reference
to Consolidated Ind AS Financial Statements
Because of the inherent limitations of internal financial controls with
reference to these consolidated Ind AS financial statements, including
the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur
and not be detected. Also, projections of any evaluation of the
internal financial controls with reference to these consolidated Ind
AS financial statements to future periods are subject to the risk that
the internal financial controls with reference to these consolidated
Ind AS financial statements may become inadequate because of
changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Subex Annual Report 2020-21 159
Opinion
In our opinion, the Holding Company and its Subsidiary Company,
which are companies incorporated in India, have, maintained in all
material respects, adequate internal financial controls with reference
to these consolidated Ind AS financial statements and such internal
financial controls with reference to these consolidated Ind AS financial
statements were operating effectively as at March 31,2021, based on
the internal control over financial reporting criteria established by
the Holding Company and its Subsidiary Companyconsidering the
essential components of internal control stated in the Guidance Note
issued by the ICAI.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 21213803AAAABR4289
Place of Signature: Bengaluru
Date: May 17, 2021
Subex Annual Report 2020-21 160
CONSOLIDATED BALANCE SHEET
as at March 31, 2021
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill on consolidation
Other intangible assets
Financial assets
Loans
Other balances with banks
Income tax assets (net)
Deferred tax assets
Other non-current assets
Current assets
Financial assets
Loans
Trade receivables
Cash and cash equivalents
Other balances with banks
Other financial assets
Other current assets
Total assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Total equity
Liabilities
Non-current liabilities
Financial liabilities
Lease Liabilities
Provisions
Deferred tax liabilities (net)
(` in Lakhs)
Notes
As at
As at
March 31, 2021
March 31, 2020
3
28
5
4
6
7
11
12
13
6
8
9
7
10
13
14
15
28
19
20
1,177
1,962
34,409
-
300
39
3,479
125
-
434
4,424
34,409
3
533
189
3,305
262
267
41,491
43,826
220
9,215
14,294
379
6,428
639
31,175
72,666
28,100
26,755
54,855
1,575
275
6,289
8,139
104
9,206
9,043
67
5,264
588
24,272
68,098
56,200
(4,661)
51,539
3,458
355
3,774
7,587
Subex Annual Report 2020-21
CONSOLIDATED BALANCE SHEET (contd.)
as at March 31, 2021
Current liabilities
Financial liabilities
Borrowings
Lease Liabilities
Trade payables
- total outstanding dues of micro enterprises and small enterprises
- total outstanding dues of creditors other than micro enterprises and small enterprises
Other financial liabilities
Other current liabilities
Provisions
Income tax liabilities (net)
Total liabilities
Total equity and liabilities
161
(` in Lakhs)
Notes
As at
As at
March 31, 2021
March 31, 2020
41
28
16
16
17
18
19
21
584
420
66
1,245
3,045
2,935
791
586
9,672
17,811
-
1,409
41
1,605
2,212
2,342
649
714
8,972
16,559
72,666
68,098
Corporate information and significant accounting policies
1 & 2
The accompanying notes are an integral part of the consolidated financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
162
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
for the year ended March 31, 2021
Notes
Year ended
Year ended
March 31, 2021
March 31, 2020
(` in Lakhs)
1
Income
Revenue from operations
Other income
Total income
2
Expenses
Employee benefits expense
Finance costs
Depreciation and amortization expense
Exchange fluctuation loss/(gain) (net)
Other expenses
Total expenses
Profit before exceptional items and tax expense (1-2)
Exceptional items
Gain on termination of lease agreement
Provision for service tax receivable
Impairment of goodwill
Provision no longer required written back
Provision for claim settlement
Total exceptional items
Net profit/ (loss) before tax expense (3+4)
Tax expense (net):
Current tax charge
Provision for MAT credit
Provision - foreign withholding taxes (net)
Deferred tax charge (net)
Net profit/ (loss) for the year (5-6)
Other comprehensive income/ (loss) ('OCI'), net of tax expense
Items that will be reclassified subsequently to profit or loss:
Net exchange gain on translation of foreign operations
Items that will not be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans
Total comprehensive income/ (loss)
3
4
5
6
7
8
22
23
24
25
26
27
28
13
5
42
21
12
21
21
34
37,203
474
37,677
19,720
296
1,378
989
6,644
29,027
8,650
554
(267)
-
-
-
287
8,937
696
-
399
2,670
3,765
5,172
636
(12)
624
36,498
563
37,061
17,454
477
1,508
(887)
10,513
29,065
7,996
-
(31,473)
761
(1,054)
(31,766)
(23,770)
117
425
754
1,849
3,145
(26,915)
5
(34)
(29)
9
Total comprehensive income/ (loss) for the year attributable to equity holders of the
Company (7+8)
10
Earnings/ (loss) per equity share [of ` 5/- each w.e.f September 29, 2020 and ` 10/- upto
29
September 28, 2020) (March 31, 2020 : ` 10)]
Basic (`)
Diluted (`)
Corporate information and significant accounting policies
1 & 2
The accompanying notes are an integral part of the consolidated financial statements
As per our report of even date
For and on behalf of the Board of Directors
5,796
(26,944)
0.96
0.94
(4.94)
(4.94)
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Date: May 17, 2021
Subex Annual Report 2020-21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended March 31, 2021
A. Equity share capital (refer note 14):
163
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020, issued,
subscribed and fully paid-up
As at April 1, 2019
Issued during the year
As at March 31, 2020
Issued during the year
Adjustment pursuant to Capital reduction order
As at March 31, 2021
B. Other equity (refer note 15):
Particulars
As at April 1, 2019
Less: Loss for the year
Less: Transition impact of Ind AS 116 - Leases, net of tax
Less: Other comprehensive income/ (loss)
Less: Equity shares purchased by Subex Employee
Welfare and Employee Stock Option Plan (“ESOP”)
Benefit Trust
Add: Share based expenses (refer note 33)
Add/(less): On account of exercise of stock options
As at March 31, 2020
Add: Profit for the year
Add/(less): Other comprehensive income/ (loss)
Less: Equity shares purchased by Subex Employee
Welfare and Employee Stock Option Plan ("ESOP")
Benefit Trust
Add: Share based expenses (refer note 33)
Add/(less): On account of exercise of stock options
Add/(less): On account of vested options lapsed during
the year
Add/(less): Adjustment pursuant to Capital reduction
order (refer note 14)
Less: Dividends [refer note 15(a)]
As at March 31, 2021
No.
` in Lakhs
56,20,02,935
-
56,20,02,935
-
-
56,20,02,935
56,200
-
56,200
-
(28,100)
28,100
(` in Lakhs)
Attributable to equity holders of the Company
Reserves and Surplus
OCI
Total
Securities
General
Employee
Surplus/
Treasury
Exchange
premium
reserve
stock
(deficit)
Shares
reserve on
options
in the
reserve
statement
consolidation
26,705
-
-
-
-
-
7
26,712
-
-
-
-
33
-
(10,301)
1,780
-
-
-
-
-
-
1,780
-
-
-
-
-
3
-
of profit
and loss
7,563
(26,915)
(442)
(34)
-
-
-
(19,828)
5,172
(12)
-
(645)
-
-
-
(611)
-
23
(1,233)
-
-
(22)
-
-
-
-
134
-
18
-
-
-
-
101
(5)
114
-
-
-
147
(26)
(3)
-
38,401
-
(12,211)
-
-
5
-
-
-
(12,206)
-
636
-
-
-
-
-
-
16,444
-
1,783
-
232
(2,746)
20,987
-
(1,121)
-
(11,570)
23,210
(26,915)
(442)
(29)
(611)
101
25
(4,661)
5,172
624
(22)
147
141
-
28,100
(2,746)
26,755
Corporate information and significant accounting policies (refer notes 1 & 2)
The accompanying notes are an integral part of the consolidated financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
164
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended March 31, 2021
(A)
Operating activities
Profit/(loss) before tax expense
Adjustments to reconcile profit/ (loss) before tax expense to net cash flows:
Depreciation of property, plant and equipment and right-of-use assets
Amortization of intangible assets
Gain on disposal of property, plant and equipment (net)
Interest income (including fair value changes)
Finance costs (including fair value changes)
Allowance for expected credit losses
Expense on share based payment
Gain on termination/ modification of lease agreement
Provision for service tax receivable
Provision no longer required written back
Advance recoverable written-off
Impairment of goodwill
Net foreign exchange differences
Operating profit before working capital changes
Working capital adjustments:
(Increase)/ decrease in loans
(Increase)/ decrease in trade receivables
(Increase)/ decrease in other financial assets
(Increase)/ decrease in other assets
Increase/ (decrease) in trade payables
Increase/ (decrease) in other financial liabilities
Increase/ (decrease) in other current liabilities
Increase/ (decrease) in provisions
Income tax paid (including TDS, net of refund)
Net cash flows from operating activities
(B)
Investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Movement in margin money deposit (net)
Purchase of treasury shares by ESOP trust
Interest received
Net cash flows used in investing activities
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
8,937
(23,770)
1,375
3
(4)
(374)
296
(153)
147
(554)
267
-
-
-
721
10,661
299
(63)
(1,010)
(43)
(437)
573
514
5
10,499
(1,404)
9,095
(862)
7
(154)
(22)
309
(722)
1,503
5
-
(156)
477
289
101
(6)
-
(761)
234
31,473
(744)
8,645
52
(181)
(718)
(2)
643
(669)
328
(17)
8,081
(1,457)
6,624
(353)
-
426
(611)
108
(430)
Subex Annual Report 2020-21
165
CONSOLIDATED STATEMENT OF CASH FLOWS (Contd.)
for the year ended March 31, 2021
(C)
Financing activities
Proceeds from exercise of ESOP
Proceeds from borrowings (refer note 41)
Interest paid
Repayment of Lease liability
Payment of dividends [refer note 15(a)]
Net cash flows used in financing activities
(D)
Net increase in cash and cash equivalents (A+B+C)
Net foreign exchange difference on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(E)
Cash and cash equivalents at year end (refer note 9)
Corporate information and significant accounting policies (refer notes 1 & 2)
The accompanying notes are an integral part of the consolidated financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
141
600
(271)
(931)
(2,746)
(3,207)
5,166
85
9,043
14,294
25
-
(452)
(907)
-
(1,334)
4,860
236
3,947
9,043
Anil Singhvi
Chairman, Non- Executive &Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2020-21
166
1. Corporate information
in USA, UK, Canada, Australia, Italy, UAE and Saudi Arabia.
Subex Limited (“the Company” or “Subex” or “holding company”
or “parent company”) a public limited company incorporated in
1994, is a leading global provider of Operations and Business
to communication service
(“OSS/BSS”)
Support Systems
providers (“CSPs”) worldwide in the Telecom industry.
transformation,
subscriber-centric
The Company pioneered the concept of a Revenue Operations
Centre (“ROC”) – a centralized approach that sustains profitable
growth and financial health for the CSPs through coordinated
operational control. Subex’s product portfolio powers the ROC
and its best-in-class solutions enable new service creation,
operational
fulfilment,
provisioning automation, data integrity management, revenue
assurance, cost management,
fraud management and
interconnect/ inter-party settlement. Subex also offers a scalable
Managed Services Program. The CSPs achieve competitive
advantage through Business Optimization and Service Agility and
improve their operational efficiency to deliver enhanced service
experiences to their subscribers. The Company has its registered
office in Bengaluru and operates through its subsidiaries in India,
USA, UK, Singapore, Canada, Bangladesh and UAE and branches
Effective November 1, 2017, the Company has restructured
its business by way of transfer of its Revenue Maximisation
Solutions and related businesses (“RMS business”) and the Subex
Secure and Analytics solutions and related businesses (“Digital
business”) to its subsidiaries, Subex Assurance LLP (“SA LLP”)
and Subex Digital LLP (“SD LLP”) (together referred to as “LLPs”),
respectively, hereinafter referred to as the “Restructuring” 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.
These consolidated financial statements for the year ended
March 31, 2021 comprise financial statements of Subex Limited
and its subsidiaries (collectively hereafter referred to as “the
Group”).
These consolidated financial statements for the year ended
March 31, 2021 are approved by the Board of Directors on May
17, 2021.
Following subsidiaries have been considered in the preparation of the consolidated financial statements:
Name of the subsidiary
Subex Americas Inc.
Subex Inc.
Subex (Asia Pacific) Pte. Limited
Subex (UK) Limited
Subex Middle East, FZE
Subex Technologies Limited *
Subex Azure Holdings Inc. *
Subex Assurance LLP
Subex Digital LLP
Subex Bangladesh Private Limited
Country of
incorporation
% of holding and voting power
either directly or indirectly through
subsidiaries as at
March 31, 2021
March 31, 2020
Canada
United States of
America
Singapore
United Kingdom
United Arab
Emirates
India
United States of
America
India
India
Bangladesh
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
* Represents non-operating companies.
All the above subsidiaries are under the same management and are engaged in the same principle activities as the holding company.
Subex Limited is the sponsoring entity of Employee Stock Option Plan (‘ESOP’) trust. Management of the Company can appoint and
remove the trustees and provide funding to the trust for buying the shares. Basis assessment by the management, it believes that the
ESOP trust is controlled by the Company and accordingly Subex Employee Welfare and ESOP Benefit Trust is consolidated [refer note
2(p) and note 33].
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 167
2. Significant accounting policies
Consolidation procedure:
a. Basis of preparation
The consolidated financial statements of the Group have
been prepared and presented in accordance with accounting
principles generally accepted
Indian
Accounting Standards (Ind AS) specified under Section 133 of the
Companies Act, 2013 read with Companies (Indian Accounting
Standards) Rules, 2015 (as amended from time to time).
including
India
in
The consolidated financial statements have been prepared on
a historical cost basis, except for certain financial instruments
which are measured at fair value at the end of each reporting
period, as explained further in the accounting policies below.
