ENRICHING LIVES THROUGH
AI-LED DIGITAL TRUST
Annual Report 2021-2022
Subex Annual Report 2021-22
02
ANNUAL
REPORT 2021-2022
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
03
Overview
04 Strategic Framework
05 Message from the Chairman
07 A Note to Shareholders
09 Quick Facts & Investment Highlights
10
Strategic Report
10 Where We Operate & Our Distinctive Resources
11 Our Business at Glance
12 Products & Services
15 Chief Executive’s Strategic View
periodically make, contain forward-looking statements that
21 Spelling New Growth with Future-ready Platforms
set out anticipated results based on the management’s plans
23 A New Charter of Growth through AI Trust
and assumptions. We have tried, wherever possible, to
26 Awards
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.
27 IDcentral: Enabling Digital Trust through Rich
Identity Analytics Solutions
29 Pushing the Boundaries of Innovation Through
No-code Platforms and AI Trust
31 Navigate Digital Cybersecurity with a Three-point Defense
33 Subex Charitable Trust
34 Financial Highlights
33
Governance
35 Board of Directors
36 Leadership Team
37
59
77
83
98
156
213
Board's Report
Report on Corporate Governance
Business Responsibility Report
Management Discussion and Analysis
Standalone Financial Statements
Consolidated Financial Statements
Shareholders’ Information
CONTENTS 03
Subex Annual Report 2021-22
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ENRICHING LIVES
THROUGH AI-LED
DIGITAL TRUST
Over the last few years, we have witnessed a digital revolution that has
transformed the world at an unprecedented speed. Driven by the pandemic
and a need to innovate how interactions and transactions are conducted,
digital transformation is now in full force. Digitalization and the move to
'online' have penetrated more than just our daily lives but also the way
organizations conduct conduct their day today business.
Today, almost every business has moved to the online realm, and digital
adoption has taken a quantum leap at both an organizational and industry
level. The realization of digital transformation has opened up multiple
possibilities for businesses. However, on the flip side, it has also exposed
businesses to hitherto unforeseen risks. Hence, as the lines between the
physical and digital worlds continue to blur, ensuring trust in every instance
has become paramount.
Today, Digital Trust plays a vital role in the success of businesses within an
economy that has become more reliant on connectivity, data usage, and
technology. Digital Trust is the cornerstone that enables customers and
businesses to interact in a secure and ethical manner for all parties involved.
Ensuring trust in this ever-growing digital landscape will set successful
companies apart from the rest. However, the scope of Digital Trust has
evolved.
With digital transformation comes data explosion and reports indicate that
over the last two years, data volumes have risen at an all-time high. Leveraging
this large volume of data poses significant opportunities for enterprises to
ensure sustainable growth and profitability and gain competitive advantage,
provided they can make sense of this data. This is where Artificial intelligence
becomes mission critical. Enterprise AI has gained immense relevance owing
to the need for businesses to compete better, improve customer experience,
launch new services, and meet rising customer expectations.
Due to this, Digital Trust needs to extend beyond transactions
and interactions into AI products and platforms that can
harness this data in a safe, secure, and ethical manner.
At Subex, this is our vision.
Subex has a legacy of handling data at scale and converting it into
decisions. Being a world leader in helping organizations build Digital Trust,
Subex now leverages its AI-first product suite to better the lives of millions of
people directly or indirectly. This is why, today, Subex is Enriching lives
through AI-led Digital Trust.
Subex Annual Report 2021-22
04
OUR VISION
ENRICHING LIVES THROUGH
AI-LED DIGITAL TRUST
OUR STRATEGY
Expand the core
• Business Assurance
• Fraud Management
• Partner Ecosystem Management
• Network Asset Management
• Capacity Management
• HyperSense
Growth in New Areas
• Sectrio
• IDcentral
• Analytics Center of Trust
STRATEGIC
FRAMEWORK
OUR PURPOSE
TO UNLOCK POSSIBILITIES
Customers
Partners
Subexians
Shareholders
GOALS
VIBRANT SUBEX
REVENUE GROWTH
OUR VALUES
Customer Obsession
Commit and Make it Happen
Create Impact
Be Agile
Win Together
Continuous Learning
05
05
Subex Annual Report 2021-22
Subex Annual Report 2021-22
MESSAGE FROM
THE CHAIRMAN
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Subex Annual Report 2021-22
Subex Annual Report 2021-22
06
06
I am pleased to see
that HyperSense is
receiving strong
market interest and
validation. It has
been mentioned in
leading analyst
reports within the
first year of its
launch.
Dear Shareholders,
Agility as one of the markers of business success, is about adapting to complex circumstances
and staying resilient. Last year, Subex underwent a difficult time and despite a downturn in
performance numbers, the Company with the support of the Board was able to navigate
through challenges and assimilate lessons that has helped it adapt well.
Invigorated by our vision to create 100,000 citizen data scientists in the next few years, Subex
has refreshed its offerings to engage its customers in innovative ways, solve emerging
problems through its products and services for telecom and other industries, and grow its
position as a strong player in the data and analytics space.
A year of transformation
The past year was marked by several transformations for Subex. The Board is happy with the
developments that are steering a new charter of growth for the Company.
One of the key steps this year was to kick-start the transition of Subex from a product and
license-based company to a subscription-based one. It followed closely at the heels of the
HyperSense launch and was a calculated decision. Today’s market is run by the ‘as-a-service’
trend where customers prefer to buy services rather than products. This decision by Subex,
supported by the Board, is spearheading the movement to a SaaS-based business and will
cement Subex’s relevance now and provide a sharp business advantage in the future.
The Company successfully completed the restructuring of Subex Assurance LLP to Subex
Limited and moved its revenue maximization solutions around fraud management and revenue
assurance to the parent company. Again, this is a tactical move to enrich shareholder value.
Financial highlights FY22
The annual revenues stood at INR 3,334 million compared to the previous year's INR 3,720
million. EBITDA margins is at INR 351 million as against INR 985 million in FY21. Profit after tax
was INR 210 million as against INR 517 million in FY21. The financial results, which have been
below our expectations, are not a true reflection of our progress across the last 12 months.
FY22 has been a significant year in terms of evolving our portfolio to align with our growth
aspirations.
Business update – Outlook for FY23
I am pleased to see that HyperSense is receiving strong market interest and validation. It has
been mentioned in leading analyst reports within the first year of its launch. It gives me great
satisfaction to see the benefits of the hard work and efforts of Subexians come to bear.
The Company has also developed a healthy product mix that cater to other industries such as
FinTech and cyber security apart from focusing on its core portfolio in a bid to diversify its
revenue streams. In addition, it is aggressively pursuing its vision of digital trust, and the
prospects are bright. You will find more details in the latter sections of this annual report on
Subex's milestones and growth journey this year.
I wish to thank all the stakeholders that have remained steadfast to the Company's goals. We
look forward to continuing to deliver value to all our shareholders through strategic moves in
the coming year.
Anil Singhvi, Chairman, Non-Executive & Non-Independent Director
07
Subex Annual Report 2021-22
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We closed the year with a
strong contract backlog,
and we have also received
significant traction for
HyperSense AI.
Dear Shareholders,
I hope you are all doing safe and well.
Over the last year, we have seen the world emerge from the effects
of the pandemic. Today, we are beginning to see a semblance of
normalcy as we see a staggered return of economic and social
activities. The ill-effects of the pandemic cannot be overstated, but it
did force organizations, businesses and industries to innovate and
find new ways to approach the norm. We have seen digitalization
take shape faster than ever before. We adopted new ways to
communicate and new approaches to do business. As we come out
of the lockdown and start to return to office, there are best practices
we can now adopt to engage and interact better than ever before.
Having said that, I am excited about travel restrictions being lifted
and the possibility of meeting customers again.
For Subex, the pandemic was a learning opportunity and an exercise
in resilience. It led us to rethink how we engage with customers,
diversify our growth strategy, and relook at our product set. On that
note, I would like to share the progress we have made across the last
year, the key developments, and the outlook for what should be a
very exciting FY23.
Redefining our vision
Nothing in the last decade has catalyzed Digital Transformation in
the way the pandemic did, and it opened up possibilities that
businesses themselves hadn’t foreseen. However, the flip side of this
is the associated risks that businesses weren’t yet prepared to deal
with. All of this meant that businesses needed more ways to build
trust in their ecosystem, in order to sustainably and profitably carry
out business. This has led to the already important concept of Digital
Trust to extend beyond transactions and interactions, to also
permeate into AI products and platforms that handle data.
A NOTE TO SHAREHOLDERS .
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Subex Annual Report 2021-22
08
to the fact that disruption and stability
can happen under the same roof, and
we will continue to work with the same
mindset. Our core areas of business are
now greatly enhanced by HyperSense
allowing us to further strengthen our
market leadership. Under our newer
areas, Sectrio, our security solution,
which was focused on IoT security, has
now evolved to cater to the needs of
Operational Technology (OT) as well.
Last year’s focus in micro-segmenting
our cyber-security offerings is bearing
fruit and we have established
partnerships as part of our
go-to-market strategy, and we continue
to win interest from clients across
maritime, automotive, and O&G
enterprises. Further, IDcentral, with the
addition of key capabilities, has also
attained product-market fit with over 1
million API pulls from its customers. I
believe our strategy is very well
balanced between our core and new
business areas. Our near-term revenue
plan is based on solid execution of core
and new product portfolios.
As we enter FY23, we have a
razor-sharp focus on our vision to
enrich lives with AI-led Digital Trust,
and we are fully geared up to execute
on our strategy. As always, We’re all
grateful for your ongoing support and
and I look forward to sharing our
progress as FY23 unfolds.
Warm regards,
Vinod Kumar Padmanabhan
Managing Director &
Chief Executive Officer
A by-product of the large-scale
transformation obviously has been the
multi-fold increase in data volumes that
we’re seeing today. While the era of Big
Data got businesses accustomed to
handling enormous volumes of data,
the past two years forced businesses to
find ways to effectively make sense of
this data, using Artificial Intelligence. At
Subex, our journey into the realm of
Artificial Intelligence began in the last
decade, and today, our portfolio
comprises of numerous AI-first
products that are touching the lives of
millions of people directly or indirectly
In line with this, our vision statement
evolved into what it is today, i.e.,
‘Enriching lives through AI-led Digital
Trust’, and this shapes the direction for
the company’s future in the coming
years.
This vision will be brought to life by our
newly launched, AI orchestration
platform, HyperSense. Over the last
year, we have made tremendous
progress in making the promise of
HyperSense a reality. With HyperSense,
the promise is to put AI into the hands
of business users – thereby bridging the
skill gap plaguing the adoption of the
technology. Hence as part of our drive
to enable businesses with AI-led digital
trust, we are also leveraging our
expertise to help the industry create the
next wave for analytics users.
Financials
With Subex now moving itself into a
pivotal position of driving AI, FY22
proved to be an evolutionary year for
the company. We have transitioned
from a product to a platform company
and operationally shifted from a
license-based model to a
subscription-based model. Thereby, the
year has been significant in terms of
evolving our portfolio to align with our
growth aspirations. The financial results,
in that regard, have not been reflective
of the progress made across the last 12
months. However, we closed the year
with a strong contract backlog, and we
have also received significant traction
for HyperSense AI, which is seeing
excellent traction from customers and
has also received multiple accolades, as
well as recognition from the media and
analyst community.
The Growth Charter
HyperSense is a result of multiple
factors: market demand for AI, the
roadblocks in adoption, and our legacy
of handling large volumes of data and
applying it into a business context.
HyperSense will solve the perennial
challenge the industry has been
grasping with – how to apply AI to solve
business problems? We have been
taking HyperSense to the market very
aggressively and demonstrating that
business users can now leverage AI.
Customers have been seeing the value
of such a platform and the feedback has
been encouraging. The accolades
HyperSense has received within a short
period of time, in the form of awards
and analyst mentions, is a strong
testimony to our vision and direction. As
we move forward, we are accelerating
our progress in migrating all our
solutions onto the platform.
We have also made good progress in
our new areas of Sectrio and IDcentral.
Sectrio, our security solution, now
covers OT Security in addition to IoT
security. This has helped us play in a
significantly large and growing market
and add new customers across the
banking, manufacturing, transport, and
mining verticals. IDcentral, with the
addition of numerous customers, has
also attained product-market fit, and
has crossed the milestone of 1 million
monthly API pulls from its customers.
With the growth of the eCommerce and
FinTech verticals in India and Indonesia,
we see a huge potential for IDcentral in
these markets.
Future outlook
Subex is a unique organization that is
structured as a corporate, but innovates
at the pace of a startup. Our strategy
has allowed us to meaningfully sustain
our market leadership in core areas
while allowing us to innovate
extensively in newer growth areas. The
emergence and success of incubations
such and Sectrio and IDcentral is proof
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09
Subex Annual Report 2021-22
QUICK
FACTS
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1994
Foundation
of the Company
25+
Years of
experience
1000+
Employees
300+
Global
Installations
90+
Countries
01
02
03
04
05
200+
Customers
Globally
40+
Industry
Awards
US$ 4mn
R&D spend in
new areas in
FY22
06
07
08
US$
117.75mn
Total Contracted
Backlog as on
31st Mar’22
09
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 start-ups 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, 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 CEO Vinod Kumar with clear focus to put the company on growth track
• Received significant industry validation, notably being mentions within 2 Gartner Market Guide for Hypersense
Subex Annual Report 2021-22
10
WHERE WE OPERATE
OUR DISTINCTIVE RESOURCES
FINANCIAL STRENGTH
Our financial strength gives us the
ability to invest in new areas and
upgrade our products in core
business with latest technolgies. Last
year we invested $ 4 Mn in R&D
initiatives
PEOPLE
The commitment & make it
happen attitude of 1000+
Subexians is a foundation of
our business
CUSTOMERS
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: Sectrio & IDcentral
INNOVATION
The virtual startups is a
testimony of continous
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
11
Subex Annual Report 2021-22
OUR BUSINESS
AT GLANCE
As the world emerges from the pandemic,
we also witness a recovery of economic
activities and a slow yet steady return of
social norms. However, businesses
continue to adopt and leverage best
practices and key learnings from the
pandemic, specifically in terms of the move
to digital. The pandemic has mandated
most C-suite executives to digitize their
business, at least partly, as a move to
protect their employees and customers and
as a workaround to deal with travel
restrictions. This has led to rapid progress
in digital adoption.
At the same time, consumer behavior has
also changed, and preferred interactions
and transactions have moved to the digital
realm. Recent data from McKinsey shows
that businesses had vaulted five years
forward in consumer and business digital
adoption in around eight weeks. It is safe to
say that digital services are here to stay.
Of course, with the rise of digital services
and interactions, the volume of data has
grown exponentially. As per IDC’s recent
Global DataSphere Forecast, 2021-2025,
global data creation and replication will
experience a compound annual growth rate
(CAGR) of 23% over the forecast period,
leaping to 181 zettabytes in 2025. That’s up
from 64.2 zettabytes of data in 2020,
which, in turn, is a tenfold increase from
the 6.5 zettabytes in 2012.
This data presents a massive,
“gold-mine”-level opportunity for
businesses looking to build better customer
experiences and new revenue streams to
ensure growth and profitability. It is largely
acknowledged that AI presents a means to
harness this opportunity, as long as
businesses know how to leverage it.
However, the reality is that 70-80% of
enterprises still lag in their ability to create
value from data. The reasons for this gap are
multifold, but the lack of AI-ready skills stands
out as a critical roadblock preventing
enterprises from reaping the fulling potential
of AI.
As an organization handling vast volumes of
data from different sources, structures, and at
varying velocities for more than two decades,
Subex is well poised to help businesses adopt
AI and data science to make business-level
decisions. With a focus on privacy, security, risk
mitigation, identity, and intelligence, Subex
now leverages HyperSense, coupled with its
world-class software suite, to help organiza-
tions to infuse Trust into their digital
ecosystems, utilizing the power of AI. Today,
Subex helps drive AI-led Digital Trust across
multiple dimensions including risk mitigation,
identity, security, intelligence, and privacy.
Subex does this by leveraging its award-win-
ning product suite, which include Business
Assurance, Fraud Management, Partner
Ecosystem Management, Network Analytics,
Sectrio, and IDcentral – all which are now
enriched with the power of AI. Through this
AI-enabled product set, Subex now helps its
customers – across the telecom industry and
beyond – ensure growth and profitability,
while safeguarding their business and
customers from threats.
Moreover, with HyperSense, Subex is on a
mission to ensure businesses can truly leverage
the power of AI. This vision extends toward
arming the next set of users of AI and analytics,
and Subex is committed to creating 100,000
citizen data scientists. To summarize, AI-led
Digital Trust is the key to success in the digital
era, and Subex is leading the way by enabling
businesses to truly leverage the power of AI.
Subex Annual Report 2021-22
12
PRODUCTS
& SERVICES
1
HyperSense
2
Fraud Management
Subex’s AI-First Fraud Management on HyperSense is an
end-to-end fraud management solution that provides
360-degree protection across various service offerings.
The solution:
• Leverages AI at every step of the fraud management
process to effectively combat fraud and security risks.
• Helps fraud teams increase business coverage, accuracy,
and agility through a state-of-the-art AI engine at the core.
• Is designed to build digital trust by leveraging Explainable
AI capabilities that provide complete transparency on how
decisions are made.
• Helps increase fraud detection and prevention by
eliminating known patterns, uncovering new fraud
patterns, minimizing fraud run-time, augmenting internal
controls, and supporting continuous fraud management
process improvements.
HyperSense is a multi-persona AI Orchestration
platform that helps enterprises operationalize AI,
enabling scalability and growth. With HyperSense AI,
a no-code, cloud-native, and SaaS-based platform,
enterprises can:
• Leverage technologies such as Machine Learning
and AI across data preparation, model building and
deployment, insight generation, and explanation.
• Bring data science closer to the business by
democratizing AI.
• Easily organize and prepare data for AI solution
building.
• Increase trust in AI using explainable AI capabilities
to make data-driven decisions.
3
Business Assurance
Subex’s Business Assurance on HyperSense helps CSPs mitigate revenue leakages and assess and address business
impacts in near real-time or proactively.
The solution:
• Provides best-in-class bottom line protection in terms of identifying and mitigating revenue leakage.
• Identifies operational Opex chokepoints, cost inefficiencies, and opportunity losses.
• Creates a verified data store (with data health and completeness verified) to drive confident decisioning.
• Incorporates best practices based on Subex’s leading industry co-creations to drive efficient operations.
• Supports top-line initiatives with analytics deployed on top of our opportunity identification layer.
• Drives a continuous and granular governance-driven auditing of systems, processes, and data.
13
Subex Annual Report 2021-22
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4
Capacity Management
5
Partner Ecosystem
Management
Subex's Capacity Management helps CSPs optimize their
network to provide the best customer experience.
The solution:
• 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.
• Helps network teams to make accurate decisions quickly to
maximize network ROI and ensure competitive advantage.
• Provides holistic visibility across any network domain,
vendor, or technology for improved decision-making.
Subex’s Partner Ecosystem Management is a holistic
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.
The solution:
• Identifies the right partners for your business and
onboards them quickly through a configurable.
workflow-based process to add new revenue streams.
• Leverages automation and data analytics to facilitate
accurate billing and settlement to manage revenue
and margins across interconnect, digital partners,
enterprise and roaming.
• Facilitates transparent partnerships by allowing
partners to access critical information and make
informed business decisions.
6
ACT (Analytics Center of Trust)
Subex’s ACT helps organizations transform from a traditional business to a digital one through the power of data
analytics.
The solution:
• Adopts a Analytics-as-a-Service approach to provide actionable business intelligence around a plethora of
cross-functional use cases.
• 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.
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Subex Annual Report 2021-22
14
7
IDcentral
8
Sectrio
IDcentral analyzes digital footprint of consumer across wide
range of data sources to provide APIs for identity verification,
identity scoring and identity attributes.
The solution:
• Enables enterprises in various domains to accurately predict
consumer risk and behavior.
• Helps businesses convert attributes to digital identities
through its comprehensive identity repository.
• Reduces risks and improves customer experience by
verifying various identity attributes like address, age, gender,
name, phone number, email id, government IDs.
• Provides data-driven intelligence for a comprehensive
behavioral score of consumers.
Sectrio 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 gradesecurity.
15
Subex Annual Report 2021-22
Chasing AI-Trust
and Moving from
Products to Platforms
A conversation with
Vinod Kumar Padmanabhan,
Managing Director &
Chief Executive Officer
Enriching lives
through AI-led
digital trust’ is
Subex’s touchstone
for success.
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.
Subex Annual Report 2021-22
16
Vinod Kumar, CEO of Subex, explains
the striking changes Subex has
undergone this past year and how these
are mapping to future growth for the
industry and the company.
Data volumes are exploding across the
globe. Enterprise AI gains traction as
more companies seek to optimize
business processes, launch services and
products faster, and meet rising
customer expectations. AI harnesses the
power of data for actionable insights
that achieve business outcomes.
However, enabling trust in AI and digital
interactions remains a challenge. The
organizations that prove themselves to
be secure, responsive, and
customer-centric are the ones that will
win big.
‘Enriching lives through AI-led digital
trust’ is Subex’s touchstone for success.
The company has embarked on several
strategic transformation programs that
engender strong market differentiation,
translating to substantial revenue and
growth.
Mr. Vinod Kumar, MD & CEO, Subex
shares how the company is pursuing its
mission of digital trust through renewed
solutions and a platform that has already
won analyst recognition. He puts into
perspective the different
transformations of Subex, growth plans,
and how Subexians continue to be the
life force behind its progress.
As the world returns to
normalcy, what are your
views on the effect of the
pandemic during FY22 and
some of the lessons during
the year?
When the pandemic hit, it was a global
shock disrupting everything from daily
lives, operations, and revenues. The
second wave hit hard in the first quarter
of FY2021-22. Telcos trimmed
expenditure due to budget cuts, which
Subex has been peeling back the
layers of digital trust to understand
the underlying mechanisms
critical to cement digital trust.
caused a downturn for Subex
revenue-wise. This was a learning
opportunity in many ways, teaching us
that overall performance is sometimes
about learning to adapt and stay
resilient. So, Subex has been focusing
on diversifying its growth strategy. Last
year, we rolled out some key
innovations, won several awards, were
recognized by top analysts, and have
sharpened our edge, which are all
contributing to the company’s
resilience.
As such, the organization realizes that
the pandemic and potential future
waves are something to be powered
through, and we have iterated our
business plan to incorporate techniques
that deal with such disruption
effectively.
In terms of lessons, the pandemic
forced us to pivot overnight to a
work-from-anywhere model that has
since evolved into a hybrid working
environment. We are still adjusting to
the hybrid model, assessing its
challenges, and devising practical ways
to scale it. Alongside, we are
re-examining our talent management
strategy. The existing recruitment,
training, and retention processes must
evolve with trending working models
(in-office, work-from-anywhere, and
now the hybrid mode). This will be key
for talent retention in the future, and we
are actively refining our talent
management strategies.
The title of this Annual
Report is “Enriching lives
through AI-led digital trust”.
What does this mean for
Subex, its customer base,
and the larger ecosystem?
The pandemic rapidly accelerated the
pace of digitization over the past nearly
two years. At present, the industry as a
whole is reaping remarkable benefits
from digital transformation. This digital
growth has demonstrated the
tremendous capacity for technology to
add value to our society, but it has also
revealed how fragile these tools and
people’s trust in those tools can be. It
has become increasingly important that
the enterprises take proactive and
strategic approach to build trust. So, the
scope of enabling digital trust is no
longer localized to just the ecosystem
but extends into AI products and
platforms that handle data. Without
implicit trust, the effects of digitalization
could be detrimental to businesses.
Subex has been peeling back the layers
of digital trust to understand the
underlying mechanisms critical to
cement digital trust within digital
ecosystems, which have been
proliferating since the pandemic.
Last year, we reached a major milestone
in this journey by curating a robust
portfolio of solutions and platforms that
17
Subex Annual Report 2021-22
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drive AI-led digital trust. Today, these
are touching the lives of governments,
organizations, vendors, partners, and
subscribers, generating a much larger
impact than we had originally envisaged.
Thus, we reframed our vision in line with
the pervading influence of AI on citizens
and customers. The influence of AI-led
trust will only grow deeper as
stakeholders progress on their
digitalization journeys, thereby
compounding the impact of our
products and platforms that are now a
critical capability in the digital world.
Earmarked as a highly relevant partner,
Subex is staying the course in line with
its vision.
Subex’s mission is to
create 100,000 citizen
data scientists. As
business users get savvy
with data science and
apply it to business
issues, it frees the
smaller pool of qualified
data scientists to focus
on complicated use
cases and take AI to the
next level.
CSPs are allocating
investments to newer
technologies such as 5G
and IoT. How will AI help
CSPs realize the full
potential of these
technologies?
Even before Covid-19, the world was
grappling with large amounts of data.
Now, with the rapid digital shift
post-pandemic, data is flooding
enterprise systems and companies lack
measures to handle this effectively.
The key is to implement solutions that
can refine the sense of these exploding
datasets.
We have heard the idiom that data is
the new oil. But crude oil, as such, has
little use unless it is distilled and
refined. In the context of data, AI is the
distillation process. Data refinement
materializes as meaningful insights
from complex data and seamless
integration of disparate datasets.
For telcos specifically, even as they
invest in technologies such as 5G and
edge computing, they must parallelly
adopt AI solutions to handle the data
deluge and maximize their returns.
When 4G began, there was an
explosion of OTT providers and
aggregators that leveraged the faster
speeds to revolutionize customer
experiences through the app economy.
While telcos enabled it, they missed
the opportunity to benefit from this
huge value creation. We are seeing a
similar shift where, because of 5G,
there is an explosion of IoT devices
and edge computing, which will
further disrupt business-as-usual. This
is yet another opportunity for telcos to
play a significant rather than just an
enabler. AI will play a central role and
can help telcos become agile,
innovative, and customer-centric, so
they re-position themselves and take
full advantage of these new
technology investments.
With much being said about
AI, how does HyperSense
address the gap between the
promise of AI and the ground
realities that CSPs face
today?
While a lot of progress has occurred on
AI adoption, the fact is that only about
15% of models being built ever make
into production. This is the ground
reality. There are three major reasons; AI
and Data Science is hard and time
consuming. Second the non-availability
of good data scientists and therefore the
poor supply-demand situation. Thirdly
the trust gap between business and the
data science team.
HyperSense plays a seminal role in
addressing all these three challenges,
i.e., time gap, talent gap and trust gap.
Being a no-code AI orchestration
platform, HyperSense breaks data siloes
and democratizes enterprise data,
creating healthy data pipelines. It also
incorporates explainable and ethical AI
and strong quality assurance processes,
enabling interpretability of results.
Finally, HyperSense empowers business
teams to experiment iteratively and
build their own AI models using several
user-friendly features like
drag-and-drop, pre-built use cases, a
feature app store, and more. Ultimately,
users derive meaningful insights that
solve the challenges they very well
understand.
Essentially, HyperSense incubates
‘citizen data scientists’.
Subex’s mission is to create 100,000
citizen data scientists. As business users
get savvy with data science and apply it
to business issues, it frees the smaller
pool of qualified data scientists to focus
on complicated use cases and take AI to
the next level. Collaboration between
teams becomes more straightforward,
more positive, and more fruitful.
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.
Subex Annual Report 2021-22
18
Organizations benefit by seeing top-line
improvements through better customer
services and bottom-line improvements
through faster go-to-market.
subscription-based model (enabled via
our platforms). Third, we expanded our
portfolio from a telecommunication
vertical to a wider multi-vertical spread.
With the launch of
HyperSense, Subex has now
moved from a license-based
model to a subscription
model. What has the
response been so far from
customers?
This year, Subex underwent multiple
transformations.
First, in line with the rise of the platform
economy, we transitioned from a
product to a platform company. Second,
we shifted from a license-based model
(dependent on products) to a
Subex revamped its IoT
security solution to
address Operational
Technology (OT) use
cases and added several
new features. Previously
called Subex Secure,
this is now rebranded
into Sectrio.
It has been an exciting year. Today, most
industries prefer to consume things
'as-a-service' and are pivoting to
flexi-models to offset the burden of
purchasing products, allocating
personnel, and managing costs for
maintenance, upkeep, support, and
licensing. Our customers in non-telco
verticals align very well with this shift
and have deftly embraced the new
model. Telcos, while appreciative of the
SaaS model’s benefits, are slow in their
adoption. But Subex’s customers
resonate with the ideology behind our
transitions. On our part, we are
aggressively pushing various
go-to-market strategies to boost
awareness of our subscription model’s
benefits.
Subex recently announced a
patent that allows for
revenue maximization at the
edge. Can you tell us more
about it?
I had mentioned earlier how 5G and IoT
would bring about seismic changes in
how telcos interact with data and that AI
will help operationalize new business
models. One of these changes is that
tremendous amounts of data will be
generated at the edge, i.e., across
nodes, IoT sensors, wearables, and
connected devices. Hence, to convert
this data into actionable insights even
faster, AI models must also move to the
edge in what is known as Edge AI.
Presently the workflow is this: Data
travels from the edge to centralized
servers (either on-premises or on cloud).
Then, ML algorithms models crunch it,
generate results, and return insights to
the edge nodes for action.
Understandably, this workflow causes a
lag due to certain in-built inefficiencies
such as low bandwidth, high latency,
and the need for massive computing
power to juggle all of this data.
Subex’s patent now pushes business
optimization processes to the edge so
that telcos can identify and resolve
problems such as revenue leakage and
fraud much faster, thereby plugging
losses. With telcos turning their sights
on 5G and IoT, this need is only
growing. Our patented revenue
maximization solution is futuristic but
will differentiate Subex and give us a
much sharper edge to compete at the
edge.
What developments are
happening in the new areas
such as IDcentral and
Sectrio?
Apart from the core HyperSense
portfolio, Subex has two start-ups –
IDcentral and Sectrio.
Subex revamped its IoT security
solution to address Operational
Technology (OT) use cases and added
several new features. Previously called
Subex Secure, this is now rebranded
into Sectrio. As a division, Sectrio is
gaining analyst interest and is seen as
one of the top IoT and OT
cybersecurity products globally. Sectrio
works by discovering vulnerabilities,
mitigating attacks, and remedying the
damage. It is a modular
industry-agnostic offering that
integrates seamlessly into existing
infrastructure such as industrial and
manufacturing facilities. It captures the
entire asset and system inventory,
assesses vulnerability points, deploys
continuous threat monitoring,
implements standard operating
procedures, and uses a prevention
approach. It also leverages the MITER
framework to categorize issues based
on severity, allowing risk teams to
resolve incidents efficiently and
systematically.
19
Subex Annual Report 2021-22
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Subex is aggressively pursuing through
its IDcentral start-up that is
industry-agnostic and taps into the API
economy. Some of its top use cases are
digital onboarding, AML screening, and
KYC verification. As a digital identity
analytics solution, IDcentral has found
traction within eCommerce and FinTech
within Indian and Indonesian markets.
The primary offering is that it
streamlines and accelerates customer
onboarding in a KYC-compliant manner.
In addition, product design allows
extreme flexibility, so it caters to new
regulations as they emerge. For
instance, the Reserve Bank of India (RBI)
now allows video KYC under certain
conditions, and IDcentral has evolved to
enable this for its users. As we advance,
our objective is to increase the accuracy
of the in-built technologies such as face
trace, liveness detection, etc., to deliver
frictionless customer experiences and
accelerate customer sign-up onto new
apps and platforms.
A visible trend with both these products
is that it allows us to reach more clients
and penetrate top-tier organizations,
which validates the hard work done to
mature these products for the digital
space.
What kind of market
validation have you received
for your AI-centric vision?
Subex is extremely proud and pleased
that our platform, HyperSense, received
some stellar mentions by top analysts
this past financial year. It has
re-positioned us as a potential strategic
vendor to organizations in telecom and
other verticals.
Earlier, Subex was regarded as a niche
provider of revenue assurance and fraud
management solutions for telcos. Upon
launching the HyperSense AI portfolio,
we are now viewed as much more.
Gartner’s ‘Market Guide for Multipersona
Data Science and Machine Learning
Platforms’ states that multi-persona
DSML platforms are critical to leverage
ML and data science. Another Gartner
report, specifically for telcos, titled
‘Market Guide for AI in CSP Customer
and Business Operations' also mentions
HyperSense as a representative vendor
for AI among CSPs. The report touches
on the role of AI in revenue assurance
and fraud management (RAFM), both of
which are legacy focus areas for Subex.
Hence, this Gartner mention denotes
our strong capabilities within AI in
solving RAFM challenges for our
customers.
These two endorsements of the tangible
merits of HyperSense are momentous.
They are altering customer perception of
Subex and generating phenomenal
traction in the market and among
stakeholders.
Subex has also won several awards this
year. In this regard we received
significant traction for HyperSense,
namely winning at the Innovation in
Artificial Intelligence category at the
2021 Pipeline Innovation Awards and at
the AI Excellence awards, hosted by the
Business Intelligence. HyperSense was
also declared as a finalist at the Aegis
Graham Bell awards. These awards
signify the capabilities of HyperSense
and its potential to help organizations in
leveraging AI for decision-making.
Additionally, we also received accolades
for our work within the TM Forum
Catalyst program, winning awards for
both our projects, i.e. 5G Digital
Marketplace Phase – II, and the
Measurements of Trust in AI
Environment.
Overall, such market recognition is very
encouraging. It is also a game-changer
for us as we race ahead of our old
competitors through solid
differentiation.
How have last year's
developments played a role
in shaping Subex for the
future?
In FY 2022, Subex refined its product mix
and opened itself to new markets and
verticals. But it takes time and effort to
execute the strategy behind the recent
transformations, and we are dedicating
investments to these goals. Subex is
driving a culture where exceptional
minds meet to deliver excellent
outcomes in an environment of fun and
innovation. Going by the initial market
interest in our new platform, we are well
on our way to becoming a fast-growing
SaaS company.
Looking ahead, we will continue to
HyperSense, received some stellar
mentions by top analysts this past
financial year. It has re-positioned us as
a potential strategic vendor to
organizations in telecom and other
verticals.
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Subex Annual Report 2021-22
20
finetune our IPs, platforms, and
solutions and tailor and validate
industry-specific use cases to meet
different customer requirements. These
moves will culminate in a positive
market perception as well as increased
profits for investors and stakeholders.
We are excited about the future
prospects and are confident in our
direction on this path.
What drives your optimism
about the growth strategy
over the next five years at
Subex?
While Subex is an established and
well-regulated company, we keenly
follow the successes of global start-up
ecosystem. Diversification and
innovation are integral to the start-up
culture. So, while we sustain our focus
on our diversified growth strategy, we
simultaneously innovate the offerings
within.
Our core areas of business are now
greatly enhanced by HyperSense
allowing us to further strengthen our
market leadership. Under our newer
areas, Sectrio, our security solution,
which was focused on IoT security, has
now evolved to cater to the needs of
Operational Technology (OT) as well.
Last year’s focus in micro-segmenting
our cyber-security offerings is bearing
fruit and we have established
partnerships as part of our go-to-market
strategy, and we continue to win interest
from clients across maritime, automotive,
and O&G enterprises. Further, IDcentral,
with the addition of key capabilities, has
also attained product-market fit with
over 1 million API pulls from its
customers. As part of IDcentral, our focus
is to develop strong partnerships with
technology vendors, forums, adjacent
product platforms, and more by engaging
with start-up ecosystems. These
partnerships will be pivotal for Subex to
act as an incubator and realize the
mission of creating 100,000 citizen data
scientists in the near future.
I believe our strategy is very well
balanced between our core and new
business areas. Our near-term revenue
plan is based on solid execution of core
and new product portfolios.
What will be Subex’s talent
acquisition strategy for
FY21-22?
Culturally, Subex follows a path that
rewards performance. Continuous
learning was crucial in helping us
weather the hard years of the past and
is a central part of our talent
management strategy this year. In line
with this, Subex has adopted industry
frameworks such as OKR and LPE. This
year, we aim to scale these frameworks
and establish a strong leadership
pipeline to bring sustainable growth.
Having learned to deal with the
workforce challenges brought on by the
pandemic, Subex is moving towards the
hybrid mode and helping its employees
navigate the shift. This entails two
things: 1) Equipping our Subexians with
the right tools so they can revamp their
learning and re-skill, and 2) hiring
experienced talent to cater to new
areas.
100% remote and 100% in-office work
paradigms are not viable today. So, we
are looking for ‘agile’ ways of working.
Overall, Subex is adopting a
best-practices-based approach to
ensure that the hybrid model operates
at the highest efficiency for our
customers and productivity for our
employees.
How is Subex championing
the charter for Diversity and
Inclusion (D&I)? What are
the main initiatives under
D&I?
The overall gender ratio at Subex is at a
positive 30%. Indeed, we believe that
D&I is advantageous to the
organization. During our D&I
analysis, we found that as one travels
up the ladder, the ratio drops below
the company average. This is an area
where we want to focus and improve
D&I gender ratio at senior levels.
Please tell us about your
team and how they stood
by company values during
the pandemic?
Subexians demonstrated
overwhelming support for the
company and their colleagues these
two years. In April 2020 and for
months after, there was minimal
clarity on the scope of disruption and
threat from the coronavirus. But
Subexians followed the business
continuity plan faithfully, and many
of Subex's customers remarked that
the transition was executed
seamlessly with no disruption to their
daily operations and
communications.