The consolidated financial statements are presented in INR (“`”)
and all the values are rounded off to the nearest Lakhs (INR
00,000) except when otherwise indicated.
b. Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Company and its subsidiaries as at March 31,
2021 as disclosed in Note 1. Control exists when the parent has:
•
•
•
Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee)
Exposure or rights, to variable returns from its involvement
with the investee, and
The ability to use its power over the investee to affect its
returns.
The Group re-assesses whether or not it controls an investee
if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation
of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the
consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.
than
Consolidated financial statements are prepared using uniform
accounting policies for like transactions and other events in
similar circumstances. If a member of the group uses accounting
policies other
the consolidated
those adopted
financial statements for like transactions and events in similar
circumstances, appropriate adjustments are made to that group
member’s financial statements in preparing the consolidated
financial statements to ensure conformity with the group’s
accounting policies.
in
The financial statements of all entities used for the purpose of
consolidation are drawn up to same reporting date as that of the
parent company, i.e., year ended on March 31, 2021.
i. Combine like items of assets, liabilities, income, expenses
and cash flows of the parent with those of its subsidiaries.
For this purpose, income and expenses of the subsidiary
are based on the amounts of the assets and liabilities
recognised in the consolidated financial statements at the
acquisition date.
ii. Offset (eliminate) the carrying amount of the parent’s
investment in each subsidiary and the parent’s portion
of equity of each subsidiary. The excess of cost to the
Company of its investments in the subsidiary companies
over its share of equity of the subsidiary companies, at
the date on which the investment in the subsidiaries were
made, is recognised as ‘Goodwill’ being an intangible asset
in the consolidated financial statements and is tested for an
impairment on an annual basis. On the other hand, where
the share of equity in the subsidiary companies as on the
date of investment is in excess of cost of investments of the
Company, it is recognised as ‘Capital Reserve’ and shown
in ‘Other Equity’, in the consolidated financial statements.
The ‘Goodwill’ is determined separately for each subsidiary
company and such amounts are not set off between
different entities.
iii. Eliminate in full intragroup assets and liabilities, income,
expenses and cash flows relating to transactions between
entities of the group (profits or losses resulting from
intragroup transactions that are recognised in assets, such
as inventory and fixed assets, are eliminated in full).
iv. The ESOP Trust is consolidated in the standalone financial
statements of the Company and the shares purchased
and held by ESOP Trust are treated as treasury shares and
recognised at cost and deducted from other equity. Refer
note 2(p).
Profit or loss and each component of other comprehensive
income (OCI) are attributed to the equity holders of the parent
company.
c. Use of estimates, assumptions and judgements
The preparation of the consolidated financial statements in
conformity with Ind AS requires the management to make
estimates, judgements and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent
assets and liabilities on the date of the consolidated financial
statements and the reported amounts of revenues and expenses
for the year reported. Actual results could differ from those
estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised and
future periods are affected.
The Group has considered internal and certain external sources
of information including economic forecasts, budgets required
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 168
to meet performance obligations and likely delays on contractual
commitments, upto the date of approval of these consolidated
Ind AS financial statements, 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 its assets. The impact of the
global health pandemic may be different from that estimated
as at the date of approval of these consolidated Ind AS financial
statement and the Group will continue to closely monitor any
material changes to its assessment of economic impact of
COVID-19 pandemic.
Key source of estimation of uncertainty as at the date of
consolidated financial statements, which may cause a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, is in respect of the following:
Revenue recognition
The Group uses the percentage of completion method in
accounting for revenue from implementation and customisation
projects. Use of the percentage of completion method requires
the Group to estimate the completed efforts as a proportion of
the total efforts. Efforts have been used to measure progress
towards completion as there is a direct relationship between
input and productivity. Provisions for estimated losses, if any,
on uncompleted contracts are recorded in the year in which
such losses become probable based on the expected contract
estimates at the reporting date.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash
generating unit (“CGU”) exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value
in use. The fair value less costs of disposal calculation is based
on available data from binding sales transactions, conducted
at arm’s length, for similar assets or observable market prices
less incremental costs for disposing of the asset. The value
in use calculation is based on a discounted cash flow (“DCF”)
model. The cash flows are derived from the budget for future
years and do not include restructuring activities that the Group
is not yet committed to or significant future investments that will
enhance the asset’s performance of the CGU being tested. The
recoverable amount is sensitive to the discount rate used for the
DCF model as well as the expected future cash-inflows and the
growth rate used for extrapolation purposes. These estimates
are most relevant to goodwill recognized by the Group. The key
assumptions used to determine the recoverable amount for the
different CGUs, are disclosed and further explained in note 5.
Impairment of financial assets
In accordance with Ind AS 109, the Group assesses impairment
of financial assets (‘Financial instruments’) and recognises
expected credit losses, which are measured through a loss
allowance.
The Group provides for impairment of trade receivables and
unbilled revenue based on assumptions about risk of default
and expected timing of collection. The Group uses judgement
in making these assumptions and selecting inputs to the
impairment calculation, based on the Group’s past history,
customer’s creditworthiness, existing market conditions as
well as forward looking estimates at the end of each reporting
period. Also, refer note 2(j).
Defined benefit plans
The cost of the defined benefit gratuity plan and other post-
employment benefits and the present value of the gratuity
obligation is determined using actuarial valuation. An actuarial
valuation involves making various assumptions that may differ
from actual developments in the future. These include the
determination of the discount rate, future salary increases and
mortality rates. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are
reviewed at each reporting date (refer note 34).
The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated
in India, the management considers the interest rates of
government bonds in currencies consistent with the currencies
of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality
tables. These mortality tables tend to change only at interval in
response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates.
Fair Value measurement of financial instruments
When the fair values of financial assets and financial liabilities
recorded in the consolidated balance sheet cannot be measured
based on quoted prices in active markets, their fair value is
measured using internal valuation techniques. The inputs to
these models are taken from observable markets where possible,
but where this is not feasible, a degree of judgement is required
in establishing fair values. Judgements include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair
value of financial instruments. Also refer note 2(l).
Share-based payments
Estimating fair value for share-based payment transactions
requires determination of the most appropriate valuation
model, which is dependent on the terms and conditions of the
grant. This estimate also requires determination of the most
appropriate inputs to the valuation model including the expected
life of the share option, volatility and dividend yield and making
assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 169
disclosed in note 33.
Taxes
The Group’s three major tax jurisdictions are India, the United
Kingdom and Bangladesh, though the Group also files tax
returns in other foreign jurisdictions. Significant judgments are
involved in determining the provision for income taxes and tax
credits including the amount expected to be paid or refunded
for uncertain tax positions.
Deferred tax assets are recognised for unused tax losses to
the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing
and the level of future taxable profits together with future tax
planning strategies. Also refer note 2(s) and note 12, note 20 &
note 21.
Leases
Ind AS 116 requires lessees to determine the lease term as the
non-cancellable period of a lease adjusted with any option
to extend or terminate the lease, if the use of such option is
reasonably certain. The Group makes an assessment on the
expected lease term on a lease-by-lease basis and thereby
assesses whether it is reasonably certain that any options
to extend or terminate the contract will be exercised. In
evaluating the lease term, the Group considers factors such as
any significant leasehold improvements undertaken over the
lease term, costs relating to the termination of the lease and
the importance of the underlying asset to Group’s operations
taking into account the location of the underlying asset and
the availability of suitable alternatives. The lease term in future
periods is reassessed to ensure that the lease term reflects the
current economic circumstances. After considering current and
future economic conditions, the Group has concluded that no
changes are required to lease period relating to the existing
lease contracts [Refer to note 2(k)].
d. Current/ non-current classification
The Group presents assets and liabilities in the consolidated
balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
All other assets are classified as non-current.
A liability is current when:
•
•
•
•
It is expected to be settled in normal operating cycle
It holds the liability primarily for the purpose of trading
It is due to be settled within twelve months after the
reporting period, or
There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current
assets and liabilities, respectively.
The operating cycle is the time between the acquisition of assets
for processing and their realisation in cash and cash equivalents.
The Group has identified twelve months as its operating cycle.
e. Business combination and goodwill
Goodwill is initially measured at cost, being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests, and any previous
interest held, over the net identifiable assets acquired and
liabilities assumed. After initial recognition, Goodwill is measured
at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is
tested for impairment annually as at March 31 or more frequently
when there is an indication that the unit may be impaired. If the
recoverable amount of the cash generating unit is less than
its carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro rata based on
the carrying amount of each asset in the unit. Any impairment
loss for goodwill is recognised in the consolidated statement of
profit and loss. An impairment loss recognised for goodwill is
not reversed in subsequent periods.
•
Expected to be realised or intended to be sold or consumed
in normal operating cycle
f.
Revenue recognition
• Held primarily for the purpose of trading
•
Expected to be realised within twelve months after the
reporting period, or
• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period
The Group derives its revenues primarily from sale and
implementation of its license and implementation of its
proprietary software and managed/ support services.
Revenue is recognized upon transfer of control of promised
products or services to customers in an amount that reflects
the consideration the Group expect to receive in exchange for
those products or services.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 170
The following specific recognition criteria must also be met
before revenue is recognised:
Revenues from licensing arrangements is recognized on
transfer of the title in user licenses, except those contracts
where transfer of title is dependent upon rendering of significant
implementation and other services by the Group, in which
case revenue is recognized over the implementation period in
accordance with the specific terms of the contracts with clients.
Revenue from implementation and customisation services
is recognised using the percentage of completion method.
Percentage of completion is determined based on completed
efforts against the total estimated efforts, which represent the
fair value of services rendered.
Revenue from managed/ support services comprise income
from fixed price contracts, time-and-material contracts and
annual maintenance contracts. Revenue from fixed price
contracts is recognized over the period of the contracts using
the percentage of completion method. Revenue from time and
material contracts is recognized when the services are rendered
in accordance with the terms of contracts. Revenue from annual
maintenance contracts is recognised rateably over the period of
the contracts.
Revenue from sale of hardware under reseller arrangements
is recognized when all the significant risks and rewards of
ownership of the goods have been passed to the buyer, usually
on delivery of goods to customers.
In case of multiple element arrangements for sale of software
license, related implementation and maintenance services,
the Group has applied the guidance in Ind AS 115, by applying
the revenue recognition criteria for each distinct performance
obligation. The arrangements generally meet the criteria for
considering the sale of software license, related implementation
and maintain services as distinct performance obligation. For
allocating the consideration, the Group has measured the
revenue in respect of each distinct performance obligation
of a transaction at its standalone selling price, in accordance
with principles given in Ind AS 115. The price that is regularly
charged for an item when sold separately is the best evidence of
its standalone selling price. In cases where the Group is unable
to determine the standalone selling price, the Group has used
a residual method to allocate the arrangement consideration.
In these cases the balance of the consideration, after allocating
the standalone selling price of undelivered components of a
transaction has been allocated to the delivered components for
which specific standalone selling price do not exist.
The Group collects Goods and Services tax and other taxes as
applicable in the respective tax jurisdictions where the Group
operates, on behalf of the government and therefore it is not
an economic benefit flowing to the Group. Hence it is excluded
from revenue.
Provisions for estimated losses on contracts are recorded in the
period in which such losses become probable based on the
current contract estimates. ‘Unbilled revenue’ included in other
financial assets represent revenues recognized in excess of
amounts billed to clients as at the balance sheet date. ‘Unearned
revenue’ included in other current liabilities represent billings in
excess of revenues recognized as at the balance sheet date.
Performance obligations and
remaining performance
obligations
The remaining performance obligation disclosure provides the
aggregate amount of the transaction price yet to be recognized
as at the end of the reporting period and an explanation as to
when the Group expects to recognize these amounts in revenue.
Applying the practical expedient as given in Ind AS 115, the
Group has not disclosed the remaining performance obligation
related disclosures for contracts where the revenue recognized
corresponds directly with the value to the customer of the
entity’s performance completed to date, typically those
contracts where invoicing is on time and material basis.
Remaining performance obligation estimates are subject
to change and are affected by several factors, including
terminations, changes in the scope of contracts, periodic
revalidations, adjustment for revenue that has not materialized
and adjustments for currency. Also, refer note 22.
Interest
Interest income is recognized as it accrues in the consolidated
statement of profit and loss using effective interest rate method.
g. Property, plant and equipment
Property, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment losses,
if any. The cost comprises purchase price, borrowing costs
if capitalization criteria are met, directly attributable cost of
bringing the plant and equipment to its working condition for
the intended use and cost of replacing part of the plant and
equipment. When significant parts of plant and equipment are
required to be replaced at intervals, the Group depreciates them
separately based on their specific useful lives. Likewise, when
a major inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a replacement
if the recognition criteria are satisfied. All other repair and
maintenance costs are recognised in the consolidated statement
of profit and loss, as incurred. The present value of the expected
cost for the decommissioning of an asset after its use is included
in the cost of the respective asset if the recognition criteria for a
provision are met.
Gains or losses arising from derecognition of the assets are
measured as the difference between the net disposal proceeds
and the carrying amounts of the assets and are recognized in
the consolidated statement of profit and loss when the assets
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 171
financial asset or a group of financial assets is impaired. Ind AS
109 (‘Financial instruments’) requires expected credit losses to
be measured through a loss allowance. The Group recognises
lifetime expected losses for all contract assets and/ or all trade
receivables that do not constitute a financing transaction. For all
other financial assets, expected credit losses are measured at an
amount equal to the 12-month expected credit losses or at an
amount equal to the life time expected credit losses if the credit
risk on the financial asset has increased significantly since initial
recognition.
Impairment of non-financial assets
Non-financial assets including Property, plant and equipment,
intangible assets and right-of-use asset with finite life are
evaluated for recoverability whenever there is any indication
that their carrying amounts may not be recoverable. If any such
indication exists, the recoverable amount (i.e. higher of the fair
value less cost to sell and the value-in-use) is determined on an
individual asset basis unless the asset does not generate cash
flows that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the CGU
to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be
less than its carrying amount, the carrying amount of the asset
(or CGU) is reduced to its recoverable amount. An impairment
loss is recognised in the consolidated statement of profit and
loss.
For assets excluding goodwill, an assessment is made at each
reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have
decreased. If such indication exists, the Group estimates the
asset’s or CGU’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change
in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset does
not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the consolidated statement
of profit and loss unless the asset is carried at a revalued amount,
in which case, the reversal is treated as a revaluation increase.
k.
Leases
are derecognized.
h.
Intangible assets (excluding goodwill on consolidation)
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization
and accumulated
Internally generated
intangibles, excluding capitalised development costs, are
not capitalised and the related expenditure is reflected in the
consolidated statement of profit and loss in the period in which
the expenditure is incurred.
impairment
losses.
Intangible assets with finite lives are amortized over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least at the
end of each reporting period. Changes in the expected useful
life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the
amortization period or method, as appropriate, and are treated
as changes in accounting estimates.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognised in the consolidated statement of profit and loss
when the asset is derecognised.
i. Depreciation and amortization
Depreciation of property, plant and equipment and amortization
of intangible assets with finite useful lives is calculated on a
straight-line basis over the useful lives of the assets estimated by
the management, basis technical assessment.
The Group has used the following useful lives to provide
depreciation on plant and equipment and amortization of
intangible assets:
Assets
Computer equipment
Furniture and fixtures
Vehicles
Leasehold improvements
Office equipment
Computer software
Useful life
3 years
5 years
5 years
5 years
5 years
4 years
The residual values, useful lives and methods of depreciation of
property, plant and equipment and amortization of intangible
assets are reviewed at each financial year end and adjusted
prospectively, if appropriate.
The Group assesses at contract inception whether a contract
is/ contains a lease. That is, if the contract conveys the right
to control the use of an identified asset for a period of time in
exchange for consideration.
j.
Impairment
Group as a lessee:
Impairment of Financial Assets
The Group assesses at each date of balance sheet whether a
The Group applies a single recognition and measurement
approach for all leases, except for short-term leases and leases
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 172
of low-value assets. The Group recognises lease liabilities to
make lease payments and right-of-use assets representing the
right to use the underlying assets.
i)
Right-of-use assets
The Group recognises right-of-use assets at the commencement
date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of right-of-
use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line
basis over the lease term.
If ownership of the leased asset transfers to the Group at the end
of the lease term or the cost reflects the exercise of a purchase
option, depreciation is calculated using the estimated useful life
of the asset.
The right-of-use assets are also subject to impairment. Refer
note 2(j) on impairment of non-financial assets.
ii)
Lease Liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. In calculating the present value
of lease payments, the Group uses its incremental borrowing
rate at the lease commencement date because the interest
rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased
to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the lease payments (e.g., changes
to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
cumulative effect of initially applying the Standard, recognised
on the date of initial application (April 1, 2019). The cumulative
effect of initially applying this standard has been recognised as
an adjustment to the opening balance of retained earnings as
on April 1, 2019.
l.
Financial instruments
A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument
of another entity.
Financial assets and liabilities are recognised when the Group
becomes a party to the contract that gives rise to financial assets
and liabilities. Financial assets and liabilities are initially measured
at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the
fair value measured on initial recognition of financial asset or
financial liability.
Cash and cash equivalents
The Group considers all highly liquid financial instruments,
which are readily convertible into known amounts of cash
that are subject to an insignificant risk of change in value and
having original maturities of three months or less from the date
of purchase, to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted for
withdrawal and usage.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized
cost if these financial assets are held within a business whose
objective is to hold these assets in order to collect contractual
cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive
iii) Short-term leases and leases of low-value assets
income
The Group applies the short-term lease recognition exemption
to its short-term leased assets (i.e., those leases that have a lease
term of 12 months or less from the commencement date and
do not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leased assets that
are considered to be low value. Lease payments on short-term
leases and leases of low-value assets are recognised as expense
on a straight-line basis over the lease term.
The Group has adopted Ind AS 116, effective annual reporting
period beginning April 1, 2019 and applied the standard to
its leases using the modified retrospective method with the
Financial assets are measured at fair value through other
comprehensive income if these financial assets are held within
a business whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or
loss unless it is measured at amortized cost or at fair value
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 173
through other comprehensive income on initial recognition.
The transaction costs directly attributable to the acquisition of
financial assets at fair value through profit or loss are immediately
recognised in the consolidated statement of profit and loss.
Financial liabilities
Financial liabilities are subsequently carried at amortized cost
using the effective interest method, except for contingent
consideration recognized in a business combination which is
subsequently measured at fair value through profit or loss. For
trade and other payables maturing within one year from the
balance sheet date, the carrying amounts approximate fair value
due to the short maturity of these instruments.
Derecognition of financial assets and liabilities
The Group derecognizes a financial asset when the contractual
rights to the cash flows from the financial asset expire or
it transfers the financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial liability (or a part of a
financial liability) is derecognized when the obligation specified
in the contract is discharged or cancelled or expires. When an
existing financial asset/ liability is replaced by another from the
same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in
the respective carrying amounts is recognised in the statement
of profit and loss.
Reclassification of financial assets
The Group determines classification of financial assets and
liabilities on initial recognition. After initial recognition, no
reclassification is made for financial assets which are equity
instruments and financial liabilities. For financial assets which
are debt instruments, a reclassification is made only if there
is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent.
The Group’s senior management determines change in the
business model as a result of external or internal changes
which are significant to the Group’s operations. Such changes
are evident to external parties. A change in the business model
occurs when the Group either begins or ceases to perform an
activity that is significant to its operations. If the Group reclassifies
financial assets, it applies the reclassification prospectively from
the reclassification date which is the first day of the immediately
next reporting period following the change in business model.
The Group does not restate any previously recognised gains,
losses (including impairment gains or losses) or interest.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net
amount is reported in the consolidated balance sheet if there
is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
Fair value of financial instruments
The Group measures financial instruments, such as, derivatives
at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
•
•
In the principal market for the asset or liability, or
In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be
accessible by the Group.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.
In determining the fair value of its financial instruments, the
Group uses following hierarchy and assumptions that are based
on market conditions and risks existing at each reporting date.
Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement.
The Group uses derivative financial instruments, such as forward
currency contracts. Such derivative financial instruments are
initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured at
fair value. Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value
is negative. Any gains or losses arising from changes in the fair
value of derivatives are taken directly to profit or loss.
Fair value hierarchy
All assets and liabilities for which fair value is measured
or disclosed in the consolidated financial statements are
categorised within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 — Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the consolidated
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 174
financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy
by re-assessing categorisation (based on the lowest level input
that is significant to the fair value measurement as a whole) at
the end of each reporting period.
m. Borrowing cost
to
Borrowing costs directly attributable
the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or
sale are capitalised as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.
n. Consolidated statement of cash flows
Cash flows are reported using the indirect method, whereby
profit/ (loss) for the period is adjusted for the effects of
transactions of a non-cash nature or any deferrals or accruals of
past or future operating cash receipts or payments and item of
income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing
activities of the Group are segregated.
o. Employee share based payments
The Group measures compensation cost relating to employee
stock options plans using the fair valuation method in accordance
with Ind AS 102, Share-Based Payment. Compensation expense
is amortized over the vesting period of the option on a straight
line basis. The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made using an
appropriate valuation model (Black-Scholes valuation model).
That cost is recognised, together with a corresponding increase
in employee stock options reserves in other equity, over the
period in which the performance and/or service conditions are
fulfilled in employee benefits expense. The cumulative expense
recognised for equity-settled transactions at each reporting date
until the vesting date reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number
of equity instruments that will ultimately vest.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share.
p. Treasury shares
The parent Company has formed Subex Employee Welfare
and ESOP Benefit Trust (ESOP Trust) for providing share-based
payment to its employees. The parent Company treats ESOP
Trust as its extension and shares held by ESOP Trust are treated
as treasury shares.
Own equity instruments that are purchased (treasury shares)
are recognised at cost and deducted from equity. No gain
or loss is recognised in profit or loss on the purchase, sale,
issue or cancellation of the parent Company’s own equity
instruments. Any difference between the carrying amount and
the consideration, if reissued, is recognised in reserve. Share
options exercised during the reporting period are adjusted with
treasury shares.
q. Employee benefits
Employee benefits include provident fund, pension fund, gratuity
and compensated absences.
Defined contribution plans
Contributions payable to recognized provident funds and
which are defined contribution schemes, are charged to the
consolidated statement of profit and loss.
Defined benefit plans
Gratuity, which is a defined benefit plan, is accrued based on
an independent actuarial valuation, which is done based on
projected unit credit method as at the balance sheet date. The
Group recognizes the net obligation of a defined benefit plan in
its balance sheet as an asset or liability. Gains and losses through
re-measurements of the net defined benefit liability/ (asset) are
recognized in other comprehensive income. In accordance with
Ind AS, re-measurement gains and losses on defined benefit
plans recognised in OCI are not to be subsequently reclassified
to the consolidated statement of profit and loss. As required
under Ind AS compliant Schedule III, the Group transfers it
immediately to ‘Surplus/ (deficit) in the statement of profit loss’.
The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated
in India, the management considers the interest rates of
government bonds where remaining maturity of such bond
correspond to expected term of defined benefit obligation.
Short-term employee benefits
Short-term employee benefits expected to be paid in exchange
for the services rendered by employees are recognised during
the year when the employees render the service. Compensated
absences, which are expected to be utilised within the next
12 months, are treated as short-term employee benefits. The
Group measures the expected cost of such absences as the
additional amount that it expects to pay as a result of the unused
entitlement that has accumulated at the reporting date.
Long-term employee benefits
Compensated absences which are not expected to occur
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 175
within twelve months after the end of the period in which the
employees render the related services are treated as long-term
employee benefits for measurement purpose. Such long-term
compensated absences are provided for based on the actuarial
valuation using the projected unit credit method at the year
end, less the fair value of the plan assets out of which the
obligations are expected to be settled. Actuarial gains/losses are
immediately taken to the consolidated statement of profit and
loss and are not deferred.
The Group presents the entire compensated absences balance
as a current liability in the consolidated balance sheet, since it
does not have an unconditional right to defer its settlement for
twelve months after the reporting date.
r.
Foreign currencies
The Group’s consolidated financial statements are presented
in INR, which is also the parent company’s functional currency.
For each entity the Group determines the functional currency
and items included in the financial statements of each entity are
measured using that functional currency.
The functional currency of the Company and its Indian
subsidiaries is Indian Rupee whereas the functional currency of
foreign subsidiaries is the currency of their countries of domicile.
Foreign currency transactions are initially recorded in the
functional currency of the Company by applying exchange rates
prevailing on the date of the transaction. For practical reasons,
the Company uses an average rate if the average approximates
the actual rate at the date of the transaction. Foreign currency
denominated monetary assets and liabilities are restated into
the functional currency using exchange rates prevailing on the
balance sheet date.
Gains and losses arising on settlement and restatement of
foreign currency denominated monetary assets and liabilities
are included in the consolidated statement of profit and loss.
Assets and liabilities of entities with functional currency other than
presentation currency have been translated to the presentation
currency using exchange rates prevailing on the balance sheet
date. The statement of profit and loss have been translated using
weighted average exchange rates. The exchange differences
arising on translation for consolidation are recognised in OCI
as ‘Exchange reserve on consolidation’. On disposal of a foreign
operation, the component of OCI relating to that particular
foreign operation is recognised in the consolidated statement
of profit and loss.
s. Taxes on income
Income tax expense comprises current tax expense and the
net change in the deferred tax asset or liability during the year.
Current and deferred tax are recognised in the consolidated
statement of profit and loss, except when they relate to items
that are recognised in other comprehensive income or directly
in other equity, in which case, the current and deferred tax are
also recognised in other comprehensive income or directly in
other equity, respectively.
Current income tax
Current income tax for the current and prior periods are
measured at the amount expected to be recovered from or
paid to the taxation authorities based on the taxable income
for that period. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted
by the balance sheet date. Management periodically evaluates
positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation
and considers whether it is probable that a taxation authority will
accept an uncertain tax treatment. The Group shall reflect the
effect of uncertainty for each uncertain tax treatment by using
either most likely method or expected value method, depending
on which method predicts better resolution of the treatment.
Deferred income tax
Deferred income tax is recognised using the balance sheet
approach, deferred tax is recognized on temporary differences
at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes, except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and affects
neither accounting nor taxable profit or loss at the time of the
transaction.
Deferred income tax assets are recognized for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and
unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed
at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilized.
Deferred income taxes are not provided on the undistributed
earnings of subsidiaries and branches where it is expected that
the earnings of the subsidiary or branch will not be distributed in
the foreseeable future.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the balance
sheet date.
Deferred tax assets include Minimum Alternative Tax (“MAT”)
paid in accordance with the tax laws in India, which is likely
to give future economic benefits in the form of availability of
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 176
set off against future income tax liability. Accordingly, MAT is
recognized as deferred tax asset in the consolidated balance
sheet when the asset can be measured reliably and it is probable
that the future economic benefit associated with the asset will
be realized. The Group reviews the “MAT credit entitlement”
asset at each reporting date and writes down the asset to the
extent that it is no longer probable that it will pay normal tax
during the specified period.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
t.
Provision and contingencies
A provision is recognized when an enterprise has a present
obligation (legal or constructive) as a result of past event and it
is probable that an outflow of resources will be required to settle
the obligation, in respect of which a reliable estimate can be
made of the amount of the obligation. If the effect of time value
of money is material, provision is discounted using a current pre-
tax rate that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
Provisions for onerous contracts, i.e. contracts where the
expected unavoidable costs of meeting obligations under
a contract exceed the economic benefits expected to be
received, are recognized when it is probable that an outflow
of resources embodying economic benefits will be required
to settle a present obligation as a result of an obligating event,
based on a reliable estimate of such obligation.