Last year, however, the emergence
of the second wave shook us deeply.
Nearly 20% of our workforce were
infected. It was a difficult period for
Subex. Thankfully, we scaled through
this period without any direct
casualties. We saw an outpouring of
support across the workforce,
assisting those who fell ill and those
who lost family members to
Covid-19.
In line with the market, we are also
facing increased attrition due to the
‘Great Resignation’, phenomenon.
We have been able to manage the
situation by timely back filling and
with the support from our
committed Subexians who stood as a
strong pillar and helping the new
joiners to quickly come up to speed.
I am glad and thankful to all
Subexians for the support extended
by their presence, dedication,
actions, and loyalty.
21
Subex Annual Report 2021-22
Spelling New Growth
with Future-ready
Platforms
A conversation with
Sumit Kumar
Chief Financial Officer
By the quarter ending
March 31,2022,
marquis orders were
added to our pipeline,
which makes us
confident that the
revenue curve will
ascend in FY 2023.
It gives me great pleasure to provide my perspective on the
company’s performance for the first time since I joined Subex at
the beginning of the calendar year. Globally, Subex is renowned
for being a robust partner to the telecom ecosystem, owing to
the strength of its portfolio and its customer-first approach.
Hence, it is with immense pride that I have taken over the reins
of CFO at Subex. It is also exciting to have joined Subex during an
evolutionary period and to have a chance to witness the
company weather the headwinds of last year through its solid
business continuity planning.
An organization’s success is not measured by its performance
alone. Though the financial performance of FY 22 was below our
expectations, strategically, the performance was bright and
Subex crossed many milestones this year. Having launched
HyperSense at the beginning of the year, this period has been
significant in terms of evolving our portfolio to align with our
growth aspirations. The platform has also received recognition
from the media and analyst community, including two notable
mentions in Gartner’s Market Guide reports, and multiple
industry awards during the course of the year. There were key
product wins, a patent announcement, and a re-branding
success. By the quarter ending March 31,2022, marquis orders
were added to our pipeline, which makes us confident that the
revenue curve will ascend in FY 2023.
Subex is also in the midst of transitioning from a product to a
platform company, as part of a strategic move to help customers
unlock the full spectrum of benefits of AI adoption. Our
sub-brands of IDcentral and Sectrio are making headway in
mining, manufacturing, transport, and banking industries,
promising a new chapter of growth.
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Subex Annual Report 2021-22
22
Financial highlights
• Annual revenues for FY22 were INR 3,334 million
compared to INR 3,720 million in FY 21.
• EBITDA for FY22 was INR 351 million compared to INR
985 million in FY21.
• Profit after tax (PAT) for FY22 was INR 210 million
compared to INR 517 million for FY21.
• Diluted earnings per share is Rs 0.38 per share in FY22
• Days Sales Outstanding is at 94 days, excluding
unbilled receivables.
Restructuring from Subex
Assurance to Subex Limited
As of March 31, 2022, we completed the
restructuring of Subex Assurance to Subex
Limited. Another exercise was the successful shift
of revenue maximization solutions to the parent
company. These strategic moves and
consolidation will bring in internal synergy, route
the business to the parent company, and heighten
value for shareholders.
Strategic highlights
and Identity Analytics
HyperSense, our most recent AI Orchestration platform,
completed one year since its launch. The market response
has been positive and the feedback from customers has
been encouraging.
o
With its official go-live in FY 2022, IDcentral shows
hockey stick growth with nearly 1 million API calls,
demonstrating user trust in the platform and very fast
adoption.
•
•
Subex is progressing well in its transition from a
traditional on-premises license and support-based
revenue model to a platform-based SaaS company. We
are already systematically enabling our existing customers
to migrate seamlessly to the new revenue model.
Feedback from customers shows that it is already
instilling predictability and stability into incoming
revenues, which is a positive sign for us.
•
This year, Subex received massive validation by way of
two analyst mentions. Gartner has validated our product
in two of its Market Guide reports, placing us in the
league of market leaders and giving global visibility to the
HyperSense platform. We believe this will positively
impact the company’s valuation in the coming months.
•
We continue to invest in the areas of IoT-OT-IT Security
o
With regards to IoT and OT security, Subex Secure was
re-branded as Sectrio and the line of business is now
consolidated across geographies. We are trained our
sights on the Indian market, starting with one of the
leading nationalized banks in the country. Despite
being a nascent launch, the financial metrics look
healthy, and hold promise.
Outlook for FY23
To weather the revenue challenges of last year, Subex is
reining in costs and tightening control on processes. We
are optimistic about returning to our progressive
pre-pandemic EBITDA and revenue profile, especially
given the rapid recognition, spate of awards, global
visibility, and clear metrics denoting quick adoption and
market interest in our existing and newly launched
platforms, brands, and services.
23
Subex Annual Report 2021-22
A New Charter of
Growth through
AI Trust
A conversation with
Suresh Chintada,
Chief Technology Officer
Subex has been cementing its position in the market by aggressively
renewing its products to keep pace with technology changes, as
every business should. With the launch of IDcentral and HyperSense,
Subex has widened its play into areas like digital identity, and
‘Enterprise AI’.
As part of its vision to enrich lives through AI-driven trust, Subex has
actualized several initiatives that allow organizations to leverage
cloud, 5G, big data, security and analytics to unify operations,
optimize costs, maximize, revenue, and enable faster and better
decision-making.
Our CTO, Suresh Chintada, shares the journey's milestones in FY
2021-22. He highlights why Subex remains a trusted partner for
telecom operators and outlines the new charter for growth. Here are
the excerpts:
Subex is known for being at the forefront of technological innovation
while keeping AI at the core. From a technology standpoint, what
have been the key developments at Subex this past year?
Subex has an industry legacy of working with communication service
providers (CSPs) to help them transform numerous business functions
across revenue assurance, fraud management, network planning, etc.
Given our deep expertise working with troves of telecom data, we
have constantly been innovating our technology pipeline to churn out
stellar solutions coupled with consulting and professional services
that assist our clients in addressing key business challenges.
In the past few years, we have witnessed tremendous technological
innovations in cloud, 5G, IoT Security and platformization of
enterprise applications. In line with this, we have renewed our
approach to problem-solving. For example, we implemented a
tactical shift from a product and license-based software products to
Subex has actualized
several initiatives that allow
organizations to leverage
cloud, 5G, big data,
security and analytics to
unify operations,
optimize costs, maximize
revenue and enable faster
and better
decision-making.
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Subex Annual Report 2021-22
24
a subscription-based ownership model
last year. We launched HyperSense, our
proprietary AI Orchestration platform
that revolutionizes how CSPs/DSPs
unlock value from data for powerful, AI
driven business insights delivered at a
user’s fingertips.
Since the launch of HyperSense, the
focus has been to shore up the
platform’s capabilities by designing and
refining features to support a variety of
data sources & formats, simplify and
accelerate how users build and
experience the solutions, fortify AI/ML
with explainable AI, MLOps, and
AutoML, all built on microservices
architecture to accelerate adoption and
to keep the upgrades current. We also
hosted several pre-built use cases onto
the platform, available in an app store
format, so companies can
plug-and-play solutions for their
immediate requirements. This is an
ongoing program, and as we discover
emerging business problems, we will
continue pushing our solutions onto
HyperSense as part of our go-to-market
strategy.
Critically, all the under-the-hood
technologies and platform innovations
are orchestrated, that will empower
companies to solve their problems
independently. We believe, it helps to
strengthen user confidence in ML
models and is in sync with our vision of
enriching lives through AI-led digital
trust.
The launch of HyperSense represented
the strategic shift for the company
towards the platform space vis-à-vis the
products space. What are some of the
key learnings for Subex during this
journey, and what are the successes?
Transitioning to a new model comes
with its challenges, but we executed this
successfully. We undertook focused
programs to educate our customers on
how the new subscription model,
vis-à-vis the previous license model,
would help them do more with less.
Our overarching aim with HyperSense is
to enable our clients to unlock value in
shorter cycles and make better
decisions using their existing data pools
Our overarching
aim with
HyperSense is to
enable our clients
to unlock value in
shorter cycles and
make better
decisions using
their existing data
pools in a secure,
scalable, and
affordable way.
in a secure, scalable, and affordable
way. In this context, HyperSense is
unique because it is designed, first and
foremost, as a platform that delivers
value. Feedback from our customers
and analysts reveals that they resonate
with this objective and are very much in
sync with the gap that HyperSense
bridges and its tangible outcomes of
faster time to value.
Over the past year, we articulated the
different value drivers for our
customers, be it cost optimization,
pre-built use cases, no-code
automation, etc. We assembled a
‘Technology Solutions Team’ to assist
customers in migrating to HyperSense
and integrating it with on-premises
enterprise systems, so adoption is
seamless. We augmented the platform
with several learning tools delivered in
self-serve and guided formats via the
HyperSense Academy so organizations
can train their employees and develop
the skills needed to use HyperSense and
get greater RoI. We also gained
certifications on Azure and Google
Cloud Platform.
It pleases me to share some of our
successes. In what is one of the most
significant milestones last year, we
received two noteworthy Gartner
mentions regarding HyperSense.
One is in the Gartner Market Guide for
Multipersona Data Science and Machine
Learning Platforms (DSML) where Subex
is listed as a representative vendor,
through HyperSense. The report
recommends that data and analytics
leaders should leverage trends of
augmentation and democratization by
encouraging the use of multipersona
DSML. This recognition comes on the
heels of being named a representative
vendor in 2022 Gartner Market Guide on
AI in CSP Customer and Business
Operations through HyperSense, which
is mentioned along with other machine
learning platforms, confirming that we
compete strongly among industry
echelons.
Subex also won two TM Forum Catalyst
Awards in 2021 – one for ‘Measurement
of Trust in AI Environment’ and another
for its ‘5G Digital Marketplace Phase 2’
for its capacity planning solution. TM
Forum's Catalyst Awards recognize the
leading global companies for their
outstanding proof-of-concept solutions
to challenges facing communications
service providers and their technology
partners.
Mr. Vinod Kumar, CEO of Subex, spoke
about creating 100,000 citizen data
scientists. How is Subex working with
organizations and colleges to realize this
goal?
There are several obstacles in the way of
scalable enterprise AI adoption. One of
them is finding qualified data scientists,
with some reports estimating a dearth of
250,000 in 2020 alone.
Subex set a goal to empower 100,000
business users with the right skills and
tools to use HyperSense AI, in effect
replenishing an organization’s talent
pool with citizen data scientists who can
learn to create and use ML models
through our no-code AI platform. As AI
evolves, so should the user community,
and this is one of the many ways Subex
is bringing innovation to the industry.
Interested users can visit the Subex
website to get a demo of HyperSense
and subscribe for a free trial. They can
also avail of certifications and speak to
25
Subex Annual Report 2021-22
our technology solutions experts to
chart their path forward.
We are also in the process of working
with few key colleges and universities to
explore opportunities to create
certifications. The nature of today's
market is such that, more than
education, the industry needs talent
that is qualified in skills. Thus, engaging
students with analytical mindsets and
an avid interest in data science will
become possible through our trainings
and certifications.
How has Subex furthered its work in the
blockchain space? Are there any key
developments that you'd like to share?
Blockchain continues to be an exciting
space for us at Subex, especially as part
of our Innovation Labs. This year, Subex
is leading a TMForum Catalyst program
that focuses on using blockchain to
solve a significant problem for telcos.
We are also working with a Tier 1
customer based in the Middle East as
part of our Joint Innovation Labs
initiative to enhance their existing
blockchain solution in Partner
Ecosystem Management.
Over the last year, Subex has been
engaging and co-creating significantly
within multiple forums. Could you
elaborate on this and how Subex is
helping define new standards for the
ecosystem?
Subex has a history of engaging and
contributing to Industry forums to really
enable our customers and the
community with innovations in the
telco data analytics space. Here, I would
like to spotlight on key engagements
with couple of industry forums. We are
very proud of the work we do with
TMForum, which is being recognized
globally as well. Subex is the leading
contributor to TM Forum’s Margin
Assurance Guidebook released this year
(GB1004B: TM Forum Guidebook
Business Assurance Transformation -
Margin Assurance).
Subex also sponsored and drove the
Risk & Assurance Group’s (RAG) Digital
Trust Survey 2021, one of the biggest
and most comprehensive industry
surveys to date in the areas of business
assurance, fraud management, and
cyber security. The survey delivers
powerful insights on RAFM trends in
telecom across the globe.
As an active member of these industry
forums, Subex is taking steps to
collaborate in defining new industry
standards on how telecoms can adopt
technology ethically and profitably and
remain relevant in the digital era.
You mentioned the work Subex is doing
around AI trust, which is also part of
Subex’s vision statement. How
important is the concept of trust when
it comes to accelerating the adoption of
AI?
Earlier, I had touched upon the
challenge of talent scarcity when
adopting AI. Apart from this, one of the
alarming issues that stymie AI adoption
is that organizations don't really trust AI
systems. Famous examples highlight
why: Amazon’s AI recruiting tool
demonstrated gender bias in the
candidates selected. Microsoft’s Twitter
bot, Tay, began to overlay racial slurs in
its conversations with users. The
underlying reason for these failures is
that companies often do not
understand and cannot see what the
model is doing. AI models are opaque,
black box entities that do not give
decision-makers insights into why they
should choose one recommendation
over the other. Logic is often masked,
leaving users unsure whether they can
trust the results. All of these breeds
apprehension in scaling AI across the
enterprise.
HyperSense frees users from these
constraints by bringing in AI
explainability whereby models and their
logic are exposed, so users can see why
the model presents the final results. It
also allows for faster feedback cycles
and iterations so the model can be
tuned many times over for superior
accuracy and ethical results.
These two criteria – explainability and
de-biasing – are paramount to building
enterprise trust in AI models and scaling
adoption, and this is precisely what
HyperSense provides in a no-code
user-friendly manner.
What are some of the key industry
partnerships that Subex has established
in FY 2021-22?
It has been an exciting journey in terms
of liaising with industry collaborators.
We began a partnership with KPMG to
unify their strong consulting experience
with our asset lifecycle management
solution. Our solution helps companies
achieve cost optimization goals by
providing visibility into their inventory
and allowing them to reprovision assets
through intelligent re-harvesting
techniques. On their part, KPMG assists
us with a vast client network, consulting
services, and client workshops for a
robust market access strategy.
Through Subex’s Joint Innovation Labs,
we have also partnered with a Tier 1
operator in the Middle East to articulate
business problems facing telcos and
co-create relevant and impactful
solutions that address these. The assets
borne out of this partnership will serve
not only the client but also amplify
Subex's IP, value proposition, and
solution portfolio.
What technology Investments does
Subex look to make as it enters the new
era with HyperSense?
Subex is allocating investments in line
with the outcomes it has defined for the
business and its customers. We will
continue on our path of designing
exciting innovations, new features,
pre-built use-cases, and enabling
MLOps for sustainable, scalable, and
profitable AI adoption for our
customers.
Our focus also remains consistent in
5G, IoT, edge computing, and digital
twins because this is where the future
lies for the business. As these
technologies come to the fore,
concerns over data privacy, security,
digital identities, and fraud
management will continue to evolve.
So, we will continue to devote
investments, research, and thought
leadership to these areas.
Subex Annual Report 2021-22
26
Featured in
Market Guide for
Multipersona
DSML Platforms
AI in CSP Customer
and Business Ops
HyperSense AI
Orchestration
Platform
2022 Global Telco Digital
Transformation Enabling Technology
Leadership Award
27
Subex Annual Report 2021-22
IDcentral:
Enabling Digital
Trust through
Rich Identity
Analytics Solutions
A conversation with
Shiva Shankar Naga Roddam,
Whole-Time Director &
Chief Operating Officer
There is a sizeable
opportunity for players
like Subex and IDcentral
that possess the
technology and, more
importantly, the credibility
to design industry-specific
solutions that enable
faster and more secure
onboarding journeys
through authentic KYC
products.
Post-pandemic, organizations are reaping value from digital
investments made during the past two years. The cyber-physical
divide gets leaner every day, catapulting ‘Digital Identities’ into
prominence. Almost every economic activity from banking to
shopping has gone digital and are accessible when customers
sign-up using their mobile numbers or email ID and provide proof of
identity.
Streamlining these first interactions is critical for many reasons.
“Apart from identity frauds, digitalization poses challenges like
fragmented customer experience and resulting dropouts. Some
industries witness as high as 60% drop out rates during the sign-up
stage on account of badly designed workflows, too many steps,
verification modules failing, false positives, etc. Yet businesses need
to verify authenticity before signing on customers for reasons like
regulatory compliance, AML, fraud, etc." says Shankar.
To offer seamless onboarding journeys, organizations must enable
verification through all possible digital channels using tools
best-suited for their workflows, compliance requirements, and
target segments. These can be video KYC, facial recognition, face
trace, biometrics, etc., all of which must adhere to myriad compli-
ance norms. “So, having a sound platform isn’t enough. Organiza-
tions need the right mix of domain experience, next-gen technolo-
gy, and industry-standard security protocols to hit the right balance
between customer delight and fraud prevention,” remarks Shankar
Roddam.
Frictionless authentication. Unerring compliance.
Delightful CX.
There is a sizeable opportunity for players like Subex and IDcentral
that possess the technology and, more importantly, the credibility to
design industry-specific solutions that enable faster and more
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Subex Annual Report 2021-22
28
secure onboarding journeys through
authentic KYC products. For instance,
IDcentral’s IP Face Trace technology
quite accurately catches recurring fraud
through image-based de-duplication,
making it a tool of choice for any
company that wants to scale its digital
customer base with reliability. In one
engagement, IDcentral reduced the
number of steps that a customer need
to go through before they are
onboarded, instantly enhancing the
customer experience, building brand
loyalty, and improving brand reputation.
Thus, if we look at the types of
problems IDcentral's solutions solve, it
has clear benefits for both enterprises
and customers. Shankar explains,
“Enterprises can better understand and
serve their customers while customers
feel reassured that their personal data is
protected and used appropriately.
IDcentral is helping organizations
streamline and scale onboarding, KYC,
and verification by designing digital
identity solutions that are intelligent,
intuitive, fast, and accurate. Moreover,
we have been aggressively creating an
API ecosystem to drive seamless data
connections, thereby facilitating trusted
commerce through one-click
implementations. It aligns very well with
our overarching vision of Enriching lives
using AI for digital trust.”
A milestone year
FY 21-22 has been a landmark year for
IDcentral.
We established a resounding
product-market fit, evidenced in our
customer base that shot up from zero
to 21 by year-end for accrued top-line
growth. In addition, the number of APIs
and API calls on the IDcentral platform
have scaled beyond expectations, a
trusted indicator of higher market
consumption and a big step towards
becoming a trusted SaaS business.
IDcentral also signed on its first telecom
customer, which is noteworthy
considering the importance of this
domain for Subex. The company also
onboarded clients from FinTech,
eCommerce, gaming, AgriTech, and
We established a
resounding
product-market fit,
evidenced in our
customer base that
shot up from zero
to 21 by year-end
for accrued
top-line growth.
cryptocurrency. The spread of these
industries – from traditional to
next-gen – speaks to IDcentral's
solutions wide breadth, relevance, and
value realization.
Solution-wise, we are augmenting the
portfolio with new features and
next-gen capabilities such as passive
liveliness, 360-degree OCR, Face Trace,
and Advanced Aadhaar, which will
further support regulations around
video KYC. One of our focus points was
to nail the integration so that compa-
nies can leverage the product suite in a
plug-and-play model for hassle-free
validation and verification. Thus, close
integrations with DigiLocker serve to
create true market differentiation.
Three-year horizon
In line with Subex’s vision to empower
100,000 data scientists by the next
financial year, we believe that
low/no-code is the way forward. So, we
are innovating to make onboarding
even more intuitive through
low/no-code solutions. This is a positive
trend for us, seeing as our client deals
are steadily increasing, and a key driver
to ensuring that our solutions help
clients realize value faster.
Looking ahead, we will continue to
steer investments and research into
the NBFC account aggregator
framework. India recently embarked
on an ‘Account Aggregator’ initiative
that promises to be a game-changer
in regulating digital identities across
the country. Subex and IDcentral are
registered members of the industry
groups to bring the concept to
fruition by leveraging our experience
and thought leadership. This will be a
notable differentiator for us in the
next few years.
Given our proven expertise in
telecom, this industry remains an area
of focus and telecom operators are
keenly eyeing our solutions with
interest. Moreover, as the regulatory
climate continues its dynamic
trajectory, it spells new growth
opportunities for Subex and
IDcentral, and we are already
receiving a lot of interest and RFPs
from different clients. Our approach
to tap into this is two-fold: accentu-
ating our differentiation and
aggressively onboarding more
organizations.
Final thoughts
We are betting big on amplifying our
position in FY2023. We intend to
continue amping up API transactions
on the platform and using market
intelligence to build out more
relevant use cases for organizations
based on their industry, region-spe-
cific regulations, customer demo-
graphic challenges, and more.
Another focus area is to develop
strong partnerships with technology
vendors, forums, adjacent product
platforms, and more as part of our
GTM strategy. In some of Subex’s
focus markets, namely India and
Indonesia, the market share for digital
identity solutions is roughly US $160
million in FY 2022. Globally, this
number is in excess of a billion
dollars. The market is thriving, and,
consequently, new players are on the
rise, driving consolidation. So, this
promises to be a very competitive
space in the near future. Our strategic
differentiation through world-class
digital identity solutions gives us a
sharper edge to monetize these
opportunities.
29
Subex Annual Report 2021-22
Subex won two
awards in the
TMFCatalyst programs,
reflecting our
purpose of vision and
ability to achieve
real-world outcomes.
Pushing the
Boundaries of
Innovation through
No-code Platforms and
AI Trust
A conversation with
Rohit Maheshwari,
Head of Strategy & Products
On 5G, cloud, and AI
Digital intensification is sweeping across the industry, heralded by the
convergence of 5G, digital, cloud, and AI. The telecom industry has a
tremendous opportunity to leverage this demand for better connec-
tivity, greater enterprise demand, and increasing interest in AI
adoption.
With data flooding into telecom networks, they are in a prized position
to extract intelligence and enable responsive decision-making, which
is crucial for all businesses. We believe this demand for faster, resilient,
and responsive telecom services will result in operators seeing a
greater need for the solution areas that Subex focuses on, such as
AI-driven decision-making, business assurance, fraud management,
partner ecosystem management, and network analytics.
At the core of digital intensification lies the need for digital trust,
without which digital ecosystems collapse. This is the space that
Subex is focusing on, leveraging its proven competencies in melding
powerful technology solutions, digital services, and a 20-year legacy
of domain experience. As we pivot from a product-based company to
a platform-centric one, we are tuning our solutions to support the
vision of enriching lives using AI-led digital trust – and this will be a
critical capability within digital ecosystems for the next decade.
Reorienting to AI at the core
AI holds much promise, yet many attempts by organizations tend to
fail or, at best, are limited in efficacy. One of the bottlenecks in
enterprise AI adoption is that most businesses don’t trust AI. Enabling
data-driven decision-making hinges on how effectively enterprises
adopt AI, and herein lies an incredible advantage for Subex with its
no-code HyperSense AI platform that comes packed with many
innovative features like Explainable AI. It exposes the black box logic of
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Subex Annual Report 2021-22
30
Underpinning our
successes with
HyperSense AI, we
will double down on
AI research and
innovation. The next
steps in the journey
involve no-code
MLOps, an
important stage to
complete
AI adoption
journeys, followed
by use cases on
deep learning.
AI, building user confidence and trust in AI models and its results, and is possibly
one of the most distinguishing innovations that set HyperSense apart in the
market.
If one were to imagine Subex’s tech stack as a multi-layer cake, the bottom layer is
the cloud-native stack, on top of which we have positioned our no-code AI
orchestration platform, HyperSense. Above this lies our entire product and service
suite from the past 20 years that are now transformed through HyperSense. As
such, the platform does three unique things: It helps other organizations simplify
and accelerate AI adoption across their data value chain. It also provides a library
of reference use-cases for organizations, inspiring them to create their own AI use
cases. Finally, it also facilitates us in renewing all our products into AI-enabled
ones, thereby making us a partner-of-choice that aligns well with our client’s
digital transformation journeys.
Innovation firepower
For vendors like Subex, winning means having the foresight to observe what drives
change in today’s market. For example, telecom fraud management and business
assurance practices are moving closer to the edge. Thus, telecom players need
solutions to converse and integrate with networks, influence real-time decisions,
and enable active risk intelligence. Moreover, typically siloed practices like
revenue assurance are now transforming to assurance across the business and
penetrating areas like software licenses, assets, margins, and customer journeys.
Subex’s proven track record makes us one of the leaders in the telecom space.
True to form, we continue to ‘innovate from within’ by constructing new
grassroots capabilities as well as ‘innovate from the larger ecosystem’ by working
with industry forums to craft industry standards and analyze how the latest
technology can meet these. Last year, Subex won two awards in the TMF Catalyst
programs, reflecting our purpose of vision and ability to achieve real-world
outcomes. We conscientiously collaborate with TM Forum, RAG, CFCA, and GSMA
to help them define ways of working and standards in the areas of AI, fraud,
business assurance, and partner management. Additionally, as a key innovator in
blockchain for telecom, Subex is breaking ground with innovative features that
realize blockchain-based BCE (Billing and Charging Evolution), which is a new
charging model mandated by GSMA that promises to revolutionize billing and
charging by giving ecosystem partners unprecedented flexibility and security.
Securing our edge for the future
Underpinning our successes with HyperSense AI, we will double down on AI
research and innovation. The next steps in the journey involve no-code MLOps, an
important stage to complete AI adoption journeys, followed by use cases on deep
learning.
But none of this happens in isolation. Subex will continue to lead and respond to
market dynamics by innovating its solutions, including 360-degree fraud
management with signaling intelligence, multi-edge computing, expanding
revenue assurance to business assurance, and growing wholesale billing to
partner ecosystem management.
As an ecosystem player, Subex has the wherewithal to build solutions beyond our
core products, bundle these with third-party apps, and truly solve real-world
business challenges for clients. Propelled by our strong market position this year,
we are well ahead on our journey to create industry-leading platforms that deliver
digital and AI-led trust.
31
Subex Annual Report 2021-22
Navigate Digital
Cybersecurity with a
Three-point Defense
A conversation with
Kiran Zachariah,
Head of IoT Security
Sectrio aims to be a
trusted vendor for
end-to-end OT security
for our customers. It
certainly possesses the
complete offering with
respect to products,
implementation
services, and managed
security services.
In the last annual report, I had alluded to the impending pivot of
Subex’s cybersecurity suite of products from pure IoT security to
the larger Operation Technology (OT) security market. IoT
implementations had stalled during the pandemic as companies
focused more on the resiliency of their current infrastructure and
paused new projects and initiatives. Still, many analyst
organizations validated Subex’s directional change, and they now
recognize IoT as a subset of OT.
OT security is about protecting the infrastructure that connects
physical processes and events. It is very different from traditional
IT security and involves systems like programmable logic
controllers (PLCs), Human Machine Interface (HMI), SCADA
systems, etc. These systems control the actual working of
manufacturing plants and critical infrastructure. Typically, OT
systems were secure because they resided in air gaps
(disconnected from the Internet). They also remained largely
untouched, sometimes even from their date of commissioning,
which makes them very vulnerable to attacks because they have
remained unpatched for a very long time.
Since the pandemic’s onset, OT systems are being connected to
the internet to enable remote support. This trend is now
becoming permanent, and companies are paying lower for
maintenance by eliminating the need for expensive site visits by
engineers. Another trend yielding substantial benefits to plant
owners is digitalization, where data from OT systems is driving
use cases such as just-in-time inventory, flexible scheduling,
robotic quality inspection, etc. The substantial benefits of
connecting the OT network outweigh the risks. And so, chief
information security officers (CISOs) are tasked with
implementing OT cybersecurity to minimize and eliminate these
risks so organizations can reap the benefits of increased
digitalization.
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Subex Annual Report 2021-22
32
Outlook for OT cybersecurity
market
Threats to OT systems are on the rise as
organized hacking groups have begun
targeting these systems because these
machines are considered the soft
underbelly of a company. The fact that
disruption to a production line
represents real material damage in
terms of shutdowns that have
associated revenue losses every second,
the line is down makes manufacturing
plants a favored target for ransomware
groups. Our global honeypots registered
a 200% increase in attacks on OT
systems last year, clearly indicating a
renewed focus from threat actors
globally on OT systems.
The OT security market is nascent but is
growing at 25% CAGR and is expected
to be a US $10 billion market by 2025.
While there is competition and many
new entrants in this space, analysts
forecast that only 10% of the potential
customers have begun a formal OT
security program. Hence, the market is
large and untapped. The potential of the
business is reflected in the valuation of
companies in the space: In the last two
years, OT security companies raised
close to US $2 billion with a combined
valuation of US $10 billion.
Customer expectations from OT security
companies have also evolved over the
last couple of years. In the early days of
OT security adoption, companies
wanted products that would provide OT
visibility tools into their current IT
security strategy. Such projects were
often not completely successful
because of the competing priorities of IT
security, such as confidentiality of data,
versus OT security such as the need for
system availability, paucity of talent with
OT security skills, coordination with
plant engineers to remediate issues,
complexity of managing multiple OEMs,
protocols, etc.
Drivers for the move to OT
security
CISOs are now looking for organizations
that can implement turnkey OT security
for them. This includes a mix of
products, services, and managed
security monitoring. These programs are
complex and executed in phases.
Broadly, it involves discovering and
cataloging all OT assets, their
vulnerabilities, and the nature of their
interaction with each other. This
information is then used to devise a
specific mitigation strategy, which is the
next step to reduce the attack surface of
the assets. Thirdly, continuous
monitoring is implemented to
constantly check for any attacks and
breaches. Lastly, response plans are
formulated for attacks keeping in mind
that the facility should never experience
downtime.
Due to such dynamics and keeping in
mind the need to effectively address this
burgeoning market, it was decided that
Subex’s division, which focused on this
sector, had to be seen as a separate
entity. We also wanted to differentiate
the OT security division from Subex
because OT security is relevant
pan-industry, whereas Subex’s legacy
has been rooted in the telecom sector.
Hence, the division and products,
hitherto known as Subex Secure, were
rebranded as Sectrio. The name Sectrio
was chosen primarily because of the
focus on converged networks, namely
OT, IoT, and IT. After the launch,
Sectrio’s digital presence has grown
substantially and has equaled, if not
surpassed, many of our more
established competitors.
The Sectrio Brand
Sectrio’s suite of modules was expanded
to meet the lifecycle of an OT security
program. It now includes several things
such as vulnerability management, the
module that helps discover assets and
their vulnerabilities,
micro-segmentation to reduce the
attack surface of the assets, threat
detection to discover new threats, and
playbooks that orchestrate remediation
and response to any threats. Expanding
on our honeypot capabilities, Sectrio
also hosts a deception module to thwart
attacks that have made it through a
network’s perimeter.
At Sectrio, we have been partnering with
organizations with the intent of
integrating their solutions into our
suite. Apart from expanding our
offerings, this gives Sectrio the ability
to bid on turnkey OT projects. Products
typically make up 20% of an OT
security implementation, with the
remaining 80% going to services.
Sectrio aims to be a trusted vendor for
end-to-end OT security for our
customers. It certainly possesses the
complete offering with respect to
products, implementation services, and
managed security services. Essentially
with this strategic change, we expect
our deal sizes to become larger in the
new year.
Strategically we continue to focus on a
very few markets, markets that were
chosen primarily on our ability to win in
those geographies, their relative
maturity in adopting OT security, and
our ability to deliver superior value
compared to our competition. While
we remain opportunistic in other
markets, we are committed to making
disproportionate investments in these
chosen geographies. We intend to go
deep as compared to going wide. The
razor focus gives us the ability to
channel our resources and maximize
our potential to achieve our goals.
We have made some key forays into
markets as well as verticals. Today
Sectrio’s implementations cover
manufacturing, smart cities,
automotive, shipping, public sector,
governments, banking, and education.
Customers start their OT security
journey with assessments, and the
number of assessments is a key lead
indicator of the projects that will
materialize. This year we have seen an
over 150% increase in assessments
performed by Sectrio, a very heartening
sign of things to come.
We expect OT security adoption to be
much stronger next year. Sectrio is well
poised to ride that wave, the team is
motivated and excited based on the
pipeline, and we all believe today that
we are in a very advantageous position
to derive maximum value for our
shareholders as we continue to
navigate new challenges. Again, we
remain grateful for your continued
support.
33
Subex Annual Report 2021-22
SUBEX CHARITABLE TRUST
Over the past few years, Subex has been actively giving back to the
society with our Subex Charitable Trust (SCT). SCT undertook
multiple initiatives like vocational training to women to be more
self-sufficient, funding towards the education of meritorious under
privileged children and many developmental initiatives towards the
society.
During the last year SCT took up a more focused project in adopting
a government school in Doddabanahalli, Bangalore. The vision of
SCT for GHPS Doddabanahalli for the next 5 years is to bring it on
par with any private funded schools. SCT will focus on holistic
development of the school and has joined forces with the school
management and an NGO namely Reaching Hand, to ensure all the
fundamental amenities are being provided to the children and
further modernize the school. Below are the developmental
initiatives by SCT:
• Infrastructure reinforcement
• Infrastructure development
• Drinking water facility
• Providing sufficient teaching faculty
• Establishing extra-curricular initiatives
o Student mental health camp
o Menstrual health management
o Art & Sport faculty
o Physical health camp
SCT is proud to announce that our school GHPS Doddabanahalli has
seen a significant increase in the number of admissions this year
from 150 to 256 and the school is looking at more admissions. The
aim of the SCT is to transform GHPS Doddabanahalli into one of the
best educational institutes in Bangalore which will focus on the
students’ holistic growth.
Subex Annual Report 2021-22
34
FINANCIAL HIGHLIGHTS
2
7
3
5
6
3
3
3
3
8
5
0
6
7
4
7
2
6
2
0
1
FY20 FY21 FY22
FY20 FY21 FY22
FY20 FY21 FY22
Revenues ( ₹ Cr)
Gross Margin (%)
EBITDA Margin (%)
35
Subex Annual Report 2021-22
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 2021-22
36
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
SUMIT KUMAR
Chief Financial Officer
ASHA SUBRAMANIAN
Chief Human Resources Officer
ROHIT MAHESHWARI
Head of Strategy & Products
KIRAN ZACHARIAH
Head of IoT Security
SURAJ BALACHANDRAN
Head of Sales – Sectrio
WARREN DUMANSKI
Executive Vice President and
General Manager, North America
BHAVNA SINGH
General Counsel
Subex Annual Report 2021-22
PB
37
Subex Annual Report 2021-22
BOARD’S REPORT
Dear Members,
Your Directors take pleasure in presenting the 28th Annual Report of the Company on the business and operations together with the audited
results for the year ended March 31, 2022.
1.
FINANCIAL RESULTS
The Company’s financial performance for the year ended March 31, 2022 is summarized as below
(` in Lakhs)
Particulars
Consolidated
Standalone
Total Revenue
Share of Profit/ (Loss)
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
a) to be reclassified to profit or loss in subsequent periods
b) not to be reclassified to profit or loss in subsequent
periods
Total comprehensive income for the year
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.
2021-22
33,344
2020-21
37,203
-
1,037
194
3,369
-
3,369
1,270
2,099
203
267
(64)
2,302
-
474
296
8,650
287
8,937
3,765
5,172
624
636
(12)
5,796
2021-22
2020-21
6,836
(1,273)
6
12
(447)
-
(447)
-
(447)
(3)
NIL
(3)
(450)
2,916
2,585
9
14
2,882
(231)
2,651
29
2,622
NIL
NIL
NIL
2,622
During the financial year ended March 31, 2022, the total
income on a standalone basis was ` 6,842 lakhs as against the
total income for the previous year which was ` 5,510 lakhs. The
Company has, during the year under review, incurred loss of
` 447 lakhs as against a profit of ` 2,622 lakhs in the previous
year. On a consolidated basis, the total income stood at ` 34,381
lakhs as against ` 37,677 lakhs during the previous year. The
profit earned for the financial year 2021-22 is ` 2,099 lakhs as
against a profit of ` 5,172 lakhs in the previous year.
3. DIVIDEND
i)
The Board at its meeting held on May 17, 2021, declared a
final dividend of ` 0.25 (5%) per share for the financial year
2020-21. The same has been approved by the members at
the 27th Annual General Meeting held on July 09, 2021.
ii) The Board has not proposed any dividend to be paid for the
financial year 2021-22.
The dividend distribution policy of the Company is available
under the link https://www.subex.com/investors/shareholder-
services/.
4. RESERVES
The Company does not propose to transfer amounts to the
general reserve out of the amount available for appropriation.
The total profit of ` 2,302 lakhs available with the Company on
a consolidated basis is proposed to be retained in the profit and
loss account.
Subex Annual Report 2021-22
38
39
Subex Annual Report 2021-22
5. SHARE CAPITAL
As at March 31, 2022, the authorized share capital of the
Company was ` 590,00,00,000 (Rupees Five hundred and
ninety crores only) divided into 117,60,80,000 (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, 2022, the issued, subscribed, and paid-up share
capital of the Company was ` 281,00,14,675 (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. TRANSFER OF RMS BUSINESS
Members are informed that the Audit Committee and the Board
of Directors at their respective meetings held on 28th October,
2021 have, subject to the approval of members and any other
approval of statutory/ competent authority (if and to the extent
necessary) approved the transfer of the RMS Business of Subex
Assurance LLP to the Company by way of slump sale, without
values being assigned to the individual assets and liabilities, for
a lumpsum consideration of ` 95,00,00,000/- (Rupees Ninety
Five Crores only) subject to working capital and/ any other
additional adjustments on such terms and conditions proposed
to be entered into by and between the Company and Subex
Assurance LLP (“Transaction”).
In terms of the General Circular No. 14/2020 dated April 08,
2020, the General Circular No. 17/2020 dated April 13, 2020,
the General Circular No. 22/2020 dated June 15, 2020, the
General Circular No. 33/2020 dated September 28, 2020,
General Circular No. 39/2020 dated December 31, 2020,
General Circular No. 10/2021 dated June, 23, 2021 and General
Circular No. 20/2021 dated December 8, 2021 (“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 framed thereunder, the Company proposed to obtain the
consent of the shareholders for the Transfer of RMS Business, by
passing of the resolution by means Postal Ballot.
In accordance with the requirements of the Companies Act
and the MCA Circulars, the Company had sent the Postal Ballot
Notice dated January 17, 2022 by email to all its members who
had registered their email addresses with the Company or
depository/ depository participants as on the cut-off date i.e
January 14, 2022 and the communication of assent/ dissent of
the members took place through remote e-voting system only.
The e-voting period for the Postal Ballot commenced on
Tuesday, January 25, 2022 from 9.00 a.m. (IST) and ended
on Wednesday, February 23, 2022 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
link https://www.subex.com/investors/investor-information/ for
the Postal Ballot notice and related documents.
The Resolution for Transfer of RMS business was approved with
requisite majority and the results were displayed on the website of
the Company under the link https://www.subex.com/investors/
investor-information/ and necessary disclosures were made to
the Stock Exchanges. Accordingly, the Transaction, between the
Company and Subex Assurance LLP was undertaken, with the
approval of the Members of the Company for the transfer of
RMS Business, including: (a) the contracts, agreements, licenses,
engagements, financial instruments, commitments and other
contractual arrangements relating to such business including
obligations under contracts which are surviving and relate to
such business; (b) the assets and properties, whether tangible or
intangible, rights, titles, interests and privileges relating to such
business, excluding the shares of Subex (UK) Limited, Subex
Middle East (FZE) & Subex Bangladesh Private Limited, intangible
asset being developed technology and/ or any other asset as
may be decided by the Board and (c) identified persons on the
payroll of Subex Assurance LLP.
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
value chain. The solution allows users without a knowledge of
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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 FY21-22.
Key Announcements in FY21-22
Subex Launches HyperSense, an End-to-End Augmented
Analytics Platform
Subex announced a launch of HyperSense, an end-to-end
Augmented Analytics platform that helps enterprises make
faster, better decisions by leveraging Artificial Intelligence
(AI) across the data value chain. Developed based on Subex’s
extensive data analytics experience, HyperSense contains all
the Augmented Analytics capabilities enterprises need in one
flexible and modular platform.
Subex’s new patent defines the future of Revenue Maximization
for telcos
Subex announced that the U.S. Patent and Trademark Office
has granted the company’s patent that defines the future of
Revenue Maximization for telcos. With this patent, Subex moves
revenue maximization to the edge, thereby setting standards for
operators to proactively identify monetization opportunities. At
the same time, it will now move a step closer to detecting and
preventing risks such as digital fraud to prevent damage before
it happens.
Subex rebrands IoT and OT Cybersecurity product as Sectrio
Subex announced the completion of the rebranding exercise
of its Internet of Things (IoT) and Operational Technology
(OT) cybersecurity product Subex Secure. Subex Secure will
henceforth be called Sectrio. The move comes in the wake
of Sectrio gaining significant market traction powered by an
exponential increase in the capabilities of its award-winning
product portfolio.
Subex extends strategic partnership with Robi to support their
5G ambitions
Subex extended its partnership with Robi to upgrade its existing
integrated Revenue Assurance and Fraud Management (iRAFM)
system. Through this upgrade, Robi will now leverage the AI/
ML capabilities of Subex’s Revenue Assurance and Fraud
Management solutions to tackle new-age telecom threats in the
region and deliver a superior customer experience as it looks to
provide services built on 5G..
Subex wins 5-year contract with Dhiraagu for integrated
Revenue Assurance and Fraud Management
Subex has been awarded a seven-digit, five-year contract from
Dhiraagu, the leading telecom operator of Maldives, to provide
its integrated Revenue Assurance and Fraud Management
(iRAFM) solution. Through the deployment, Dhiraagu will
upgrade its systems and consolidate its standalone assurance
functions to better equip themselves for the 5G era.
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 on boarding diverse partners. It will also enable digital
trust among CSPs and their partners by creating a transparent
partner ecosystem.
9. SUBSIDIARIES OF THE COMPANY
As on March 31, 2022, the Company has 10 subsidiaries.
SUBEX ASSURANCE LLP AND ITS SUBSIDIARIES
For the year ended March 31, 2022, Subex Assurance LLP
earned a net income of ` 29,204 lakhs as against net income
of ` 33,268 lakhs in the previous year and a net profit of ` 1,353
lakhs, as against a net Profit of ` 4,628 lakhs in the previous year.
As at March 31, 2022, 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, 2022, the
Standalone net income of Subex (UK) Limited was ` 18,820
lakhs as against ` 20,974 lakhs in the previous year, and a
net loss of ` 84 lakhs as against a net profit of ` 2,487 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, 2022, the Standalone net income of Subex (Asia Pacific)
Pte. Limited was ` 3,895 lakhs as against ` 3,898 lakhs in the
previous year, and a net profit of ` 143 lakhs as against a net
loss of ` 347 lakhs in the previous year.
Subex Inc. is a wholly owned subsidiary of Subex (UK)
Limited. For the year ended March 31, 2022, the Standalone
net income of Subex Inc. was ` 9,727 lakhs as against
` 9,547 lakhs in the previous year, and the net profit of
` 914 lakhs as against a net profit of ` 534 lakhs in the
previous year.
Subex Middle East (FZE) is a wholly owned subsidiary of
Subex Assurance LLP. For the year ended March 31, 2022,
the standalone net income of Subex Middle East (FZE) is
` 2,889 lakhs as against ` 2,374 lakhs in the previous year
and net loss of ` 518 lakhs as against a net loss of ` 67 lakhs
in the previous year.
Subex Bangladesh Private Limited, is a wholly owned
subsidiary of Subex Assurance LLP. For the year ended
March 31, 2022, the standalone net income of Subex
Bangladesh Private Limited is ` 903 Lakhs as against ` 266
and net profit of ` 1 Lakh as against a net loss of ` 57 lakhs.
Subex Account Aggregator Services Private Limited has been
incorporated on May 09, 2022 as a wholly owned subsidiary of
the Company for undertaking Account Aggregator Services.
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SUBEX DIGITAL LLP
For the year ended March 31, 2022, Subex Digital LLP earned
a net income of ` 1,839 lakhs as against ` 1,429 lakhs in the
previous year, and a net loss of ` 2,626 lakhs as against a net loss
of ` 2,043 lakhs in the previous year.
As at March 31, 2022, Subex Limited held 99.99% of the capital
in Subex Digital LLP and the balance is held by Subex Assurance
LLP.
SUBEX TECHNOLOGIES LIMITED
Subex Technologies Limited is a wholly owned subsidiary
of Subex Limited. For the year ended March 31, 2022, 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, 2022, the standalone net income
of Subex Americas Inc. is ` 1,083 lakhs as against ` 1,024 lakhs
in the previous year, and a net loss is ` 33 lakhs as against a net
loss of ` 10 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.
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/.
10. DEPOSITS
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 34 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
and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021, are available on the
Company’s website under the following link https://www.
subex.com/investors/announcement-filing/#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. During the FY 2022, the Nomination &
Remuneration Committee of the Company at its meeting held
on January 31, 2022 granted 14,48,000 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 31
and 32 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 2021-22 and the date of this report,
affecting the financial position of the Company.
14. CORPORATE GOVERNANCE
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
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Subex Annual Report 2021-22
always strives to follow the path of good governance through a
broad framework of various processes.
(LODR), Regulations, 2015. The dates on which meetings were
held are as follows:
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 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
The Board of the Company is formed with an optimum
combination of Executive and Non-Executive Directors, which
not only meet the legal obligation but also make a diversified
Board with a mixed blend of experiences, expertise, and
professionals. The details of Board and committee composition,
tenure of directors, areas of expertise and other details are
available in the Corporate governance report that forms part of
this Annual Report.
RETIREMENT BY ROTATION
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. Anil Singhvi,
Non-Executive & Non-Independent Director, who retires by
rotation at the ensuing AGM and being eligible, offers himself
for re-appointment.
APPOINTMENT/ RE-APPOINTMENT/CESSATION
There were no appointment/re-appointment/cessation of
Directors during the financial year 2021-22.
Mr. Venkatraman G S resigned from the position of Chief
Financial Officer with effect from December 10, 2021.
Mr. Sumit Kumar was appointed as the Chief Financial Officer
with effect from January 31, 2022.
Pursuant to the recommendations of the Nomination &
Remuneration Committee, the Board at its meeting held on May
30, 2022, re-appointed Ms. Poornima Prabhu as an Independent
Director of the Company for a further period of 5 (five) years
with effect from July 28, 2022. Her appointment for a period of
five years is being placed before the members for their approval
at this 28th AGM.
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/.
17. BOARD MEETINGS
During the year, five 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
Board Meeting Number
Date of Meeting
1/2021-22
2/2021-22
3/2021-22
4/2021-22
5/2021-22
May 17, 2021
August 9, 2021
September 3, 2021
October 28, 2021
January 31, 2022
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 January 31, 2022 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.
The Independent Directors of the Company at its separate
meeting held during the year also reviewed the performance
of Non- Independent Directors and Board as a whole and
Chairman of the Company taking into account the views of
Executive Directors and Non-Executive Directors.
19. DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY
MANAGERIAL PERSONNEL
The Company’s Policy on Director’s Appointment and
Remuneration has been uploaded on the website of the Company
https://www.subex.com/investors/shareholder-services/.
Disclosure pertaining to remuneration and other details as
required under Section 197(12) of the Companies Act, 2013 read
with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is given in “Annexure D”,
which is annexed hereto and forms part of the Directors’ Report.
20. AUDIT COMMITTEE
As on March 31, 2022, the Audit Committee consisted of 4
(four) Directors as its members.
Composition
Category
Ms. Nisha Dutt
(Chairperson)
Mr. Anil Singhvi
Independent Director
Non-Executive,
Non-Independent Director
Ms. Poornima Prabhu
Independent Director
Mr. George Zacharias
Independent Director
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).
21. AUDITORS
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, 2022
does not contain any qualifications, reservations, or adverse
remarks.
22. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies
Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, a
statement comprising the names of top 10 (ten) employees
in terms of remuneration drawn and every person employed
throughout or part of the financial year, who were in receipt of
remuneration as per the prescribed limit, forms part of Directors’
Report.
The above Annexure is not being sent along with this Annual
Report to the Members of the Company in line with the
provision of Section 136 of the Companies Act, 2013. Members
who are interested in obtaining these particulars may write to
the Company Secretary at investorrelations@subex.com. The
aforesaid Annexure is also available for inspection by Members
on any working day at the Registered Office of the Company
upto the date of the Annual General Meeting. Members
seeking to inspect such documents can send an email at
investorrelations@subex.com.
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.
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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
Subex aims to reduce its impact on the environment by:
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
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.
26. FOREIGN EXCHANGE INFLOW AND OUTFLOW
During the year 2021-22, total foreign exchange inflow and
outflow of the Company is as follows:
i)
ii)
Foreign Exchange inflow ` 3,510 lakhs (Previous Year
` 1,482 lakhs)
Foreign Exchange outflow ` 511 lakhs (Previous Year ` 576
lakhs)
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27. CORPORATE SOCIAL RESPONSIBILITY
30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
To enable contribution to the society and other stakeholders, the
Company has constituted the Corporate Social Responsibility
Committee (CSR Committee) comprising of the following
Directors as on March 31, 2022:
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 &
COO
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 F” 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 33 of
the Annual Report for details of the activities conducted during
the year.
28. RISK MANAGEMENT POLICY & IMPLEMENTATION
The Risk Management Committee as required under Regulation
21 of the SEBI (LODR) Regulations, 2015 has been constituted
by the Company. According to Regulation 21(5) of the said
Regulations, the provisions of Risk Management Committee
shall be applicable to top 1000 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
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.
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.
Subex Annual Report 2021-22
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Subex Annual Report 2021-22
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 2021-22.
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
There were no significant and material order passed by the
Regulators or Courts during the financial year 2021-22
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 year under review, no complaints have been received
by the Company.
33. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria
of independence as prescribed both under the Companies Act,
2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
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,
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.
However, the Company would like to inform that, SEBI had
alleged that the Company violated Clause 10 of Code of
Conduct under Schedule B of Regulation 9(1) of SEBI (PIT)
Regulation, 2015 and granted relaxation to Mr. Subash Menon
for executing the opposite transaction within six months of
the previous transaction (i.e., Contra Trade) without recording
in writing the reasons for grant of relaxation. The Company
had denied the allegations made by SEBI and informed that it
is the Company in the first instance which prudently informed
SEBI regarding the non-disclosure of the Transaction by the
Promoters, as mandated by the SEBI PIT Regulations and Code
of Conduct for prevention of Insider trading of the Company
under Schedule B of Regulation 9(1) of the SEBI PIT Regulations
and had duly submitted detailed responses to the Investigating
Officer from time to time. Adjudication proceedings were
conducted on December 20, 2021 through video conferencing
by WebEx and company represented the matter.
Securities Exchange Board of India vide Adjudication Order No.:
Order / MC / VS / 2022-23 / 15935 - 15937 dated April 11, 2022
disposed off the adjudication proceeding initiated against the
Company in connection with the Show Cause Notice dated
May 7, 2021 for alleged violations of the SEBI (Prohibition of
Insider Trading) Regulations, 2015 (“2015 PIT Regulations”) and
the SEBI Act, with respect to trading in the scrip of the Company
during August 08, 2018 to October 01, 2018.
36. ANNUAL RETURN
A copy of the Annual Return of the Company for the Financial
year 2021-22, as required under Section 92(3) read with Section
134(3)(a) of the Companies Act, 2013 and Rule 12 of the
Companies (Management and Administration) Rules, 2014 shall
be placed on the Company’s website at https://www.subex.
com/investors/announcement-filing/#disclosures.
37. LISTING WITH STOCK EXCHANGES
The Company has paid the Annual Listing Fees for the year
2021-22 and 2022-23 to the Exchanges’ where the Company’s
shares are listed i.e., the National Stock Exchange of India Ltd
(‘NSE’) and BSE Ltd (‘BSE’).
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.
38. MAINTENANCE OF COST RECORDS
Maintenance of cost records as specified by the Central
Government under sub-section (1) of Section 148 of the
Subex Annual Report 2021-22
44
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Subex Annual Report 2021-22
Companies Act, 2013, is not applicable to the Company as the
Company operates out of a Special Economic Zone (SEZ) .
39. DIRECTORS’ RESPONSIBILITY STATEMENT
f)
That systems to ensure compliance with the provisions of
all applicable laws were in place and such systems were
adequate and operating effectively;
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, 2022, the applicable accounting
followed along with proper
standards have been
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, 2022 and of the profit of the Company for the
year ended on that date;
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, 2022 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;
40. APPRECIATION/ACKNOWLEDGEMENTS
Your Directors thank the customers, vendors,
investors,
shareholders’ and bankers for their continued support during
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, BSE Limited, National Stock Exchange of India Ltd,
National Securities Depository Limited, 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: Bengaluru
Date : May 30, 2022
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
Date : May 30, 2022
Subex Annual Report 2021-22
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Subex Annual Report 2021-22
ESOP 2018
2,61,38,500
14,48,000
200,73,908
1,00,66,280
NIL#
45,64,592**
` 6 to ` 20
None
` 6,03,97,680
1,15,07,628$
-
Srinivas M R – 90,000
Yathish Nagavalli – 90,000
Manish Agarwal – 125,000
Asha Subramanian – 150,000
-
` (0.08)
N.A
ANNEXURE A
Information as at March 31, 2022 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, 2022
b) Options granted during the year
Options vested as on March 31, 2022
Options exercised as on March 31, 2022
No. of shares arising as a result of exercise of options during the year ended March 31, 2022
Options Lapsed as on March 31, 2022
Exercise Price
Variation of terms of options
Money realized by exercise of options as on March 31, 2022
Total number of options in force
10
Employee wise details of options granted during the year under review to:
(i) Key managerial personnel
(ii) other employee receiving a grant in the year of option amounting to 5% or more of options granted
during 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.
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’
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:
11
12
13
14
Weighted-average exercise prices and weighted-average fair values of options separately for options whose
exercise price either equals or exceeds or is less than the market price of the stock.
Weighted average exercise price: ` 8.86
Weighted average fair value: ` 6.05
Description of the method used during the year to estimate the fair values of options, including the following
weighted-average information:
i. risk-free interest rate
ii. expected life
iii. expected volatility
iv. expected dividends
v. market price on grant date
Black Scholes
Model
6.68%
3 years
67.51%
1.59%
` 47.1
**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, 2022. Shares were transferred from
the ESOP Trust against the exercise of options.
$ Include 50,000 options for which exercise price received on March 28, 2022 and exercised on April 6, 2022.
For Subex Limited
Anil Singhvi
Chairman, Non-Executive & Non-Independent Director
DIN:00239589
Place: Bengaluru
Date : May 30, 2022
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
Date : May 30, 2022
Subex Annual Report 2021-22
46
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Subex Annual Report 2021-22
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”) having CIN:
L85110KA1994PLC016663, 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from the
period April 01, 2021, to March 31, 2022. 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 30, 2022
Place: Bangalore
For BMP & Co. LLP
Company Secretaries
Pramod S M
Partner
FCS 7834 / CP No. 13784
UDIN: F007834D000432126
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Subex Annual Report 2021-22
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, 2022
ANNEXURE C
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, 2022 (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 and
Overseas Direct Investment. The Company had not borrowed any money under External Commercial Borrowings route during the period
under review;
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 (Not Applicable to the
Company during the Audit Period);
d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;
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)
j)
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
The Securities and Exchange Board of India (Issue and Listing of Non- Convertible Redeemable Preference Shares) Regulations, 2013
(Not Applicable to the Company during the Audit Period).
k) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (Not Applicable to
the Company during the Audit Period).
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.
Subex Annual Report 2021-22
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Subex Annual Report 2021-22
c) Copy Right Act, 1957.
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 BSE Limited and 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.
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.
The following events / actions were having a major bearing on the company’s affairs in pursuance of the above referred laws, rules, regulations,
guidelines etc., during the audit period:
a) Subex Assurance LLP, a wholly owned subsidiary of the Company has transferred its Revenue Maximization Solutions (RMS) Business
to the Company (Subex Limited) for a lump sum consideration of ` 95 Crores subject to working capital and / any other additional
adjustments on such terms and conditions proposed to be entered into by and between the Company and Subex Assurance LLP. Special
Resolution was passed in this regard through Postal Ballot process between January 25, 2022 and February 23, 2022 by the Company.
b) The Board of Directors of the Company at its meeting held on October 28, 2021 approved the proposal to incorporate new subsidiary for
undertaking Account Aggregate Services and making investment up to ` 2.25 Crores towards subscription of shares of the Company.
c) The Board of Directors of the Company has passed the resolution at its meeting held on October 28, 2021 for withdrawal of Capital
Contribution along with share of profit from / of Subex Assurance LLP.
d) Securities Exchange Board of India vide Adjudication Order No.: Order/MC/VS/2022-23/15935-15937 dated April 11, 2022 disposed off
the adjudication proceeding initiated against the Company vide Show Cause Notice dated May 7, 2021 for alleged violations of the SEBI
(Prohibition of Insider Trading) Regulations, 2015 (“2015 PIT Regulations”) and the SEBI Act, into trading in the scrip of the Company during
August 08, 2018 to October 01, 2018.
e) On December 06, 2021 there was an outage of our infrastructure and external facing websites. The Company thereby took immediate
action by suspending access to protect its infrastructure and to identify the root cause. Upon Investigation, it was established that there
was a targeted cybersecurity ransomware attack on the infrastructure of the Company. The Company took a measured approach in
bringing its systems back and minimize any potential impact.
For V. SREEDHARAN & ASSOCIATES
(Pradeep B. Kulkarni)
Partner
FCS: 7260; CP No. 7835
Place: Bengaluru
Date: May 30, 2022
UDIN: F007260D000425623
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.
Subex Annual Report 2021-22
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Subex Annual Report 2021-22
‘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
Bangalore – 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
Place: Bengaluru
Date: May 30, 2022
UDIN: F007260D000425623
Peer Review Certificate No.: 589/2019
Subex Annual Report 2021-22
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Subex Annual Report 2021-22
Secretarial compliance report of Subex Limited for the year ended March 31, 2022
[Pursuant to Regulation 24A of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015]
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, 2022 (“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) 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; (Not Applicable to the
Company during the Review Period).
(c) 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 and Sweat Equity) Regulations, 2021;
(f) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008. (Not Applicable to the Company during
the Review Period).
(g) 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) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
(i) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (Not Applicable to the
Company during the Audit Period).
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 Securities Exchange Board of India under aforesaid Acts/Regulations
and circulars/guidelines issued thereunder:
Sl. No. Action taken by SEBI / Stock
Details of violation
Exchanges
Details of action taken e.g., fines,
warning letter, debarment etc.,
Observations/ remarks of the
Practicing Company Secretary
if any
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Subex Annual Report 2021-22
1
SEBI had informed the Company
vide SCN EAD5 / MC / VS /
2021 / 10069 / 1 dated May 07,
2021
for alleged violation of
Clause 10 of Minimum Standard
of Code of Conduct under
Schedule B of Regulation 9(1) of
SEBI PIT Regulations, 2015 by
not disgorging the profit earned
by Mr. Subash Menon through
execution of Contra Trade and
remit the same to the Board for
Credit to the Investor Protection
and Education Fund administered
by the Board under the Act.
SEBI had alleged
Company violated:
that
the
1. Clause 10 of Code of
Conduct under Schedule
B of Regulation 9(1) of SEBI
(PIT) Regulations, 2015
2. Clause 10 of Code of
Conduct under Schedule
B of Regulation 9(1) of SEBI
(PIT) Regulations, 2015 by
granting relaxation to Mr.
Subash Menon for executing
the opposite
transaction
within six months of the
transaction
previous
(i.e.,
Trade) without
Contra
the
recording
reasons
of
relaxation
in writing
grant
for
informed to SEBI that
in the first
1. The Company had denied the allegations
is the
it
and
Company
instance which
prudently informed SEBI regarding the
non-disclosure of
the Transaction by
the Promoters, as mandated by the SEBI
PIT Regulations and Code of Conduct
for prevention of Insider trading of the
Company under Schedule B of Regulation
9(1) of the SEBI PIT Regulations.
2. The Compliance officer duly submitted
detailed responses to the Investigating
Officer Vide his letter dated January 30,
2020 clearly laying out grounds considered
for providing the Pre-Clearance.
Adjudication proceedings were conducted
on December 20, 2021
through video
conferencing by WebEx and company
represented the matter.
Securities Exchange Board of India vide
Adjudication Order No.: Order / MC / VS /
2022-23 / 15935 - 15937 dated April 11, 2022
disposed off the adjudication proceeding
initiated against the Company in connection
with the Show Cause Notice dated May
7, 2021 for alleged violations of the SEBI
(Prohibition of Insider Trading) Regulations,
2015 (“2015 PIT Regulations”) and the SEBI
Act, into trading in the scrip of the Company
during August 08, 2018 to October 01, 2018.
is
the Company at
first
It
prudently
instance which
informed SEBI regarding non-
disclosure by the promoters as
per Regulation 7(2) of SEBI (PIT)
Regulation, 2015.
The Company
submitted
detailed responses with respect
to details sought by SEBI from
time to time and informed its
inability to disgorge the profits
earned by Mr. Subash Menon
through execution of Contra
Trade and requested SEBI to
kindly approach Mr. Subhash
Menon directly in this matter.
Since SEBI vide its order no.
Order / MC / VS / 2022-23
/ 15935 - 15937 dated April
11, 2022 disposed off
the
proceedings
adjudication
initiated against the Company,
hence this matter stands closed
as on date.
(d) The listed entity was not required to take any actions as there was no observations made by the Practicing Company Secretary (Secretarial
Auditors) in previous reports.
For V. SREEDHARAN & ASSOCIATES
Company Secretaries
(Pradeep B. Kulkarni)
Partner
FCS: 7260; CP No. 7835
Place: Bengaluru
Date: 25.05.2022
UDIN: F007260D000386991
Peer Review Certificate No.: 589/2019
Subex Annual Report 2021-22
52
53
Subex Annual Report 2021-22
Annexure- D
Particulars
(i) the ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial
year;
(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
Non-Executive Directors / Independent Directors Ratio to the median remuneration
Mr. Anil Singhvi
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. George Zacharias
1.21 : 1
1.21 : 1
1.21 : 1
1.21 : 1
Executive Directors
Ratio to the median remuneration
Mr. Vinod Kumar Padmanabhan
Mr. Shiva Shankar Naga Roddam
43.55 : 1*
43.52 : 1*
Note:
* The remuneration paid also includes perquisites arising out of exercise of ESOPs.
Directors, Chief Executive Officer, Chief
Financial Officer and Company Secretary
Percentage of increase in
remuneration in the financial year
Mr. Anil Singhvi
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. George Zacharias
Mr. Vinod Kumar Padmanabhan
Mr. Shiva Shankar Naga Roddam
Mr. Sumit Kumar
Mr. Venkatraman G S
Mr. G V Krishnakanth
Note:
Not applicable*
Not applicable*
Not applicable*
Not applicable*
Incomparable@
Incomparable#
Not applicable$
Not applicable^
77%&
*Non-Executive Non-Independent and Independent Directors were not paid any
remuneration except for commission for the FY 22.
@ Mr. Vinod Kumar Padmanabhan drew remuneration from Subex Limited and
Subex Assurance LLP during the FY 21. The members at the 27th AGM approved
the re-appointment of Mr. Vinod Kumar Padmanabhan as the Managing Director
& CEO of the Subex Limited for a period of 3 years with effect from April 01, 2021.
Mr. Vinod Kumar Padmanabhan was paid a remuneration of ` 4,30,17,700 for the
FY 22. The Remuneration paid also includes perquisites arising out of exercise of
ESOPs.
# 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 the same was approved by the members at its 27th AGM. Mr. Shiva
Shankar Naga Roddam was paid a remuneration of ` 4,29,84,455 for FY22.
$Mr. Sumit Kumar has been appointed as Chief Financial Officer with effect from
January 31, 2022
^ Mr. Venkatraman G S has resigned as Chief Financial Officer of the Company
with effect from December 10, 2021
& The entire percentage increase in the remuneration constitutes perquisites
arising out of exercise of ESOPs
(iii) the percentage increase in the median remuneration of
employees in the financial year;
Incomparable.
(iv) the number of permanent employees on the rolls of Company;
213 employees as on March 31, 2022
(v) average percentiles increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are
any exceptional circumstances for increase in the managerial
remuneration;
Incomparable as 48% of employees got transferred from Subex Assurance LLP to
Subex Ltd on January 1, 2021. Increase in remuneration paid to Managing Director
& CEO and Whole- Time Director & COO is incomparable (Please refer point (ii)
above).
(vi) Affirmation that the remuneration is as per the remuneration
policy of the Company.
The remuneration of Directors, Senior Management and Employees is as per the
Remuneration Policy of the Company.
Subex Annual Report 2021-22
54
55
Subex Annual Report 2021-22
ANNEXURE- E
FORM AOC 2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and
Rule 8(2) of the 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 Transactions
• Subex (Asia Pacific) Pte. Ltd
• Subex Inc.
• Subex Middle East (FZE)
• Subex Assurance LLP
• Subex Digital LLP
B. Marketing & Support Services Expense Transactions
• Subex (Asia Pacific) Pte. Ltd
• Subex Inc.
• Subex Middle East (FZE)
• Subex (UK) Limited
• Subex Assurance LLP
• Subex Digital LLP
C. Reimbursement of expenses
• Subex (UK) Limited
• Subex Middle East (FZE)
• Subex (Asia Pacific) Pte Ltd
• Subex Assurance LLP
• Subex Digital LLP
• Subex Inc.
• Subex Americas 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
Subex Annual Report 2021-22
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55
Subex Annual Report 2021-22
(c) Duration of the contracts/ arrangements/ transactions
The transactions mentioned in 2(b) above are continuing
contracts.
(d) Salient terms of the contracts or arrangements or transactions including the value, if any: A. Sub-Contracting Transactions
The subsidiary transfers a portion of the revenue generated by
them to the ultimate holding Company
B. Marketing & Support Services Expense Transactions
The subsidiary transfers the cost incurred in earning the
revenue to the ultimate holding 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 31)
May 30, 2022
NA
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
Date : May 30, 2022
(e) Date(s) of approval by the Board, if any:
(f) Amount paid as advances, if any:
For Subex Limited
Anil Singhvi
Chairman, Non-Executive & Non-Independent Director
DIN:00239589
Place: Bengaluru
Date : May 30, 2022
Subex Annual Report 2021-22
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57
Subex Annual Report 2021-22
ANNEXURE- F
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.
1
2
3
4
Name of Director
Designation / Nature of
Directorship
Number of meetings of
CSR Committee
held during the year
Number of meetings of
CSR Committee attended
during the year
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 & COO
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 loss 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
(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 2021-22:
Subex Annual Report 2021-22
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57
Subex Annual Report 2021-22
5. (a) CSR amount spent or unspent for the financial year: NIL
Total Amount Spent for the
Financial Year. (in `)
Amount Unspent (in `)
Total Amount transferred to Unspent CSR
Account as per section 135(6).
Amount transferred to any fund specified under Schedule VII as per
second proviso to section 135(5).
Amount
Date of transfer.
Name of the Fund
Amount
Date of transfer
Not applicable
(b) Details of CSR amount spent against ongoing projects for the financial year:
1
Sl.
No
2
3
4
5
6
7
8
9
10
11
Name
of the
Project
Local
area
(Yes
/No).
Item from
the list of
activities in
schedule
VII to the
Act.
Location of the
project.
Project
duration.
Amount
allocated for
the project
(in `).
Amount
spent in the
current
financial
Year (in `)
Amount transferred
to Unspent CSR
Account for the
project as per
Section 135(6)
(in `).
Mode of
Implementation
- Direct (Yes/No)
Mode of Implementation
- Through Implementing
Agency
State District
Not applicable
Name
CSR
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 (6b+6c+6d+6e): Not applicable
(g) Excess amount for set off, if any: Nil
Sl. No. Particular
(i)
Two percent of average net loss of the company as per section 135(5)
Amount (in `)
Not applicable, as the Company has incurred a
loss during the preceding 3 financial years
Not applicable
Not applicable
Total amount spent for the Financial Year
Excess amount spent for the financial year [(ii)-(i)]
(ii)
(iii)
(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 Financial
Year.
Amount transferred
to Unspent CSR
Account under
section 135(6) (in `)
Amount spent in the
reporting Financial
Year (in `).
Amount transferred to any fund specified under
Schedule VII as per section 135(6), if any.
Name of the
Fund
Amount (in `).
Date of
transfer
Amount remaining
to be spent in
succeeding
financial years. (in `)
1
2
3
4
Not applicable
Subex Annual Report 2021-22
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59
Subex Annual Report 2021-22
(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): NA
1
2
3
4
Sl. No
Project ID.
Name of the
Project.
Financial Year
in which the
project was
commenced.
5
Project
duration.
6
7
8
9
Total amount
allocated for
the project
(in `).
Amount spent on
the project in the
reporting Financial
Year (in `).
Cumulative amount
spent at the end of
reporting Financial
Year. (in `)
Status of
the project -
Completed /
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.:NA
(d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset).:NA
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
For Subex Limited
Anil Singhvi
Chairman- CSR Committee
DIN:00239589
Place: Bengaluru
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN:06563872
Place: Bengaluru
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 33 of the Annual Report for details.
Subex Annual Report 2021-22
58
59
Subex Annual Report 2021-22
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 behavior 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 and has always ensured transparency to stakeholders.
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 on March 31, 2022,
unless otherwise stated. Material changes and events between
the end of the financial year and date of the report are provided
wherever required.
The Board of the Company is formed with an optimum
combination of Executive and Non-Executive Directors, which
not only meet the legal obligation but also make a diversified
Board with a mixed blend of experiences, expertise, and
professionals. As on March 31, 2022, 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. The Chairman of the Board is Non-
Executive Director and is not related to the Managing Director &
Chief Executive Officer (‘CEO’) of the Company.
Director’s Profile:
The Board of Directors is composed of highly renowned
professionals drawn from diverse fields, who bring with them
wide range of skill and experience to the Board, which enhances
the quality of the Board’s decision making process.
The brief profile of the Company’s Board of Directors is as
under:
Mr. Anil Singhvi, Chairman, Non-Executive & Non-Independent
Director 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 like Shree Digvijay Cement Co. Limited, IDFC Limited,
Assets Care & Reconstruction Enterprise Limited to name a few.
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.
She has been instrumental on Board and helps to ensure the
good governance aspect with respect to conduct of Board
meetings by giving valuable suggestions to major decision
making aspects of the Board and Committees.
Subex Annual Report 2021-22
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61
Subex Annual Report 2021-22
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, Independent Director 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. He has served on reputed companies like Yahoo!
is
Netherlands B.V., Mindtree Ltd to name a few and
currently serving as an Independent Director on the Board of
Matrimony.com.
Mr. Shiva Shankar Naga Roddam is the Whole-Time Director &
Chief Operating Officer and is responsible for Sales, Marketing,
Engineering & Delivery of Subex Group. He 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.
He has been instrumental in bringing great business deals and
has added value to the Company.
Details of appointments / re-appointments:
i.
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.
ii.
The members at the 27th AGM approved the revision in
terms of appointment of Mr. Shiva Shankar Naga Roddam
with effect from February 01, 2021.
iii. Based on the recommendation of the Nomination &
Remuneration Committee, the Board at its meeting
held on May 30, 2022, approved the re-appointment of
Ms. Poornima Prabhu as an Independent Directors for a
further period of 5 years with effect from July 28, 2022.
Her re-appointment is being placed before the members
for their approval, at this 28th AGM.
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 (“Act”), 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.
B. Details of attendance of Board of Directors and other directorship/committee positions, etc as on March 31, 2022:
Director
Position & Category
No. of
Board
Meetings
Held
No. of
Board
Meetings
Attended
Last AGM
Attended
Directorships^
held in
other public
companies
No. of
Committees
in Which the
Director is
Chairman #
No. of
Committees
in Which the
Director Is
Member #
Mr. Anil Singhvi
Chairman, Non-
Executive & Non-
Independent Director
Mr. Vinod Kumar Padmanabhan Managing Director &
Chief Executive Officer
[Executive/ WTD]
Ms. Nisha Dutt
Independent Director
Ms. Poornima Prabhu
Independent Director
Mr. George Zacharias
Independent Director
Mr. Shiva Shankar Naga Roddam Whole-Time Director &
COO [Executive/ WTD]
5
5
5
5
5
5
5
5
5
4
5
5
Yes
Yes
Yes
Yes
Yes
Yes
5
1
-
-
1
1
2
-
-
-
-
-
3
-
-
-
1
-
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Subex Annual Report 2021-22
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
IDFC Limited
Non-Executive, Independent Director
Shree Digvijay Cement Co Limited
Executive, Non-Independent Director
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. George Zacharias
Nil
Nil
Nil
Nil
Matrimony.com Limited
Non-Executive, Independent Director
Mr. Shiva Shankar Naga Roddam
Nil
Nil
Notes:
^ For the purpose of reckoning Directorship /Committees position on which a Director can serve, all public limited companies, whether listed or not, have
been included and all other companies including Subex Limited, private limited companies, foreign companies, and companies under Section 8 of the
Companies Act, 2013, have been excluded.
# For the purpose of considering the limit of Committee membership and chairpersonship of a director, membership and chairpersonship of Audit Committee
and Stakeholders Relationship Committee of public companies have been considered. Excludes the membership & chairpersonship in Subex Limited.
** Regulation 17A of the Listing Regulations provides for the inclusion of only equity listed entities for reckoning the directorship in the listed entity, hence
directorships held in debt listed entities have not been considered for reporting as above
C. Number and Dates of Board Meetings
Details of meetings of the Board held during the financial year
2021-22 are as follows:
Sl. No
Board Meeting Number
Date of the Board Meeting
1.
2.
3.
4.
5.