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events
beyond the control of the Group or a present obligation that
is not recognized because it is not probable that an outflow of
resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability
that cannot be recognized because it cannot be measured
reliably. The Group does not recognize a contingent liability but
discloses its existence in the consolidated financial statements.
u. Cash dividend to the equity holders of the Company
The Company recognises a liability to make cash distributions
to equity holders of the Company when the distribution is
authorised, and the distribution is no longer at the discretion
of the Company. Final dividends on shares is recorded as a
liability on the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of declaration by
the Company’s Board of Directors.
v. Earnings/ (loss) per share
Basic earnings/ (loss) per share is computed by dividing the
profit/ (loss) after tax attributable to the equity holders of the
Group by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is
computed by dividing the profit/ (loss) after tax as adjusted for
dividend, interest (net of any attributable taxes) other charges to
expense or income relating to the dilutive potential equity shares,
by the weighted average number of equity shares considered
for deriving basic earnings per share and the weighted average
number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share or increase the
net loss per share. Potential dilutive equity shares are deemed
to be converted as at the beginning of the period, unless they
have been issued at a later date. The dilutive potential equity
shares are adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. average market value of
the outstanding shares). Dilutive potential equity shares are
determined independently for each period presented.
w. Segment reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision
maker.
The Group identifies primary segments based on the dominant
source, nature of risks and returns and the internal organization
and management structure. The operating segments are the
segments for which separate financial information is available
and for which operating profit/ loss amounts are evaluated
regularly by the Executive Management in deciding how to
allocate resources and in assessing performance. The analysis
of geographical segments is based on the areas in which major
operating divisions of the Group operate.
The accounting policies adopted for segment reporting are in
line with the accounting policies of the Group. Segment revenue,
segment expenses, segment assets and segment liabilities have
been identified to the segments on the basis of their relationship
to the operating activities of the segment.
Common allocable costs are allocated to each segment
according to the relative contribution of each segment to the
total common costs. Revenue, expenses, assets and liabilities
which relate to the Group as a whole and are not allocable
to segments on a reasonable basis have been included under
‘unallocated revenue/ expenses/ assets/ liabilities’.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 3. Property, plant and equipment
177
(` in Lakhs)
Cost
As at April 1, 2019
Additions
Disposals
Exchange differences
As at March 31, 2020
Additions
Disposals
Exchange differences
As at March 31, 2021
Depreciation
As at April 1, 2019
Charge for the year
Disposals
Exchange differences
As at March 31, 2020
Charge for the year
Disposals
Exchange differences
As at March 31, 2021
Net block
As at March 31, 2020
As at March 31, 2021
4.
Intangible assets
Cost
As at April 1, 2019
Additions
Disposals
Exchange differences
As at March 31, 2020
Additions
Disposals
Exchange differences
As at March 31, 2021
Computer
Furniture and
Vehicles
Leasehold
Office equipment
Total
equipment
fixtures
improvements
2,015
246
(36)
13
2,238
747
(144)
11
2,852
1,526
359
(36)
7
1,856
313
(143)
2
2,028
382
824
43
-
-
2
45
-
(7)
-
38
27
7
-
3
37
5
(6)
-
36
8
2
2
-
-
-
2
-
-
-
2
1
1
-
-
2
-
-
-
2
-
-
-
-
-
-
-
293
-
-
293
-
-
-
-
-
10
-
-
10
-
283
128
27
(4)
4
155
44
(26)
-
173
94
20
(4)
1
111
19
(25)
-
105
44
68
2,188
273
(40)
19
2,440
1,084
(177)
11
3,358
1,648
387
(40)
11
2,006
347
(174)
2
2,181
434
1,177
Computer software
(` in Lakhs)
Total
236
-
(6)
2
232
-
(130)
-
102
236
-
(6)
2
232
-
(130)
-
102
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
178
4.
Intangible assets (Contd.)
Amortization
As at April 1, 2019
Amortization for the year
Disposals
Exchange differences
As at March 31, 2020
Amortization for the year
Disposals
Exchange differences
As at March 31, 2021
Net block
As at March 31, 2020
As at March 31, 2021
5. Goodwill on consolidation
Carrying value as per last financial statement
Less: Impairment of goodwill
Carrying value of goodwill
Below is the Cash Generating Unit (‘CGU’) wise break-up of goodwill:
Revenue Management Solutions ('RMS')
Data Integrity Management ('DIM')
Goodwill impairment testing
Computer software
229
5
(6)
1
229
3
(130)
-
102
3
-
(` in Lakhs)
Total
229
5
(6)
1
229
3
(130)
-
102
3
-
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
34,409
-
34,409
65,882
(31,473)
34,409
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
33,444
965
34,409
33,444
965
34,409
During the previous year ended March 31, 2020, 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 as at December 31, 2019 in respect of carrying value of goodwill. Based on the above assessment and
valuation carried out by an external valuation expert, there has been impairment of goodwill amounting to ` 28,712 Lakhs in relation
to RMS CGU and ` 2,761 Lakhs in relation to DIM CGU towards carrying value of goodwill as on March 31, 2020. The aforesaid
impairment has been reflected as ‘exceptional item’ in the previous year ended March 31, 2020. As at March 31, 2021, the
management has reassessed its projections and assumptions and has concluded that, the carrying value of it’s goodwill is appropriate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
179
The recoverable amount of a CGU is determined based on value-in-use calculations which require the use of assumptions.
The calculations use cash flow projections based on financial budgets approved by the Board of Directors. An average of the range of each
assumption used is mentioned below:
Growth rate
Operating margins
Discount rate
As at
As at
March 31, 2021
March 31, 2020
3% to 8%
9% to 18%
13% to 16%
3% to 8%
9% to 18%
13% to 16%
The above discount rate is based on the Weighted Average Cost of Capital (WACC) which represents the weighted average return attributable
to all the assets of the CGU. These estimates are likely to differ from future actual results of operations and cash flows. Management believes
that any reasonable possible changes in the key assumptions would not cause the carrying amount to exceed the recoverable amount of the
cash generating unit.
6. Loans
Carried at amortized cost
Non-Current
Unsecured, considered good
Security deposits
Total
Current
Unsecured, considered good
Security deposit
Loans to employees
Total
7. Other balances with banks
Non-current
Other bank balances (refer note 9)
Margin money deposits
Current
Other bank balances (refer note 9)
Margin money deposits
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
300
300
1
219
220
533
533
-
104
104
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
39
39
379
379
189
189
67
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
180
8. Trade receivables
Unsecured, carried at amortized cost
Unsecured, considered good
Unsecured, credit impaired
Total (a)
Impairment allowance (allowance for expected credit loss)
Trade receivable, credit impaired
Total (b)
Net Trade Receivables (a-b)
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
9,215
2,088
11,303
(2,088)
(2,088)
9,215
9,206
2,178
11,384
(2,178)
(2,178)
9,206
During the year ended March 31, 2021, ` 3,195 Lakhs of unbilled revenue as of April 1, 2020 has been converted to trade receivables on billing.
(During the previous year ended March 31, 2020, ` 3,198 Lakhs of unbilled revenue as of April 1, 2019 converted to trade receivables). Also,
refer note 10.
No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Further,
there are no trade or other receivables which are due from firms or private companies in which any director is a partner, a director or a
member.
Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.
9. Cash and cash equivalents
Current
Balance with banks
In current accounts
In EEFC accounts
Deposits with original maturity of less than 3 months
Earmarked balances with banks being unpaid dividend accounts*^
Other balances with banks
Margin money deposits with remaining maturity for more than 3 months and less than 12 months
Less: Disclosed under Other balances with banks (Current) (refer note 7)
A
B
(A+B)
Non-current
Other balances with banks
Margin money deposits
Less: Disclosed under Other balances with banks (Non-current) (refer note 7)
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
4,113
1,595
8,586
-
14,294
379
379
(379)
-
3,773
18
5,252
-
9,043
67
67
(67)
-
14,294
9,043
39
39
(39)
-
189
189
(189)
-
^ Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off.
*These balances are not available for use by the Company as they represent corresponding unclaimed dividend liabilities.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the total of current portion of cash and cash equivalents as
above.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
10. Other financial assets
Unsecured, considered good
Current
Carried at amortized cost
Unbilled revenue*
Interest accrued but not due on bank deposits
Carried at fair value through profit or loss
Foreign currency forward contract
*Also, refer note 8
11. Income tax assets (net)
Non-current
Advance income-tax [net of provision for taxation ` 1,994 Lakhs (March 31, 2020: ` 1,471 Lakhs)]
12. Deferred tax assets (net) *
Non-current
Minimum alternative tax ('MAT') credit entitlement
Less: Provision for MAT credit**
Deferred tax assets (net)
Depreciation and amortization expense: Difference between tax depreciation and depreciation
and amortization expense
Losses available for offsetting against future taxable profits
Provision for employee benefits and others
A
B
(A+B)
181
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
6,379
40
9
6,428
5,258
6
-
5,264
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
3,479
3,479
3,305
3,305
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
425
(425)
-
7
-
118
125
125
425
(425)
-
5
184
73
262
262
* Also refer note 20 and note 21.
**During the previous year ended March 31, 2020, the MAT credit entitlement of ` 425 Lakhs has been provided for considering the uncertainty as regards to its
utilisation.
In respect of certain group entities, deferred tax asset has not been recognized in absence of reasonable certainty that future taxable profit will be available for
utilisation against carry forward losses.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
182
13. Other assets
Non-current
Balance with statutory/ government authorities*
Less: Provision for service tax receivable
Current
Balance with statutory/ government authorities
Advance recoverable in cash or kind
Prepaid expenses
Advance to suppliers
Expenses incurred on behalf of customers
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
267
(267)
-
21
422
194
2
639
267
-
267
19
344
163
62
588
*Balances represents service tax inadvertently paid by the Company during the financial years 2004 to 2008, under reverse charge mechanism, for which refund
application has been filed with the service tax department and the same was under dispute. During the year ended March 31, 2021, the Company has made
provision of ` 267 Lakhs considering the uncertainty as regards to its realisation.
14. Share capital
Authorised share capital
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020*
No
` in Lakhs
As at April 1, 2019
Increase during the year
As at March 31, 2020
Increase during the year
Increase pursuant to Capital reduction order*
As at March 31, 2021
Preference shares of ` 98 each
As at April 1, 2019
Increase during the year
As at March 31, 2020
Increase during the year
As at March 31, 2021
Issued, subscribed and fully paid-up share capital
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020*^
As at April 1, 2019
Issued during the year
As at March 31, 2020
Issued during the year
Adjustment pursuant to Capital reduction order*
As at March 31, 2021
58,80,40,000
-
58,80,40,000
-
58,80,40,000
1,17,60,80,000
2,00,000
-
2,00,000
-
2,00,000
56,20,02,935
-
56,20,02,935
-
-
56,20,02,935
58,804
-
58,804
-
-
58,804
196
-
196
-
196
56,200
-
56,200
-
(28,100)
28,100
* The Board of Directors in its meeting held on February 07, 2020, 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. The Hon’ble NCLT approved the said Scheme vide its order dated September 23, 2020.
Consequently, the Company filed a certified copy of the Order with Registrar of Companies (‘ROC’) on September 29, 2020 and utilized an amount of ` 28,100
Lakhs from paid-up share capital of the Company by reducing the face value of the equity shares from ` 10/- to ` 5/- each and ` 10,301 Lakhs from securities
premium to write-off its accumulated losses of ` 38,401 Lakhs.
^ includes 243,207 (March 31, 2020: 243,207) shares in respect of which Global Depository Receipts of the Company are listed on London Stock Exchange.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
183
14. Share capital (contd.)
a) Terms/ rights attached to equity shares
The Company has only one class of equity shares having par value of ` 5 per share w.e.f September 29, 2020 and ` 10 per share upto
September 28, 2020. Each holder of equity shares is entitled to one vote per share and such amount of dividend per share as declared by
the Company. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
b) As at March, 31, 2021 and as at March 31, 2020, there is no individual shareholder or shareholder (together with ‘Person acting in concert’)
holding more than 5% shares of the Company.
c)
Shares reserved for issue under options (No.)
Outstanding employee stock options under below schemes, granted/ available for grant (refer note 33):
ESOP - V
d) Number of treasury shares outstanding
Balance as per last financial statements
Add: Additions during the year
Less: Exercise during the year
Closing balance
15. Other equity
Securities premium
Balance as per last financial statements
Less: Adjustment pursuant to Capital reduction order
Add: On account of exercise of share options
Closing balance
General reserve
Balance as per last financial statements
Add: On account of vested options lapsed during the year
Closing balance
Employee stock options reserve
Balance as per last financial statements
Add: Share based expenses
Less: On account of exercise of share options
Less: On account of vested options lapsed during the year
Closing balance
As at
As at
March 31, 2021
March 31, 2020
1,98,71,500
1,98,71,500
2,19,75,000
2,19,75,000
As at
As at
March 31, 2021
March 31, 2020
2,19,75,000
2,50,000
(23,53,500)
1,98,71,500
1,12,00,000
1,07,75,000
(4,25,000)
2,19,75,000
As at
(` in Lakhs)
As at
March 31, 2021
March 31, 2020
26,712
(10,301)
33
16,444
1,780
3
1,783
114
147
(26)
(3)
232
26,705
-
7
26,712
1,780
-
1,780
18
101
(5)
-
114
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
184
15. Other equity (contd.)
Surplus/ (deficit) in the statement of profit and loss
Balance as per last financial statements
Add: Profit/ (loss) for the year
Add: Adjustment pursuant to Capital reduction order
Less: Transition impact of Ind AS 116 - Leases, net of tax
Less: OCI - Re-measurement losses on defined benefit obligations
Less: Dividends [refer (15(a)]
Closing balance
Exchange reserve on consolidation
Balance as per last financial statements
Add: Effect of foreign exchange rate variations during the year
Closing balance
Treasury Shares
Balance as per last financial statements
Less: Equity shares purchased by Subex Employee Welfare and ESOP Benefit Trust
Add: On account of exercise of share options
Closing Balance
Summary of other equity:
Securities premium
Securities premium is used to record the premium on issue of shares and profit and loss on exercise of stock
options held as treasury shares (refer note 33). The reserve shall be utilised in accordance with the provisions of
section 52 of the Companies Act, 2013.