No. 1/2021-22
No. 2/2021-22
No. 3/2021-22
No. 4/2021-22
No. 5/2021-22
May 17, 2021
August 09, 2021
September 03, 2021
October 28, 2021
January 31, 2022
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 at
March 31, 2022
% of equity
Mr. Anil Singhvi
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. Vinod Kumar Padmanabhan
Mr. George Zacharias
60,000
NIL
NIL
5,44,095
NIL
Mr. Shiva Shankar Naga Roddam
5,00,000
0.011
NA
NA
0.097
NA
0.089
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
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
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
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Subex Annual Report 2021-22
Description
Financial management,
allocation,
accounting, financial reporting, Compliance, best
practices in governance, ethics and values to
enhance the value of the stakeholders
Capital
Management decisions, branding, operational
integration,
business
environments, economic conditions and regulatory
framework
understanding
diverse
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
independent directors can be accessed at
imparted to
https://www.subex.com/shareholder-services/.
Competencies
/ Skills
Finance and
Governance
Core Skills/Expertise/Competencies of the Board of Directors.
Strategy
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:
Sales and
marketing
Developing strategies for increasing market share,
Sales growth, expanding global markets and
enhance reputation of the organisation
Personnel and
Leadership
People practices and policies, geographic, cultural
and economic conditions and driving strengths and
talent, succession planning, risk management and
long-term growth.
The details of Directors of the Company who possess those skills/expertise/competencies are as given below:
Skills/ expertise/ competencies
Anil Singhvi
Nisha Dutt
Poornima
Prabhu
Vinod Kumar
Padmanabhan
George
Zacharias
Shiva Shankar
Naga Roddam
Finance - Financial management, Capital
allocation, accounting, financial reporting
Governance - best practices in governance,
ethics and values
Strategy - operational integration,
understanding diverse business
environments, economic conditions
Decision making - Management decisions,
branding
Sales and marketing
Personnel and Leadership
-
-
-
-
-
-
H.
Independent Directors and Declaration of Independence
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.
In terms of Regulation 25(8) of Listing Regulations, the
Independent Directors have confirmed that they are not
aware of any circumstance or situation that exists or may be
reasonably anticipated that could impair or impact their ability
to discharge their duties. 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 SEBI (LODR) Regulations, 2015. Based
on the declarations received from the Independent Directors,
the Board of Directors has confirmed that they meet the criteria
of independence as mentioned under Regulation 16(1)(b) of the
SEBI (LODR) Regulations, 2015 and Section 149(6) of the Act and
that they are independent of the management.
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
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Subex Annual Report 2021-22
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.
The members at the 27th AGM of the Company approved
the payment of remuneration by way of commission to
Non-Executive and/Independent Directors a sum not exceeding
1% per annum of the net profits of the Company. In any financial
year, if the company has no profits or its profits are inadequate,
the company can pay remuneration to its Non-Executive and/
Independent Directors in accordance with Part II, Section II of
Schedule V.
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.
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
27th 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 auditors’ 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
statements arising out of audit findings.
the
financial
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;
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 auditors’
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
qualifications, experience and background, etc. of the
candidate;
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 Rs.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 Rs.100 crore or 10% of the asset size of the
subsidiary, whichever is lower including existing loans /
advances / investments.
29. Considering
and commenting on
rationale,
cost-benefits and impact of schemes involving merger,
demerger, amalgamation etc., on the listed entity and its
shareholders.
the
The Audit Committee charter containing
terms of
reference is also available on the Company’s website at
https://www.subex.com/investors/shareholder-services/.
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Subex Annual Report 2021-22
B. Composition of the Audit Committee as on March 31, 2022
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
C. Meetings and Attendance of the Committee during the Year
During the financial year 2021-22, the following meetings of the
Audit Committee were held:
Sl.
No
1.
2.
3.
4.
Meeting No.
Date of the meeting
No. 1/ 2021-22
No. 2/ 2021-22
No. 3/ 2021-22
No. 4/ 2021-22
May 17,2021*
August 09, 2021*
October 28, 2021 *
January 31, 2022*
*dates on which the Qarterly/Half Yearly/Year ended results for the
financial year 2021-22 were considered.
The Attendance of the directors at the Audit Committee
Meetings during the Financial Year 2021-22 are as follows:
Name of the Director
No. of Audit
Committee
Meetings Held
No. of Audit
Committee
Meetings Attended
Ms. Nisha Dutt (Chairperson)
Mr. Anil Singhvi
Ms. Poornima Prabhu
Mr. George Zacharias
4
4
4
4
4
4
3
4
The minutes of the meetings of the Audit Committee are placed
before and noted by the Board. All recommendations made by
the Audit Committee were accepted by the Board of Directors
of the Company during the financial year 2021- 2022.
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, 2015. 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.
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;
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Subex Annual Report 2021-22
2.
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.
3. Devising a policy on diversity of board of directors;
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.
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 (LODR) Regulations, 2015, 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, 2022 is as follows:
Sl.
No
1
2
Name of the Director
Category
Ms. Poornima Prabhu
(Chairperson)
Mr. Anil Singhvi
Independent Director
Non -Executive &
Non -Independent Director
3.
Ms. Nisha Dutt
Independent Director
C. Meetings and Attendance of the Committee during the Year
During the financial year 2021-22, the following meetings of the
Nomination & Remuneration Committee are held:
Sl.
No
1.
2.
3.
Meeting No.
Date of the meeting
No. 1/ 2021-22
No. 2/ 2021-22
No. 3/ 2021-22
May 17, 2021
October 28, 2021
January 31, 2022
Ms. Poornima Prabhu, Chairperson of the Nomination &
Remuneration Committee was present at the 27th Annual
General Meeting.
Attendance of the members of the Nomination & Remuneration
Committee meetings during the Financial Year 2021-22 were as
follows:
Name of the Director
No. of Nomination
& Remuneration
Committee
Meetings Held
No. of Nomination
& Remuneration
Committee
Meetings Attended
Ms. Poornima Prabhu
Mr. Anil Singhvi
Ms. Nisha Dutt
3
3
3
2
3
3
the meetings of
The minutes of
the Nomination and
Remuneration Committee are placed before and noted by
the Board. All recommendations made by the Nomination
and Remuneration Committee were accepted by the Board of
Directors of the Company during the financial year 2021-2022.
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.
E. 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
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Subex Annual Report 2021-22
Act, 2013 and is available on the website of the Company at
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.
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:
F. REMUNERATION OF DIRECTORS
Pecuniary relationships or transactions
During the year under review, there was no pecuniary
relationship or transactions between the Company and any of
its Non-Executive Directors apart from sitting fees, commission
and reimbursement of expenses incurred by them to attend the
meetings of the Company.
Non-Executive Directors’ compensation and disclosures
The Non-Executive Directors are paid sitting fees for attending
the meetings of the Board and Committees of the Board. During
the year under review, the Company paid the sitting fee to Non-
Executive Director for attending meetings of the Board, Audit,
Nomination and Remuneration, Stakeholders Relationship and
Risk Management Committee.
In compliance with the provisions of the Act and SEBI (LODR)
Regulations, 2015, the Non-Executive Directors
including
Independent Directors are also paid a commission, the amount
whereof is recommended by the NRC and approved by the
Board. The shareholders of the Company at its 27th Annual
General Meeting held on July 9, 2021, had approved payment
of commission to the Non- Executive Directors of the Company
for each year commencing from financial year 2021. No Stock
option has been granted to the Non-Executive Directors.
The details of the Commission and sitting fees paid/ payable
to Non-Executive Directors for FY 2021-22 are given below:
Name of the Director
Sitting fees
(` in Lakhs)
Commission#
(Relating to FY
2021-22)
Particulars of Remuneration
Salary as per provisions contained
in Section 17(1) of the Income Tax
Act, 1961
Allowances and perquisites
Contribution to Retiral Funds
Total
Options Granted during the year
Options exercised during the year
No. of Shares held (as on March
31, 2022)
Term of Service Contract
(` in Lakhs)
Mr. Vinod
Kumar
Padmanabhan
Mr. Shiva
Shankar Naga
Roddam
186.97
90.87
234.56
8.64
430.17
Nil
5,00,000
5,44,095
335.02
3.96
429.85
Nil
6,50,000
5,00,000
From April 01,
2021 till March
31, 2024
From February
01, 2021 till
February 06,
2023
Notice Period
3 months
3 months
Notes:
i)
ii)
Salary includes fixed pay and performance linked variable pay
In view of no profits / inadequate profit as computed in
accordance with Section 198 of the Act, the Managing Director and
CEO/ Whole-time Director and COO have been paid remuneration
in accordance with Part II of Section II of Schedule V of the Act for
the year ended March 31, 2022.
iii) Remuneration includes value of perquisites arising out of the
exercise of employee stock options
iv)
The retirement benefit shall include benefits such as provident fund
and gratuity.
Mr. Anil Singhvi
Ms. Nisha Dutt
Ms. Poornima Prabhu
Mr. George Zacharias
18.00
14.00
13.00
11.00
11.00
9.00
7.00
9.00
# The Board at its meeting held on May 30, 2022 approved an amount
of ` 36 lakhs be paid to the Independent Director and Non- Executive
Director as Commission for the Financial year 2022.
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
G. DIRECTORS AND OFFICERS INSURANCE
Pursuant to requirement under Regulation 25(10) of SEBI (LODR)
Regulations, 2015, the Company has undertaken Directors and
Officers Insurance (‘D and O’ insurance) for all its Directors,
including Independent Directors for such quantum and risks as
determined by the Board of Directors of the Company.
H. 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/ transmission of shares, non-receipt
of annual report, non-receipt of declared dividends, issue of
new/duplicate certificates, general meetings etc. Details of
grievances of the investors are provided in the “Shareholders’
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Subex Annual Report 2021-22
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 acts as secretary of
the Committee in addition to being the Compliance Officer of
the Committee.
A. Composition of the Stakeholders Relationship Committee as
on March 31, 2022:
Sl.
No
1
2
3.
Name of the Director
Category
Mr. Anil Singhvi (Chairman)
Non-Executive &
Non-Independent Director
Ms. Poornima Prabhu
Independent Director
Mr. Vinod Kumar Padmanabhan Managing Director & CEO
B. Meetings and Attendance of the Committee during the Year
During the financial year 2021-22, the following meetings of the
Stakeholders Relationship Committee were held:
Sl.
No
1.
2.
3.
4.
Meeting No.
Date of the meeting
No. 1/2021-22
No. 2/2021-22
No. 3/2021-22
No. 4/2021-22
May 17, 2021
August 09,2021
October 28, 2021
January 31, 2022
Attendance of the Directors at the Stakeholders Relationship
Committee Meetings for the Financial Year 2021-22 are as
follows:
Name of the Director
No. of
Stakeholders
Relationship
Committee
Meetings Held
No. of
Stakeholders
Relationship
Committee
Meetings Attended
Mr. Anil Singhvi
Ms. Poornima Prabhu
Mr. Vinod Kumar Padmanabhan
4
4
4
4
4
4
Mr. Anil Singhvi, Chairman of the Committee attended the last
Annual General Meeting of the Company held on July 9, 2021,
and addressed the queries of the shareholders. 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, 2022 are as follows:
Number of shareholders
complaints redressed during the year.
Number of shareholders complaints
not solved to the satisfaction of the
shareholders
Number of shareholders complaints
pending at end of the year
169
0
00*
I.
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 and as amended from
time to time. 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.
J. 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, 2022
Sl.
No
1
2
3.
4.
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
Mr. Shiva Shankar Naga
Whole-Time Director & COO
Name of the Non-Executive Director
heading the Committee
Mr. Anil Singhvi, Chairman,
Non– Executive and Non-
Independent Director
B. Meetings and Attendance of the Committee during the Year
2021-22:
Name and designation of the
Compliance Officer
Mr. G V Krishnakanth,
Company Secretary
There were no meetings of the Committee held during the
financial year under consideration.
Number of shareholders complaints
pending at the beginning of the year
Number of shareholders complaints
received during the year
3
166
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.
The Company had voluntarily constituted a Corporate Social
Responsibility Committee although the criteria under section 135
of Companies Act, 2013 was not met and 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 a separate section in this Annual
Report as ‘Annexure G’ to the Board’s 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
K. 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.
A. Terms of Reference
The Roles and responsibility of the Risk Management Committee
has, inter alia, the following mandate as prescribed under Part D
of Schedule II of The SEBI (LODR) Regulations, 2015 :
1.
To formulate a detailed risk management policy which shall
include:
(a) A framework for identification of internal and external
risks specifically faced by the listed entity, in particular
including financial, operational, sectoral, sustainability
(particularly, ESG related risks), information, cyber
security risks or any other risk as may be determined
by the Committee.
Name of the Director
Mr. Anil Singhvi
Ms. Nisha Dutt
Mr. Vinod Kumar Padmanabhan
Mr. George Zacharias
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(b) Measures for risk mitigation including systems and
processes for internal control of identified risks.
(c) Business continuity plan.
2. To ensure
that appropriate methodology, processes
and systems are in place to monitor and evaluate risks
associated with the business of the Company;
3. To monitor and oversee implementation of the risk
management policy, including evaluating the adequacy of
risk management systems;
4. To monitor and review risk management plan and such
other functions as it may deem fit including cyber security.
5. To periodically review the risk management policy, at least
once in two years, including by considering the changing
industry dynamics and evolving complexity;
6. To keep the board of directors informed about the nature
and content of its discussions, recommendations and
actions to be taken;
7.
The appointment, removal and terms of remuneration of
the Chief Risk Officer (if any) shall be subject to review by
the Risk Management Committee.
B. Composition of the Risk Management Committee as on March
31, 2022
Sl.
No
1.
2.
3.
4.
Name of the Director
Category
Mr. Anil Singhvi (Chairman)
Non-Executive &
Non-Independent Director
Ms. Nisha Dutt
Independent Director
Mr. Vinod Kumar Padmanabhan Managing Director & CEO
Mr. George Zacharias
Independent Director
C. Meetings and Attendance during the Year
During the financial year 2021-22, the following meetings of the
Risk Management Committee were held
Sl.
No
1.
2.
Meeting No.
Date of the meeting
No. 1/2021-22
No. 2/2021-22
October 28, 2021
December 27,2021
No. of Risk Management
Committee Meetings Held
No. of Risk Management
Committee Meetings attended
2
2
2
2
2
2
2
2
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L. MEETING OF INDEPENDENT DIRECTORS
During the year under review, the Independent Directors met once on March 02, 2022, inter alia, to:
•
•
•
Review the performance of the Non-Independent Directors and the Board of Directors as a whole;
Review the performance of the Chairperson of the listed entity, taking into account the views of Executive Directors and
Non-Executive Directors;
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.
M. GENERAL BODY MEETINGS
A. Location and Time of the Last Three AGMs
Year
2018-19
2019-20
Date of AGM
Venue
Time
July 04, 2019
“The Grand Ball Room”, Hotel Lalit Ashok, Kumara Krupa High Grounds, Bengaluru-560 001
2:00 PM
September 25, 2020
Video Conference/Other Audio-Visual Means (Deemed Venue is at the Registered Office of
the Company situated at Pritech Park - SEZ, Block-09, 4th Floor, B Wing, Sy No. 51-64/4, ORR,
Bellandur Vlg, Varthur Hobli, Bangalore- 560103 )
3:00 PM
2020-21
July 09, 2021
Video Conference/Other Audio-Visual Means (Deemed Venue is at the Registered Office of
the Company situated at Pritech Park - SEZ, Block-09, 4th Floor, B Wing, Sy No. 51-64/4, ORR,
Bellandur Vlg, Varthur Hobli, Bangalore- 560103)
11.00 AM
Details of the Special Resolutions passed at the Last Three AGMs:
Date of Annual
General Meeting
No. of special
resolutions passed
Details of Resolutions pertaining to
July 04, 2019
September 25, 2020
July 09, 2021
1
2
3
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
1.
2.
3.
Revision in terms of appointment of Mr. Shiva Shankar Naga Roddam as a Whole-Time Director of the
Company
Re-appointment of Mr. Vinod Kumar Padmanabhan as Managing Director & CEO of the Company
Payment of remuneration to the independent & non-executive directors by way of commission
B. Extraordinary General Meeting:
No Extraordinary General Meeting of the members was held
during FY 2021-22
C. Postal Ballot during year 2021-22
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 2021-
22 for the following businesses:
Resolution No. 1: Approval for transfer of RMS business from
Subex Assurance LLP to the Company
The Notice of Postal Ballot was approved by the Board of
Directors at their meeting held on October 28, 2021.
(FCS
The Company had appointed Mr. Biswajit Ghosh,
Membership No. 8750 and Certificate of Practice No. 8239),
Partner, BMP & Co., LLP, Practicing Company Secretaries, as
the Scrutinizer and Mr. Pramod S.M. (Membership No. 7834
and Certificate of Practice No.13784), Partner, BMP & Co., LLP,
Practicing Company Secretaries, as an alternate scrutinizer to
Mr. Biswajit Ghosh. 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 Approval for transfer
of RMS business from Subex Assurance LLP to the Company
through e-voting procedure, which commenced on January 25,
2022 and concluded on February 23, 2022, in accordance with
the MCA General Circular No. 14/2020 dated April 08, 2020, the
General Circular No. 17/2020 dated April 13, 2020, the General
Circular No. 22/2020 dated June 15, 2020, the General Circular
No. 33/2020 dated September 28, 2020, General Circular
No. 39/2020 dated December 31, 2020, General Circular No.
10/2021 dated June, 23, 2021 and General Circular No. 20/2021
dated December 8, 2021 (“MCA Circulars”), Regulation 44 of
the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015
(“Listing
Regulations”) read with SEBI Circular Nos. SEBI/HO/CFD/
CMD1/CIR/P/2020/79 dated May 12, 2020 and SEBI / HO /
CFD /CMD2 /CIR/P/2021/11 dated January 15, 2021, Secretarial
Standard on General Meetings (“SS-2”) issued by the Institute
of Company Secretaries of India and other applicable, laws,
rules and regulations (including any statutory modification(s)
or re-enactment(s) thereof, for the time being in force and as
amended from time to time).
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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/
investor-information/ 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
Approval for transfer of RMS
business from Subex Assurance
LLP to the Company
38700247
36176927
2516108
93.50
Passed with
Requisite Majority
The required resolution was approved with requisite majority, the results were displayed on the website of the Company and necessary
disclosures were made to the Stock Exchanges.
N. MEANS OF COMMUNICATION
A. Annual/Half Yearly and Quarterly Results
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
https://www.subex.com/
investors/announcement-
(click on
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://subex.com/newsroom/.
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, Auditors’ 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 2021-22, had scheduled the Investor calls to discuss on
the Earnings of the Company for relevant quarters which were
scheduled on May 19, 2021, August 10, 2021, October 29, 2021
and February 01, 2022 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 Management of the Company
has interacted with Analysts and the details of the same are
available on the website under the link https://www.subex.
com/investors/announcement-filing/#investor-analyst-call.
The transcripts pertaining to the Earning’s call held during the
year are uploaded on the Company’s website under the link
h t t p s : / / w w w . s u b e x . c o m / i n v e s t o r s / a n n o u n c e m e n t -
filing/#investor-analyst-call (click on investors/announcement-
filing/investor-analyst-call). Pursuant
to General Circular
No’s.14/2020, 17/2020, 20/2020, 02/2021, 19/2021, 21/2021
and 02/2022 dated April 08, 2020, April 13, 2020, May 05,
2020, January 13, 2021, December 08, 2021, December 14,
2021 and May 05, 2022 respectively, issued by the Ministry of
Corporate Affairs (“collectively MCA Circulars”) and Circular Nos.
SEBI/HO/CFD/CMD1/CIR/P/2020/79, SEBI/HO/CFD/CMD2/
CIR/P/2021/11 and SEBI/HO/CFD/CMD2/CIR/P/2022/62 dated
May 12, 2020, January 15, 2021 and May 13, 2022, respectively,
issued by the Securities & Exchange Board of India (“SEBI
Circulars”), companies have been allowed to hold AGM during the
period up to December 31, 2022 Video Conferencing or Other
Audio Visual Means (“VC/OAVM”). The said MCA Circulars and
SEBI Circulars have dispensed with the requirement of printing
and dispatch of annual reports to shareholders. Relaxation has
been provided up to December 31, 2022 from Regulation 36(1)
(b) of SEBI (LODR) Regulations, 2015, which requires sending
hard copy of annual report containing salient features of all the
documents prescribed in Section 136 of the Companies Act,
2013 to the shareholders who have not registered their email
addresses. However, in terms Regulation 36(1)(c) of SEBI (LODR)
Regulations, 2015, the Company shall to send hard copy of full
annual report to those shareholders who request for the same.
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 2021-22 (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 the MCA Circulars and SEBI Circulars, the Company
has taken 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 the 28th AGM
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O.
DISCLOSURES
A. RELATED PARTY TRANSACTIONS
All transactions entered 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 31 to the Standalone
and Note 32 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. Disclosure by listed entity and its subsidiaries of “Loans and
advances in the nature of loans to firms / companies in which
Directors are interested by name and amount”:
There were no loans and advances provided to firms/ companies
in which Directors are interested.
C. COMPLIANCE WITH ACCOUNTING STANDARD
In the preparation of the financial statements, the Company
has followed and adopted all relevant Accounting Standards
notified by the Companies (Indian Accounting Standards) Rules,
2015 (IND AS) specified under Section 133 of the Companies
Act, 2013 read with relevant Rules made thereunder and other
recognized accounting policies and practices. The Significant
Accounting Policies which are consistently applied and followed
by the Company to the extent applicable have been set out in
the Notes to the Financial Statements.
D.
INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading) Regulations,
2015 (‘Prohibition of Insider Trading Regulations’), the Company
has formulated and adopted the ‘Code of Conduct to Regulate,
Monitor and Report Trading by Designated Persons and Code
of Practices and Procedures for Fair Disclosures of Unpublished
Price Sensitive Information’ (‘Code’).
The said Code is applicable to all the Designated Persons,
their immediate relatives, and subsidiaries of the Company,
requires pre-clearance for dealing in the Company’s shares
and prohibits trading in securities of the Company while
in possession of unpublished price sensitive
information
in relation to the Company and during the period when
the Trading Window is closed. The Code has also been
uploaded on the Company’s website and can be accessed at
https://www.subex.com/investors/shareholder-services/.
Pursuant to the above, the Company has put in place adequate
and effective system of internal controls to ensure compliance
with the requirements of the Prohibition of Insider Trading
Regulations.
The Code expressly lays down the guidelines and the procedures
to be followed and disclosures to be made, while dealing with
the shares of the Company.
E. DETAILS OF NON-COMPLIANCE BY THE COMPANY,
PENALTIES, STRICTURES IMPOSED ON THE COMPANY BY THE
STOCK EXCHANGES, SEBI OR ANY STATUTORY AUTHORITY
ON ANY MATTER RELATED TO CAPITAL MARKETS
The Company has complied with all the requirements of the
SEBI (LODR) Regulations, 2015 as well as regulations and
guidelines of SEBI. There has been no non-compliance by the
Company on any matter related to Capital Markets during the
last three years. No penalties or strictures have been imposed
on the Company by SEBI, Stock Exchanges or any statutory
authority during last three years relating to capital markets
F. 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.
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/.
G. 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.
H. 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. The Company follows a currency hedging
policy to limit impact of exchange volatility on net receivables.
Hedging strategies are decided and monitored periodically by
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the Risk Management Committee of the Board convened on a
regular basis.
I. 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
2021-22.
J. 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.
K. 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.
L. 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, 2022, is as follows:
M. 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.
N. 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, 2022. 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 website under the link
https://www.subex.com/investors/shareholder-services/.
O. RECOMMENDATION OF THE COMMITTEES
The minutes of the meetings of all the Committees are placed
before and noted by the Board. There were no instances in the
financial year 2021-22, where the Board had not accepted any
recommendations of any Committees of the Board which is
mandatorily required.
P. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis is presented in a
separate section forming part of the Annual Report.
Q. GENERAL SHAREHOLDER INFORMATION
General shareholder information is provided in the “Shareholders’
Information” Section of the Annual Report.
(` in Lakhs)
R. COMPLIANCE WITH CORPORATE GOVERNANCE
Fees for audit and related services paid to S.R. Batliboi
& Associates LLP
Other fees paid to S.R. Batliboi & Associates LLP and
Affiliate firms and to entities of the network of which
the statutory auditor is a part.
Total fees
96
28
124
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.
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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.
duties that are attributable to the Company on a regular basis
pursuant to the provisions of Regulation 27(1) of SEBI (LODR)
Regulation, 2015.
S. DETAILS OF COMPLIANCE WITH MANDATORY
B. Shareholders’ Rights
REQUIREMENTS AND ADOPTION OF NON-MANDATORY
REQUIREMENTS
The Company is compliant with all the mandatory requirements
of SEBI (LODR) Regulations, 2015 for the financial year 2021-22.
The following non-mandatory requirements under Part E of
Schedule II of SEBI (LODR) Regulations, 2015 to the extent they
have been adopted are mentioned below:
A. The Board
The Company appointed Mr. Anil Singhvi, Non- 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
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) and are also hosted 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 Auditors
The Internal Auditors 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
Anil Singhvi
Chairman, Non-Executive, &
Non-Independent Director
DIN: 00239589
Place: Bengaluru
Date: May 30, 2022
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN: 06563872
Place: Bengaluru
Date: May 30, 2022
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Subex Annual Report 2021-22
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, 2022 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 30, 2022
Place: Bengaluru
For Subex Limited
Sumit Kumar
Chief Financial Officer
Date: May 30, 2022
Place: Bengaluru
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ANNEXURE 2
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015)
To,
The Members of
Subex Limited
CIN L85110KA1994PLC016663
Pritech Park - SEZ, Block-09, 4th Floor,
B Wing, Sy No. 51-64/4, ORR, Bellandur Vlg,
Varthur Hobli Bengaluru-560103
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Subex Limited having CIN -
L85110KA1994PLC016663 and having registered office at Pritech Park - SEZ, Block-09, 4th Floor, B Wing, Sy No. 51-64/4, ORR, Bellandur Vlg,
Varthur Hobli Bangalore Karnataka 560103 (hereinafter referred to as ‘the Company’), produced before us by the Company for the purpose of
issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at
the portal 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 2022 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
Nisha Dutt
Poornima Kamalaksh Prabhu
Vinod Kumar Padmanabhan
George Zacharias
Shiva Shankar Naga Roddam
DIN
00239589
06465957
03114937
06563872
00162570
07212118
Designation
Chairman - Non - Executive Director-Non-Independent Director
Non - Executive– Independent Director
Non - Executive – Independent Director
Executive Director – CEO - MD
Non - Executive – Independent Director
Executive Director
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.
Date: May 30, 2022
Place: Bangalore
UDIN No: F007834D000432313
For BMP & Co. LLP
Company Secretaries
Pramod S M
Partner
FCS 7834 / CP No. 13784
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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, 2022.
Place: Bengaluru
Date: May 30, 2022
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN: 06563872
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BUSINESS RESPONSIBILITY REPORT
Introduction
This report is in accordance with Regulation 34 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.
Founded in 1994, we have been part of the evolution of mobile
technology. 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 Settlement and
Analytics. It also complements them through its newer solutions
such as IoT Security, Digital Identity Management and Anomaly
Detection. Subex also offers scalable Managed Services and Business
Consulting services.
We have a global presence, employing over 800+ people, with
headquarters in Bengaluru, India and offices in Singapore, UK, USA,
Bangladesh and UAE
Section A – General Information about the Company
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- 560 103
https://www.subex.com/
investorrelations@subex.com
Financial Year reported
April 01, 2021 to March 31, 2022
Sector(s) that the Company is engaged in (industrial
activity code-wise)
IT Software, Services, and related activities. NIC Codes – 62011, 62013
List three key products / services that the Company
manufacture / provides (as in Balance Sheet)
Please refer page 90 of the Annual Report (forming part of the Management Discussion and
Analysis)
Total number of locations where business activity is undertaken by the Company
i) Number of International Locations (Provide details of major 5)
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 /
National / International
India, Americas, EMEA, Asia Pacific
Section B – Financial Details of the Company (on a Consolidated basis) (as on 31.03.2022)
1.
2.
3.
4.
5.
Paid up Capital (INR)
As on March 31, 2022, the paid-up capital of the Company stood at ` 2810014675 consisting of
562,002,935 equity shares of ` 5 each.
Total turnover (INR in Lakhs)
Total Profit/ (loss) after Taxes (INR in Lakhs)
` 33,344
` 2,099
Total spending on Corporate Social Responsibility
(CSR) as percentage of profit after tax (%)
NIL (See point no. 5)
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”) had undertaken welfare activities by adopting a
government school and incurred Rs. 16,19,519 towards repairing and development activities of the school. 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 a separate section in this Annual Report
as ‘Annexure G’ to the Board’s Report (Annual Report on CSR Activities).
Further details on the activities undertaken by the SCT are contained under Principles 4 & 8.
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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. Subex Digital LLP
3. Subex Technologies Limited
4. Subex Americas Inc.
5. Subex (UK) Limited
6. Subex Middle East (FZE)
7. Subex Bangladesh Private Limited
8. Subex Azure Holdings Inc.
9. Subex (Asia Pacific) Pte Limited
10. Subex Inc.
11. Subex Account Aggregator Services Private Limited*
*Incorporated on May 10, 2022.
2.
3.
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.
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.
Name
Designation
1.
Mr. Vinod Kumar Padmanabhan
Managing Director & CEO
DIN
06563872
b) Details of the BR Head
Sl. No.
Particulars
1
2
3
4
5
DIN
Name
Designation
Telephone No.
E-mail ID
Details
06563872
Mr. Vinod Kumar Padmanabhan
Managing Director & CEO
080-37451377
investorrelations@subex.com
2. Principle-wise (as per NVGs) BR policy / policies
As per Regulation 34 of the Listing 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)
Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.
Principle 2 (P2)
Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.
Principle 3 (P3)
Businesses should promote the well-being of all employees.
Principle 4 (P4)
Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged,
vulnerable and marginalized.
Principle 5 (P5)
Businesses should respect and promote human rights.
Principle 6 (P6)
Businesses should respect, protect, and make efforts to restore the environment.
Principle 7 (P7)
Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner.
Principle 8 (P8)
Businesses should support inclusive growth and equitable development.
Principle 9 (P9)
Businesses should engage with and provide value to their customers and consumers in a responsible manner.
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Sl. No Questions
P1
P2
P3
P4
P5
P6
P7
P8
P9
1.
2.
3.
4.
5.
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? If yes, specify?
Has the policy been approved by the Board? If yes, has it been
signed by MD / Owner / CEO / appropriate Board Director
Does the Company have a specified committee of the Board /
Director / Official to oversee the implementation of the policy
Indicate the link for the policy to be viewed on line?
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.
10.
Has the Company carried out independent audit / evaluation
of the working of this policy by an internal or external agency?
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
The policies are available on the Company’s website –
https://www.subex.com/investors/shareholder-services/
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 = Yes
3. Governance related to BR
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.
Does the Company publish a BR or a Sustainability Report?
What is the hyperlink for viewing this report? How frequently
it is published
Subject to the provisions of the SEBI (LODR) Regulations, 2015,
BR will be published annually, as part of the Annual Report
and can be accessed at https://www.subex.com/investors/
shareholder-services/.
No complaints have been received in FY 2021-22 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:
SECTION E – Principle-wise performance
a.
IoT/OT Security:
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
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:
Digital transformation has resulted
in telecom operators
spreading their wings 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
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customers and thus makes a significant contribution towards
making our societies safer.
Principle 3: Businesses should promote the wellbeing of all
employees
c. HyperSense Augmented Analytics Platform:
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
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.
We also run women specific sessions by external parties addressing
women specific issues.
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.
1. Please indicate the total number of employees - 1135
2. Please indicate the total number of employees hired on
temporary / contractual / casual basis - 103
3. Please indicate the Number of permanent women employees
3. Does the Company have procedure in place for sustainable
- 302
sourcing (including transportation)?
4. Please indicate the Number of permanent employees with
(a) If yes, what percentage of your inputs was sourced sustainably?
disabilities – Nil
Also provide details thereof, in about 50 words or so
5. Do you have an employee association that is recognised by
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 the
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.
management – Not applicable
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 – Nil.
8. What percentage of your under mentioned employees were
given safety & skill up-gradation training, in the last year?
Mock drills related to safety and security is provided to all the
employees to create awareness. The Company also provides
on job training, online training and class room sessions for our
employees.
Details of the skill up-gradation training*:
A. Permanent Employees – 69.27%
B. Permanent Women Employees – 70.22%
C. Casual / Temporary / Contractual Employees – 64.78%
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
D. Employees with disabilities – Not Applicable
* Mandatory trainings are undertaken by all employees..
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 the Owner of the park.
Subex co-operates with the owner and the vendors towards
ensuring the timely recycling of waste.
Being environmentally cautious and waste sensitive, over 93% of
the waste is managed, with less than 7% going into landfills.
Principle 4 - Businesses should respect the interests of, and be
responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalised.
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
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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.
Yes. Please refer page 33 of the Annual report for details of the
activities conducted by SCT during the year.
Principle 5 – Businesses should respect and promote human rights
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?
2. Does the company have strategies / initiatives to address global
environmental issues such as climate change, global warming
etc.
Yes, the Company has taken initiatives to control environmental
impact or influence considering a life cycle perspective. 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.
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.
Yes, the Company is based in a technology park and supports
the initiatives undertaken by the authorities of the technology
park thereby contributing to clean technology, energy efficiency
and renewable energy.
These policies are applicable to all 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 80 of the
Annual Report (forming part of the Shareholders’ Information
section, for details pertaining to investor complains received
during the year).
Principle 6 – Business should respect, protect and make efforts to
restore the environment
1. Does the policy related to Principle 6 cover only the Company
or extends to the Group / Joint Ventures / Suppliers /
Contractors / NGOs / Others?
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.
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
There were no pending or unresolved show cause/legal notices
from CPCB/SPCB as at the end of financial year 2022.
Principle 7 – Business, when engaged in influencing public and
regulatory policy, should do so in a responsible manner
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.
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 information on demand regarding the prevailing threat
environment.
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Principle 8 – Business should support inclusive growth and
equitable development
Principle 9 – Business should engage with and provide value to
their customers and consumers in a responsible manner
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 33 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 of 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 33 of the Annual Report for details
of the activities conducted during the year.
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 a Technology based
Company.
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 followed the standard CSAT Survey until 2018. Post
2018, Subex changed its survey modus operandi to NPS (Net
Promoter Score).
5. Have you taken steps to ensure that this Community
the
is successfully adopted by
development
Community? Please explain in 50 words or so
initiative
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.
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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/ losses
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 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 more, 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 of which help 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 AI Orchestration platform, Subex empowers
CSPs and enterprise customers to make faster and better decisions
by leveraging Artificial Intelligence (AI) 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.
“The Subex advantage” comes from our 25+ years of experience in
enabling 3/4th of the largest 50 CSPs globally achieve competitive
advantage. Being truly a global company, we have more than 300
installations across 90+ countries.
We have a global presence, employing over 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
2021 witnessed the world to continue reeling and adapting from the
global pandemic. During the period, the relevance of connectivity
continued to be at the forefront by enabling social and economic
interaction and providing ways for enterprises to operate. With the
increased dependence on remote connectivity, 2021 witnessed a
rise in the number of mobile internet subscribers, now reaching 4.2B
people globally.
As the world continues to emerge from the pandemic, connectivity
and the telecom world will continue to play an important role in the
way people interact, businesses operate, and in helping economies
recover and become more resilient.
With the dependency on connectivity increasing, investments
towards the network has been a major focus for CSPs; with
investments in newer technologies such as 5G and IoT taking center
stage. 2022 will be a landmark year for 5G, with the total number of
connections expected to reach 1B in the year. Of course, with the
increased focus in technologies such as 5G and IoT, the avenues
for enabling enhanced productivity, new critical services and social
interaction are only set to increase leading to a rise in the need for
new partnerships, new requirements for assurance, and new forms
of risk.
With that in mind, let’s take a look at some of the key trends for 2022:
Enter 5G
• With 5G adoption accelerating, 4G has begun to see a decline
•
•
Key drivers for the increase in 5G adoption include economic
recovery from the pandemic, rising 5G handset sales, network
coverage expansions and overall marketing efforts by mobile
operators
By the end of 2025, 5G will account for around 25% of total
mobile connections
• More than two in five people around the world will live within
reach of a 5G network
•
4G still demonstrates relevance in most developing markets,
particularly in Sub-Saharan Africa, where 4G adoption is still
below a fifth of total connections
• However, 4G adoption will account for 55% of total connections
by 2025, down from a peak of 58% in 2021
•
5G rollout and commercialization will bring a new set of
opportunities and challenges around Capex and monetization
during a period where economic value has shifted away from
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operators towards internet giants. The onus on operators now is to find ways to leverage new technologies and delivery models to derive
increased value.
•
5G standalone (5G SA) gains traction:
o By the end of 2021, there were 22 commercial 5G SA networks in 16 countries across the world, with several more expected to go
live in the coming year
Mobile Internet for All (Almost!)
• Over 50% of the world’s population were on the mobile internet in 2021, reaching a figure of 4.2 billion users globally.
• More than 200 million people connected to mobile internet for the first time in 2021
•
•
By 2025, estimates state that 5 billion users will be on the mobile internet, accounting for 60% of the world’s population
Today there are almost six times more people living within the footprint of a mobile broadband network but not using mobile internet.