General reserve
This represents appropriation of profit by the Company. Also, the amounts recorded in share options outstanding
account are transferred to general reserve on account of lapse of vested stock options.
Employee stock options reserve
The employee stock option reserve is used to record the value of equity-settled share based payment
transactions with employees. The amounts recorded in this account are transferred to reserves upon exercise
of stock options by employees.
Surplus/ (deficit) in the consolidated statement of profit and loss
This represents surplus/ (deficit) arising from operations of the Group.
Exchange reserve on consolidation
The exchange differences arising on translation of financial statements of foreign operations with functional
currency other than Indian rupees is recognised in other comprehensive income and is presented within equity
in the foreign currency translation reserve.
Treasury Shares
This represents own equity shares that are acquired from open market for issuance to employees under ESOP
scheme.
Total other equity
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
(19,828)
5,172
38,401
-
(12)
(2,746)
20,987
(12,206)
636
(11,570)
(1,233)
(22)
134
(1,121)
7,563
(26,915)
-
(442)
(34)
-
(19,828)
(12,211)
5
(12,206)
(645)
(611)
23
(1,233)
(` in Lakhs)
As at
March 31, 2021
As at
March 31, 2020
16,444
26,712
1,783
1,780
232
114
20,987
(19,828)
(11,570)
(12,206)
(1,121)
(1,233)
26,755
(4,661)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
185
15(a) Distributions made and proposed
During the year ended March 31, 2021, the Board of Directors at its meeting held on February 01, 2021 had declared an interim dividend
of ` 0.50/- (10 %) per equity share on face value of ` 5/- each for the financial year 2020-2021. The interim dividend was paid during the
year that resulted in cash outflow of ` 2,746 Lakhs.
The Board of Directors has also recommended a final dividend of ` 0.25/-(5%) per equity share on face value of ` 5/- each for the financial
year 2020-2021. This payment is subject to the approval of shareholders at the Annual General Meeting of the Company and if approved,
would result in a cash outflow of approximately ` 1,373 Lakhs.
With effect from 1 April 2020, the Dividend Distribution Tax (‘DDT’) payable by the company under section 115O of Income Tax Act was
abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the
recipient.
16. Trade payables
Carried at amortized cost
Current
Trade payables
- total outstanding dues of micro enterprises and small enterprises*
- total outstanding dues of creditors other than micro enterprises and small enterprises
*Payable to micro enterprises and small enterprises
Description
a)
b)
c)
the principal amount remaining unpaid to any supplier as at the end of accounting year;
interest due thereon remaining unpaid to any supplier as at the end of accounting year;
the amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium
Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond
the appointed day during each accounting year;
d)
the amount of interest due and payable for the period of delay in making payment (which have been paid
but beyond the appointed day during the year) but without adding the interest specified under the Micro,
Small and Medium Enterprises Development Act, 2006;
e)
f)
the amount of interest accrued and remaining unpaid at the end of each accounting year; and
the amount of further interest remaining due and payable even in the succeeding years, until such date
when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance
of a deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development
Act, 2006.
Terms and conditions of the above financial liabilities:
- Trade payables are non-interest bearing and are normally settled on 30 - 45 days terms.
- For explanations on the Group’s liquidity risk management, refer note 38.
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
66
1,245
1,311
41
1,605
1,646
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
66
-
-
-
-
-
41
-
-
-
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
186
17. Other current financial liabilities
Carried at amortized cost
Current
Employee related liabilities
Interest accrued but not due on borrowings
Capital creditors
Unpaid Dividend^
^ Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off.
18. Other current liabilities
Unearned revenue
Statutory dues
19. Provisions
Non-current
Provisions for employee benefits
Gratuity [refer note 34(b)]
Current
Provisions for employee benefits
Gratuity [refer note 34(b)]
Leave benefits
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,815
5
225
-
3,045
2,210
-
2
-
2,212
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,182
753
2,935
1,858
484
2,342
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
275
275
127
664
791
355
355
111
538
649
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
187
20. Deferred tax liabilities (net)*
Non-current
Deferred tax liabilities
Tax impact of depreciation arising from intangible assets pursuant to restructuring
Deferred tax assets
Depreciation and amortization expense: Tax impact of difference between tax depreciation and
depreciation and amortization expense
Provision for employee benefits and others
Losses available for offsetting against future taxable profits
*Also, refer note 21.
21. Income tax liabilities (net)
Provision for tax [net of advance tax ` 87 Lakhs (March 31, 2020: ` 19 Lakhs)]
Provision for foreign taxes
Provision for litigation [net of tax deducted at source ` 62 Lakhs (March 31, 2020: ` 62 Lakhs)]*
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
A
B
(A-B)
7,058
7,058
13
756
-
769
6,289
5,861
5,861
32
899
1,156
2,087
3,774
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
91
333
162
586
36
516
162
714
*Provision for litigation consists of matters which are sub-judice. There is no movement in the provision during the current and previous year, refer note 32(i) for
further details.
Income tax expense in the consolidated statement of profit and loss consist of the following:
(` in Lakhs)
Tax expense:
Current tax charge
Provision for MAT credit
Provision - foreign withholding taxes(net)*
Deferred tax charge (net)**
Total tax expense
Notes:
As at
As at
March 31, 2021
March 31, 2020
696
-
399
2,670
3,765
117
425
754
1,849
3,145
*Represents reversal/provision in respect of foreign withholding taxes deducted/ deductible by the overseas customers of the Group. Considering the expected
utilisation of foreign withholding taxes, provision of ` 723 Lakhs (including provision of ` 279 Lakhs as at April 01, 2020) made during the earlier quarters, has been
reversed during the year ended March 31, 2021.
** Deferred tax charge, comprises of deferred tax liability arising on account of tax benefits from amortization 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 restructuring. The
liability for the previous year ended March 31, 2020 in respect of tax benefits from amortization of intangibles is net of provision no longer considered necessary
amounting to ` 1,014 Lakhs considering the favourable assessment order in respect of Assessment Year 2016-17 with respect to foreign tax credit allowance.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
188
21. Income tax liabilities (net) (contd.)
Reconciliation of tax to the amount computed by applying the statutory income tax rate to the income before tax is summarized below:
(` in Lakhs)
Profit/ (loss) before tax expense
Applicable tax rates in India
Computed tax charge (A)
Components of tax expense:
Provision for foreign withholding taxes (net)
Deferred tax on FTC
Tax effect of differential overseas tax rates
Impact of disallowable income/expense
Provision for MAT credit
Others
Total adjustments (B)
Total tax expense (A+B)
Deferred tax relates to the following:
Year ended
Year ended
March 31, 2021
March 31, 2020
8,937
34.94%
3,123
399
-
88
-
-
155
642
3,765
(23,770)
34.94%
(8,306)
754
(1,014)
(11)
10,998
425
299
11,451
3,145
(` in Lakhs)
Particulars
Consolidated Balance Sheet
Consolidated Statement of profit and loss
Depreciation and amortization expense: Tax impact of
difference between tax depreciation and depreciation and
amortization expense
Tax impact of depreciation arising from intangible assets
pursuant to restructuring
Losses available for offsetting against future taxable profits
Provision for employee benefits and others*
Minimum alternative tax ('MAT') credit entitlement
Exchange differences
Total
As at
As at
Year ended
Year ended
March 31, 2021
March 31, 2020
March 31, 2021
March 31, 2020
(20)
(37)
18
(3)
7,058
-
(874)
-
-
6,164
5,861
(1,340)
(972)
-
-
3,512
1,196
1,340
98
-
18
2,670
1,206
652
(6)
425
-
2,274
*Includes ` 64 Lakhs in respect of adoption of Ind AS 116 “Leases” being cumulative adjustment to retained earnings during the previous year ended March 31,
2020.
22. Revenue from operations*
Sale of products
Sale of services
Other operating income
Disaggregation of revenue:
Revenue by offering
Sale of license
Implementation and customisation
Managed services
Support services
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
3,873
33,128
202
37,203
3,873
11,096
10,739
11,293
3,274
33,224
-
36,498
3,274
10,066
11,412
10,753
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
22. Revenue from operations* (contd.)
Others**
Revenue by contract type
Fixed price contract
Time and Material Contract
189
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
-
37,001
14,442
22,559
37,001
993
36,498
14,655
21,843
36,498
*During the year ended March 31, 2021, the Group recognized revenue of ` 2,976 Lakhs arising from opening unearned revenue, gross of trade receivables of
` 3,565 Lakhs, as of April 01, 2020 (March 31, 2020: ` 2,642 lakhs arising out of opening unearned revenue, gross of receivables of ` 2,852 Lakhs as of
April 01, 2019).
**Represents revenue from sale of hardware amounting to ` 993 Lakhs during the previous year ended March 31, 2020.
Refer note 30 for disaggregation of revenue by geographical segment.
Remaining performance obligations
The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2021, other than those contracts
wherein invoicing is on time and material basis is ` 10,461 Lakhs (March 31, 2020 : ` 6,939 Lakhs). Out of the total remaining performance
obligation other than contracts where invoicing is on time and material basis, the Group expects to recognize revenue of around 75% within
the next one year and the remaining thereafter. This includes contracts that can be terminated for convenience without a substantive penalty
since, based on current assessment, the occurrence of the same is expected to be remote.
23. Other income
Insurance claim
Income from Government incentive schemes
Interest income on:
Security deposits
Bank deposits
Miscellaneous income
Net gain on disposal of property, plant and equipment
24. Employee benefits expense
Salaries and wages*
Contribution to provident and other funds
Employee share based payments
Gratuity expense [refer note 34 (b)]
Staff welfare expenses
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
-
79
31
343
17
4
474
155
213
50
106
39
-
563
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
17,784
1,129
147
101
559
15,606
1,099
101
134
514
19,720
17,454
* Net of reversal of provision no longer required, in respect of employee incentives amounting to ` 333 Lakhs (March 31, 2020: ` 692 Lakhs).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
190
25. Finance cost
Interest
Interest expense on Lease liability
Other borrowings
Other finance charges
Interest others
26. Depreciation and amortization expense
Depreciation of property, plant and equipment
Depreciation on right-of-use assets
Amortization of intangible assets
27. Other expenses
Cost of hardware, software and support charges
Sub-contract charges
Rent
Power and fuel
Repairs and maintenance
Building
Others
Insurance
Communication costs
Printing and stationery
Travelling and conveyance
Rates and taxes
Advertisement and business promotion
Consultancy charges
Payments to auditors [refer note 27(i)]
Sales commission
Commission to directors
Allowance for expected credit loss (net of reversal)
Directors' sitting fees (refer note 31)
Bank Charges
Miscellaneous expenses
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
269
5
20
2
296
452
-
25
-
477
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
347
1,028
3
1,378
387
1,116
5
1,508
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
414
2,672
364
142
92
657
103
225
11
296
169
125
812
160
373
48
(153)
70
58
6
6,644
1,019
2,262
371
214
131
747
95
240
28
2,701
145
595
917
168
437
-
289
54
87
13
10,513
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
191
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
87
3
7
3
100
59
1
60
160
91
3
11
6
111
56
1
57
168
27(i). Payments to auditors (excluding goods and services tax):
(a) Statutory auditors
As auditor
Audit fee
Tax audit fee
In other capacity
Other services (certification services)
Reimbursement of expenses
(b) Other auditors for the subsidiaries
As auditor
Audit fee
In other capacity
Reimbursement of expenses
28. Leases
During the year ended March 31, 2021, the Company had decided to shift from its earlier corporate office to a new premises in Bengaluru,
India. Consequently, on account of the termination of lease agreement and in accordance with Ind AS 116 – ‘Lease’, the Company had written-
off the amortized value of existing right-of-use asset of ` 2,972 Lakhs and Lease liability of ` 3,414 Lakhs determined till the completion of
notice period and vacation of existing premises, and has recognized a net gain of ` 554 Lakhs as Exceptional Item.
On account of entering into the new lease agreement, the Company recognised a right-of-use asset of ` 1,514 Lakhs and lease liability of
` 1,452 Lakhs. The weighted average incremental borrowing rate of 6.82% has been applied to lease liabilities recognised in the balance sheet
at the date of commencement of the leases.
On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-to-use
asset, and finance cost for interest accrued on lease liability.
The details of the right-of-use asset held by the Group is as follows:
Gross Carrying Value
As at April 1, 2019
Additions on account of lease modifications
Disposals during the year
Exchange differences
As at March 31, 2020
Additions during the year
Disposals during the year on termination of lease agreement
Exchange differences
As at March 31, 2021
(` in Lakhs)
Buildings
Total
4,816
707
-
20
5,543
1,514
(4,756)
25
2,326
4,816
707
-
20
5,543
1,514
(4,756)
25
2,326
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
192
28. Leases (contd.)
Depreciation
As at April 1, 2019
Charge for the year
Disposals
Exchange differences
As at March 31, 2020
Charge for the year
Disposals during the year on termination of lease agreement
Exchange differences
As at March 31, 2021
Net block
As at March 31, 2020
As at March 31, 2021
-
1,116
-
3
1,119
1,028
(1784)
1
364
4,424
1,962
-
1,116
-
3
1,119
1,028
(1784)
1
364
4,424
1,962
During the year ended March 31, 2021, the Group has incurred ` 364 Lakhs (March 31, 2020 ` 371 Lakhs) towards expenses relating to short-
term leases and leases of low-value assets.