• Connectivity to underserved and far-flung communities still remain a challenge, resulting in a usage gap of 3.2 billion people, or 41% of
the global population.
Telecom Revenues Improve, but Capex still a growing concern
• With the effect of Covid beginning to wane, CSPs have begun to see a recovery in revenue growth as economic activities pick up around
the world
•
As per GSMA’s Mobile Economy Report 2022, operator revenues are slated to grow from $1.08tn in 2021 to $1.16tb in 2025
• However, Capex still continues to be significantly high at $620bn for the above period, clocking the Capex Intensity at over 12%
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•
5G investments will account for a large portion of the Capex at 85%
• Drivers for the high Capex across the past decade can be attributed to the continuous pressure to make up for the gradual value decrease
from traditional areas, culminating in increased network investments to meet increasing performance and capacity requirements
•
Revenue diversification has become a strategic focus with services beyond core now a key component for growth. The shift to digital for
consumers and enterprises has accelerated due to the pandemic, fueling further growth in services beyond core
Customer experience and revenue generation are key factors driving operators’ network transformation strategy
•
Revenue growth – either through new revenues streams or by improving the customer experience – remains a top consideration for
operators in their network transformation efforts.
• With new mobile network innovations such as open RAN, edge networking and network automation coming to market, decisions on
network transformation strategies are now more important than ever.
Welcome to the Metaverse
•
The metaverse will be an industry disruptor, with applications in interactive and immersive use cases
• However, the metaverse will presents a mixed bag for operators:
o
In 5G (and subsequently 6G), the metaverse will provide further monetization opportunities built on high-performance connectivity
and new services
o On the other hand, the metaverse will lead to an increased demand on network infrastructure, resulting in additional capex to meet
capacity requirements
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Conclusion:
5G is at hand and for CSPs, it will present a host of new opportunities, exposure into new verticals, the expansion of both the retail and
enterprise segments, and so much more. At the same time, 5G will also come with it, a plethora of new risks and challenges and a strain on
the already high Capex Intensity. Subex, as a leader in the space of Digital Trust, is uniquely positioned to help telcos to embrace their journey
to 5G.
OUR PRODUCTS
Subex helps its customers maximize their revenues and profitability. With a legacy of having served the market through 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 risk mitigation, security, predictability, and intelligence, Subex helps businesses embrace disruptive changes and
succeed with confidence in creating a secure digital world for their customers.
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 coding knowledge 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, all on a no-code platform.
Subex also offers scalable Managed Services and Business Consulting services.
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. The foundation layer is Risk Mitigation
and is the non-negotiable layer required to prevent any undesirable
outcomes for the business. 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. 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.
Our Portfolio
HyperSense
HyperSense is an AI Orchestration platform that helps enterprises
operationalize AI enabling scalability and growth. Enabling
technologies such as machine learning and AI assists with data
preparation, model building and deployment, insight generation, and
explanation to augment how enterprises explore and analyze the
data. It is a cloud-native and SaaS-based platform that democratizes
AI across the entire data value chain, making AI accessible to
everyone across an enterprise. HyperSense provides five cutting-
edge capabilities:
Prepare Data
Collect, clean, structure, and get a 360-degree view of all the data
from multiple databases, sources and business functions in one
place. Manage, view, and access complex enterprise data with ease
and empower both expert and citizen data scientists to quickly build
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data pipelines with datasets, transform and join the datasets to build
machine learning models.
NETWORK ANALYTICS
Enterprise Asset Management
Build AI Models
Helps to build, test, deploy, and manage complex AI models in
minutes without writing a single line of code. Provides access to an
automated machine learning environment that redefines Enterprise
AI by automating every step of the data life cycle, including auto
model building using simple workflows. It eliminates bias through
Explainable AI capabilities ensuring transparency and interpretability.
Operationalize AI Models
Runs rules in real-time and generates actionable intelligence from
data. Create complex business rules and combine them into
workflows to simulate business environments and processes with
a no-code AI-enabled rule engine system. Enterprises can perform
various analytics on data to generate insights and run predictions
using AI/ML algorithms.
Visualize Data
Helps enterprises make quick and better decisions by visualizing the
data. Visualize, analyze, and share complex business data insights.
It auto-visualizes business data and uncovers hidden and crucial
insights. Enterprises can also create dashboards, reports, and charts.
Automate Workflows
Automates resolution workflows to manage complex business
cases seamlessly. Creates a visual representation and provides a
360-degree view of all the business cases in one place, enabling
better collaboration among the stakeholders.
Business Assurance
HyperSense Business Assurance system based on Active Risk
Intelligence (ARI) provides the most comprehensive AI/ML tooling in
the Business Assurance industry from over 25 years of implementation
experience. It enables telcos to work on a dynamic risk marketplace
and entails collaboration & knowledge management to enhance risk
mitigation and improve decision making. 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.
Fraud Management
Built on 25+ years of domain expertise, the HyperSense Fraud
Management system is the only AI-first fraud management system
for telcos enabling them to effectively combat fraud and security
risks by leveraging AI in every step of the fraud management process.
With a state-of-the-art AI engine at the core, it helps risk professionals
increase business-coverage, accuracy, and precision and enables
them to use AI in a sustained manner. With Subex’s comprehensive
fraud management system, operators can detect more than 350
types of fraud in all telecom environments.
Subex’s Enterprise Asset Management provides CSPs with the
necessary framework and controls to make the best use of their assets,
thereby helping manage network Capex efficiently and maximizing
asset ROI. 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.
Partner Ecosystem Management
A platform to manage all aspects of the digital and traditional
partnerships that will allow CSPs to accelerate their digital services
portfolio expansion.
Partner Lifecycle 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.
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Wholesale Billing and Routing
IDcentral (Digital Identity)
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.
Billing & Charging Evolution
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:
• 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.
Billing and Charging Evolution Solution is a part of our roadmap
which is a next generation solution for the settlement of roaming
by Implementing BCE process, where all the participants will have
a simplified settling and reconciliation processes. Solution will be
flexible enough to support charging models for the known future
services as well as capable to support different frequency of
exchange as required. Enhance Customer experience with better
dispute management where reconciliation and discrepancy can be
achieved in a near real time.
•
•
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.
Sectrio
The Sectrio suite of IoT-OT-IT and 5G cybersecurity solutions
include:
•
•
•
IoT-OT-IT Converged Security Suite: a comprehensive
secure converged
cybersecurity offering designed
environments
includes
from cross-stream
technology-specific and tech agonistic threats that can operate
across environments to target devices, IT systems, and SCADA
and ICS.
to
threats. This
Threat Intelligence: offers specific threat intelligence that is
relevant, actionable, and contextual to various businesses. This
leads to reduced false positives, improved SecOps efficiency
and improved threat hunting.
offers
Security:
5G
protection
5G
for
installations
infrastructure
In addition to the above, there are also modules for vulnerability
management, threat management and micro segmentation.
comprehensive
and
linked
Consulting & Assessment Services
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:
Maturity Assessment & Improvement: Benchmarking of their Business
Assurance (including Revenue Assurance, Fraud Management and
other assurance areas) processes concerning global standards,
and providing recommendations across strategies, people skills,
processes, technologies, measurement and management reporting
practices.
Functional Assessments: Gap analysis of existing RAFM functional
processes, technology and provide the roadmap to close these gaps
using “analyse, evaluate, assess and recommend” framework.
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Risk Advisory & Management: Identify the risks in the revenue chain
and plug leakages promptly, through regular 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 utilizing relevant industry standards and developing
comprehensive standard operating procedures.
Business process re-engineering: Review of the existing business
processes, design and implementation of new business processes
based on industry leading practices.
Transformation & Migration Assurance: Creation of assurance
framework across the transformation or migration journey of OSS/
BSS systems. Subex can assist operators in providing the necessary
support during the end-to-end migration process to avoid revenue/
cost leakages, negative customer experience, project delays and
budget over runs.
Product and Service Margin Assurance: Assessment of the target
market, holistic margin and profitability for the entire service and
product catalogue.
Accounting Assurance: Formalization of secondary control universe
which would be executed by Business Assurance teams to provide
the assurance to CFO on the current revenue reporting across all
revenue segments. This will also include an independent revenue
computation to identify the gaps (if any)
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
— 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.
Creating a resilient telecom landscape by tracking threats and
unlocking opportunity
Cloud and digital intensify across the industry
As industries re-orient themselves from the disruptions of the
past year, we are seeing numerous positive shifts within the
telecommunications industry over the past year. Digital intensification
grows, propelled by customer demand for more robust networks
and a wider bouquet of services. Accordingly, telcos are amping up
their connectivity, resilience, and bandwidth, particularly to cater to
the expectations of enterprise customers and deliver exceptional
quality of service and quality of experience. Many want to reimagine
their role as B2B2X ecosystem providers and seek next-gen digital
solutions that steer them towards this new positioning.
Along with digital intensification comes the need to rationalize
IT infrastructure to support the new phase of growth. Egged on
by hyper-scale cloud providers, telcos are embarking on cloud
transformation journeys to enable agile networking, virtualize OSS/
BSS, and modernize enterprise-wide support systems across billing,
customer care, revenue assurance, fraud management, HRM, etc.
Consequently, there is keen market interest in collaborating with
providers like Subex that marry solutions with the overarching cloud
vision.
Subex is extremely well-placed to meet some of the requirements
brought on by cloud and digital, thanks to our foresight in building
a cloud-native technology stack for all our products. Our offerings
across enterprise partner management, business assurance, and
fraud management are steered by cloud-first approaches and plug
seamlessly into hosted as well as on-premises infrastructure, helping
players hone their edge and realize value rapidly.
Data and AI-first is the new mantra
With these transformation programs running side-by-side, telcos are
growing savvy at managing their data. They know that fragmented
systems are a barrier to cloud, digital, 5G, and AI and recognize the
value in breaking the siloes that telecom data previously resided in.
Integration of telecom data sets the stage for becoming AI-ready.
Telecom players want to put data and AI at the core of business
decision-making, which mandates powerful decision analytics
solutions. The HyperSense offering from Subex encompasses a
proven AI adoption framework consisting of a no-code AI platform,
Auto-ML, and MLOps and is geared towards this opportunity. Since its
launch, several reputed market analysts, researchers, and innovators
across the community have endorsed HyperSense for its pioneering
ability to simplify AI adoption.
Finally, the increasing maturity of 5G adoption is driving telecom
players to create viable business models tailored to 5G services. At the
moment, many are eyeing the benefits of opening up their ecosystem
to diverse partners in order to leverage the potential of 5G. However,
many are unprepared for the various risks of introducing innovative
service offerings – be it privacy violations, fraud, or data breaches.
Setting this in the context of emerging regulations governing 5G, it
becomes clear that future-proof solutions are the need of the hour.
Subex’s legacy as a proven RAFM partner comes into play as we build
awareness and thought leadership on the concerns, challenges, and
corrective actions. We also effectively bridge the gap with our suite of
business assurance, fraud management, cyber security, and partner
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ecosystem management solutions. When coupled with our plug-
and-play HyperSense platform, which democratizes data, we help
partners and customers build out relevant use cases, deal effectively
with threats as they emerge, and enrich lives through AI-driven trust.
Building an effective response to threats
Amid all of these opportunities, we are also keenly monitoring
potential threats to the business model. Key concerns perhaps temper
the enthusiasm for adopting digital products. Even as telecom players
consider the steep investments needed to reimagine their offerings
and leverage the above trends of 5G, cloud, digitalization, and the
need for digital trust, monetizing these to reap true RoI comes with a
certain level of risk. Any misstep can prove dangerous, which leads to
some lag in pushing forward with transformation programs.
Further, the rising adoption of digital exposes telecom players to
greater unknown risks from cyberattacks and breaches. Just as
privacy risks present an opportunity for our solutions, the flipside
is that the uncontrolled spread of cyberattacks could lead to a
slowdown in adopting digital to minimize the attack surface.
Certain global shifts are also on our radar. We continue to track the
ongoing market volatility due to the conflict in Eastern Europe and
its ripple effect on investment confidence among telcos, priming us
to take necessary steps when needed to best pivot our offerings.
Another global trend that reached boardroom priority for nearly
every industry is ‘The Great Resignation’, which has led to talent
attrition. Like others, Subex too witnessed churn of 4-5%, but we are
actively managing this. Proactive steps have helped minimize any
negative impact as we revamp our tie-ups with leading universities
and business schools and refresh our talent pool.
As we look ahead, we continue to hone in on the right opportunities
for Subex to support the growth of its partners and the global telecom
landscape through cutting-edge technologies, AI-first use cases, and
future-proofed solutions that enrich customer lives through deep
digital trust.
Key Announcements in FY22
Subex Launches HyperSense, an End-to-End Augmented Analytics
Platform
Subex announced a launch of HyperSense, an end-to-end Augmented
Analytics platform that helps enterprises make faster, better decisions
by leveraging Artificial Intelligence (AI) across the data value chain.
Developed based on Subex’s extensive data analytics experience,
HyperSense contains all the Augmented Analytics capabilities
enterprises need in one flexible and modular platform.
Subex’s new patent defines the future of Revenue Maximization for
telcos
Subex announced that the U.S. Patent and Trademark Office has
granted the company’s patent that defines the future of Revenue
Maximization for telcos. With this patent, Subex moves revenue
maximization to the edge, thereby setting standards for operators to
proactively identify monetization opportunities. At the same time, it
will now move a step closer to detecting and preventing risks such as
digital fraud to prevent damage before it happens.
Subex rebrands IoT and OT Cybersecurity product as Sectrio
Subex announced the completion of the rebranding exercise
of its Internet of Things (IoT) and Operational Technology (OT)
cybersecurity product Subex Secure. Subex Secure will henceforth
be called Sectrio. The move comes in the wake of Sectrio gaining
significant market traction powered by an exponential increase in the
capabilities of its award-winning product portfolio.
Subex extends strategic partnership with Robi to support their 5G
ambitions
Subex extended its partnership with Robi to upgrade its existing
integrated Revenue Assurance and Fraud Management (iRAFM)
system. Through this upgrade, Robi will now leverage the AI/ML
capabilities of Subex’s Revenue Assurance and Fraud Management
solutions to tackle new-age telecom threats in the region and deliver
a superior customer experience as it looks to provide services built
on 5G..
Subex wins 5-year contract with Dhiraagu for integrated Revenue
Assurance and Fraud Management
Subex has been awarded a seven-digit, five-year contract from
Dhiraagu, the leading telecom operator of Maldives, to provide its
integrated Revenue Assurance and Fraud Management (iRAFM)
solution. Through the deployment, Dhiraagu will upgrade its systems
and consolidate its standalone assurance functions to better equip
themselves for the 5G era.
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
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
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so we can better understand their needs and we have opportunity to
educate them on our offerings and skills.
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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, 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.
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.
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.
Reduction in Consumer and Business Purchasing
We depend on our customers – primarily large communication
service providers (“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.
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
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fines and penalties. At the same time, we are storing and processing
increasingly large amounts of personal data which leads to increased
potential exposure.
With the disruptions due to pandemic, our recruiters had to reorient
the hiring process and quickly moved to the virtual hiring process and
facilitating quick closure. The steps have been taken below:
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 of continued pandemic in FY 22, a lot of our hiring
was done virtually, and we hired close to 600 Subexians.
•
•
•
•
Training the recruitment team
Streamline recruitment process
POFU (Post offer follow up)
Focused strategy on campus hiring’s adding premier institute
like NI,IIT, IIIT in the list.
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.
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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, 2022.
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”).
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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.
Subex conducts security awareness programs and improve the
existing business continuity controls. 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 Ending 31st March
2021-22
2020-21
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
Equity dividend %
Share Capital
Reserves & Surplus
Net worth
Gross Property, Plant & equipment,
right-of-use asset and other intangible assets
Net Property, Plant & equipment,
right-of-use asset and other intangible assets
33,344
34,381
2,526
3,369
-
3,369
1,270
2,099
203
5%
28,100
28,267
56,357
5,706
2,359
6,836
6,842
832
(447)
-
(447)
(-)
(447)
(3)
5%
28,100
20,826
48,926
6,263
715
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
3,139
2,916
5,510
302
2,882
(231)
2,651
29
2,622
NIL
10%
28,100
22,066
50,166
6,259
874
Total Assets
72,008
54,364
72,666
57,919
COMMENTARY ON FINANCIAL STATEMENTS
Share Capital
Reserves and Surplus
Securities premium
As at March 31, 2022, the issued, subscribed and paid-up share
capital of the Company was ` 281,00,14,675 (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 Company has not allotted equity shares
in FY 2021-22.
On standalone and consolidated basis, the balance of security
premium as at March 31, 2021 amounted to ` 16,444 lakhs. During
the year 2021-22, ` 114 lakhs has been transferred to securities
premium on exercise of share options by employees. As at March 31,
2022, the balance of security premium was ` 16,558 lakhs.
Retained Earnings
On a standalone basis, as at March 31, 2021, there was surplus
balance in retained earnings amounting ` 1,952 lakhs. As at March 31,
2022, the surplus balance has decreased to ` 135 Lakhs.
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On a consolidated basis, as at March 31, 2021, there was surplus in
retained earnings amounting ` 20,987 lakhs. As at March 31, 2022,
the surplus balance has increased to ` 21,655 Lakhs
Exchange differences on translating the financial statements of a
foreign operation
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.
During the year 2021-22, the balance of Foreign Currency Translation
Reserve of ` 11,303 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 is at ` 48,926 lakhs as at March 31, 2022, as compared
to ` 50,166 lakhs as at March 31, 2021.
On a consolidated basis, the total equity attributable to equity
holders of the Company has increased to ` 56,367 lakhs as at March
31, 2022 from ` 54,855 lakhs as at March 31, 2021. The movement
was primarily on account of profits earned during the year, dividend
paid to the shareholders and exchange gain on foreign currency
translation.
Employee Stock Options Plan
Under the Subex Employees Stock Option Scheme-2018 Company
has granted 1,448,000 options during the year ended March 31, 2022
as compared to 1,240,500 options during March 31, 2021. The net
amount carried in respect of stock options outstanding at March 31,
2022 amounts to ` 267 Lakhs (Previous year : ` 232 Lakhs).
Property, plant, equipment, right-of-use asset and other intangible
assets
During the year, the Company added ` 319 Lakhs on consolidated
basis and ` 4 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, 2022, the balance in right-of-use asset stands at ` 1,386 Lakhs on
consolidated basis and ` 36 lakhs on standalone basis. Refer Note
29 of consolidated financial statement and Note 28 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 ` 2,359 Lakhs (Previous
year ` 3,139 Lakhs) on consolidated basis and ` 715 lakhs (Previous
year ` 874 lakhs) on standalone basis.
Goodwill
On a consolidated basis, carrying value of goodwill as at March 31,
2022 and March 31, 2021 stood at ` 34,409 lakhs .
Investments
On a standalone basis, the total investment value as at March 31,
2022 and as at March 31, 2021 stood at ` 42,761 Lakhs and ` 47,561
Lakhs respectively.
During the year 2021-22 and previous year 2020-21, there is no
diminution in the carrying value of investment. in Subex Digital LLP,
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.
The management believes that the overall composition and
condition of trade receivables is satisfactory post assessment of
doubtful receivables. As at March 31, 2022, on a standalone basis
trade receivable amounted to ` 5,824 lakhs (previous year; ` 2,184
lakhs) net of provision for doubtful debts of ` 2,239 lakhs (previous
year; ` 2,239 lakhs).
On a consolidated basis trade receivable amounted to ` 9,681 lakhs
(previous year ` 9,956 lakhs) net of provision for doubtful debts of
` 1,834 lakhs (previous year ` 2,088 lakhs).
Cash and Cash Equivalents
On a standalone basis, balance in current and deposit accounts
stood at ` 802 lakhs as at March 31, 2022, as compared to ` 397
lakhs as at March 31, 2021.
On a consolidated basis, balance in current, EEFC and deposit
accounts stood at ` 8,539 lakhs as at March 31,2022 as compared to
` 14,294 lakhs as at March 31, 2021.
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, 2022
was Nil (Previous year ` 584 Lakhs).
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.
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Pursuant to the above re-organization, common costs pertaining to
sales and business support function amounting to ` 4,618 lakhs 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.
Expenditure
The employee benefits expenses increased to ` 21,449 lakhs
compared to previous year at ` 19,720 lakhs on consolidated basis.
Increase on consolidated is majorly on account of new additions to
the headcount.
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 ` 1,361 lakhs during
previous year to ` 4,293 lakhs during year ended March 31, 2022.
Operating Profits
During the year, on consolidated basis, the Company earned an
Operating Profit before interest, depreciation, tax, amortization and
exceptional items, of ` 3,514 Lakhs being 10.5% of total revenue as
against ` 9,850 Lakhs at 26.5% of total revenue during the previous
year. Decrease is majorly on account of increase in expenditure by
` 2,477 Lakhs and decrease in revenue by ` 3,859 Lakhs.
On a standalone basis, the Company incurred Operating profit
before Interest, depreciation, tax and exceptional items of ` 995
Lakhs (excluding other income and share of profit/loss from LLP’s)
being 14.6% of total income (excluding other income and share of
profit/loss from LLP’s ) as against operating profit of ` 495 Lakhs at
17% during the previous year. Increase in profit is majorly on account
of increase in revenue by ` 3,920 lakhs, compensated by increase in
expense by ` 3,420 lakhs.
Interest
During the year ended March 31,2022, company recognized interest
expense totaling to ` 194 Lakhs (Previous year: ` 296 Lakhs) on a
consolidated basis and ` 12 lakhs (Previous year: ` 14 Lakhs) on a
standalone basis.
For the year ended March 31, 2022, expenditure includes interest on
Lease liability recognized as per Ind AS 116, Leases amounting ` 124
Lakhs (Previous year ` 269 lakhs) and ` 4 Lakhs (Previous year ` 14
lakhs) on a consolidated and standalone basis respectively.
Depreciation
During the year ended March 31, 2022, depreciation expense
amounted to ` 988 Lakhs (Previous year: ` 1,378 Lakhs) on
consolidated basis and ` 163 Lakhs (Previous year: ` 193 Lakhs) on
standalone basis.
For the year ended March 31, 2022, depreciation and amortization
include depreciation on right of use asset recognized as per Ind AS
116- Leases, amounting ` 457 Lakhs (Previous year ` 1,028 lakhs)
and ` 10 Lakhs (Previous year ` 54 lakhs) on a consolidated and
standalone basis respectively.
Tax Expense
For the year ended March 31, 2022, there was a tax expense of ` Nil
(Previous year: tax expense of ` 29 lakhs) on a standalone basis.
On a consolidated basis, tax expense was ` 1,270 lakhs (previous
year; ` 3,765 lakhs).
Tax expense for the year March 31, 2022 includes tax charge of
` 251 lakhs (Previous year ` 696 lakhs), deferred tax of ` 426 lakhs
(Previous year ` 2,670 lakhs) and provision on Foreign tax credit of
` 593 (Previous year ` 399 lakhs).
Net Profit
On consolidated basis, the net profit of the Company amounted to
` 2,099 Lakhs as against a ` 5,172 Lakhs during the previous year.
Total Comprehensive profit for the year is ` 2,302 Lakhs as compared
to ` 5,796 Lakhs during previous year.
On standalone basis, the net loss of the Company amounted to ` 447
lakhs as against net profit of ` 2,651 Lakhs during the previous year.
Total Comprehensive loss for the year is ` 450 Lakhs as compared
to total comprehensive profit of ` 2,622 Lakhs during previous year
Earnings per Share
Basic Earnings per share computed based on number of common
stock outstanding, as on the Balance Sheet date is ` 0.38 per share
(Previous year: ` 0.96 per share) on a consolidated basis and loss of
` 0.08 per share [Previous year : Earning of ` 0.49 per share] on a
standalone basis.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL
RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
Subexians
FY22 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.
Our endeavour was to enhance the Subexian experience throughout
his/her lifecycle spanning recruitment, onboarding, performance,
learning & growth and offboarding. As an organization, we take
pride in ensuring the experience of each Subexian is positive and
meaningful.
Our employees are spread across the globe and the larger centres
are our offices located in Bengaluru, London, Denver, Dubai and
Singapore. As of March 31, 2022, 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.
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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.
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, and
this continues to be updated
This Subex Handbook is a living repository and will undergo
continuous up-dations.
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. We hired our new CFO,
Sumit Kumar in FY22 among other functional leaders.
Recruitment
A lot of our recruitment was executed remotely given the pandemic
environment. To add to the rigor 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.
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 incidences of negative behavior, reduces 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.
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.
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STANDALONE
F I N A N C I A L
STATEMENTS
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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, 2022, the Standalone
Statement of Profit and Loss, including the statement of Other
Comprehensive (Loss)/Income, 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, 2022, its
loss including other comprehensive (loss)/ income, 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,
2022. 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, 2022, the net carrying value of investment in wholly owned
subsidiaries in the standalone Ind AS balance sheet amounts to ` 42,761 lakhs.
To assess if there is an impairment of the carrying value of investment,
management conducted impairment tests, annually or whenever changes in
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
reviewed and approved by the Board of Directors of the Company.
Our audit procedures included the following:
(i) We evaluated the Company’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 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;
(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
and involves significant judgement. The key assumptions involved in
impairment tests are projected revenue growth, operating margins, discount
rates and terminal growth rate.
(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 standalone Ind AS financial
statements.
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Evaluation of key tax matters (as described in note 33 of the standalone Ind AS financial statements)
The Company 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 Company to determine the possible
outcome of the uncertain tax positions, consequently having an impact on
related accounting and disclosures in the standalone financial statements,
which have been a matter of significance during the audit and hence
considered as a key audit matter.
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 do 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 (loss)/income, 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
safeguarding of the assets of the Company and for preventing and
Our audit procedures included the following:
(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;
(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 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.
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.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit.
We also:
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•
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, 2022 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, 2020
(“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 (Loss)/Income, 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, 2022 taken on record by the
Board of Directors, none of the directors is disqualified as
on March 31, 2022 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, 2022 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.
ii.
The Company has disclosed the impact of pending
litigations on its financial position in its standalone
Ind AS financial statements – Refer note 33 to the
standalone Ind AS financial statements.
The Company did not have any long-term contracts
including derivative contracts for which there were
any material foreseeable losses.
iii. There were no amounts which were required to be
transferred to the Investor Education and Protection
Fund by the Company.
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iv. a) The management has represented that, to the
best of its knowledge and belief, no funds have
been advanced or loaned or invested (either from
borrowed funds or share premium or any other
sources or kind of funds) by the Company to or
in any other person or entity, including foreign
entities (“Intermediaries”), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the
company (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries; and
reasonable and appropriate
c) Based on such audit procedures that were
considered
in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub-clause (a) and (b)
contain any material misstatement.
v.
The dividend declared and paid during the year by the
Company is in compliance with section 123 of the Act.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
b) The management has represented
that,
to
the best of its knowledge and belief, no funds
have been received by the Company from
any person or entity, including foreign entities
(“Funding Parties”), with
the understanding,
whether recorded in writing or otherwise, that
the Company shall, whether, directly or indirectly,
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or provide
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 22213803AJXLIP6256
Place of Signature: Bengaluru
Date: May 30, 2022
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Annexure ‘1’ referred to in paragraph under the heading “Report on other legal and regulatory requirements”
of our report of even date on the Standalone Ind AS Financial Statements of Subex Limited
In terms of the information and explanations sought by us and given
by the company and the books of account and records examined by
us in the normal course of audit and to the best of our knowledge
and belief, we state that:
(i) (a) (A) The Company has maintained proper records showing
including quantitative details and
full particulars,
situation of property, plant and equipment.
(B) The Company has maintained proper records showing
full particulars of intangibles 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 (other
than properties where the Company is the lessee and the
lease agreements are duly executed in favour of the lessee)
held by the Company and accordingly, the requirements
under paragraph 3(i)(c) of the Order are not applicable to
the Company.
(d) The Company has not revalued its property, plant and
equipment (including right of use assets) or intangible
assets during the year ended March 31, 2022.
(e) According to the information and explanations given
by the management, there are no proceedings initiated
or are pending against the Company for holding any
benami property under the Prohibition of Benami Property
Transactions Act, 1988 and rules made thereunder.
(ii) (a) The Company’s business does not involve inventories and
accordingly, the requirements under paragraph 3(ii)(a) of
the Order are not applicable to the Company.
(b) According to the information and explanations given by
the management, the Company has not been sanctioned
working capital limits in excess of Rs. five crores in
aggregate from banks or financial institutions during any
point of time of the year on the basis of security of current
assets. Accordingly, the requirement to report on clause
3(ii)(b) of the Order is not applicable to the Company.
(iii) (a) During the year, the Company has provided advances in the
nature of loans to other parties (i.e. employees) as follows:
Guarantees Security Loans Advances
-
-
-
-
in nature of
loans
` 13.50
Lakhs
` 9.85
Lakhs
-
-
Aggregate amount
granted/provided
during the year
- Others (i.e.
employees)
Balance outstanding
as at balance sheet
date in respect of
above cases
- Others (i.e.
employees)
(b) During the year, the terms and conditions of the grant of all
loans and advances in the nature of loans to other parties (i.e.
employees) are not prejudicial to the Company’s interest.
(c) The Company has granted advance in the nature of loans
during the year to other parties (i.e. employees) where the
schedule of repayment of principal and payment of interest
has been stipulated and the repayment or receipts are
regular. In case of following party where loans were granted
in earlier years, there are no repayments of principal and
interest:
Name of the Entity
Amount
Due date
Extent of delay
Remarks, if any
Subex Technologies Limited
` 1,706 Lakhs
Note 1
Note 1
The amount given to the subsidiary is fully provided for,
in the books of the Company.
Note 1: The Company had granted the above loans in
earlier years which have been fully impaired in the books of
the Company in earlier years. Further, no interest is accrued
in respect of these loans.
(d) There are no amounts of loans and advances in the nature
of loans granted to companies, firms, limited liability
partnerships or any other parties (i.e. employees) which are
overdue for more than ninety days.
(e) There were no loans or advance in the nature of loan
granted to other parties (i.e. employees) which have fallen
due during the year, that have been renewed or extended
or fresh loans granted to settle the overdues of existing
loans given to the same parties
(f) The Company has not granted any loans or advances in
the nature of loans, either repayable on demand or without
specifying any terms or period of repayment to companies,
firms, limited liability partnerships or any other parties.
Accordingly, the requirement to report on clause 3(iii)(f) of
the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given by the management, there are no loans, investments,
guarantees, and security in respect of which provisions of sections
185 and 186 of the Companies Act, 2013 (“the Act”) are applicable
and accordingly, the requirement to report on clause 3(iv) of the
Order is not applicable to the Company. However, in case on
one subsidiary where the loan granted during previous years
amounting to INR 1,706 lakhs has been provided for in previous
years considering the financial position of the said subsidiary.
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(v) The Company has neither accepted any deposits from the
public nor accepted any amounts which are deemed to be
deposits within the meaning of sections 73 to 76 of the Act and
the rules made thereunder, to the extent applicable. Accordingly,
the requirement to report on clause 3(v) of the Order is not
applicable to the Company.
(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 regular in depositing with appropriate
authorities undisputed statutory dues including goods and
services tax, provident fund, employees’ state insurance,
income-tax, duty of customs, cess and other statutory
dues applicable to it. According to the information and
explanations given to us and based on audit procedures
performed by us, no undisputed amounts payable in
respect of these statutory dues were outstanding, at the
year end, for a period of more than six months from the
date they became payable.
(b) According to the records of the Company, there are no
dues of goods and services tax, provident fund, employees’
state insurance, income tax, sales-tax, service tax, duty of
customs, duty of excise, value added tax, cess, goods and
service tax and other statutory dues which have not been
deposited on account of any dispute, except the following:
Name of the
statute
Nature of the dues
Disputed amount *
(` in Lakhs)
Amount paid/
refund adjusted
under protest
(` in Lakhs)
Period to which the
amount relates
(Financial Year)
Forum where dispute is
pending
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
-
2014-15
1,397
2013-14
379 2010-11
924 April 2006 to
October 2007
3,608
- April 2006 to July
2009
Income Tax Appellate
Tribunal (‘ITAT’), Bangalore
Income Tax Appellate
Tribunal (‘ITAT’), Bangalore
Hon’ble High Court of
Karnataka
Central Excise and Service
Tax Appellate Tribunal,
Bangalore
Commissioner of Service
Tax, Bangalore
* Excluding penalty and interest from the date of Order to March 31, 2022.
(viii) The Company has not surrendered or disclosed any transaction,
previously unrecorded in the books of account, in the tax
assessments under the Income Tax Act, 1961 as income during
the year. Accordingly, the requirement to report on clause 3(viii)
of the Order is not applicable to the Company.
(f) On an overall examination of the financial statements,
the Company has not taken any funds from any entity or
person on account of or to meet the obligations of its
subsidiaries. The Company does not have any associates or
joint ventures.
(ix) (a) The Company did not have any outstanding loans or
borrowings or interest thereon due to any lender during
the year. Accordingly, the requirement to report on clause
ix(a) of the Order is not applicable to the Company.
(b) The Company has not been declared wilful defaulter by
any bank or financial institution or government or any
government authority.
(c) The Company did not have any term loans outstanding
during the year hence, the requirement to report on clause
(ix)(c) of the Order is not applicable to the Company.
(d) The Company did not raise any funds during the year
hence, the requirement to report on clause (ix)(d) of the
Order is not applicable to the Company.
(e) On an overall examination of the financial statements of the
Company, the Company has not taken any funds from any
entity or person on account of or to meet the obligations of
its subsidiaries. The Company does not have any associates
or joint ventures.
(x) (a) According to the information and explanation given by the
management, the Company has not raised any money
during the year by way of initial public offer / further public
offer (including debt instruments) hence, the requirement
to report on clause 3(x)(a) of the Order is not applicable to
the Company.
(b) The Company has not made any preferential allotment or
private placement of shares/ fully or partially or optionally
convertible debentures during the year under audit and
hence, the requirement to report on clause 3(x)(b) of the
Order is not applicable to the Company.
(xi) (a) The Company experienced a cybersecurity incident related
to ransomware as detailed in the Note 44 of the standalone
Ind AS financial statement of the Company. According to
the information and explanation given by the management,
the Company did not have any material financial impact.
Subex Annual Report 2021-22
104
105
Subex Annual Report 2021-22
(b) During the year, no report under sub-section (12) of
section 143 of the Act has been filed by secretarial audit
or by us in Form ADT – 4 as prescribed under Rule 13 of
Companies (Audit and Auditors) Rules, 2014 with the
Central Government.
(c) As represented to us by the management, there are no
whistle blower complaints received by the Company
during the year.
(xii) In our opinion, the Company is not a nidhi company as per the
provisions of the Act. Therefore, the requirement to report on
clause 3(xii)(a), (b) and (c) of the Order is 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) (a) The Company has an internal audit system commensurate
with the size and nature of its business.
(b) The internal audit reports of the Company issued till the
date of the audit report, for the period under audit have
been considered by us.
(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
its directors, as referred to in section 192 of the Act and hence
requirement to report on clause 3(xv) of the Order is not
applicable to the Company.
(xvi) (a) According to the information and explanations given by the
management, the provisions of section 45-IA of the Reserve
Bank of India Act, 1934 (2 of 1934) are not applicable to the
Company. Accordingly, the requirement to report on clause
(xvi)(a) of the Order is not applicable to the Company.
(d) There is no Core Investment Company as a part of the
Group, hence, the requirement to report on clause 3(xvi) of
the Order is not applicable to the Company.
(xvii) The Company has incurred cash losses in the current year
amounting to ` 284 lakhs. In the immediately preceding financial
year, the Company had not incurred cash losses.
(xviii) There has been no resignation of the statutory auditors during
the year and accordingly requirement to report on clause 3(xviii)
of the Order is not applicable to the Company.
(xix) On the basis of the standalone Ind-AS financial ratios disclosed
in note 40 to the standalone Ind-AS financial statements, ageing
and expected dates of realization of financial assets and payment
of financial liabilities, other information accompanying the
financial statements, our knowledge of the Board of Directors
and management plans and based on our examination of the
evidence supporting the assumptions, nothing has come to
our attention, which causes us to believe that any material
uncertainty exists as on the date of the audit report that
Company is not capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within a period
of one year from the balance sheet date. We, however, state that
this is not an assurance as to the future viability of the Company.
We further state that our reporting is based on the facts up to
the date of the audit report and we neither give any guarantee
nor any assurance that all liabilities falling due within a period of
one year from the balance sheet date, will get discharged by the
Company as and when they fall due.
(xx) The Company does not have any obligation to incur expenses
in relation to Corporate Social Responsibility as disclosed in note
39 to the standalone Ind-AS financial statements. Accordingly,
the requirement to report on clause (xx)(a) and (b) of the Order
is not applicable to the Company.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
(b) The Company has not conducted any Non-Banking
Financial or Housing Finance activities without obtaining
a valid Certificate of Registration (“CoR”) from the Reserve
Bank of India as per the Reserve Bank of India Act, 1934.
(c) The Company is not a Core Investment Company as
defined in the regulations made by Reserve Bank of India.
Accordingly, the requirement to report on clause 3(xvi) of
the Order is not applicable to the Company.