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Opening
Additions
Interest on lease liabilities
Payments
On account of lease modification
Exchange difference
Closing
Current
Non-current
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
4,867
1,452
269
(1,202)
(3,414)
23
1,995
420
1,575
5,052
701
452
(1,359)
-
21
4,867
1,409
3,458
The following are the amounts recognised in statement of profit and loss:
(` in Lakhs)
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases (included in other expenses)
Gain on termination of lease agreement *
Total amount recognised in statement of profit and loss
Year ended
Year ended
March 31, 2021
March 31, 2020
1,028
269
364
(554)
1,107
1,116
452
371
-
1,939
*Represents gain arising on termination of the lease agreement of existing office premises in India.
During the year ended March 31, 2021, the Group had total cash outflows for leases of ` 1,202 Lakhs (March 31, 2020: ` 1,359 Lakhs). During the year ended the
Group also had non-cash additions to right-of-use assets of ` 1,514 Lakhs (March 31,2020: ` 707 Lakhs) and lease liabilities of ` 1,452 Lakhs (March 31, 2020: ` 701
Lakhs). There are no future cash outflows relating to leases that have not yet commenced.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
193
29. Earnings/ (loss) per share
Basic earnings/ (loss) per share (EPS) amounts are calculated by dividing the profit/ (loss) for the year attributable to equity holders of the parent
by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit/ (loss) attributable to equity holders of the Parent Company by the weighted average
number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion
of all the dilutive potential equity shares into equity shares.
Computation of basic and diluted EPS:
Nominal value per equity share (of ` 5/- each w.e.f September 29, 2020 and ` 10/- upto September 28, 2020)
Profit/(loss) attributable to equity shareholders (` in Lakhs)
Weighted average number of basic equity shares (No. in Lakhs)*
Basic
Diluted
Earnings/(loss) per share (` per share)**
Basic
Diluted
Year ended
Year ended
March 31, 2021
March 31, 2020
5
5,172
5,406
5,513
0.96
0.94
10
(26,915)
5,452
5,452
(4.94)
(4.94)
*The weighted average number of shares takes into account the weighted average effect of changes in treasury shares.
**Employee stock options outstanding as at March 31, 2021 are dilutive (March 31, 2020: anti-dilutive) and accordingly have been considered
for the purpose of computing dilutive EPS.
30. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board
of directors of the Group assesses the financial performance and position of the Group. The Chief Executive Officer has been identified as the
chief operating decision maker.
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.
The Group’s operations spans across the world and are categorized geographically as (a) Americas, (b) EMEA (c) India and (d) APAC and rest
of the World. ‘Americas’ comprises the Group’s operations in North America, South America and Canada. ‘EMEA’ comprises the Group’s
operations in Europe, Middle East and Africa and the Group’s operations in the rest of the world, excluding India are organized under ‘APAC
and the rest of the world’. Customer relationships are driven based on customer domicile.
Segment revenue by geographical location are as follows*:
Region
Americas
EMEA
India
APAC and rest of the world
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
6,615
20,752
1,172
8,664
37,203
7,226
20,224
1,260
7,788
36,498
* Revenues by geographic area are based on the geographical location of the customer.
No single customer represents 10% or more of the Group’s total revenue for the year ended March 31, 2021 (March 31, 2020 : Nil)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 194
Non-current operating assets by geographical location are as follows**:
(` in Lakhs
Region
India
Outside India
Unallocated ***
Total non-current operating assets
As at
As at
March 31, 2021
March 31, 2020
2,391
748
34,409
37,548
4,271
857
34,409
39,537
** Non-current operating assets includes Property, plant and equipment, Right-of-use assets, Other intangible assets and Balance with statutory/ government
authorities and Prepaid expenses.
*** Unallocated represents Goodwill on consolidation. The management is of the view that it is not practically feasible to allocate such goodwill to various regions.
31. Related party transactions
i.
Related parties under Ind AS 24 and Companies Act, 2013
Trust that is consolidated
Subex Employee Welfare and ESOP Benefit Trust
Key management personnel of the Company:
Anil Singhvi
Nisha Dutt
Poornima Kamalaksh Prabhu
George Zacharias
Vinod Kumar Padmanabhan
Shiva Shankar Naga Roddam
Venkatraman G S
G V Krishnakanth
Chairman, Non-Executive & Non-Independent Director (w.e.f June 18, 2020)
Chairman & Independent Director (upto June 17, 2020)
Independent Director
Independent Director
Independent Director (w.e.f. May 13, 2019)
Managing Director & Chief Executive Officer
Designated partner of Subex Assurance LLP
Designated partner of Subex Digital LLP
Whole-time Director & Chief Operating Officer (w.e.f February 7,2020)
Chief Financial Officer & Senior Vice President
Designated partner of Subex Assurance LLP
Designated partner of Subex Digital LLP
Company Secretary & Compliance Officer
ii. Details of transactions with key management personnel during the year ended March 31, 2021:
(` in Lakhs)
Salary and perquisites:*
Vinod Kumar Padmanabhan (includes remuneration from Subex Assurance LLP)**
Venkatraman G S **
G V Krishnakanth **
Shiva Shankar Naga Roddam **
Dividend
Vinod Kumar Padmanabhan
Venkatraman G S
Shiva Shankar Naga Roddam
Director sitting fees
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
Year ended
Year ended
March 31, 2021
March 31, 2020
340
113
46
207
706
2
2
1
5
20
16
19
11
66
332
67
50
16
465
-
-
-
-
19
10
17
4
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
195
31. iii. Details of transactions with key management personnel during the year ended March 31, 2021: (contd.)
Commission payable***
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
Year ended
Year ended
March 31, 2021
March 31, 2020
12
12
12
12
48
-
-
-
-
-
-
* The remuneration to the key managerial personnel does not include the provision/ accruals made on best estimate basis as they are determined for the Group
as a whole.
** During the year ended March 31, 2021, the Company has granted Nil ESOPs (March 31, 2020 : 18,00,000 ESOPs) to certain key management personnel under
ESOP 2018 scheme. Of the aforesaid ESOPs, 5,60,000 options (March 31, 2020 : 4,25,000 ESOPs) has been exercised during the year ended March 31, 2021. Refer
note 33.
*** Commission payable to Independent Directors and Non-Executive Director is subject to the approval of shareholders at the Annual General Meeting of the
Company.
32. Contingent liabilities
Income tax demands [refer note (i)]
Service tax demands [refer note (ii)]
Bank guarantees (furnished to customers)
i.
Income tax
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
6,609
3,687
299
6,619
3,687
256
a) The Company has received assessment orders in respect of each of the financial years 2010-11, 2013-14 and 2014-15, wherein certain
adjustments were made to the taxable income in relation to various matters including adjustments in respect of transfer pricing
under section 92CA of the Income Tax Act, 1961 and disallowances of certain expenditures. These demands are disputed by the
management and the Company has filed appeals against these orders with various appellate authorities. The management, including
its tax experts/ advisors, are of the view that the prices determined by it are at arm’s length, expenditures are deductible based on
outcome of previous litigations, and is confident that its position will likely be upheld on ultimate resolution and will not have material
adverse effect on the Company’s financial position and results of operations. With respect to the demands of Subex Limited, the
Company has paid ` 995 lakhs.
b) One of the subsidiary, Subex Technologies Limited, had received demand orders in relation to disallowance of subcontracting
charges on non-deduction of withholding taxes pertaining to financial year ended March 31, 2008, amounting to ` 3,088 Lakhs
under section 143(3) of Income Tax Act, 1961 and ` 1,214 Lakhs under section 201(1) of Income Tax Act, 1961. In the matter relating
to demand u/s 143(3) of Income Tax Act, 1961, the Company had received a favourable decision from the Honorable Income Tax
Appellate Tribunal in November 2016 wherein refund has been determined. Subsequently, the Department of Income Tax has filed
an appeal in this regard with the Honorable High Court. The matter relating to section 201(1) of Income Tax Act, 1961 is stayed in the
interim by the Honorable High Court pending the hearing in respect of the matter. Based on the opinion received from the external
consultants, the management is of the view that, these expenses are deductible from taxable income, and is confident that the
demands raised by the Assessing Officers are not tenable under law.
ii.
Service tax
The Group has received demand order towards the service tax on import of certain services and equivalent amount of penalties under the
provisions of the Finance Act, 1994 along with the consequential interest during the period April 2006 to July 2009. These demands are
disputed by the management and the Group has filed appeals against these orders with various appellate authorities. The management
is of the view that the service tax is not applicable on those import of services, and is confident that the demands raised by the Assessing
Officers are not tenable under law.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
196
33. Employee stock options plans (‘ESOPs’)
The Group during the year 2005-2006 had established equity settled ESOP schemes of ESOP III. As per the schemes, the Compensation
Committee grants the options to the employees deemed eligible by the Advisory Board constituted for the purpose. The options are granted
at a price, which is not less than 85% of the average market price of the underlying shares based on the quotation on the Stock Exchange
where the highest volume of shares are traded for 15 days prior to the date of grant. The shares granted vest over a period of 1 to 4 years and
can be exercised over a maximum period of 3 years from the date of vesting.
During the year 2018-2019, the Board of Directors and the shareholders of the Company approved “Subex Employees Stock Option Scheme
– 2018” (referred to as the “ESOP Scheme 2018” or “ESOP - V” ) to be administered through Subex Employee Welfare and ESOP Benefit Trust
(referred to as the “ESOP Trust”). The ESOP Trust is authorised to acquire shares of the Company through secondary market for providing such
share-based payments to its employees. The ESOP Trust is consolidated in the standalone financial results of the Company and the shares
reacquired and held by ESOP Trust are treated as treasury shares recognised at cost and deducted from other equity. The ESOP trust held
1,98,71,500 and 2,19,75,000 treasury shares as at March 31, 2021 and March 31, 2020 respectively.
The Nomination and Remuneration Committee of the Group in their meeting held on February 1, 2021 granted 12,40,500
(March 31, 2020: 1,28,00,000) options under approved “Subex Employees Stock Option Scheme – 2018” to the eligible employees. The shares
granted vest over a period of 1 to 2 years and can be exercised over a maximum period of 2 years from the date of vesting.
Employees stock options details as on the balance sheet date are:
Options outstanding at the beginning of the year
ESOP – III
ESOP – V
Exercised during the year
ESOP – III
ESOP – V
Granted during the year
ESOP – III
ESOP – V
Forfeited and expired during the year
ESOP – III
ESOP – V
Options outstanding at the end of the year
ESOP – III
ESOP – V
Options exercisable at the end of the year
ESOP – III
ESOP – V
2020-21
2019-20
Options (no.)
Weighted average
Options (no.)
Weighted average
exercise price per
stock option (`)
exercise price per
stock option (`)
-
2,19,75,000
-
23,53,500
-
-
6.00
-
6.00
-
6,125
1,06,50,000
-
4,25,000
-
12,40,500
18.00
1,28,00,000
-
9,90,500
-
1,98,71,500
-
1,19,24,750
-
6.00
-
6.75
-
6.00
6,125
10,50,000
-
2,19,75,000
-
43,75,000
13.74
6.00
-
6.00
-
6.00
13.74
6.00
-
6.00
-
6.00
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 197
33. Employee stock options plans (‘ESOPs’) (contd.)
Details of weighted average remaining contractual life and range of exercise prices for the options outstanding at the balance sheet
date:
Particulars
ESOP – III
ESOP – V
Weighted average remaining contractual
Range of exercise prices (`)
life(years)*
2020-21
2019-20
2020-21
2019-20
-
2.16
-
2.94
-
6.00-18.00
-
6.00
* considering vesting and exercise period
Fair value methodology
The key assumptions used in Black-Scholes model for calculating fair value of ESOP V during the year is as below:
Particulars
Risk-free interest rate
Expected volatility of share
Expected life(years)
Dividend yield
Exercise Price
Weighted average fair value as on grant date (`)
March 31, 2021
March 31, 2020
6.12%
72.08%
2
1.88%
18.00
12.64
6.70%
41.00%
2
-
6.00
1.23
The expected life of stock options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that
may occur. The expected volatility reflects assumption that the historical volatility over a period similar to the life of the options is indicative of
future trends, which may also not necessarily be the actual outcome.
34. Employee benefit plans
a) Provident fund
The Group makes contributions to Provident Fund, Pension Fund, Employee State Insurance scheme and other funds which are defined
contribution plan for qualifying employees. Under the scheme, the Group is required to contribute a specified percentage of the payroll
costs to fund the benefits. The Group recognized ` 1,110 Lakhs (March 31, 2020: ` 1,055 Lakhs) towards Provident Fund and Pension Fund
contributions (including 401K contribution).
b) Gratuity
The Group offers Gratuity benefits to employees, a defined benefit plan. Gratuity plan is governed by the Payment of Gratuity Act, 1972.
Under gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @15 days of last drawn
salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.
The following tables set out the status of the gratuity plan:
Disclosure as per Ind AS 19
A.
Change in defined benefit obligation
Obligations at beginning of the year
Service cost
Interest cost
Benefits settled
Actuarial loss (through OCI)
Currency translation adjustment
Obligations at end of the year
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
740
101
38
(133)
16
(4)
758
651
134
43
(138)
36
14
740
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
198
34. Employee benefit plans (contd.)
B.
Change in plan assets
Plan assets at beginning of the year, at fair value
Expected return on plan assets
Actuarial gain (through OCI)
Contributions
Benefits settled
Plan assets at the end of the year
Present value of defined benefit obligation at the end of the year
Fair value of plan assets at the end of the year
C.
Net liability recognised in the consolidated balance sheet
D.
Expenses recognised in the consolidated statement of profit and loss:
Service cost
Interest cost (net)
Net gratuity cost
E.
Re-measurement gains/ (losses) in OCI
Actuarial (loss)/ gain due to financial assumption changes
Actuarial (loss)/ gain due to experience adjustments
Actuarial (loss)/ gain - return on plan assets greater than discount rate
Total expenses recognised through OCI
F.