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 22213803AJXLIP6256
Place of Signature: Bengaluru
Date: May 30, 2022
Subex Annual Report 2021-22
106
107
Subex Annual Report 2021-22
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”)
Meaning of Internal Financial Controls With Reference to these
Standalone Ind AS Financial Statements
We have audited the internal financial controls with reference
to standalone Ind AS financial statement of Subex Limited (“the
Company”) as of March 31, 2022 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.
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.
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.
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, 2022, 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.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership number: 213803
UDIN: 22213803AJXLIP6256
Place of Signature: Bengaluru
Date: May 30, 2022
Subex Annual Report 2021-22
106
107
Subex Annual Report 2021-22
STANDALONE BALANCE SHEET
as at March 31, 2022
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Financial assets
Investments
Other financial assets
Income tax assets (net)
Deferred tax asset (MAT credit entitlement)
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
Notes
As at
March 31, 2022
As at
March 31, 2021
(` in Lakhs)
3
28
4
5
10
11
12
13
6
7
8
9
10
13
14
15
28
19
29
36
650
42,761
26
2,903
141
12
53
46
775
47,561
14
2,900
-
-
46,558
51,349
30
5,824
802
75
1,012
63
7,806
54,364
28,100
20,826
48,926
27
100
127
26
2,184
397
-
3,900
63
6,570
57,919
28,100
22,066
50,166
35
116
151
Subex Annual Report 2021-22
108
109
Subex Annual Report 2021-22
STANDALONE BALANCE SHEET (contd.)
as at March 31, 2022
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
Notes
As at
March 31, 2022
As at
March 31, 2021
(` in Lakhs)
28
16
16
17
18
19
20
11
11
134
1,031
3,767
104
122
142
5,311
5,438
3
355
6,909
99
90
135
7,602
7,753
54,364
57,919
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
108
109
Subex Annual Report 2021-22
STANDALONE STATEMENT OF PROFIT AND LOSS
for the year ended March 31, 2022
Notes
Year ended
March 31, 2022
Year ended
March 31, 2021
(` in Lakhs)
1
Income
Revenue from operations
Share of profit from Limited Liability Partnerships
Other income
Total income
2
Expenses
Employee benefits expense
Finance costs
Depreciation and amortization expense
Share of loss from Limited Liability Partnerships
Other expenses
Total expenses
(Loss)/ Profit before exceptional items and tax expense (1-2)
Exceptional items
Gain on termination of lease agreement
Provision for service tax receivable
Total exceptional items
Net (loss)/ profit before tax expense (3+4)
Tax expense (net):
Current tax charge
MAT credit entitlement
Reversal - foreign withholding taxes
Net (loss)/ profit for the year (5-6)
Other comprehensive (loss)/ income ('OCI'), net of tax expense
Items that will not be reclassified subsequently to profit or loss
Re-measurement loss on defined benefit plans
Total other comprehensive (loss)/ income
Total comprehensive (loss)/ income for the year attributable to equity holders of the
Company (7+8)
(Loss)/ earnings per equity share [ of ` 5/- each w.e.f September 29, 2020 and ` 10 upto
September 28, 2020) (March 31, 2021: ` 5)]
Basic (`)
Diluted (`)
3
4
5
6
7
8
9
10
21
22
23
24
25
26
22
27
28
13
20
20
35
29
6,836
-
6
6,842
4,293
12
163
1,273
1,548
7,289
(447)
-
-
-
(447)
141
(141)
-
-
(447)
(3)
(3)
(450)
(0.08)
(0.08)
2,916
2,585
9
5,510
1,361
14
193
-
1,060
2,628
2,882
36
(267)
(231)
2,651
35
-
(6)
29
2,622
-
-
2,622
0.49
0.48
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
STANDALONE STATEMENT OF CHANGES IN EQUITY
for the year ended March 31, 2022
A. Equity share capital (refer note 14):
Subex Annual Report 2021-22
110
111
Subex Annual Report 2021-22
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, 2020
Issued during the year
Adjustment pursuant to Capital reduction order
As at March 31, 2021
Issued during the year
As at March 31, 2022
B. Other equity (refer note 15):
Particulars
As at April 1, 2020
Add: Profit for the year
Less: Equity shares purchased by Subex Employee Welfare and
Employee Stock Option Plan ("ESOP") Benefit Trust
Add: Share based expenses (refer note 34)
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
Less: Loss for the year
Less: Other comprehensive loss
Add: Share based expenses (refer note 34)
Add/(less): On account of exercise of stock options
Add/(less): On account of vested options lapsed during the year
Less: Dividend [refer note 15(a)]
As at March 31, 2022
No.
` in Lakhs
56,20,02,935
-
56,20,02,935
-
56,20,02,935
56,200
-
(28,100)
28,100
-
28,100
(` in Lakhs)
Attributable to equity holders of company
Reserves and surplus
Total
Capital
reserve
Securities
premium
General
reserve
Employee
stock options
reserve
Surplus/ (deficit)
in the statement
of profit and loss
Treasury
shares
2,776
26,712
1,780
114
(36,325)
(1,233)
(6,176)
-
-
-
-
-
-
-
-
33
-
-
(10,301)
-
-
-
-
-
-
3
-
-
-
-
147
(26)
(3)
-
-
2,622
-
2,622
-
-
-
-
38,401
(22)
(22)
-
134
-
-
147
141
-
28,100
(2,746)
-
(2,746)
2,776
16,444
1,783
232
1,952
(1,121)
22,066
-
-
-
-
-
-
-
-
-
114
-
-
-
-
-
-
4
-
2,776
16,558
1,787
-
-
137
(98)
(4)
-
267
(447)
(3)
-
-
-
(1,367)
-
-
-
424
-
-
(447)
(3)
137
440
-
(1,367)
135
(697)
20,826
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
110
111
Subex Annual Report 2021-22
STANDALONE STATEMENT OF CASH FLOWS
for the year ended March 31, 2022
(A)
Operating activities
(Loss)/ profit before tax expense
Adjustments to reconcile loss/ (profit) 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)
Net gain on sale of investments
Finance costs (including fair value changes)
Allowance for expected credit losses
Gain on termination of lease agreement
Provision for service tax receivable
Share of loss/ (profit) from Limited Liability Partnerships (net)
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 (used)/ from in operating activities
(B)
Investing activities
Purchase of property, plant and equipment
Drawings from Limited Liability Partnerships
Share of loss paid to Limited Liability Partnership
Sale of Investments
Purchase of investments
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, 2022
Year ended
March 31, 2021
(447)
2,651
38
125
7
(4)
(1)
12
-
-
-
1,273
93
1,096
(4)
(3,619)
(43)
(12)
824
(50)
5
5
(1,798)
(137)
(1,935)
-
9,074
(5,750)
2,875
(2,876)
(75)
-
3
3,251
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
Subex Annual Report 2021-22
112
113
Subex Annual Report 2021-22
STANDALONE STATEMENT OF CASH FLOWS (contd.)
for the year ended March 31, 2022
(C)
Financing activities
Proceeds from exercise of ESOP
Interest paid
Repayment of Lease liability
Payments of dividend [refer note 15(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)
Refer to note 28 for supplementary information on statement of cash flows
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
440
(4)
(8)
(1,339)
(911)
405
397
802
141
(14)
(51)
(2,746)
(2,670)
5
392
397
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
112
113
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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.
These standalone financial statements for the year ended March
31, 2022 are approved by the Board of Directors on May 30,
2022.
2. Significant accounting policies
a. Basis of preparation
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.
Further, the Board of Directors of the Company in its meeting held
on October 28, 2021 has approved the restructuring of the business,
subject to all requisite approvals, wherein the business carried out
by Subex Assurance LLP will be transferred to Subex Limited on
a ‘going concern’ basis excluding Developed Technology and
Investment in subsidiaries. The aforesaid restructuring is being
carried out to achieve higher operational efficiencies upon
integration and consolidation of business in the listed entity. On
February 23, 2022, the shareholder of the Company approved the
aforesaid restructuring through postal ballot.
The standalone financial statements of the Company have
been prepared and presented in accordance with accounting
Indian
principles generally accepted
Accounting Standards (Ind AS) specified under Section 133
of the Companies Act, 2013 (“the Act”) read with Companies
(Indian Accounting Standards) Rules, 2015 (as amended from
time to time).
including
India
in
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 34].
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.
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:
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash
generating unit (“CGU”) exceeds its recoverable amount, which
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NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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).
Impairment of financial assets
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 35).
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.
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 34.
Taxes
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 20.
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)].
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
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•
Expected to be realised within twelve months after the
reporting period, or
efforts against the total estimated efforts, which represent the
fair value of services rendered.
• 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
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 Company derives its revenues 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.
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
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
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
obligations
remaining performance
The remaining performance obligation disclosure provides the
aggregate amount of the transaction price yet to be recognized
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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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.
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
and accumulated
Internally generated
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
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.
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Impairment of non-financial assets
Company as a lessee:
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
longer exist or have
losses no
recognised
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.
Investment in Limited Liability Partnership (‘LLP’) firms is carried
at cost in the separate financial statements. The share in profit/
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 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.
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 Company
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 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.
iii) Short-term leases and leases of low-value assets
the short-term
The Company applies
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.
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
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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
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 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 Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial asset
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
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NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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
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.
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
Ind AS 102, Share-Based Payment.
in accordance with
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
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.
p. Employee benefits
Employee benefits
compensated absences.
include provident
fund, gratuity and
Defined contribution plans
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’.
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NOTES TO THE STANDALONE FINANCIAL STATEMENTS
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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
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.
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.
q. Foreign currencies
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.
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.
Subex Annual Report 2021-22
120
121
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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.
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’.
Subex Annual Report 2021-22
122
123
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
w. New Accounting standards, amendments and interpretations
not yet adopted by the Company:
Companies (Indian Accounting Standards) Amendment Rules,
2022
Ministry of Corporate Affairs (“MCA”) notifies new standard or
amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time.
On March 23, 2022, MCA amended the Companies (Indian
Accounting Standards) Amendment Rules, 2022, applicable for
annual periods beginning on or after April 1, 2022, as below:
Amendments to Ind AS 103 – Business Combinations –
Reference to Conceptual Framework
The amendments specifies that to qualify for recognition as
part of applying the acquisition method, the identifiable assets
acquired and liabilities assumed must meet the definitions of
assets and liabilities in the Conceptual Framework for Financial
Reporting under Indian Accounting Standards (Conceptual
Framework) issued by the Institute of Chartered Accountants of
India at the acquisition date. These changes do not significantly
change the requirements of Ind AS 103. The adoption of
amendments to Ind AS 103 is not expected to have any material
impact on the standalone financial statements.
Amendments to Ind AS 109 – Financial Instruments
The amendments clarifies which fees an entity includes when it
applies the ’10 percent’ test of Ind AS 109 in assessing whether
to derecognize a financial liability. The adoption of amendments
to Ind AS 109 is not expected to have any material impact on the
standalone financial statements.
Amendments to Ind AS 16 – Property, Plant and Equipment –
Proceeds before intended use
The amendments clarifies that excess of net sale proceeds of
items produced over the cost of testing, if any, shall not be
recognised in the profit or loss but deducted from the directly
attributable costs considered as part of cost of an item of
property, plant, and equipment. The adoption of amendments
to Ind AS 16 is not expected to have any material impact on the
standalone financial statements.
Amendments to Ind AS 37 – Onerous Contracts – Cost of
Fulfilling a Contract
The amendments specifies that the cost of fulfilling a contract
comprises the costs that relate directly to the contract. Costs
that relate directly to a contract can either be the incremental
costs of fulfilling that contract (for example, direct labour and
materials); or an allocation of other costs that relate directly to
fulfilling contracts (for example, an allocation of the depreciation
charge for an item of property, plant and equipment used
in fulfilling that contract among others). The adoption of
amendments to Ind AS 37 is not expected to have any material
impact on the standalone financial statements.
Subex Annual Report 2021-22
122
123
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
3. Property, plant and equipment
Computer
equipment
Furniture and
fixtures
Vehicles
Leasehold
improvement
Office
equipment
(` in Lakhs)
Total
Cost
As at April 1, 2020
Additions
Disposals
As at March 31, 2021
Additions
Disposals
As at March 31, 2022
Depreciation
As at April 1, 2020
Charge for the year
Disposals
As at March 31, 2021
Charge for the year
Disposals
As at March 31, 2022
Net block
As at March 31, 2021
As at March 31, 2022
73
46
(4)
115
4
-
119
63
13
(4)
72
25
-
97
43
22
1
-
-
1
-
-
1
-
-
-
-
1
-
1
1
-
2
-
-
2
-
-
2
2
-
-
2
-
-
2
-
-
-
9
-
9
-
-
9
-
-
-
-
2
-
2
9
7
4
-
-
4
-
-
4
3
1
-
4
-
-
4
-
-
80
55
(4)
131
4
-
135
68
14
(4)
78
28
-
106
53
29
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
124
125
Subex Annual Report 2021-22
4. Intangible assets
Cost
As at April 1, 2020
Additions
Disposals
As at March 31, 2021
Additions
Disposals
As at March 31, 2022
Amortization and impairment*
As at April 1, 2020
Amortization for the year
Disposals
As at March 31, 2021
Amortization for the year
Disposals
As at March 31, 2022
Net block
As at March 31, 2021
As at March 31, 2022
Computer Software
Intellectual Property
Rights
(` in Lakhs)
Total
6,208
-
(130)
6,078
-
-
6,078
-
-
6,078
-
-
6,078
6,078
5,178
125
-
5,303
125
-
5,428
775
650
5,308
125
(130)
5,303
125
-
5,428
775
650
130
-
(130)
-
-
-
-
130
-
(130)
-
-
-
-
-
-
*During the 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, 2022, 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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
A. Investments in equity shares of wholly owned subsidiaries (unquoted equity instruments)
100 (March 31, 2021: 100) equity shares fully paid-up, no-par value, in Subex Americas Inc. [Impairment on
investment ` 76,560 Lakhs (March 31, 2021: ` 76,560 Lakhs)]*
49,99,991 (March 31, 2021: 49,99,991) equity shares of ` 10 each fully paid-up in Subex Technologies Limited
[Impairment on investment ` 500 Lakhs (March 31, 2021: ` 500 Lakhs)]
B. Investments in limited liability partnership firms (refer note 22 )
Investment in Subex Assurance LLP [Impairment on investment ` 16,808 Lakhs (March 31, 2021: ` 16,808 Lakhs)
and drawings from capital account of ` 4,800 Lakhs (March 31, 2021: Nil)]*
Investment in Subex Digital LLP*
Total Investments carried at cost (A+B)
936
-
936
936
-
936
39,956
44,756
1,869
41,825
42,761
1,869
46,625
47,561
Subex Annual Report 2021-22
124
125
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
5. Investments (contd.)
Aggregate amount of unquoted investments in subsidiaries
Aggregate amount of impairment on investments
1,36,629
93,868
42,761
(` in Lakhs)
1,41,429
93,868
47,561
*As at March 31, 2022, the Management has assessed the carrying value of the investment in its subsidiaries, based on future operational plan and projected cash
flows. Considering the aforesaid assessment, the management is of the view that, the carrying value of the investment in subsidiaries as at March 31, 2022 is
appropriate.
6. Loans
Carried at amortized cost
Non-current
Loan receivable
Loan receivable - credit impaired
Loans to related parties (refer note 31)
Impairment Allowance for loan receivable
Loan Receivables - credit impaired
Loans to related parties (refer note 31)
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 (refer note 31)
Trade receivables from other than related parties
Unsecured, which have significant increase in credit risk
Trade receivables from related parties
Trade receivables from other than related parties
Unsecured, credit impaired
Trade receivables from related parties (refer note 31)
Trade receivables from other than related parties
Total (a)
Impairment allowance (allowance for expected credit loss)
Receivable from related parties, credit impaired (refer note 31)
Receivables from other than related parties, credit impaired
Total (b)
Net Trade Receivables (a-b)
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
1,706
1,706
(1,706)
-
1,706
1,706
(1,706)
-
30
30
26
26
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
5,339
485
-
-
1,874
365
8,063
(1,874)
(365)
(2,239)
5,824
1,768
416
-
-
1,874
365
4,423
(1,874)
(365)
(2,239)
2,184
Subex Annual Report 2021-22
126
127
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
7 . Trade receivables* (contd.)
Trade receivables ageing schedule
As at March 31, 2022
(` in Lakhs)
Particulars
Current but
not due
Outstanding for following periods from due date of payment
Total
Less than 6
Months
6 months –
1 year
1-2 years
2-3 years
More than
3 years
Undisputed Trade Receivables – considered good
2,767
2,333
301
Undisputed Trade Receivables – which have significant
increase in credit risk
Undisputed Trade receivable – credit impaired
Disputed Trade receivables - considered good
Disputed Trade receivables – which have significant
increase in credit risk
Disputed Trade receivables – credit impaired
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
2,767
2,333
301
-
-
-
-
-
-
-
423
-
-
-
-
-
-
-
5,824
-
2,147
2,147
-
-
-
-
92
92
423
2,239
8,063
Less: Impairment allowance (allowance for expected
credit loss)
Net Trade Receivables
As at March 31, 2021
Particulars
(2,239)
5,824
(` in Lakhs)
Current but
not due
Outstanding for following periods from due date of payment
Total
Less than 6
Months
6 months –
1 year
1-2 years
2-3 years
More than
3 years
Undisputed Trade Receivables – considered good
1,656
113
Undisputed Trade Receivables – which have significant
increase in credit risk
Undisputed Trade receivable – credit impaired
Disputed Trade receivables - considered good
Disputed Trade receivables – which have significant
increase in credit risk
Disputed Trade receivables – credit impaired
-
-
-
-
-
-
-
-
-
-
Total
1,656
113
-
-
-
-
-
-
-
415
-
-
-
-
-
2,184
-
59
2,091
2,150
-
-
-
-
-
-
-
89
89
-
-
-
415
59
2,180
4,423
Less: Impairment allowance (allowance for expected
credit loss)
Net Trade Receivables
*includes dues from related parties. Refer note 31.
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.
(2,239)
2,184
Subex Annual Report 2021-22
126
127
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
8. Cash and cash equivalents
Current
Balance with banks
In current accounts
In EEFC accounts
Deposits with original maturity of less than 3 months
Other balances with banks
Earmarked balances with banks being unpaid dividend accounts
Deposits with original maturity more than 3 months but less than 12 months
Margin money deposits with original maturity more than 3 months but less than 12 months
Less: Disclosed under Other balances with banks (Current) (refer note 9)
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
196
16
590
802
28
25
22
75
(75)
-
802
137
-
260
397
-
-
-
-
-
-
397
A
B
(A+B)
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 balances with banks
Current
Other bank balances (refer note 8)
Earmarked balances with banks being unpaid dividend accounts*^
Deposits with original maturity more than 3 months but less than 12 months
Margin money deposits with original maturity more than 3 months but less than 12 months
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
28
25
22
75
-
-
-
-
^ Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off as at March 31, 2021.
*These balances are not available for use by the Company as they represent corresponding unclaimed dividend liabilities.
10. Other financial assets
Unsecured, considered good
Carried at amortized cost
Non-current
Security deposit
Margin money deposits with remaining maturity more than 12 Months
Current
Unbilled revenue
Share of profit in excess of drawings from Subex Assurance LLP (refer note 31)
Interest accrued but not due on bank deposits
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
20
6
26
31
979
2
1,012
14
-
14
-
3,900
-
3,900
Subex Annual Report 2021-22
128
129
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
11. Income tax assets (net)
Non-current
Advance income-tax [net of provision for taxation ` 1,030 Lakhs (March 31, 2021: ` 995 Lakhs)]
12. Deferred tax asset
Non-current
Minimum alternative tax ('MAT') credit entitlement
Less: Provision for MAT credit*
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
2,903
2,903
2,900
2,900
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
566
(425)
141
425
(425)
-
*Represents MAT credit entitlement of ` 425 Lakhs been provided for considering the uncertainty as regards to its utilisation.
13. Other assets
Non-current
Advance recoverable in cash or kind
Prepaid expenses
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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
12
267
(267)
12
29
34
-
63
-
267
(267)
-
9
6
48
63
* 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 previous year ended March 31, 2021, the Company has
made provision of ` 267 Lakhs considering the uncertainty as regards to its realisation.
Subex Annual Report 2021-22
128
129
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
14. Share capital
Authorised share capital
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020*
As at April 1, 2020
Increase during the year
Increase pursuant to Capital reduction order*
As at March 31, 2021
Increase during the year
As at March 31, 2022
Preference shares of ` 98 each
As at April 1, 2020
Increase during the year
As at March 31, 2021
Increase during the year
As at March 31, 2022
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, 2020
Issued during the year
Adjustment pursuant to Capital reduction order*
As at March 31, 2021
Issued during the year
As at March 31, 2022
No.
` in Lakhs
58,80,40,000
58,804
-
58,80,40,000
1,17,60,80,000
-
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
196
-
196
-
196
56,200
-
(28,100)
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, 2021: 243,207) shares in respect of which Global Depository Receipts of the Company are listed on London Stock Exchange.
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 may be
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, 2022 and as at March 31, 2021, there is no individual shareholder or shareholder (together with ‘Persons acting in concert’)
holding more than 5% shares of the Company.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
130
131
Subex Annual Report 2021-22
14. Share capital (contd.)
c) Shares reserved for issue under options (No.)
Outstanding employee stock options under below schemes granted/ available for grant:
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
e) The Promoters, as defined by Companies Act 2013, do not hold any shares in the Company.
15. 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
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
As at
March 31, 2022
As at
March 31, 2021
1,25,33,720
1,98,71,500
1,25,33,720
1,98,71,500
As at
March 31, 2022
As at
March 31, 2021
1,98,71,500
2,19,75,000
-
2,50,000
(73,37,780)
1,25,33,720
(23,53,500)
1,98,71,500
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
2,776
-
2,776
16,444
-
114
16,558
1,783
4
1,787
232
137
(98)
(4)
267
2,776
-
2,776
26,712
(10,301)
33
16,444
1,780
3
1,783
114
147
(26)
(3)
232
Subex Annual Report 2021-22
130
131
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
15. Other equity (contd.)
Surplus/ (deficit) in the statement of profit and loss
Balance as per last financial statements
Add: (Loss)/ profit for the year
Add: Adjustment pursuant to Capital reduction order
Less: OCI - Remeasurement loss on defined benefit obligations
Less: Dividends [refer 15(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
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. The reserve shall be utilised in accordance
with the provisions of section 52 of the Companies Act, 2013.
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
1,952
(447)
-
(3)
(1,367)
135
(1,121)
-
424
(697)
(36,325)
2,622
38,401
-
(2,746)
1,952
(1,233)
(22)
134
(1,121)
2,776
2,776
16,558
16,444
General reserve
1,787
1,783
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
267
232
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
135
1,952
This represents surplus/ (deficit) arising from operations of the Company.
Treasury Shares
(697)
(1,121)
This represents own equity shares that are acquired from open market for issuance to employees under ESOP
scheme.
Total other equity
20,826
22,066
15(a) Distributions made and proposed
During the year ended March 31, 2022, the Company has paid a final dividend of ` 0.25/- (5%) per equity share on face value of ` 5/- each for
the financial year 2020-2021.
During the previous year ended March 31, 2021, the Company has paid an interim dividend of ` 0.50/- (10 %) per equity share on face value
of ` 5/- each for the financial year 2020-2021.
Subex Annual Report 2021-22
132
133
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
134
1,031
1,165
3
355
358
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
a)
b)
c)
d)
e)
f)
the principal amount remaining unpaid to any supplier as at the end of accounting year;
134
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;
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;
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
-
-
-
-
-
Trade payable ageing schedule
As at March 31, 2022
Particulars
Outstanding for following periods from due date of payment
Unbilled
Not due
<1 year
1-2 years
2-3 years
More than
3 years
3
-
-
-
-
-
(` in Lakhs)
Total
Total outstanding dues of micro enterprises and small
enterprises
Total outstanding dues other than micro enterprises and
small enterprises
Disputed dues - micro enterprises and small enterprises
Disputed dues - other than micro enterprises and small
enterprises
-
125
-
-
22
93
-
-
112
811
-
-
Total
125
115
923
-
2
-
-
2
-
-
-
-
-
-
-
-
-
134
1,031
-
-
-
1,165
Subex Annual Report 2021-22
132
133
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
16. Trade payables (contd.)
As at March 31, 2021
Particulars
Outstanding for following periods from due date of payment
Unbilled
Not due
<1 year
1-2 years
2-3 years
More than
3 years
(` in Lakhs)
Total
Total outstanding dues of micro enterprises and small
enterprises
Total outstanding dues other than micro enterprises and
small enterprises
Disputed dues - micro enterprises and small enterprises
Disputed dues - other than micro enterprises and small
enterprises
-
87
-
-
3
219
-
-
Total
87
222
** includes dues to related parties. Refer note 31.
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 38
-
49
-
-
49
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3
355
-
-
358
17. Other current financial liabilities
Carried at amortized cost
Current
Share of Loss from Subex Digital LLP (refer note 31)
Employee related liabilities
Capital creditors
Payable to related parties (refer note 31)
Unclaimed dividend^
^ Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off as at March 31, 2021.
18. Other current liabilities
Statutory dues
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
3,271
464
4
-
28
6,395
512
-
2
-
3,767
6,909
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
104
104
99
99
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
134
135
Subex Annual Report 2021-22
19. Provisions
Non-current
Provisions for employee benefits
Gratuity [refer note 35(b) and 42]
Current
Provisions for employee benefits
Gratuity [refer note 35(b) and 42]
Leave benefits (refer note 42)
20. Income tax liabilities (net)
Current
Provision for tax [net of advance tax ` 102 Lakhs (March 31, 2021: ` Nil)]
Provision for foreign taxes
Provision for litigation [net of tax deducted at source ` 62 Lakhs (March 31, 2021: ` 62 Lakhs)]*
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
100
100
34
88
122
116
116
26
64
90
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
39
1
102
142
32
1
102
135
* 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 33(i)
for further details.
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 credit entitlement
MAT liability
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
-
-
(141)
141
-
-
(6)
-
35
29
*Represents reversal of provision in respect of foreign withholding taxes deducted/ deductible by the overseas customers of the Company, no longer required.
Subex Annual Report 2021-22
134
135
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
20. 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:
(Loss)/ profit before tax expense
Applicable tax rates in India
Computed tax charge (A)
Components of tax expense:
Reversal for foreign withholding taxes (net)
Exempt (income)/ expense - share of (profit)/ loss from LLP's
Brought forward loss set off
Impact of disallowable income/expense
Total adjustments (B)
Total tax expense (A+B)
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
(447)
34.94%
(156)
-
443
(332)
45
156
-
2,651
34.94%
926
(6)
(903)
-
12
(897)
29
In respect of carry forward losses as at March 31, 2022 and March 31, 2021, 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.
21. Revenue from operations
Sale of services
Other operating income
Disaggregation of revenue:
Revenue by offering
Sub-contracting services (refer note 31)
Support services (refer note 31 and 42)
22. Share of (loss)/ profit from Limited Liability Partnerships (net)*
Share of profit from Subex Assurance LLP
Share of loss from Subex Digital LLP
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
6,814
22
6,836
2,196
4,618
6,814
2,714
202
2,916
1,308
1,406
2,714
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
1,353
(2,626)
(1,273)
4,628
(2,043)
2,585
* 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.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
136
137
Subex Annual Report 2021-22
23. Other income
Interest income on:
Security deposits
Bank deposits
Miscellaneous income
24. Employee benefits expense
Salaries, wages and bonus (refer note 42)
Contribution to provident and other funds
Employee share based payments
Gratuity expense [refer note 35(b)]
Staff welfare expenses
25. Finance cost
Interest expense on Lease liability
Finance cost on Actuarial valuation
26. Depreciation and amortization expense
Depreciation of property, plant and equipment
Depreciation on right-of-use assets
Amortization of intangible assets
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
-
5
1
6
2
7
-
9
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
3,973
1,270
146
7
23
144
43
9
10
29
4,293
1,361
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
4
8
12
14
-
14
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
28
10
125
163
14
54
125
193
Subex Annual Report 2021-22
136
137
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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
Commission to directors
Payments to auditors [refer note 27(i)]
Marketing and support service charges (refer note 31)
Allowance for expected credit loss (net)
Exchange fluctuation gain (net)
Directors sitting fees (refer note 31)
Bank Charges
27(i). Payments to auditors (excluding goods and services tax):
As auditor
Audit fee
Tax audit fee
In other capacity
Other services (certification services)
Reimbursement of expenses
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
2
3
46
3
-
115
1
16
1
136
69
38
213
36
39
913
-
(143)
56
4
1,548
11
36
13
8
2
23
1
14
-
-
72
19
92
48
39
651
(23)
(13)
66
1
1,060
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
35
1
2
1
39
35
1
2
1
39
Subex Annual Report 2021-22
138
139
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
28. Leases
During the previous 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.
The details of the right-of-use asset held by the Company is as follows:
(` in Lakhs)
Buildings
Total
Gross Carrying Value
As at April 1, 2020
Additions
Disposals on termination of lease agreement
As at March 31, 2021
Additions
Disposals
As at March 31, 2022
Accumulated Depreciation
As at April 1, 2020
Charge for the year
Disposals on termination of lease agreement
As at March 31, 2021
Charge for the year
Disposals
As at March 31, 2022
Net block
As at March 31, 2021
As at March 31, 2022
311
50
(311)
50
-
-
50
66
54
(116)
4
10
-
14
46
36
311
50
(311)
50
-
-
50
66
54
(116)
4
10
-
14
46
36
The Company incurred ` 46 Lakhs for the year ended March 31, 2022 (March 31, 2021: ` 13 Lakhs) towards expenses relating to short-term leases and leases of
low-value assets.
Subex Annual Report 2021-22
138
139
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
28. Leases (contd.)
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
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
March 31, 2022
Year ended
March 31, 2021
46
-
4
(12)
-
38
11
27
272
48
14
(65)
(223)
46
11
35
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
10
4
46
-
60
54
14
13
(36)
45
The Company had total cash outflows for leases of ` 12 Lakhs for the year ended March 31, 2022 (March 31, 2021: ` 65 Lakhs). There are no future cash outflows
relating to leases that have not yet commenced.
Cash and non-cash changes in liabilities arising from financing activities:
Lease Liabilities
Total
Lease Liabilities
Total
As at
April 1, 2021
46
46
As at
April 1, 2020
272
272
Cash flow
Non-cash changes -
Interest on lease liability
(12)
(12)
Cash flow
(65)
(65)
4
4
Non-cash
changes *
(161)
(161)
(` in Lakhs)
As at
March 31, 2022
38
38
(` in Lakhs)
As at
March 31, 2021
46
46
* Non-cash changes includes addition in lease liability, interest on lease liability and deletion in lease liability on account of lease modification.
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
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.
Subex Annual Report 2021-22
140
141
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
29. Earnings/ (loss) per share (contd.)
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)
(Loss)/ profit attributable to equity shareholders (` in Lakhs)
Weighted average number of equity shares (No. in Lakhs)*
Basic
Diluted
(Loss)/ earning per share (` per share)**
Basic
Diluted
Year ended
March 31, 2022
Year ended
March 31, 2021
5
(447)
5,461
5,548
(0.08)
(0.08)
5
2,622
5,406
5,513
0.49
0.48
*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, 2022 are anti-dilutive (March 31, 2021: dilutive).
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 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 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
March 31, 2022
Year ended
March 31, 2021
373
879
4,665
919
6,836
430
202
1,406
878
2,916
* 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, 2022 and March 31, 2021.
Revenue from its subsidiaries accounts for more than 10% of the total revenues of the Company (refer note 31).
Non-current operating assets by geographical location are as follows**:
Region
India
Outside India
Total non-current operating assets
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
727
-
727
874
-
874
** Non-current operating assets includes Property, plant and equipment, Right-of-use assets, Other intangible assets, Balance with statutory/ government
authorities and Prepaid expenses.
Subex Annual Report 2021-22
140
141
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
31. 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
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
G V Krishnakanth
Sumit Kumar
Venkatraman G S
Chairman, Non-Executive & Non-Independent Director (w.e.f June 18, 2020)
Independent Director
Independent Director
Independent Director
Managing Director & Chief Executive Officer
Whole-time Director & Chief Operating Officer
Company Secretary & Compliance Officer
Chief Financial Officer (w.e.f January 31, 2022)
Chief Financial Officer & Senior Vice President (upto December 10, 2021)
iii. Details of the transactions with the related parties during the year ended March 31, 2022:
A. Transactions with wholly owned subsidiaries
Income from subcontracting and support services:
Subex Inc.
Subex (Asia Pacific) Pte. Limited
Subex Middle East (FZE)
Subex Assurance LLP (refer note 42)
Subex Digital LLP (refer note 42)
Marketing and support charges:
Subex Inc.
Subex Middle East (FZE)
Subex (UK) Ltd.
Subex (Asia Pacific) Pte. Limited
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
373
919
857
4,137
528
6,814
246
218
61
76
430
878
-
1,331
75
2,714
516
-
-
-
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
142
143
Subex Annual Report 2021-22
31. Related party transactions (contd.)
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 Middle East (FZE)
Subex Assurance LLP
Subex Digital LLP
Subex (Asia Pacific) Pte. Limited
Subex Inc.
Subex Americas Inc.
Reimbursement of expenses incurred by the subsidiaries on behalf of Subex Limited:
Subex Assurance LLP
Subex Middle East (FZE)
Subex (Asia Pacific) Pte. Limited
Subex (UK) Limited
Subex Inc.
Drawings during the year from Limited Liability Partnership:
Subex Assurance LLP (current account)
Subex Assurance LLP (capital account)
Reimbursement of share of loss to Limited Liability Partnership:
Subex Digital LLP
Advance repaid by Trust
Subex Assurance LLP
Share of profit/(loss) from Limited Liability Partnerships:
Subex Assurance LLP
Subex Digital LLP
Net liabilities transferred from (refer note 42):
Subex Assurance LLP
Subex Digital LLP
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
251
61
913
124
6
130
1
26
180
123
2
1
1
334
76
18
6
4
2
106
4,274
4,800
9,074
5,750
5,750
-
-
1,353
(2,626)
(1,273)
67
13
80
131
4
651
121
17
138
1
-
56
3
18
-
-
78
48
-
3
-
1
52
2,600
-
2,600
-
-
2
2
4,628
(2,043)
2,585
445
21
466
Subex Annual Report 2021-22
142
143
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
31. Related party transactions (contd.)
B. Transactions with key managerial personnel
Salary and perquisites*
Vinod Kumar Padmanabhan **
Venkatraman G S **
G V Krishnakanth **
Shiva Shankar Roddam**
Sumit Kumar
Dividend paid
Vinod Kumar Padmanabhan
Venkatraman G S
Shiva Shankar Roddam
Anil Singhvi^
G V Krishnakanth^^
Director sitting fees
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
Commission payable
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
422
327
77
426
17
1,269
-
2
1
-
-
3
18
14
13
11
56
11
9
7
9
36
57
113
46
17
-
233
2
2
1
-
-
5
20
16
19
11
66
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, 2022, the Company has granted Nil ESOPs (March 31, 2021 : Nil ESOPs) to certain key management personnel under ESOP
2018 scheme. Of the total granted ESOPs, 17,10,000 (March 31, 2021 : 3,60,000) options has been exercised during the year. Refer note 34.
^ Represents dividend paid ` 15,000 during the year ended March 31, 2022 and ` 30,000 during the year ended March 31, 2021 which are presented as Nil due
to rounding off.
^^ Represents dividend paid ` 21,250 during the year ended March 31, 2022 and ` 17,500 during the year ended March 31, 2021 which are presented as Nil due
to rounding off.
iv. Details of balances receivable from and payable to related parties are as follows:
(` in Lakhs)
Balances receivable from and payable to wholly owned subsidiaries
Trade receivables
Subex Americas Inc. [Net of provision of ` 1,841 Lakhs (March 31, 2021: ` 1,841 Lakhs)]
Subex Inc.
Subex (Asia Pacific) Pte. Limited [Net of provision of ` 33 Lakhs (March 31, 2021:` 33 Lakhs)]
Subex Assurance LLP
Subex Middle East (FZE)
As at
March 31, 2022
As at
March 31, 2021
-
348
272
3,062
906
-
250
65
1,372
-
Subex Annual Report 2021-22
144
145
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex UK Limited
Subex Digital LLP
Trade payables
Subex (UK) Limited
Subex Inc.
Subex Middle East (FZE)
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, 2021: ` 1,706 Lakhs)]
Other current financial assets
Share of profit in excess of drawings from Subex Assurance LLP
Other current financial liabilities
Share of loss from Subex Digital LLP
Payable to related party
Subex Assurance LLP
Investment in Limited Liability Partnership
As at
March 31, 2022
As at
March 31, 2021
1
750
5,339
59
88
242
49
-
431
869
-
-
979
979
3,271
-
3,271
1
80
1,768
-
87
-
3
4
150
244
-
-
3,900
3,900
6,395
2
6,397
Subex Assurance LLP [net of impairment on investment ` 16,808 Lakhs (March 31, 2021: ` 16,808 Lakhs) and
drawings from capital account of ` 4,800 Lakhs (March 31, 2021: Nil)]
39,956
44,756
Subex Digital LLP
Investment in equity shares
Subex Americas Inc [net of impairment on investment ` 76,560 Lakhs (March 31, 2021: ` 76,560 Lakhs)]
Also, refer note 33(iii) for comfort letter given to subsidiaries.