Assumptions
Discount rate
Expected return on plan assets
Salary escalation*
Attrition rate
Retirement age
274
18
4
193
(133)
356
(758)
356
(402)
251
18
2
141
(138)
274
(740)
274
(466)
(` in Lakhs)
Year ended
Year ended
March 31, 2021
March 31, 2020
101
20
121
-
(16)
4
(12)
4.90%
6.41%
5.95%
18.00%
60 years
134
25
159
(16)
(20)
2
(34)
5.20%
7.30%
6.20%
18.00%
60 years
Assumptions regarding future mortality experience are set in accordance with the published statistics by Indian Assured Lives Mortality
(2012-14) [March 31, 2020: Indian Assured Lives Mortality (2012-14)].
*The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant
factors, benefit obligation such as supply and demand in the employment market.
G.
Five years pay-outs
Year 1
Year 2
Year 3
Year 4
Year 5
After 5th Year
(` in Lakhs)
As at
March 31, 2021
As at
March 31, 2020
127
109
98
91
82
498
111
106
99
89
80
499
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
34. Employee benefit plans (contd.)
H. Contribution likely to be made for the next one year
I.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Investment with insurer
J.
Sensitivity analysis
199
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
127
111
100%
100%
(` in Lakhs)
Particulars
Year ended March 31, 2021
Year ended March 31, 2020
Effect of change in discount rate
0.5% increase
0.5% decrease
0.5% increase
0.5% decrease
Impact on defined benefit obligation increase/ (decrease)
(16)
17
(17)
17
Effect of change in salary
1% increase
1% decrease
1% increase
1% decrease
Impact on defined benefit obligation increase/ (decrease)
32
(31)
32
(30)
Effect of change in withdrawal assumption
5% increase
5% decrease
5% increase
5% decrease
Impact on defined benefit obligation increase/ (decrease)
(20)
25
(19)
24
K.
The average duration of the defined benefit plan obligation at the end of the reporting period of gratuity is 6 years (March 31, 2020: 6 years).
35. Additional information pursuant to para 2 of general instructions for the preparation of consolidated
financial statements:
Contribution of net assets/ (liability) in the consolidated financial statements:
As at and for the year ended March 31, 2021
(` in Lakhs)
Name of the entity
Net Assets i.e., total assets
Share in profit or loss
Share in other
Share in total
minus total liabilities
comprehensive income
comprehensive income
As % of
Amount
As % of
Amount
As % of
Amount
As % of
Amount
Consolidated
net assets
Consolidated
profit or (loss)
consolidated
consolidated
other
total
comprehensive
comprehensive
income
income
47% 50,166
34%
2,622
-
-
31%
2,622
Parent
Subex Limited
Indian subsidiaries
Subex Technologies Limited
-
15
-
(4)
Subex Assurance LLP
Subex Digital LLP
Foreign subsidiaries
Subex (Asia Pacific) Pte Ltd.
Subex (UK) Ltd.
Subex Americas Inc.
44% 48,634
62%
4,836
(4%)
(4,528)
(26%)
(2,010)
-
8%
5%
493
8,146
5,760
(4%)
(347)
29%
2,283
-
(10)
-
(2%)
1%
4%
85%
2%
-
(15)
8
26
535
12
-
(4)
57%
4,821
(24%)
(2,002)
(4%)
(321)
34%
2,818
-
2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
200
35. Additional information pursuant to para 2 of general instructions for the preparation of consolidated
financial statements:
Contribution of net assets/ (liability) in the consolidated financial statements: (Cont.)
Name of the entity
Net Assets i.e., total assets
Share in profit or loss
Share in other
Share in total
minus total liabilities
comprehensive income
comprehensive income
As % of
Amount
As % of
Amount
As % of
Amount
As % of
Amount
Consolidated
net assets
Consolidated
profit or (loss)
consolidated
consolidated
other
total
comprehensive
comprehensive
income
income
Subex Inc.
Subex Middle East
Subex Bangladesh Pvt.Ltd
(2%)
(1,628)
-
-
69
(45)
7%
(1%)
(1%)
533
(67)
(57)
11%
(1%)
-
66
(8)
-
7%
(1%)
(1%)
599
(75)
(57)
Total
100% 1,07,082
100%
7,779
100%
624
100%
8,403
Adjustments arising out of consolidation
Total
(52,227)
54,855
(2,607)
5,172
-
624
As at and for the year ended March 31, 2020
(2,607)
5,796
(` in Lakhs)
Name of the entity
Net Assets i.e., total assets
minus total liabilities
Share in profit or loss
Share in other
comprehensive income
Share in total
comprehensive income
Parent
Subex Limited
Indian subsidiaries
Subex Technologies Limited
Subex Assurance LLP
Subex Digital LLP
Foreign subsidiaries
Subex (Asia Pacific) Pte Ltd.
Subex (UK) Ltd.
Subex Americas Inc.
Subex Inc.
Subex Middle East
Subex Bangladesh Pvt.Ltd
Total
Adjustments arising out of consolidation
Total
Amount
As % of
Consolidated
net assets
Amount
As % of
Consolidated
profit or (loss)
Amount
As % of
consolidated
other
comprehensive
income
As % of
consolidated
total
comprehensive
income
Amount
48% 50,024
63% (20,588)
72%
(21)
63% (20,609)
-
16
45% 46,413
(2%)
(2,527)
-
(4)
40% (12,974)
6% (1,999)
-
(24%)
14%
-
7
(4)
-
(4)
40%
(12,967)
6%
(2,003)
1%
5%
6%
815
5,313
5,758
(2%)
(2,227)
-
-
144
12
-
(29)
(4%)
(2%)
(3%)
-
-
1,301
664
1,060
15
11
100% 1,03,741
100% (32,543)
(52,202)
51,539
5,628
(26,915)
(103%)
(786%)
203%
762%
(34%)
(3%)
100%
30
228
(59)
(221)
10
1
(29)
-
(29)
-
(5%)
(2%)
(3%)
-
-
1
1,529
605
839
25
12
100%
(32,572)
5,628
(26,944)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
201
36. Capital management
The Group’s objective for capital management is to maximize shareholder value, safeguard business continuity and support the growth of the
Group. The Group determines the capital requirement based on annual operating plans and long-term and other strategic investment plans.
The funding requirements are met through equity and operating cash flows generated. The Group does not have any long term debts hence
there is no capital gearing ratio. Surplus fund has been invested into risk free highly liquid financial instruments.
37. Fair value hierarchy
The carrying value of financial instruments by categories is as follows:
Particulars
Financial assets measured at amortized cost
Interest accrued but not due on bank deposits*
Trade receivables*
Unbilled revenue*
Security deposits^
Loans and advances to employees*
Financial assets measured at fair value through profit or loss
Foreign currency forward contract#
Cash and cash equivalents and other balances with banks
Balance with banks
Earmarked balances with banks being unpaid dividend accounts**
Margin money deposits
Financial liabilities measured at amortized cost
Employee related liabilities*
Trade payables*
Capital creditors*
Borrowings*
Interest accrued but not due on borrowings*
Lease liabilities^
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
40
9,215
6,379
301
219
16,154
9
9
14,294
-
418
14,712
2,815
1,311
225
584
5
1,995
6,935
6
9,206
5,258
533
104
15,107
-
-
9,043
-
256
9,299
2,210
1,646
2
-
-
4,867
8,725
* The carrying value of these accounts are considered to be the same as their fair value, due to their short term nature. Accordingly, these are classified as level 3
of fair value hierarchy.
^ The fair value of these accounts was calculated based on cash flow discounted using a current lending/ borrowing rate, they are classified as level 3 fair value
hierarchy due to inclusion of unobservable inputs including counterparty credit risk.
# These accounts are considered to be highly liquid / liquid and the carrying amount of these are considered to be the same as their fair value.
**Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off.
38. Financial risk management:
The Group’s activities expose it to the following risks:
i. Credit risk
ii.
Interest rate risk
iii. Liquidity risk
iv. Market risk
i. Credit risk
Credit Risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract leading to a
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
202
38. Financial risk management (contd.)
financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables and unbilled revenue) and from
its financing activities including deposits with banks, foreign exchange transactions and other financial instruments.
a.
Trade receivables
Credit risk is managed by each business unit as per the Group’s established policy, procedures and control relating to customer credit risk
management. Outstanding customer receivables are regularly monitored.
The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor
receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of financial assets. The Group does not hold collateral as security.
b. Credit risk exposure
The Group’s credit period generally ranges from 30 - 180 days. The credit risk exposure of the Group is as below:
Particulars
Trade receivables
Unbilled revenue
Total
The movement in credit loss allowance on customer balance is as follows :
Opening balance
Add/ (less): (Reversal)/ provided during the year
Less: Bad-debts written-off
Add: Translation difference
Closing balance
c. Other financial assets and deposits with banks
(` in Lakhs)
As at
March 31, 2021
As at
March 31, 2020
9,215
6,379
15,594
9,206
5,258
14,464
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
2,178
(153)
-
63
2,088
1,789
289
(25)
125
2,178
Credit risk is limited, as the Group generally invests in deposits with banks with high credit ratings assigned by international and domestic
credit rating agencies. Counterparty credit limits are reviewed by the Group periodically and the limits are set to minimise the concentration
of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
ii.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest
rates. The Group risk of changes in interest rates relates primarily to the Group’s debt obligations with floating interest rates for the period
the group was holding the debts.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant.
The impact on entity’s profit before tax due to change in the interest rate/ fair value of financial liabilities are as disclosed below:
Particulars
Year ended March 31, 2021
Year ended March 31, 2020
(` in Lakhs)
Borrowings
Change in interest
Effect of profit before
rate
exceptional items and
tax expense
+1%
-1%
6
(5)
Change in interest
rate
Effect of profit before
exceptional items and
tax expense
-
-
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
203
38. Financial risk management (contd.)
iii. Liquidity risk
The Group’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Group
believes that the cash and cash equivalents is sufficient to meet its current requirements. Accordingly no liquidity risk is perceived.
The break-up of cash and cash equivalents and deposits is as below:
Particulars
Cash and cash equivalents
Other balances with banks
(` in Lakhs)
As at
As at
March 31, 2021
March 31, 2020
14,294
418
14,712
9,043
256
9,299
The table below summarises the maturity profile of the Group’s financial liabilities at the reporting date. The amounts are based on
contractual undiscounted payments.
Particulars
As at March 31, 2021
Trade payables
Lease Liability*
Borrowings
Other financial liabilities
As at March 31, 2020
Trade payables
Lease Liability*
Other financial liabilities
On demand
0-180 Days
181-365 Days More than 365 Days
Total
(` in Lakhs)
1
-
-
-
1
92
-
-
92
1,301
258
584
3,045
5,188
1,554
705
2,212
4,471
9
391
-
-
400
-
705
-
705
-
1,830
-
-
1,830
-
4,334
-
4,334
1,311
2,479
584
3,045
7,419
1,646
5,744
2,212
9,602
*Includes future cash outflow toward estimated interest on lease liabilities
iv. Market risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. The Group’s exchange risk arises from its foreign operations, foreign currency revenues and expenses.
The Group has exposures to United States Dollars (‘USD’), Great Britain Pound (‘GBP’), Euro (‘EUR’) and other currencies. The Group’s
exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities and financing activities.
Below is the summary of foreign currency exposure of Group’s financial assets and liabilities.
As at March 31, 2021
Particulars
Financial assets
Trade receivables
Cash and cash equivalents and
other bank balances
Denominated currency
USD
4,410
1,427
GBP
-
363
(` in Lakhs)
Total
EUR
Others
1,916
340
975
1,503
7,301
3,633
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
204
38. Financial risk management (contd.)
Other financial assets
Total financial assets
Financial liabilities
Other financial liabilities
Total financial liabilities
Net financial assets/ (liabilities)
As at March 31, 2020
Particulars
Financial assets
Trade receivables
Cash and cash equivalents and
other bank balances
Other financial assets
Total financial assets
Financial liabilities
Other financial liabilities
Total financial liabilities
Net financial assets/ (liabilities)
3,860
9,697
505
505
9,192
6
369
-
-
369
919
3,175
292
292
2,883
951
3,429
29
29
3,400
Denominated currency
USD
GBP
EUR
Others
5,682
531
2,776
8,989
900
900
8,089
-
-
-
-
-
-
-
1,322
281
1,125
2,728
132
132
2,596
770
382
412
1,564
19
19
1,545
5,735
16,669
826
826
15,843
(` in Lakhs)
Total
7,774
1,194
4,313
13,281
1,051
1,051
12,230
The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in
exchange rates on foreign currency exposures. The counter party for these transactions are banks. These derivative financial instruments
are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in
the market place.
Forward contracts outstanding are as below:
Currency
USD
GBP
Sensitivity analysis
Foreign currency amount
Amount in ` lakhs
As at March 31, 2021 As at March 31, 2020
As at March 31, 2021
As at March 31, 2020
6,50,000
4,50,000
-
-
475
453
-
-
Every 1% appreciation or depreciation in the respective foreign currencies against functional currency of the each of the group entities
would cause the profit before exceptional items in proportion to revenue to increase or decrease respectively by 0.43% (March 31, 2020:
0.34%).
39. As per section 135 of The Company’s Act, 2013, a Corporate Social Responsibility (‘CSR’) committee has been formed by Subex Limited.
The primary function of the Committee is to assist the Board of Directors in formulating the CSR policy and review the implementation
and progress of the same from time to time. The CSR Policy focuses on creating opportunities for the disadvantaged with emphasis on
persons with disabilities. During the year ended March 31, 2021, considering losses incurred in past years, the Company does not have
the obligation to incur expenses in relation to CSR.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21 205
40. The Group Companies has entered into ‘International transactions’ with ‘Associated Enterprises’ which are subject to Transfer Pricing
regulations in India, as well as in the other geographies. The Group is in the process of carrying out transfer pricing study for the year
ended March 31, 2021 in this regard, to comply with the requirements of the Income Tax Act, 1961 and other applicable laws in other
countries. The Management of the Group, is of the opinion that such transactions with Associated Enterprises are at arm’s length and
hence in compliance with the aforesaid legislation. Consequently, this will not have any impact on the consolidated financial statements,
particularly on account of tax expense and that of provision for taxation.