1,869
41,825
936
936
1,869
46,625
936
936
32. Disclosure as per Regulation 34(3) and Regulation 53(1)(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, 2022
As at March 31, 2021
Subex Technologies Limited
Loans and advances given
Less: Provision for loans and advances given
Outstanding Amount
Maximum balance
outstanding during
the year
Outstanding Amount
Maximum balance
outstanding during
the year
1,706
(1,706)
-
1,706
(1,706)
1,706
(1,706)
-
1,706
(1,706)
Subex Annual Report 2021-22
144
145
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
33. Contingent liabilities
Income tax demands [refer note (i)]
Service tax demands [refer note (ii)]
i.
Income tax
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
2,307
3,687
2,307
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 aforesaid demands ` 1,776 Lakhs has been paid/refund
adjusted under protest.
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.
iii. The Company has issued comfort letter to provide continued financial support to its subsidiaries viz., Subex Technologies Ltd., Subex
Americas Inc. and Subex Digital LLP.
34. Employee stock options plans (‘ESOPs’)
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 administering
ESOP for 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 1,25,33,720 and
1,98,71,500 treasury shares as at March 31, 2022 and March 31, 2021, respectively.
The Nomination & Remuneration Committee in their meeting held on January 31, 2022 granted 14,48,000 (March 31, 2021: 12,40,500) options
under approved “Subex Employees Stock Option Scheme – 2018” to the eligible employees. The shares granted vest over a period of 1 to 3
years and can be exercised over a maximum period of 3 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 – V
Exercised during the year
ESOP – V
Granted during the year
ESOP – V
2021-22
Options (no.)
Weighted average
exercise price per
stock option (`)
2020-21
Options (no.)
Weighted average
exercise price per
stock option (`)
1,98,71,500
6.75
2,19,75,000
73,37,780
6.00
23,53,500
6.00
6.00
14,48,000
20.00
12,40,500
18.00
Subex Annual Report 2021-22
146
147
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
2021-22
Options (no.)
Weighted average
exercise price per
stock option (`)
2020-21
Options (no.)
Weighted average
exercise price per
stock option (`)
Forfeited and expired during the year
ESOP – V
Options outstanding at the end of the year
25,24,092
6.95
9,90,500
ESOP – V
1,14,57,628
8.86
1,98,71,500
Options exercisable at the end of the year
ESOP – V
94,89,628
6.66
1,19,24,750
6.00
6.75
6.00
Details of weighted average remaining contractual life and range of exercise prices for the options outstanding at the balance sheet date:
Particulars
ESOP – V
* considering vesting and exercise period
Weighted average remaining contractual
life(years)*
Range of exercise prices (`)
2021-22
1.84
2020-21
2021-22
2020-21
2.16
6.00-20.00
6.00-18.00
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, 2022
March 31, 2021
6.68%
67.51%
3
1.59%
20.00
30.24
6.12%
72.08%
2
1.88%
18.00
12.64
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.
35. 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
` 146 Lakhs (March 31, 2021: ` 43 Lakhs) for Provident Fund contributions including administration charges..
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.
Subex Annual Report 2021-22
146
147
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
35. Employee benefit plans (contd.)
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 (gain)/ loss (through OCI)
Obligations at end of the year
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
Interest cost (net)
Net gratuity cost
E.
Re-measurement (losses)/ gains 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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
178
31
23
10
(30)
4
216
36
2
1
73
(30)
82
(216)
82
(134)
25
151
10
1
(10)
1
178
19
1
1
25
(10)
36
(178)
36
(142)
Year ended
March 31, 2022
(` in Lakhs)
Year ended
March 31, 2021
23
8
31
(3)
(1)
1
(3)
6.19%
5.79%
6.00%
18.00%
10
-
10
2
(3)
1
-
5.79%
6.41%
6.00%
18.00%
60 years
60 years
Subex Annual Report 2021-22
148
149
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
35. Employee benefit plans (contd.)
Assumptions regarding future mortality experience are set in accordance with the published statistics by Indian Assured Lives Mortality (2012-14) [March 31, 2021:
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
H.
Contribution likely to be made for the next one year
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
34
32
30
27
24
141
34
26
26
24
22
20
119
26
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.
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
March 31, 2022
As at
March 31, 2021
100%
100%
(` in Lakhs)
Year ended March 31, 2022
Year ended March 31, 2021
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)
(4.30)
4.49
(3.74)
3.91
Effect of change in salary
1% increase
1% decrease
1% increase
1% decrease
Impact on defined benefit obligation increase/ (decrease)
7.57
(7.14)
7.02
(6.63)
Effect of change in withdrawal assumption
5% increase
5% decrease
5% increase
5% decrease
Impact on defined benefit obligation increase/ (decrease)
(1.84)
1.34
(3.29)
3.33
K.
The average duration of the defined benefit plan obligation at the end of the reporting period of gratuity is 5 years (March 31, 2021: 5 years).
36. 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. Surplus fund has been invested into
risk free highly liquid financial instruments.
The capital structure as of March 31, 2022 and March 31, 2021 was as follow:
Total equity (` in Lakhs)
As percentage of total capital
Lease liabilities (` in Lakhs)
As percentage of total capital
Total capital (` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
48,926
99.92%
38
0.08%
48,964
50,166
99.91%
46
0.09%
50,212
(A)
(B)
(A+B)
Subex Annual Report 2021-22
148
149
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
37. 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*
Interest accrued but not due on bank deposits*
Trade receivables*
Unbilled revenue*
Security deposits^
Loans and advances to employees*
Margin money deposits with remaining maturity more than 12 months
Cash and cash equivalents and other balances with banks
Balance with banks
Margin money deposits with original maturity more than 3 months but less than 12 months
Earmarked balances with banks being unpaid dividend accounts#
Financial liabilities measured at amortized cost
Employee related liabilities*
Trade payables*
Capital creditors*
Payable to related party*
Share of Loss from Subex Digital LLP*
Unclaimed dividend#
Lease Liabilities^
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
979
2
5,824
31
20
30
6
3,900
-
2,184
-
14
26
-
6,892
6,124
827
22
28
877
464
1,165
4
-
3,271
28
38
4,970
397
-
-
397
512
358
-
2
6,395
-
46
7,313
* 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 as at March 31, 2021.
38. 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.
Subex Annual Report 2021-22
150
151
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
38. Financial risk management (contd.)
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
Unbilled revenue
Total
The movement in credit loss allowance on customer balance is as follows:
Particulars
Opening balance
Less: (Reversal) during the year
Less: Bad-debts written-off
Add/(less): Translation difference
Closing balance
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
5,824
31
5,855
2,184
-
2,184
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
2,239
-
(9)
9
2,239
2,262
(15)
-
(8)
2,239
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, 2022 and as at March 31, 2021. 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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
802
802
397
397
Subex Annual Report 2021-22
150
151
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
38. Financial risk management (contd.)
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, 2022
Trade payables
Lease Liability*
Other financial liabilities
As at March 31, 2021
Trade payables
Lease Liability*
Other financial liabilities
On demand
0-180 Days
181-365 Days More than 365 Days
-
-
3,271
3,271
-
-
6,395
6,395
1,165
6
491
1,662
355
6
514
875
-
6
5
11
3
6
-
9
-
33
-
33
-
45
-
45
*Includes future cash outflow toward estimated interest on lease liabilities.
iv. Market risk
(` in Lakhs)
Total
1,165
45
3,767
4,977
358
57
6,909
7,324
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, 2022
Particulars
Financial assets
Trade receivables
Cash and cash equivalents and other bank balances
Total financial assets
Financial liabilities
Trade payables
Other financial liabilities
Total financial liabilities
Net financial assets/ (liabilities)
March 31, 2021
Particulars
Financial assets
Trade receivables
Total financial assets
Financial liabilities
Trade payables
Total financial liabilities
Net financial assets/ (liabilities)
Sensitivity analysis
Denominated currency
SGD
272
-
272
49
-
49
223
Others
908
-
908
271
-
271
637
Denominated currency
SGD
Others
65
65
3
3
62
-
-
-
-
-
USD
4,151
39
4,190
497
16
513
3,677
USD
463
463
87
87
376
(` in Lakhs)
Total
5,331
39
5,370
817
16
833
4,537
(` in Lakhs)
Total
528
528
90
90
438
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 0.66% (March 31, 2021: 0.15%).
Subex Annual Report 2021-22
152
153
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
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, 2022, considering losses incurred in past years, the Company does not have
the obligation to incur expenses in relation to CSR.
40 Analytical Ratios
Ratios
Measured
in
Numerator
Denominator
As at
March 31, 2022
As at
March 31, 2021
Variance Reasons of Variance
Current ratio
Times
Current Assets
Current Liabilities
1.47
0.86
70.06% Increase is due to
reimbursement of share
of loss to Limited Liability
Partnership in the current
year
Debt- Equity
Ratio*
Debt Service
Coverage ratio
Times
Times
Total Debt = Lease
liabilities
Total equity
0.00
0.00
(15.3%)
Earnings for debt service
= Net (loss)/ profit for
the year + Finance cost
+ Non-cash operating
expenses
Debt service
= Interest &
Lease Payments
+ Principal
Repayments
(13.60)
43.52
(131.25%) Reduction is majorly due to
loss incurred in the current
year as compared to profits
earned in the previous year
Inventory
turnover ratio
Return on Equity
ratio
Trade Receivable
Turnover Ratio
Trade Payable
Turnover Ratio
Net Capital
Turnover Ratio
This ratio is not applicable considering the nature of business of the Company
Percentage Net (loss)/ profit for the
year
Average total
equity
(0.90%)
5.29%
(117.05%) Reduction is majorly due to
loss incurred in the current
year as compared to profits
earned in the previous year
Times
Revenue from operations Average trade
1.71
1.88
(9.28%)
Times
Other expenses
receivable
Average trade
payables
2.03
3.29
Times
Revenue from operations Average working
2.74
(2.83)
capital = Total
current assets
- Total current
liabilties
Revenue from
operations
Capital Employed
= Tangible net
worth + Lease
liability
(6.54%)
89.92%
(0.91%)
5.84%
(38.25%) Reduction is majorly due to
increase in other expenses
and related trade payable
for the current year.
196.97% Improvement in the ratio is
due to increase in revenue
from operations and
improvement in current
ratio
(107.27%) Reduction is majorly due to
loss incurred in the current
year as compared to profits
earned in the previous year
(115.63%) Reduction is majorly due to
loss incurred in the current
year as compared to profits
earned in the previous year
Net Profit Ratio
Percentage Net (loss)/ profit for the
year
Return on Capital
Employed
Percentage (Loss)/ earnings before
interest and taxes
Return on
investment
Ratio relating to return on investment is not presented due to no treasury investments as at March 31, 2022 and March 31, 2021.
* Represents 0.00078 times for year ended March 31, 2022 and 0.00092 times for year ended March 31, 2021.
Subex Annual Report 2021-22
152
153
Subex Annual Report 2021-22
NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
41. 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, 2022 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.
42. Effective January 1, 2021, the Company had 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 had been transferred to the Company. During the year ended March 31, 2022 and previous
year ended March 31, 2021, the common costs pertaining to sales and business support function amounting to ` 4,618 Lakhs and ` 1,406
Lakhs respectively had been recovered by the Company with an agreed mark-up from other group entities and is reflected under revenue
from operations.
43. The Board of Directors of the Company in its meeting held on October 28, 2021 has approved the restructuring of the business, subject to
all requisite approvals, wherein the business carried out by Subex Assurance LLP will be transferred to Subex Limited on a ‘going concern’
basis excluding Developed Technology and Investment in subsidiaries. The aforesaid restructuring is being carried out to achieve higher
operational efficiencies upon integration and consolidation of business in the listed entity. On February 23, 2022, the shareholder of the
Company approved the aforesaid restructuring through postal ballot. The aforesaid restructuring is likely to be completed over next few
months.
44. On December 6, 2021, the Company experienced a cybersecurity incident related to ransomware. The Company could contain the
incident in a timely basis and has also ensured that all traces of the infection are completely cleared from the network. All affected systems
were restored and brought back to normalcy in the order of priority. The management has assessed the impact of the incident on the
control environment and the financial statement process and conclude there was no material impact on the financial results. Since then,
the Company has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from
such risks in the future.
45. Other Regulatory Information
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
(ii) The Company do not have any transactions with companies struck off.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company does not have any sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or
financial institutions on the basis of security of current assets.
(v) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(viii) The Company have not entered into any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as search or survey or any other
relevant provisions of the Income Tax Act, 1961).
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NOTES TO THE STANDALONE FINANCIAL STATEMENTS
for the year ended March 31, 2022
(ix) The Company has complied with the provisions of clause (87) of section 2 of the Act read with Companies (Restriction on number
of Layers) Rules, 2017.
(x) The Company has complied with the provisions of section 123 of the Companies Act, 2013 in relation to dividend declared or paid
during the year.
46. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards
Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on
November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess
the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in
the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
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Subex Annual Report 2021-22
FORM AOC 1
(Information in respect of each Subsidiary to be presented with amounts in ` Lakhs)
Sr. No
Name of the
Subsidiary
Reporting Period
of the Subsidiary
Concerned
1
2
3
4
5
6
7
8
9
Subex (Aisa
Pacific) PTE
Ltd
Subex (UK)
Ltd.
Subex
Americas Inc
Subex Inc.
Subex
Technologies
Ltd.***
Subex Middle
East (FZE)
Subex
Bangladesh
Pvt Ltd.
Subex
Assurance
LLP
Subex Digital
LLP
March 31,
2022
March 31,
2022
March 31,
2022
March 31,
2022
March 31,
2022
March 31,
2022
March 31,
2022
March 31,
2022
March 31,
2022
Reporting Currency
SGD
GBP
USD
USD
INR
AED
55.97
99.46
75.79
75.79
1
20.64
BDT
0.87
INR
1
INR
1
Exchange Rate as
on the last date of
relevant financial
year in the case of
foreign subsidiaries
Share Capital/
Partners Capital
3,986
41
49,806
-
500
27
-
40,934
(1,402)
Reserve & Surplus
(3,333)
8,086
(50,184)
(761)
(489)
(487)
(49)
-
-
Total Assets
2,195
12,827
949
3,727
Total Liabilities
1,542
4,700
1,327
4,487
Investments
Turnover*
Profit/ (loss) before
Taxation
Profit/ (loss) after
Taxation
-
-
-
-
3,871
18,699
1,083
9,094
128
512
28
933
143
(84)
(33)
914
Proposed Dividend
-
-
-
-
75
64
-
-
(4)
(4)
-
4,654
995
52,364
1,582
5,115
1,044
11,430
2,984
-
-
20,691
-
2,889
903
28,933
1,839
(492)
38
2,073
(2,626)
(518)
-
1
-
1,353
(2,626)
-
-
%of Shareholding**
100%
100%
100%
100%
100%
100%
100%
100%
100%
Date of Acquisition/
Incorporation
June 23,
2006
June 23,
2006
April 1,
2007
June 23,
2006
March 28,
2005
March 25,
2015
February 13,
2020
April 05,
2017
April 05,
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
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman & Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
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Subex Annual Report 2021-22
CONSOLIDATED
F I N A N C I A L
S T A T E M E N T S
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Subex Annual Report 2021-22
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, 2022, 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, 2022, 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, 2022.
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 23 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;
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(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, 2022, 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 33 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 impact on 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.
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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
India,
including
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
Indian
in
principles generally accepted
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 consolidated 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 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,
intentional omissions, misrepresentations, or the
forgery,
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 consolidated Ind 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.
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• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
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 consolidated Ind AS financial statements for the financial
year ended March 31, 2022 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, 2020
(“the Order”), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, based on
our audit of separate financial statements and the other financial
information of the subsidiary company, incorporated in India,
we give in the “Annexure 1” a statement on the matters specified
in paragraph 3(xxi) of the Order.
2. 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;
(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, 2022,
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, 2022 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 2” to this
report;
(g)
In our opinion, the managerial remuneration for the
year ended March 31, 2022, 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 consolidated
Ind AS financial statements – Refer Note 33 to the
consolidated Ind AS financial statements;
The Group did not have any material foreseeable
losses on long-term contracts including derivative
contracts during the year ended March 31, 2022; 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, 2022.
iv. a) The respective managements of the Holding
Company and
subsidiaries which are
its
companies incorporated in India whose financial
statements have been audited under the Act
have represented to us respectively that, to the
best of its knowledge and belief, no funds have
been advanced or loaned or invested (either
from borrowed funds or share premium or any
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other sources or kind of funds) by the Holding
Company or any of such subsidiaries to or in
any other person or entity including foreign
entities (“Intermediaries”), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of
the respective Holding Company or any of such
subsidiaries (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of
the Ultimate Beneficiaries;
its
b) The respective managements of the Holding
subsidiaries which are
Company and
companies incorporated in India whose financial
statements have been audited under the Act have
represented to us respectively that, to the best
of its knowledge and belief, no funds (which are
material either individually or in the aggregate)
have been received by the respective Holding
Company or any of such subsidiaries from
any person or entity, including foreign entities
the understanding,
(“Funding Parties”), with
whether recorded in writing or otherwise, that
the Holding Company or any of such subsidiaries
shall, whether, directly or indirectly, lend or
invest in other persons or entities identified in
any manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries; and
c) Based on the audit procedures that has been
considered reasonable and appropriate in the
circumstances performed by us nothing has
come to our notice that has caused us to believe
that the representations under sub-clause (a) and
(b) contain any material mis-statement.
v.
The dividend declared and paid during the year by the
Holding company is in compliance with section 123 of
the Act.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership Number: 213803
UDIN: 22213803AJXLRZ6942
Place of Signature: Bengaluru
Date: May 30, 2022
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Annexure ‘1’ referred to in paragraph under the heading “Report on other legal and regulatory requirements”
of our report of even date on the Consolidated Ind AS Financial Statements of Subex Limited
In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us
in the normal course of audit and to the best of our knowledge and belief, we state that:
(xxi) There are no qualifications or adverse remarks by us in the Companies (Auditors Report) Order (CARO) report of the company included
in the consolidated Ind AS financial statements. Accordingly, the requirement to report on clause 3(xxi) of the Order is not applicable to
the Holding Company.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership Number: 213803
UDIN: 22213803AJXLRZ6942
Place of Signature: Bengaluru
Date: May 30, 2022
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Annexure ‘2’ 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, 2022,
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 2021-22
164
165
Subex Annual Report 2021-22
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, 2022, 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 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: 22213803AJXLRZ6942
Place of Signature: Bengaluru
Date: May 30, 2022
Subex Annual Report 2021-22
164
165
Subex Annual Report 2021-22
CONSOLIDATED BALANCE SHEET
as at March 31, 2022
Notes
As at
March 31, 2022
As at
March 31, 2021
(` in Lakhs)
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill on consolidation
Other intangible assets
Financial assets
Other financial assets
Income tax assets (net)
Deferred tax assets (Including MAT credit entitlement)
Other non-current assets
Current assets
Financial assets
Loans
Investments
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)
3
29
5
4
11
12
13
14
6
7
8
9
10
11
14
15
16
29
20
21
959
1,386
34,409
14
447
4,947
148
42
42,352
161
1,165
9,681
8,539
2,328
7,003
779
29,656
72,008
28,100
28,267
56,367
998
304
6,742
8,044
1,177
1,962
34,409
-
302
3,479
125
-
41,454
220
-
9,956
14,294
207
5,896
639
31,212
72,666
28,100
26,755
54,855
1,575
275
6,289
8,139
Subex Annual Report 2021-22
166
167
Subex Annual Report 2021-22
CONSOLIDATED BALANCE SHEET (contd.)
as at March 31, 2022
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
Notes
As at
March 31, 2022
As at
March 31, 2021
(` in Lakhs)
42
29
17
17
18
19
20
22
-
470
276
1,396
1,491
2,506
830
628
7,597
15,641
584
420
66
1,245
3,045
2,935
791
586
9,672
17,811
72,008
72,666
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
166
167
Subex Annual Report 2021-22
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
for the year ended March 31, 2022
Notes
Year ended
March 31, 2022
Year ended
March 31, 2021
(` in Lakhs)
1
Income
Revenue from operations
Other income
Total income
2
Expenses
Employee benefits expense
Finance costs
Depreciation and amortization expense
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
Total exceptional items
Net profit before tax expense (3+4)
Tax expense (net):
Current tax charge
Provision - foreign withholding taxes (net)
Deferred tax charge (net)
Profit 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 other comprehensive income
Total comprehensive income for the year attributable to equity holders of the Company (7+8)
Earnings per equity share [nominal value of ` 5/- each (March 31, 2021 : ` 5)]
Basic (`)
Diluted (`)
3
4
5
6
7
8
9
10
23
24
25
26
27
28
29
14
22
22
22
35
30
33,344
1,037
34,381
21,449
194
988
8,381
31,012
3,369
-
-
-
3,369
251
593
426
1,270
2,099
37,203
474
37,677
19,720
296
1,378
7,633
29,027
8,650
554
(267)
287
8,937
696
399
2,670
3,765
5,172
267
636
(64)
203
2,302
0.38
0.38
(12)
624
5,796
0.96
0.94
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended March 31, 2022
Subex Annual Report 2021-22
168
169
Subex Annual Report 2021-22
A. Equity share capital (refer note 15):
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, 2020
Issued during the year
Adjustment pursuant to Capital reduction order (refer note 15)
As at March 31, 2021
Issued during the year
As at March 31, 2022
B. Other equity (refer note 16):
Particulars
As at April 1, 2020
Add: Profit for the year
Add/(less): Other comprehensive (loss)/ income
Less: Equity shares purchased by Subex Employee Welfare and
Employee Stock Option Plan ("ESOP") Benefit Trust
Add: Share based expenses (refer note 34)
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 15)
Less: Dividends [refer note 16(a)]
As at March 31, 2021
Add: Profit for the year
Add/(less): Other comprehensive (loss)/ income
Add: Share based expenses (refer note 34)
Add/(less): On account of exercise of stock options
Add/(less): On account of vested options lapsed during the year
Less: Dividends [refer note 16(a)]
As at March 31, 2022
No.
` in Lakhs
56,20,02,935
-
-
56,20,02,935
-
56,20,02,935
56,200
-
(28,100)
28,100
-
28,100
(` in Lakhs)
Attributable to equity holders of the Company
Reserves and surplus
OCI
Total
Securities
premium
General
reserve
Employee
stock
options
reserve
Surplus/
(deficit) in the
statement of
profit and loss
Treasury
Shares
Exchange
reserve on
consolidation
26,712
1,780
114
(19,828)
(1,233)
(12,206)
(4,661)
-
-
-
-
33
-
(10,301)
-
-
-
-
-
-
3
-
-
-
-
-
147
(26)
(3)
-
-
5,172
(12)
-
-
-
-
38,401
(2,746)
-
-
(22)
-
134
-
-
-
-
5,172
636
-
-
-
-
-
-
624
(22)
147
141
-
28,100
(2,746)
16,444
1,783
232
20,987
(1,121)
(11,570)
26,755
-
-
-
114
-
-
-
-
-
-
4
-
16,558
1,787
-
-
137
(98)
(4)
-
267
2,099
(64)
-
-
-
(1,367)
-
-
-
424
-
-
-
2,099
267
-
-
-
-
203
137
440
-
(1,367)
21,655
(697)
(11,303)
28,267
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
168
169
Subex Annual Report 2021-22
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended March 31, 2022
(A) Operating activities
Profit before tax expense
Adjustments to reconcile profit 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)
Fair value gain on mutual fund at fair value through profit or loss
Net gain on sale of investments
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
Waiver of borrowings (PPP Loan and interest)
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 (used in)/ from operating activities
(B)
Investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of Investments
Sales of investments
Movement in other balances with bank
Purchase of treasury shares by ESOP trust
Interest received
Net cash flows used in investing activities
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
3,369
8,937
987
1
-
(266)
(7)
(15)
194
536
137
(12)
-
(584)
(165)
4,175
76
(27)
(1,006)
(185)
329
(1,375)
(551)
(34)
1,402
(2,278)
(876)
(540)
-
(9,672)
8,529
(2,111)
-
260
(3,534)
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)
Subex Annual Report 2021-22
170
171
Subex Annual Report 2021-22
CONSOLIDATED STATEMENT OF CASH FLOWS (contd.)
for the year ended March 31, 2022
(C)
Financing activities
Proceeds from exercise of ESOP
Proceeds from borrowings (refer note 42)
Interest paid
Repayment of Lease liability
Payment of dividends [refer note 16(a)]
Net cash flows used in financing activities
(D) Net (decrease)/ 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)
Refer to note 29 for supplementary information on statement of cash flows.
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
440
-
(178)
(389)
(1,339)
(1,466)
(5,876)
121
14,294
8,539
141
600
(271)
(931)
(2,746)
(3,207)
5,166
85
9,043
14,294
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
170
171
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
1. Corporate information
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
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.
Further, the Board of Directors of the Company in its meeting held
on October 28, 2021 has approved the restructuring of the business,
subject to all requisite approvals, wherein the business carried out
by Subex Assurance LLP will be transferred to Subex Limited on
a ‘going concern’ basis excluding Developed Technology and
Investment in subsidiaries. The aforesaid restructuring is being
carried out to achieve higher operational efficiencies upon
integration and consolidation of business in the listed entity. On
February 23, 2022, the shareholder of the Company approved the
aforesaid restructuring through postal ballot.
These consolidated financial statements for the year ended
March 31, 2022 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, 2022 are approved by the Board of Directors on May
30, 2022.
Following subsidiaries have been considered in the preparation of the consolidated financial statements:
Name of the subsidiary
Country of incorporation
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
* Represents non-operating companies.
Canada
United States of America
Singapore
United Kingdom
United Arab Emirates
India
United States of America
India
India
Bangladesh
% of holding and voting power either
directly or indirectly through subsidiaries
as at
March 31, 2022
March 31, 2021
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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 34].
Subex Annual Report 2021-22
172
173
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
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 (‘the Act’) 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 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, 2022.
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.
Subex Annual Report 2021-22
172
173
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
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 35).
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 disclosed in note 34.
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
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and the level of future taxable profits together with future tax
planning strategies. Also refer note 2(s) and note 13, note 21 &
note 22.
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.
Leases
e. Business combination and goodwill
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.
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.
An asset is treated as current when it is:
f.
Revenue recognition
•
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 Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current
assets and liabilities, respectively.
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.
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
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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
obligations
remaining performance
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 23.
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
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
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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
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
The residual values, useful lives and methods of depreciation
of property, plant and equipment and amortisation 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
Impairment of Financial Assets
The Group assesses at each date of balance sheet whether 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 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
Group as a lessee:
The Group applies a single recognition and measurement
approach for all leases, except for short-term leases and leases
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
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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.
iii) Short-term leases and leases of low-value assets
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.
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
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 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
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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
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
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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.
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
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.
q. Employee benefits
r.
Foreign currencies
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.
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
Subex Annual Report 2021-22
180
181
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
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
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.
Subex Annual Report 2021-22
180
181
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
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’.
x. New Accounting standards, amendments and interpretations
not yet adopted by the Company:
Companies (Indian Accounting Standards) Amendment Rules,
2022
Ministry of Corporate Affairs (“MCA”) notifies new standard or
amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time.
On March 23, 2022, MCA amended the Companies (Indian
Accounting Standards) Amendment Rules, 2022, applicable for
annual periods beginning on or after April 1, 2022, as below:
Amendments to Ind AS 103 – Business Combinations –
Reference to Conceptual Framework
The amendments specifies that to qualify for recognition as
part of applying the acquisition method, the identifiable assets
acquired and liabilities assumed must meet the definitions of
assets and liabilities in the Conceptual Framework for Financial
Reporting under Indian Accounting Standards (Conceptual
Framework) issued by the Institute of Chartered Accountants of
India at the acquisition date. These changes do not significantly
change the requirements of Ind AS 103. The adoption of
amendments to Ind AS 103 is not expected to have any material
impact on the consolidated financial statements.
Amendments to Ind AS 109 – Financial Instruments
The amendments clarifies which fees an entity includes when it
applies the ’10 percent’ test of Ind AS 109 in assessing whether
to derecognize a financial liability. The adoption of amendments
to Ind AS 109 is not expected to have any material impact on the
consolidated financial statements.
Amendments to Ind AS 16 – Property, Plant and Equipment –
Proceeds before intended use
The amendments clarifies that excess of net sale proceeds of
items produced over the cost of testing, if any, shall not be
recognised in the profit or loss but deducted from the directly
attributable costs considered as part of cost of an item of
property, plant, and equipment. The adoption of amendments
to Ind AS 16 is not expected to have any material impact on the
consolidated financial statements.
Amendments to Ind AS 37 – Onerous Contracts – Cost of
Fulfilling a Contract
The amendments specifies that the cost of fulfilling a contract
comprises the costs that relate directly to the contract. Costs
that relate directly to a contract can either be the incremental
costs of fulfilling that contract (for example, direct labour and
materials); or an allocation of other costs that relate directly to
fulfilling contracts (for example, an allocation of the depreciation
charge for an item of property, plant and equipment used
in fulfilling that contract among others). The adoption of
amendments to Ind AS 37 is not expected to have any material
impact on the consolidated financial statements.
Subex Annual Report 2021-22
182
183
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
3. Property, plant and equipment
Computer
equipment
Furniture and
fixtures
Vehicles
Leasehold
improvement
Office
equipment
(` in Lakhs)
Total
Cost
As at April 1, 2020
Additions
Disposals
Exchange differences
As at March 31, 2021
Additions
Disposals
Exchange differences
As at March 31, 2022
Depreciation
As at April 1, 2020
Charge for the year
Disposals
Exchange differences
As at March 31, 2021
Charge for the year
Disposals
Exchange differences
As at March 31, 2022
Net block
As at March 31, 2021
As at March 31, 2022
4. Intangible assets
Cost
As at April 1, 2020
Additions
Disposals
Exchange differences
As at March 31, 2021
Additions
Disposals
Exchange differences
As at March 31, 2022
2,238
747
(144)
11
2,852
283
(189)
10
2,956
1,856
313
(143)
2
2,028
448
(189)
2
2,289
824
667
45
-
(7)
-
38
7
(3)
-
42
37
5
(6)
-
36
2
(3)
-
35
2
7
2
-
-
-
2
-
-
-
2
2
-
-
-
2
-
-
-
2
-
-
-
293
-
-
293
-
-
-
293
-
10
-
-
10
59
-
-
69
283
224
155
44
(26)
-
173
14
(8)
-
179
111
19
(25)
-
105
21
(8)
-
118
68
61
Computer software
232
-
(130)
-
102
15
(10)
-
107
2,440
1,084
(177)
11
3,358
304
(200)
10
3,472
2,006
347
(174)
2
2,181
530
(200)
2
2,513
1,177
959
(` in Lakhs)
Total
232
-
(130)
-
102
15
(10)
-
107
Subex Annual Report 2021-22
182
183
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
4. Intangible assets (contd.)
Amortization
As at April 1, 2020
Amortization for the year
Disposals
Exchange differences
As at March 31, 2021
Amortization for the year
Disposals
Exchange differences
As at March 31, 2022
Net block
As at March 31, 2021
As at March 31, 2022
5. Goodwill on consolidation
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
3
(130)
-
102
1
(10)
-
93
-
14
(` in Lakhs)
Total
-
229
3
(130)
-
102
1
(10)
-
93
-
-
-
14
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
34,409
34,409
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
33,444
965
34,409
33,444
965
34,409
During the 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. As at March 31, 2022, the management has reassessed
its projections and assumptions and has concluded that, the carrying value of it’s goodwill is appropriate.
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:
Subex Annual Report 2021-22
184
185
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
5. Goodwill on consolidation (contd.)
Growth rate
Operating margins
Discount rate
As at
March 31, 2022
As at
March 31, 2021
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
Current
Unsecured, considered good
Security deposit
Loans to employees
Total
7. Investments
Investment carried at fair value through profit or loss
Liquid mutual funds units (quoted)
Aggregate cost of quoted investments
Aggregate market value of quoted investments
8. Trade receivables
Unsecured, carried at amortized cost
Unsecured, considered good
Unsecured, which have significant increase in credit risk
Unsecured, credit impaired
Total (a)
Impairment allowance (allowance for expected credit loss)
Trade receivable, credit impaired
Total (b)
Net Trade Receivables (a-b)
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
-
161
161
1
219
220
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
1,165
1,165
1,150
1,165
-
-
-
-
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
9,681
-
1,834
11,515
(1,834)
(1,834)
9,681
9,956
-
2,088
12,044
(2,088)
(2,088)
9,956
Subex Annual Report 2021-22
184
185
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
8. Trade receivables (contd.)
Trade receivables ageing schedule:
As at March 31, 2022
Particulars
Current but
not due
Outstanding for following periods from due date of payment
Total
Less than 6
Months
6 months –
1 year
1-2 years
2-3 years
More than
3 years
(` in Lakhs)
Undisputed Trade Receivables – considered good
3,902
3,221
1,482
Undisputed Trade Receivables – which have significant
increase in credit risk
Undisputed Trade receivable – credit impaired
Disputed Trade receivables - considered good
Disputed Trade receivables – which have significant
increase in credit risk
Disputed Trade receivables – credit impaired
Total
Add: Unbilled Trade Receivable
Less: Impairment allowance (allowance for expected
credit loss)
Net Trade Receivables
As at March 31, 2021
Particulars
Undisputed Trade Receivables – which have significant
increase in credit risk
Undisputed Trade receivable – credit impaired
Disputed Trade receivables - considered good
Disputed Trade receivables – which have significant
increase in credit risk
Disputed Trade receivables – credit impaired
Total
Add: Unbilled Trade Receivable
Less: Impairment allowance (allowance for expected
credit loss)
Net Trade Receivables
-
-
-
-
-
-
-
-
-
-
-
54
-
-
-
3,902
3,221
1,536
-
-
-
-
-
-
-
-
-
-
822
-
195
-
-
4
5,313
3,080
1,021
-
-
567
-
-
17
584
-
-
27
-
-
-
-
8,605
-
388
1,036
-
-
-
-
78
105
703
798
1,091
10,439
1,076
(1,834)
9,681
(` in Lakhs)
-
-
-
-
-
-
9,215
-
214
103
542
1,054
-
-
175
389
-
-
-
-
-
-
124
227
731
1,034
1,273
11,303
741
(2,088)
9,956
Undisputed Trade Receivables – considered good
5313
3080
Current but
not due
Outstanding for following periods from due date of payment
Total
Less than 6
Months
6 months –
1 year
1-2 years
2-3 years
More than
3 years
During the year ended March 31, 2022, ` 3,854 Lakhs of unbilled revenue as of April 1, 2021 has been converted to trade receivables on billing.
(During the previous year ended March 31, 2021, ` 3,195 Lakhs of unbilled revenue as of April 1, 2020 converted to trade receivables). Also,
refer note 11.
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.
Subex Annual Report 2021-22
186
187
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
9. Cash and cash equivalents
Current
Balance with banks
In current accounts
In EEFC accounts
Deposits with original maturity less than 3 months
Bank balances other than cash and cash equivalents
Earmarked balances with banks being unpaid dividend accounts
Deposits with original maturity more than 3 months but less than 12 months
Margin money deposits with original maturity more than 3 months but less than 12 months
Less: Disclosed under Other balances with banks (Current) (refer note 10)
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
5,394
165
2,980
8,539
28
2,124
176
2,328
(2,328)
-
8,539
4,113
1,595
8,586
14,294
-
-
207
207
(207)
-
14,294
A
B
(A+B)
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.
10. Other balances with banks
Current
Other bank balances (refer note 9)
Earmarked balances with banks being unpaid dividend accounts*^
Deposits with original maturity more than 3 months but less than 12 months
Margin money deposits with original maturity more than 3 months but less than 12 months
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
28
2,124
176
2,328
-
-
207
207
^ Represents ` 6,159 of unpaid dividend which is presented as Nil due to rounding off as at March 31, 2021.
*These balances are not available for use by the Company as they represent corresponding unclaimed dividend liabilities.
Subex Annual Report 2021-22
186
187
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
11. Other financial assets
Unsecured, considered good
Non-current
Security deposits
Margin money deposits with remaining maturity more than 12 months
Current
Carried at amortized cost
Unbilled revenue*
Interest accrued but not due on bank deposits
Margin money deposits with remaining maturity less than 12 months
Carried at fair value through profit or loss
Foreign currency forward contract
*Also, refer note 8
12. Income tax assets (net)
Non-current
Advance income-tax [net of provision for taxation ` 2,109 Lakhs (March 31, 2021: ` 1,994 Lakhs)]
13. 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
Provision for employee benefits and others
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
317
130
447
6,780
34
181
8
7,003
300
2
302
5,638
40
209
9
5,896
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
4,947
4,947
3,479
3,479
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
566
(425)
141
7
-
7
A
B
(A+B)
148
425
(425)
-
7
118
125
125
* Also refer note 21 and note 22.
**Represents MAT credit entitlement of ` 425 Lakhs which have 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 the 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, 2022
Subex Annual Report 2021-22
188
189
Subex Annual Report 2021-22
14. Other assets
Non-current
Prepaid expenses
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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
42
267
(267)
42
68
593
87
31
779
-
267
(267)
-
21
422
194
2
639
*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 previous year ended March 31, 2021, the Company has
made provision of ` 267 Lakhs considering the uncertainty as regards to its realisation.