41. The US Federal government in the wake of COVID 19 pandemic has provided support to business through Paycheck Protection Program
(PPP). Subex Inc. have obtained a benefit under this scheme for ` 600 Lakhs during May 2020. This loan is eligible for forgiveness on
fulfilment of certain conditions. Subex Inc. has applied for forgiveness and application is pending with Small Business Administration,
United States government agency for review and approval. Pending, approval of the forgiveness application, the benefit is reflected as
borrowings and in the event the application is not approved, the benefit needs to be refunded along with interest @ 1% p.a.
42. During the previous year ended March 31, 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.
43. 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 Ind AS financial
statements, 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
its assets. The impact of the global health pandemic may be different from that estimated as at the date of approval of these consolidated
Ind AS financial statements and the Group will continue to closely monitor any material changes to its assessment of economic impact
of COVID- 19 pandemic.
44. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received
Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will
come into effect has not been notified and the final rules/interpretation have not yet been issued. The Group will assess the impact of the
Code when it comes into effect and will record any related impact in the period the Code becomes effective.
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place: Bengaluru, India
Date: May 17, 2021
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Venkatraman G S
Chief Financial Officer
Place: Bengaluru, India
Date: May 17, 2021
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Mumbai, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended March 31, 2021Subex Annual Report 2020-21
206
“SHAREHOLDERS’ INFORMATION”
REGISTERED OFFICE
The Registered office of the Company is at Pritech Park – SEZ,
Block-09, 4th Floor, B Wing, Survey No. 51 to 64/4,
Outer Ring Road, Bellandur Village, Varthur Hobli,
Bengaluru, Karnataka-560 103.
DATE AND VENUE OF THE 27TH ANNUAL GENERAL MEETING (AGM)
Date : Friday, July 09, 2021
Venue : Video Conference (“VC”)/Other Audio Visual Means (“OAVM”)
Time : 11:00 A.M. (IST)
E-voting date: Tuesday, July 06, 2021, 9:00 A.M. (IST) to Thursday, July 08, 2021, 5:00 P.M. (IST)
DATES OF BOOK CLOSURE
From July 03, 2021 to July 09, 2021 (both days inclusive)
BOARD MEETINGS & FINANCIAL CALENDAR
Calendar of Board Meetings to adopt the accounts
Financial year 2020-21
– April 01, 2021 to March 31, 2022
For quarter ending June 30, 2021
– 2nd week of August 2021
For quarter ending September 30, 2021
– 2nd week of November 2021
For quarter ending December 31, 2021
– 2nd week of February 2022
For the year ending March 31, 2022
– 4th week of May 2022
DIVIDEND
The Board at its meeting held on February 01, 2021 declared an interim dividend of ` 0.50 per share (10% per share of Face value of ` 5)
for the financial year 2020-21.
The Board at its meeting held on May 17, 2021, recommended a final dividend of ` 0.25 (5%) per share, subject to the approval of the
members at the 27th Annual General Meeting to be held on July 09, 2021.
The Company has uploaded the names of the Members and the details of the unpaid/unclaimed dividend on its website at https://www.
subex.com/investors/dividend/. Members are requested to inspect the same and find out whether their dividend is outstanding.
LISTING ON STOCK EXCHANGES
Equity Shares of the Company are quoted on the National Stock Exchange of India Limited (NSE) since September 05, 2003 and on the
BSE Limited (BSE) since July 31, 2000. The Company has paid listing fees for the year 2020-21 in accordance with the provisions of the
SEBI (LODR) Regulations, 2015
The 2,43,207 Global Depositary Receipts (GDRs) of the Company are listed on the Professional Securities Market of London Stock
Exchange since March 09, 2007.
The stock codes of the Company at the Stock Exchanges are as follows:
Name and address of the Stock Exchange
Stock code
National Stock Exchange of India Limited, Exchange Plaza, 5th Floor, Plot No. C/1, G Block Bandra
SUBEXLTD
Kurla Complex, Bandra (East) Mumbai- 400 051
BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001
London Stock Exchange, 10 Paternoster Square London EC4M 7LS
532348
SUBX
The International Securities Identification Number (ISIN) for the Company’s Equity Shares in dematerialized form is INE754A01055.
CUSTODIAL FEE
Pursuant to the Securities and Exchange Board of India (SEBI) Circular No. MRD/DoP/SE/Dep/Cir-4/2005 dated January 28, 2005 issuer
companies are required to pay custodial fees to the depositories with effect from April 01, 2005. The said circular has been partially
Subex Annual Report 2020-21
207
modified vide SEBI’s Circular No. MRD/DoP/SE/Dep/Cir-2/2009 dated February 10, 2009. The Company, in accordance with the aforesaid
circulars, paid custodial fees for the year 2020-21 to NSDL and CDSL on the basis of the number of beneficial accounts maintained by
them as on March 31, 2021.
STOCK MARKET DATA RELATING TO EQUITY SHARES LISTED IN INDIA
Monthly high and low quotes during each month in the financial year 2020-21 as well as the volume of shares traded on NSE and BSE
are as under:
Month
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
High Price
Low Price Number of shares traded (in lakhs)
High Price
Low Price
Number of shares traded
NSE
BSE
4.15
7.00
9.75
9.35
12.70
12.85
17.15
23.50
35.00
29.85
31.30
41.65
3.00
3.55
6.65
7.40
9.10
9.30
11.65
15.35
23.50
23.20
24.50
27.25
93.22
53.99
453.77
162.87
452.11
353.40
1062.27
731.70
2859.81
994.31
1151.37
2638.42
4.16
7.52
9.82
9.30
12.70
13.00
17.19
23.50
35.00
29.85
31.20
42.00
3.05
3.59
7.01
7.37
8.75
9.28
11.70
15.30
23.45
23.20
24.50
27.30
8,23,039
1,63,85,895
3,28,54,745
77,28,594
1,90,39,727
1,93,42,339
1,83,02,157
2,63,31,260
7,65,89,042
2,54,67,757
2,08,05,328
4,76,52,464
SUBEX LIMITED SHARE PRICE VERSUS NSE S&P CNX NIFTY AND SENSEX
Month
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
BSE Sensex
33,717.62
32,424.10
34,915.80
37,606.89
38,628.29
38,067.93
39,614.07
44,149.72
47,751.33
46,285.77
49,099.99
49,509.15
Nifty 50
9,859.90
9,580.30
10,471.00
11,300.55
11,647.60
11,604.55
11,971.05
13,055.15
13,981.95
14,644.70
15,314.70
15,245.60
Subex Annual Report 2020-21 208
Subex Annual Report 2020-21 209
CREDIT RATING
The India Ratings and Research organisation (Ind-Ra) in their letter dated September 04, 2020 confirmed that the company’s outlook has been
revised to Positive from Stable and the credit rating remained unchanged at ‘IND A-’.
Rating History is as mentioned below:
Instrument Type
Current Rating/Outlook
Historical Rating Outlook
Issuer Rating
Long-Term
-
IND A-/Positive
IND A-/Stable
IND A-/Stable
Rating Type
Rated Limits (million)
Rating
07 August 2019
26 July 2018
20 July 2017
IND A-/Stable
SHAREHOLDING PATTERN
(As per records of the RTA)
Distribution of Shareholding:
No. of Equity shares held
As on March 31, 2021
As on March 31, 2020
No. of share
% to total share holders
No. of share
% to total share holders
1 – 5000
5001 – 10000
10001 – 20000
20001 –30000
30001 – 40000
40001 – 50000
50001 – 100000
100001 and above
TOTAL
holders
1,26,544
12,637
8,161
4,565
1,548
2,093
2,514
3,105
1,61,167
78.52
7.84
5.06
2.83
0.96
1.30
1.56
1.93
100
holders
51,234
16,528
10,926
4,787
2,324
3,468
4,577
5,164
99,008
51.75
16.69
11.04
4.83
2.35
3.50
4.62
5.22
100
Categories of Shareholders:
Categories of Shareholders
No. of Shares of face value of ` 5 each
% of holding
Promoter & Promoter group
Nil
Public
Non-Promoter, Non-Public *
TOTAL
54,18,88,228
2,01,14,707
56,20,02,935
*Includes shares held by the Subex Employee Welfare and ESOP Benefit Trust
R & T AGENTS AND SHARE TRANSFER SYSTEM
Nil
96.46
3.54
100
Kfin Technologies Private Limited as Registrar and Transfer Agent of the Company having its registered office at Karvy Selenium, Tower B,
Plot No- 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500 032 with effect from April 15, 2020. However due
to the current pandemic situation of COVID-19, the change of RTA was deferred to May 31, 2020. Further since the lockdown was relaxed
conditionally and transfer of electronic and physical data from Canbank Computer Services Limited (previous Registrar and Transfer
Agents) to Kfin Technologies Private Limited was pending, the Board was requested to extend the date of change of Registrar & Transfer
Agents of the Company to July 31, 2020. The change in RTA took effect from July 24, 2020.
A.
Process for Transfer of Shares:
With a view to expedite the transfer process in the interest of investors, SEBI vide its Circular No. CIR/MIRSD/8/2012 dated July 05, 2012
has reduced the timeline for registering the transfer of shares to 15 days with effect from October 01, 2012.
Share transfers would be registered and returned within a period of fifteen days from the date of receipt, if the documents are clear in all
respects. For matters regarding transfer of shares, change of address etc., shareholders are requested to contact M/s. Kfin Technologies
Private Limited, R&T Agent.
Subex Annual Report 2020-21 210
B.
Share transfers and other communication regarding Share certificates, updation of records, email addresses, etc. may be
addressed to:
Kfin Technologies Private Limited ,
Selenium Building, Tower-B,
Plot No- 31 & 32, Financial District,
Nanakramguda, Serilingampally,
Hyderabad, Rangareddi, Telangana - 500 032
Tel No. 1-800-3094-001
Email: einward.ris@kfintech.com
Website: https://www.kfintech.com/
SHARES HELD IN PHYSICAL AND DEMATERIALISED FORM
As on March 31, 2021, 99.99% of the Company’s shares were held in dematerialized form and the rest in physical form.
OUTSTANDING GDRs/ADRs/WARRANTS/CONVERTIBLE INSTRUMENTS AND THEIR IMPACT ON EQUITY
As on March 31, 2021, the outstanding GDRs were 2,43,207. There are no outstanding convertible instruments in the company.
LOCATIONS
-
-
-
-
-
Broomfield, Colorado USA
Harrow, Middlesex, UK
Burlington Square, Singapore
Sharjah Airport International Free Zone, Sharjah, UAE
Dhaka, Bangladesh
LEGAL PROCEEDINGS
There are no legal proceedings against the Company which are material in nature.
NOMINATION
Pursuant to the provisions of Section 72 of the Companies Act, 2013, members may file nomination in respect of their shareholdings. Any
member willing to avail this facility may submit to the Company the prescribed Form SH 13 (in duplicate), if not already filed. Form SH 13 can
be obtained from the R&T Agents of the Company. Members holding shares in electronic form are requested to give the nomination request
to their respective Depository Participants directly.
INVESTOR GRIEVANCES
Details of the investor grievances received from the Registrar and Transfer agent (RTA) for the period from April 01, 2020 to March 31, 2021 are
as stated below. Additionally, the Company has attended to all the investor grievances/correspondence received through email or telephone
on a timely manner.
Nature of complaints (excluding the grievances received through E-mails or telephone)
Received
Cleared
Non-receipt of share certificates/refund orders/call money notice/allotment advice/dividend warrant/ annual report
Letters from NSDL, Banks etc.
Correction/change of bank mandate of refund order/Change of address
Postal returns of cancelled stock invests / refund orders/ share certificates / dividend warrants
Other general query
Total
*Pending complaints were addressed post the end of the financial year.
2
1
1
7
2
2
1
1
4
2
13
10*
Subex Annual Report 2020-21 211
ADDRESS FOR CORRESPONDENCE
For any queries, please write to:
Mr. G V Krishnakanth
Company Secretary & Compliance Officer
Subex Limited, Pritech Park – SEZ, Block-09,
4th Floor, B Wing, Survey No. 51 to 64/4,
Outer Ring Road, Bellandur Village,
Varthur Hobli, Bengaluru, Karnataka-560 103. India
Telephone: +91 80 3745 1377
Email: investorrelations@subex.com
WEBSITE
Company’s website www.subex.com contains comprehensive information about the Company, products, press releases, financials
and investor relations. It serves as a source of information to the shareholders by providing key information like Board of Directors
and the committees, financial results, shareholding pattern, preceding year’s Annual Reports, Annual General Meetings, distribution of
shareholding, dividend etc.
Subex Annual Report 2020-21
India
CIN : L85110KA1994PLC016663
Pritech Park – SEZ
Block -09, 4th Floor, B Wing
Survey No. 51 to 64/4
Outer Ring Road, Bellandur Village
Varthur Hobli
Bangalore, Karnataka – 560 103
Tel No. 080 3745 1377
UK
Subex (UK) Limited
1st Floor, Rama Apartment,
17 St Ann’s Road, Harrow,
Middlesex, HA1 1JU, UK
Middle East
Subex Middle East (FZE)
Executive Desk Q1-04-098/B,
P.O. Box: 513156,
Sharjah Airport International
Free Zone, Sharjah, UAE
USA
Subex Inc.
12303 Airport Way, Bldg. 1,
Suite. 390, Broomfield,
CO 80021,
USA
Singapore
Subex (Asia Pacific)
Pte Limited
175A Bencoolen Street
#08-03 Burlington Square
Singapore - 189650
Canada
Subex Americas Inc.
C/O BDO Canada LLP,
5494, Manotick Main Street
Box. 918, Manotick, Ontario
Canada, K4M1A8
Bangladesh
Subex Bangladesh Private Limited
Wakil Tower, Ta-131 (8th Floor)
Gulshan Badda Link Road,
Gulshan
Dhaka-1212, Bangladesh.
www.subex.com | Regional offices: Dubai, Ipswich