15. Share capital
Authorised share capital
Equity shares of ` 5 each w.e.f September 29, 2020 and ` 10 each upto September 28, 2020*
As at April 1, 2020
Increase during the year
Increase pursuant to Capital reduction order*
As at March 31, 2021
Increase during the year
As at March 31, 2022
Preference shares of ` 98 each
As at April 1, 2020
Increase during the year
As at March 31, 2021
Increase during the year
As at March 31, 2022
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, 2020
Issued during the year
Adjustment pursuant to Capital reduction order*
As at March 31, 2021
Issued during the year
As at March 31, 2022
No.
` in Lakhs
58,80,40,000
58,804
-
58,80,40,000
1,17,60,80,000
-
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
196
-
196
-
196
56,200
-
(28,100)
28,100
-
28,100
Subex Annual Report 2021-22
188
189
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
15. Share capital (contd.)
* 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, 2021: 243,207) shares in respect of which Global Depository Receipts of the Company are listed on London Stock Exchange.
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 may be
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, 2022 and as at March 31, 2021, 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:
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
e) The Promoters, as defined by Companies Act 2013, do not hold any shares in the Company.
16. 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
As at
March 31, 2022
As at
March 31, 2021
1,25,33,720
1,25,33,720
1,98,71,500
1,98,71,500
As at
March 31, 2022
As at
March 31, 2021
1,98,71,500
2,19,75,000
-
(73,37,780)
1,25,33,720
2,50,000
(23,53,500)
1,98,71,500
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
16,444
-
114
16,558
1,783
4
1,787
26,712
(10,301)
33
16,444
1,780
3
1,783
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
190
191
Subex Annual Report 2021-22
16. Other equity (contd.)
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
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: OCI - Re-measurement losses on defined benefit obligations
Less: Dividends [refer 16(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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
232
137
(98)
(4)
267
20,987
2,099
-
(64)
(1,367)
21,655
(11,570)
267
(11,303)
(1,121)
-
424
(697)
114
147
(26)
(3)
232
(19,828)
5,172
38,401
(12)
(2,746)
20,987
(12,206)
636
(11,570)
(1,233)
(22)
134
(1,121)
As at
March 31, 2022
(` in Lakhs)
As at
March 31, 2021
16,558
16,444
Securities premium is used to record the premium on issue of shares. The reserve shall be utilised in accordance
with the provisions of section 52 of the Companies Act, 2013.
General reserve
1,787
1,783
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
267
232
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 in the consolidated statement of profit and loss
This represents surplus arising from operations of the Group.
21,655
20,987
Subex Annual Report 2021-22
190
191
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
16. Other equity (contd.)
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.
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
(11,303)
(11,570)
Treasury Shares
(697)
(1,121)
This represents own equity shares that are acquired from open market for issuance to employees under ESOP
scheme.
Total other equity
28,267
26,755
16(a) Distributions made and proposed
During the year ended March 31, 2022, the Company has paid a final dividend of ` 0.25/-(5%) per equity share on face value of ` 5/- each for
the financial year 2020-2021.
During the previous year ended March 31, 2021, the Company has paid an interim dividend of ` 0.50/- (10 %) per equity share on face value
of ` 5/- each for the financial year 2020-2021.
17. 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
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
276
1,396
1,672
66
1,245
1,311
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
a)
b)
c)
d)
e)
f)
the principal amount remaining unpaid to any supplier as at the end of accounting year;
276
66
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;
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;
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.
-
-
-
-
-
-
-
-
-
-
Subex Annual Report 2021-22
192
193
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
17. Trade payables (contd.)
Trade payable ageing schedule
As at March 31, 2022
Particulars
Unbilled
Not due
Outstanding for following periods from due
date of payment
<1 year
1-2 years
2-3 years More than
3 years
(` in Lakhs)
Total
Total outstanding dues of micro enterprises and small enterprises
-
148
Total outstanding dues of creditors other than micro enterprises and
small enterprises
306
1,003
Disputed dues - micro enterprises and small enterprises
Disputed dues - Total outstanding dues of creditors other than micro
enterprises and small enterprises
-
-
-
-
128
87
-
-
306
1,151
215
-
-
-
-
-
-
-
-
-
-
-
-
-
-
276
1,396
-
-
-
1,672
Total
As at March 31, 2021
Particulars
Unbilled
Not due
Outstanding for following periods from due
date of payment
<1 year
1-2 years
2-3 years More than
3 years
(` in Lakhs)
Total
Total outstanding dues of micro enterprises and small enterprises
Total outstanding dues of creditors other than micro enterprises and
small enterprises
Disputed dues - micro enterprises and small enterprises
Disputed dues - Total outstanding dues of creditors other than micro
enterprises and small enterprises
-
466
-
-
54
764
-
-
12
15
-
-
Total
466
818
27
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66
1,245
-
-
-
1,311
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 39.
18. 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 as at March 31, 2021.
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
1,459
-
4
28
1,491
2,815
5
225
-
3,045
Subex Annual Report 2021-22
192
193
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
19. Other current liabilities
Unearned revenue
Statutory dues
20. Provisions
Non-current
Provisions for employee benefits
Gratuity [refer note 35(b)]
Current
Provisions for employee benefits
Gratuity [refer note 35(b)]
Leave benefits
21. Deferred tax liabilities (net)*
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
1,803
703
2,506
2,182
753
2,935
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
304
304
134
696
830
275
275
127
664
791
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
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
*Also, refer note 22.
22. Income tax liabilities (net)
Provision for tax [net of advance tax ` 364 Lakhs (March 31, 2021: ` 87 Lakhs)]
Provision for foreign taxes
Provision for litigation [net of tax deducted at source ` 62 Lakhs (March 31, 2021: ` 62 Lakhs)]*
A
B
8,088
8,088
12
1,334
1,346
7,058
7,058
13
756
769
(A-B)
6,742
6,289
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
84
382
162
628
91
333
162
586
*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 33(i) for
further details.
Subex Annual Report 2021-22
194
195
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
22. Income tax liabilities (net) (contd.)
Income tax expense in the consolidated statement of profit and loss consist of the following:
Tax expense:
Current tax charge
Provision - foreign withholding taxes(net)**
Deferred tax charge (net)^
Total tax expense
Notes:
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
251
593
426
1,270
696
399
2,670
3,765
**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 (net), comprises of 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 business restructuring effected
from November 1, 2017, wherein, the Company’s RMS business and the Digital business was transferred on going concern basis to Subex Assurance LLP and
Subex Digital LLP respectively. Effective April 1, 2021 considering the favourable order received, no additional liability is created in respect of aforesaid tax benefits.
Reconciliation of tax to the amount computed by applying the statutory income tax rate to the income before tax is summarized below:
Profit before tax expense
Applicable tax rates in India
Computed tax charge (A)
Components of tax expense:
Provision for foreign withholding taxes (net)
Tax effect of differential overseas tax rates
Others
Total adjustments (B)
Total tax expense (A+B)
Deferred tax relates to the following:
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
3,369
34.94%
1,177
593
(465)
(35)
93
1,270
8,937
34.94%
3,123
399
88
155
642
3,765
(` 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
March 31, 2022
As at
March 31, 2021
Year ended
March 31, 2022
Year ended
March 31, 2021
(16)
(20)
4
18
8,088
-
(1,337)
(141)
-
6,594
7,058
-
(874)
-
-
6,164
1,030
-
(463)
(148)
3
426
1,196
1,340
98
-
18
2,670
Subex Annual Report 2021-22
194
195
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
23. 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
Sale of hardware
Revenue by contract type
Fixed price contract
Time and Material Contract
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
1,873
31,361
110
33,344
1,873
10,099
10,261
10,904
97
33,234
11,852
21,382
33,234
3,873
33,128
202
37,203
3,873
11,096
10,739
11,293
-
37,001
14,442
22,559
37,001
*During the year ended March 31, 2022, the Group recognized revenue of ` 3,420 Lakhs arising from opening unearned revenue, gross of trade receivables of
` 4,302 Lakhs, as of April 01, 2021 (March 31, 2021: ` 2,976 lakhs arising out of opening unearned revenue, gross of receivables of ` 3,565 Lakhs as of April 01, 2020).
Refer note 31 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, 2022, other than those contracts
wherein invoicing is on time and material basis is ` 10,481 Lakhs (March 31, 2021 : ` 10,461 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.
24. Other income
Income from Government incentive schemes (refer note 42)
Interest income on:
Security deposits
Bank deposits
Miscellaneous income
Income from investment in Mutual fund
Net gain on disposal of property, plant and equipment
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
706
12
254
43
22
-
1,037
79
31
343
17
-
4
474
Subex Annual Report 2021-22
196
197
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
25. Employee benefits expense
Salaries and wages*
Contribution to provident and other funds
Employee share based payments
Gratuity expense [refer note 35 (b)]
Staff welfare expenses
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
19,340
1,314
137
126
532
17,784
1,129
147
101
559
21,449
19,720
* Net of reversal of provision no longer required, in respect of employee incentives amounting to ` 786 Lakhs (March 31, 2021: ` 333 Lakhs).
26. Finance cost
Interest
Interest expense on lease liability
Other borrowings
Finance cost on Actuarial valuation
Interest others
27. Depreciation and amortization expense
Depreciation of property, plant and equipment
Depreciation on right-of-use assets
Amortization of intangible assets
28. Other expenses
Cost of hardware, software and support charges
Sub-contract charges
Rent
Power and fuel
Repairs and maintenance
Building
Others
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
124
1
15
54
194
269
5
20
2
296
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
530
457
1
988
347
1,028
3
1,378
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
356
2,491
639
112
126
812
414
2,672
364
142
92
657
Subex Annual Report 2021-22
196
197
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
28. Other expenses (contd.)
Insurance
Communication costs
Printing and stationery
Traveling and conveyance
Rates and taxes
Advertisement and business promotion
Consultancy charges
Payments to auditors [refer note 28(i)]
Sales commission
Commission to directors
Allowance for expected credit loss and bad debt written-off (net of reversal)
Exchange fluctuation (gain)/ loss (net)
Directors' sitting fees (refer note 32)
Donation
Bank Charges
Miscellaneous expenses
28(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
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
114
221
19
564
278
428
1,214
156
249
36
536
(133)
60
5
77
21
103
225
11
296
169
125
812
160
373
48
(153)
989
70
-
58
6
8,381
7,633
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
84
3
6
3
96
59
1
60
156
87
3
7
3
100
59
1
60
160
Subex Annual Report 2021-22
198
199
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
29. Leases
During the previous 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 writtenoff 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 lease.
During the year ended March 31, 2022, one of the subsidiary namely Subex Inc. has decided to shift its earlier registered office to a new
premises in United States of America. 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 ` 136 Lakhs and Lease liability of ` 148 Lakhs
determined till the completion of notice period and vacation of existing premises, and has recognized a net gain of ` 12 Lakhs as other income.
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:
(` in Lakhs)
Buildings
Total
Gross Carrying Value
As at April 1, 2020
Additions during the year on account of lease modifications
Disposals during the year on termination of lease agreement
Exchange differences
As at March 31, 2021
Additions during the year
Disposals during the year on termination of lease agreement
Exchange differences
As at March 31, 2022
Accumulated Depreciation
As at April 1, 2020
Charge for the year
Disposals during the year on termination of lease agreement
Exchange differences
As at March 31, 2021
Charge for the year
Disposals during the year on termination of lease agreement
Exchange differences
As at March 31, 2022
Net block
As at March 31, 2021
As at March 31, 2022
5,543
1,514
(4,756)
25
2,326
-
(225)
26
2,127
1,119
1,028
(1,784)
1
364
457
(89)
9
741
1,962
1,386
5,543
1,514
(4,756)
25
2,326
-
(225)
26
2,127
1,119
1,028
(1,784)
1
364
457
(89)
9
741
1,962
1,386
During the year ended March 31, 2022, the Group has incurred ` 639 Lakhs (March 31, 2021 : ` 364 Lakhs) towards expenses relating to short-term leases and
leases of low-value assets.
Subex Annual Report 2021-22
198
199
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
29. Leases (contd.)
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
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
March 31, 2022
Year ended
March 31, 2021
1,995
-
124
(513)
(148)
10
1,468
470
998
4,867
1,452
269
(1,202)
(3,414)
23
1,995
420
1,575
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
457
124
639
(12)
1,208
1,028
269
364
(554)
1,107
During the year ended March 31, 2022, the Group had total cash outflows for leases of ` 513 Lakhs (March 31, 2021: ` 1,202 Lakhs). During the year ended the
Group also had non-cash additions to right-of-use assets of Nil (March 31, 2021: ` 1,514 Lakhs) and lease liabilities of Nil (March 31, 2021: ` 1,452 Lakhs). There are
no future cash outflows relating to leases that have not yet commenced.
Cash and non-cash changes in liabilities arising from financing activities:
Borrowings
Lease Liabilities
Total
As at
April 1, 2021
Cash flow
Non-cash changes
Other
movements*
Foreign exchange
movement
(` in Lakhs)
As at
March 31, 2022
584
1,995
2,579
-
(513)
(513)
(578)
(24)
(602)
(6)
10
4
-
1,468
1,468
* Other movements to :
(a) Borrowings represents waiver of borrowings (PPP Loan).
(b) Lease liabilities includes interest on lease liabilities and deletion in lease liability on account of lease modification.
Borrowings
Lease Liabilities
Total
As at
April 1, 2020
Cash flow
Non-cash changes
Other
movements**
Foreign exchange
movement
(` in Lakhs)
As at
March 31, 2021
-
4,867
4,867
600
(1,202)
(602)
-
(1,693)
(1,693)
(16)
23
7
584
1,995
2,579
** Other movements to Lease liabilities includes addition to lease liabilities, interest on lease liabilities and deletion in lease liability on account of lease modification.
Subex Annual Report 2021-22
200
201
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
30. 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 (` 5/- each w.e.f September 29, 2020 and ` 10 upto September 28, 2020)
Profit attributable to equity shareholders (` in Lakhs)
Weighted average number of basic equity shares (No. in Lakhs)*
Basic
Diluted
Earnings per share (` per share)
Basic
Diluted
Year ended
March 31, 2022
Year ended
March 31, 2021
5
2,099
5,461
5,548
0.38
0.38
5
5,172
5,406
5,513
0.96
0.94
*The weighted average number of shares takes into account the weighted average effect of changes in treasury shares.
31. 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
March 31, 2022
Year ended
March 31, 2021
5,945
20,161
520
6,718
33,344
6,615
20,752
1,172
8,664
37,203
* 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, 2022 (March 31, 2021 : Nil)
Subex Annual Report 2021-22
200
201
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
31. Segment reporting (contd.)
Non-current operating assets by geographical location are as follows**:
Region
India
Outside India
Unallocated ***
Total non-current operating assets
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
1,920
481
34,409
36,810
2,391
748
34,409
37,548
** Non-current operating assets includes Property, plant and equipment, Right-of-use assets, Other intangible assets, 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.
32. Related party transactions
i.
Name of related parties and nature of relationship
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
Chairman, Non-Executive & Non-Independent Director (w.e.f June 18, 2020)
Independent Director
Independent Director
Independent Director
Managing Director & Chief Executive Officer
Designated partner of Subex Assurance LLP
Designated partner of Subex Digital LLP
Shiva Shankar Naga Roddam
Whole-time Director & Chief Operating Officer
Sumit Agarwal
G V Krishnakanth
Venkatraman G S
Designated partner of Subex Assurance LLP (w.e.f. December 10, 2021)
Designated partner of Subex Digital LLP (w.e.f. December 10, 2021)
Chief Financial Officer (w.e.f. January 31, 2022)
Company Secretary & Compliance Officer
Chief Financial Officer & Senior Vice President (upto December 10, 2021)
Designated partner of Subex Assurance LLP (upto December 10, 2021)
Designated partner of Subex Digital LLP (upto December 10, 2021)
ii. Details of transactions with key management personnel during the year ended March 31, 2022:
Salary and perquisites:*
Vinod Kumar Padmanabhan (includes remuneration from Subex Assurance LLP)**
G V Krishnakanth**
Shiva Shankar Naga Roddam (includes remuneration from Subex Assurance LLP) **
Sumit Agarwal
Venkatraman G S**
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
568
77
509
17
327
1,498
340
46
207
-
113
706
Subex Annual Report 2021-22
202
203
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
32. Related party transactions (contd.)
Dividend
Vinod Kumar Padmanabhan
Venkatraman G S
Shiva Shankar Naga Roddam
Anil Singhvi^
G V Krishnakanth^^
Director sitting fees
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
Commission payable
Anil Singhvi
Nisha Dutt
Poornima Prabhu
George Zacharias
(` in Lakhs)
Year ended
March 31, 2022
Year ended
March 31, 2021
-
2
1
-
-
3
18
14
13
11
56
11
9
7
9
36
2
2
1
-
-
5
20
16
19
11
66
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, 2022, the Company has granted Nil ESOPs (March 31, 2021 : Nil ESOPs) to certain key management personnel under ESOP
2018 scheme. Of the total granted ESOPs, 17,10,000 (March 31, 2021 : 5,60,000) options has been exercised during the year. Refer note 34.
^ Represents dividend paid ` 15,000 during the year ended March 31, 2022 and ` 30,000 during the year ended March 31, 2021 which are presented as Nil due
to rounding off.
^^ Represents dividend paid ` 21,250 during the year ended March 31, 2022 and ` 17,500 during the year ended March 31, 2021 which are presented as Nil due
to rounding off.
33. 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
March 31, 2022
As at
March 31, 2021
6,609
3,687
508
6,609
3,687
299
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
Subex Annual Report 2021-22
202
203
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
33. Contingent liabilities (contd.)
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 aforesaid demands ` 1,776 Lakhs
has been paid/refund adjusted under protest.
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.
34. Employee stock options plans (‘ESOPs’)
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 administering
ESOP for 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 1,25,33,720 and
1,98,71,500 treasury shares as at March 31, 2022 and March 31, 2021, respectively.
The Nomination & Remuneration Committee in their meeting held on January 31, 2022 granted 14,48,000 (March 31, 2021: 12,40,500) options
under approved “Subex Employees Stock Option Scheme – 2018” to the eligible employees. The shares granted vest over a period of 1 to 3
years and can be exercised over a maximum period of 3 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 – V
Exercised during the year
ESOP – V
Granted during the year
ESOP – V
Forfeited and expired during the year
ESOP – V
Options outstanding at the end of the year
ESOP – V
Options exercisable at the end of the year
ESOP – V
2021-22
Options (no.)
Weighted average
exercise price per
stock option (`)
2020-21
Options (no.)
Weighted average
exercise price per
stock option (`)
1,98,71,500
6.75
2,19,75,000
73,37,780
6.00
23,53,500
6.00
6.00
14,48,000
20.00
12,40,500
18.00
25,24,092
6.95
9,90,500
1,14,57,628
8.86
1,98,71,500
94,89,628
6.66
1,19,24,750
6.00
6.75
6.00
Subex Annual Report 2021-22
204
205
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
Details of weighted average remaining contractual life and range of exercise prices for the options outstanding at the balance sheet date:
Particulars
ESOP – V
* considering vesting and exercise period
Fair value methodology
Weighted average remaining contractual
life(years)*
Range of exercise prices (`)
2021-22
1.84
2020-21
2021-22
2020-21
2.16
6.00-20.00
6.00-18.00
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, 2022
March 31, 2021
6.68%
67.51%
3
1.59%
20.00
30.24
6.12%
72.08%
2
1.88%
18.00
12.64
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.
35. 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 ` 1,310 Lakhs (March 31, 2021: ` 1,127 Lakhs) towards Provident Fund contribution
(including administration charges) 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
March 31, 2022
As at
March 31, 2021
758
126
37
(137)
67
8
859
740
101
38
(133)
16
(4)
758
Subex Annual Report 2021-22
204
205
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
35. 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 (losses)/ gains 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
As at
March 31, 2022
(` in Lakhs)
As at
March 31, 2021
356
22
3
177
(137)
421
(859)
421
(438)
274
18
4
193
(133)
356
(758)
356
(402)
Year ended
March 31, 2022
Year ended
March 31, 2021
126
15
141
(3)
(64)
3
(64)
4.20%
6.15%
6.00%
18.00%
60 years
101
20
121
-
(16)
4
(12)
4.90%
6.41%
5.95%
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, 2021:
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, 2022
As at
March 31, 2021
134
126
115
105
97
584
127
109
98
91
82
498
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
206
207
Subex Annual Report 2021-22
H.
I.
Contribution likely to be made for the next one year
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
134
100%
127
100%
(` in Lakhs)
Year ended March 31, 2022
Year ended March 31, 2021
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)
(18)
19
(16)
17
Effect of change in salary
1% increase
1% decrease
1% increase
1% decrease
Impact on defined benefit obligation increase/ (decrease)
35
(33)
32
(31)
Effect of change in withdrawal assumption
5% increase
5% decrease
5% increase
5% decrease
Impact on defined benefit obligation increase/ (decrease)
(19)
22
(20)
25
K.
The average duration of the defined benefit plan obligation at the end of the reporting period of gratuity is 6 years (March 31, 2021: 6 years).
36. 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, 2022
(` 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 Assurance LLP
Subex Digital LLP
Subex Technologies Limited
Foreign subsidiaries
Subex (Asia Pacific) Pte Ltd.
Subex (UK) Ltd.
Subex Americas Inc.
Subex Inc.
Subex Middle East
Subex Bangladesh Pvt.Ltd
Amount
As % of
Consolidated
net assets
As % of
Consolidated
profit or
(loss)
Amount
As % of
consolidated
other
comprehensive
income
Amount
As % of
consolidated
total
comprehensive
income
Amount
48%
48,926
33%
(447)
(1%)
(3)
39%
(450)
40%
(1%)
-
40,893
(1,408)
8
(102%)
1,368
195%
(2,618)
-
(4)
1%
8%
6%
(1%)
-
-
653
8,073
5,713
(713)
(460)
(68)
(11%)
11%
2%
(70%)
39%
1%
143
(152)
(33)
937
(518)
(20)
(17%)
(5%)
-
8%
141%
(7%)
(11%)
(6%)
(1%)
(35)
(11)
-
17
286
(14)
(22)
(13)
(2)
203
-
203
(117%)
1,333
230%
(2,629)
-
(4)
(14%)
(12%)
4%
(80%)
47%
2%
160
134
(47)
915
(531)
(22)
100%
(1,141)
3,443
2,302
Total
100%
1,01,617
100%
(1,344)
100%
Adjustments arising out of consolidation
Total
(45,250)
56,367
3,443
2,099
Subex Annual Report 2021-22
206
207
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
36. Additional information pursuant to para 2 of general instructions for the preparation of consolidated
financial statements: (contd.)
As at and for the year ended March 31, 2021
(` 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 Assurance LLP
Subex Digital LLP
Subex Technologies Limited
Foreign subsidiaries
Subex (Asia Pacific) Pte Ltd.
Subex (UK) Ltd.
Subex Americas Inc.
Subex Inc.
Subex Middle East
Subex Bangladesh Pvt.Ltd
Amount
As % of
Consolidated
net assets
As % of
Consolidated
profit or
(loss)
Amount
As % of
consolidated
other
comprehensive
income
Amount
As % of
consolidated
total
comprehensive
income
Amount
47%
50,166
34%
2,622
-
-
31%
2,622
62%
4,836
(2%)
(15)
57%
4,821
44%
(4%)
-
-
8%
5%
48,634
(4,528)
15
493
8,146
5,760
(2%)
(1,628)
-
-
69
(45)
(26%)
(2,010)
-
(4)
(4%)
29%
-
7%
(1%)
(1%)
(347)
2,283
(10)
533
(67)
(57)
1%
-
4%
85%
2%
11%
(1%)
-
8
-
26
535
12
66
(8)
-
624
-
624
(24%)
(2,002)
-
(4)
(4%)
34%
-
7%
(1%)
(1%)
(321)
2,818
2
599
(75)
(57)
100%
8,403
(2,607)
5,796
Total
100%
1,07,082
100%
7,779
100%
Adjustments arising out of consolidation
Total
(52,227)
54,855
(2,607)
5,172
37. 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. Surplus fund has been invested into risk free highly
liquid financial instruments.
The capital structure as of March 31, 2022 and March 31, 2021 was as follow:
Total equity (` in Lakhs)
As percentage of total capital
Borrowings
Lease liabilities (` in Lakhs)
Total borrowings and lease liabilities
As percentage of total capital
Total capital (` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
56,367
97.46%
-
1,468
1,468
2.54%
57,835
54,855
95.51%
584
1,995
2,579
4.49%
57,434
(A)
(B)
(A+B)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
Subex Annual Report 2021-22
208
209
Subex Annual Report 2021-22
38. 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*
Margin money deposits with remaining maturity more than 12 months
Margin money deposits with remaining maturity less than 12 months
Financial assets measured at fair value through profit or loss
Foreign currency forward contract#
Liquid Mutual Fund
Cash and cash equivalents and other balances with banks
Balance with banks
Earmarked balances with banks being unpaid dividend accounts**
Margin money deposits with original maturity more than 3 months but less than 12 months
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
March 31, 2022
As at
March 31, 2021
34
9,681
6,780
317
161
130
181
40
9,956
5,638
301
219
2
209
17,284
16,365
8
1,165
1,173
10,663
28
176
10,867
1,459
1,672
4
-
-
1,468
4,603
9
-
9
14,294
-
207
14,501
2,815
1,311
225
584
5
1,995
6,935
* 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.
# 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.
^ 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 as at March 31, 2021.
39. 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
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.
Subex Annual Report 2021-22
208
209
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
39. Financial risk management (contd.)
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:
Particulars
Opening balance
Add/(less): Provided/(reversal) during the year
Less: Bad-debts written-off
Add/(less): Translation difference
Closing balance
c. Other financial assets and deposits with banks
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
9,681
6,780
16,461
9,956
5,638
15,594
(` in Lakhs)
As at
March 31, 2022
As at
March 31, 2021
2,088
351
(654)
49
1,834
2,178
(153)
-
63
2,088
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 Group does not have any debt outstanding as at March 31, 2022. Also, the Group’s investments are primarily in fixed rate interest
bearing investments. Hence, the Group is not significantly exposed to interest rate risk as at March 31, 2022.
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
Borrowings
(` in Lakhs)
Year ended March 31, 2022
Year ended March 31, 2021
Change in interest
rate
Effect of profit before
exceptional items
and tax expense
Change in interest
rate
Effect of profit before
exceptional items
and tax expense
-
-
-
-
+1%
-1%
6
(5)
Subex Annual Report 2021-22
210
211
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
39. 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
March 31, 2022
As at
March 31, 2021
8,539
2,639
11,178
14,294
418
14,712
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.
(` in Lakhs)
Particulars
As at March 31, 2022
Trade payables
Lease liabilities*
Other financial liabilities
As at March 31, 2021
Trade payables
Lease liabilities*
Borrowings
Other financial liabilities
On demand
0-180 Days
181-365 Days More than 365 Days
Total
-
-
28
28
1
-
-
-
1
1,669
236
1,417
3,322
1,301
258
584
3,045
5,188
3
233
46
282
9
391
-
-
400
-
1,194
-
1,194
-
1,830
-
-
1,830
1,672
1,663
1,491
4,826
1,311
2,479
584
3,045
7,419
*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.
March 31, 2022
Particulars
Financial assets
Trade receivables
Cash and cash equivalents and other bank balances
Other financial assets
Total financial assets
Denominated currency
USD
GBP
EUR
Others
1,925
341
1,521
3,787
733
467
109
1,309
2,342
240
1,078
3,660
863
682
1,001
2,546
(` in Lakhs)
Total
5,863
1,730
3,709
11,302
Subex Annual Report 2021-22
210
211
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
39. Financial risk management (contd.)
Particulars
Denominated currency
Financial liabilities
Other financial liabilities
Total financial liabilities
Net financial assets/ (liabilities)
March 31, 2021
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)
USD
GBP
EUR
Others
480
480
3,307
88
88
1,221
502
502
3,158
236
236
2,310
USD
GBP
EUR
Others
Denominated currency
4,410
1,427
3,860
9,697
505
505
9,192
-
363
6
369
-
-
369
1,916
340
919
3,175
292
292
2,883
975
1,503
951
3,429
29
29
(` in Lakhs)
Total
1,306
1,306
9,996
(` in Lakhs)
Total
7,301
3,633
5,736
16,670
826
826
3,400
15,844
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, 2022
20,85,000
-
As at
March 31, 2021
As at
March 31, 2022
As at
March 31, 2021
6,50,000
4,50,000
1,580
-
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 0.30% (March 31, 2021:
0.43%).
40. 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, 2022, considering losses incurred in past years, the Company does not have
the obligation to incur expenses in relation to CSR.
41. 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, 2022 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.
Subex Annual Report 2021-22
212
213
Subex Annual Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended March 31, 2022
42. The US Federal government in the wake of COVID 19 pandemic provided support to business through Paycheck Protection Program
(PPP). Subex Inc. obtained a benefit under this scheme for ` 600 Lakhs during May 2020. During the year ended March 31, 2022, Subex
Inc. obtained complete waiver of the loan amount from Small Business Administration, United States government agency and accordingly
the loan and interest accrued thereon was recognised as other income.
43. The Board of Directors of the Company in its meeting held on October 28, 2021 has approved the restructuring of the business, subject to
all requisite approvals, wherein the business carried out by Subex Assurance LLP will be transferred to Subex Limited on a ‘going concern’
basis excluding Developed Technology and Investment in subsidiaries. The aforesaid restructuring is being carried out to achieve higher
operational efficiencies upon integration and consolidation of business in the listed entity. On February 23, 2022, the shareholder of the
Company approved the aforesaid restructuring through postal ballot. The aforesaid restructuring is likely to be completed over next few
months.
44. On December 6, 2021, the Group experienced a cybersecurity incident related to ransomware. The Group could contain the incident
in a timely basis and has also ensured that all traces of the infection are completely cleared from the network. All affected systems were
restored and brought back to normalcy in the order of priority. The management has assessed the impact of the incident on the control
environment and the financial statement process and conclude there was no material impact on the financial results. Since then, the
Group has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such
risks in the future.
45. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards
Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on
November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess
the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in
the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
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 30, 2022
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN : 06563872
Place: Bengaluru, India
Sumit Kumar
Chief Financial Officer
Place: Bengaluru, India
Date: May 30, 2022
Anil Singhvi
Chairman, Non- Executive & Non-Independent Director
DIN : 00239589
Place: Bengaluru, India
G V Krishnakanth
Company Secretary
Place: Bengaluru, India
Subex Annual Report 2021-22
212
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Subex Annual Report 2021-22
“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,
Bangalore, Karnataka-560103.
DATE AND VENUE OF THE 28TH ANNUAL GENERAL MEETING (AGM)
Date
: September 19, 2022
Venue
: Video Conference/Other Audio-Visual Means
(Deemed Venue is at the Registered Office of the Company situated at
Pritech Park - SEZ, Block-09, 4th Floor, B Wing, Sy No. 51-64/4,
ORR, Bellandur Vlg, Varthur Hobli, Bangalore- 560103 )
Time
: 11:00 A.M (IST)
DATES OF BOOK CLOSURE
From September 13, 2022 to September 19, 2022 (both days inclusive)
BOARD MEETINGS & FINANCIAL CALENDAR
The Company financial year begins on April 1 and ends on March 31 every year.
Calendar of Board Meetings to adopt the accounts
Financial year 2022-23
: April 01, 2022 to March 31, 2023
For quarter ending June 30, 2022
– 2nd week of August 2022
For quarter ending September 30, 2022
– 2nd week of November 2022
For quarter ending December 31, 2022
– 2nd week of February 2023
For the year ending March 31, 2023
– 4th week of May 2023
DIVIDEND
The Directors have not proposed any dividend to be paid for the financial year 2021-22.
LISTING ON STOCK EXCHANGES
Equity Shares of the Company are quoted on the National Stock Exchange of India Limited (NSE) since September 5, 2003 and on the BSE
Limited (BSE) since July 31, 2000. The Company has paid listing fees for the financial year(s) 2021-22 and 2022-23 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
National Stock Exchange of India Limited,
Exchange Plaza, 5th Floor, Plot No. C/1, G Block Bandra Kurla Complex,
Bandra (East) Mumbai- 400051
BSE Limited,
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001
London Stock Exchange
10 Paternoster Square, London, EC4M 7LS
Stock code
SUBEXLTD
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 1, 2005. The said circular has been partially 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 financial year 2021-22 and 2022-23 to NSDL and CDSL on the basis of the number of beneficial accounts maintained by
them as on March 31, 2021 and March 31, 2022 respectively.
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Subex Annual Report 2021-22
STOCK MARKET DATA RELATING TO EQUITY SHARES LISTED IN INDIA
Monthly high and low quotes during each month in the financial year 2021-22 as well as the volume of shares traded on NSE and BSE are as
under:
Month
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
NSE
High Price
Low Price
Number of shares
traded
BSE
High Price
Low Price
Number of shares
traded
62.10
67.40
63.20
74.40
63.30
58.75
58.10
58.80
61.20
56.20
46.60
38.80
35.00
50.20
51.20
56.00
43.15
50.25
41.15
41.30
48.85
44.00
33.40
30.40
41,33,03,277
34,28,35,846
23,25,07,033
39,76,28,299
25,04,90,178
15,42,61,116
17,78,69,188
20,18,76,043
18,06,37,020
10,62,55,753
8,61,86,171
10,92,51,276
62.20
67.40
63.10
74.45
63.50
58.70
58.00
58.75
61.30
56.00
46.60
38.75
35.05
49.00
51.30
56.05
43.10
50.25
41.00
41.25
48.75
44.15
33.30
30.40
5,74,87,654
6,08,94,727
4,93,31,736
6,59,08,511
4,61,07,370
2,89,91,114
3,19,27,023
3,02,35,168
3,03,53,613
1,84,71,092
2,11,98,401
3,30,73,002
SUBEX LIMITED SHARE PRICE VERSUS NSE S&P CNX NIFTY AND SENSEX (* Closing indices)
Month
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
BSE Sensex *
48,782.36
51,937.44
52,482.71
52,586.84
57,552.39
59,126.36
59,306.93
57,064.87
58,253.82
58,014.17
56,247.28
58,568.51
Nifty 50
14,894.90
15,582.80
15,869.25
15,924.20
17,132.20
17,855.10
18,477.05
18,109.45
17,516.85
18,308.10
17,780.00
17,498.25
Subex Annual Report 2021-22
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Subex Annual Report 2021-22
CREDIT RATING
As per the CRISIL’s letter dated September 03, 2021, the Company’s credit rating is CCR A-/Stable.
Rating History is as mentioned below:
Instrument Type
Current Rating/Outlook
Historical Rating Outlook
Issuer Rating
CCR A-/Stable
IND A-/Positive
IND A-/Stable
Rating
04 September 2020
07 August 2019
26 July 2018
IND A-/Stable
SHAREHOLDING PATTERN
Distribution of Shareholding:
No. of Equity shares held
1 – 5000
5001 – 10000
10001 – 20000
20001 –30000
30001 – 40000
40001 – 50000
50001 – 100000
100001 and above
TOTAL
Categories of Shareholders:
Categories of Shareholders
Promoter & Promoter group
Public
Non-Promoter, Non-Public *
TOTAL
As on March 31, 2022
As on March 31, 2021
No. of share holders
% to total share holders
No. of share holders
% to total share holders
3,13,967
23,928
13,653
6,367
2,291
2,471
3,150
3,045
3,68,872
85.115433
6.486803
3.701284
1.726073
0.621083
0.669880
0.853955
0.825490
100
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
No. of Shares of face value of ` 5 each
% of holding
Nil
54,84,96,508
1,35,06,427
56,20,02,935
Nil
97.60
2.40
100
*Includes shares held by the Subex Employee Welfare and ESOP Benefit Trust
REGISTRAR AND SHARE TRANSFER AGENTS (RTA) AND SHARE TRANSFER SYSTEM
KFin Technologies Limited (Formerly known as KFin Technologies Private Limited) are the Registrar and Share Transfer Agent of the Company
having its registered office at Karvy Selenium, Tower B, Plot No- 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad –
500032.
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Subex Annual Report 2021-22
A. Process for Transfer of Shares:
According to SEBI (LODR) Regulations, 2015, no shares can be transferred unless they are held in dematerialized mode. Members holding
shares in physical form are therefore requested to convert their holdings into dematerialized mode to avoid loss of shares and fraudulent
transactions and avail better investor servicing. Accordingly, only valid transmission or transposition cases may be processed by the RTA
of the Company, subject to compliance with the guidelines prescribed by SEBI.
The Board has delegated the authority for approving transmissions or transposition of shares etc. to the Stakeholders Relationship
Committee. The decisions of the Stakeholders Relationship Committee are placed before the Board at the subsequent Board Meeting.
Shares in physical form for transfer/transmission/transposition should be lodged with the office of the Company’s Registrar & Share
Transfer Agent, M/s. Kfin Technologies Limited, at the addresses given above or at the Registered Office of the Company. The above cases
are processed if technically found to be in order and complete in all respects.
B. Share transfers and other communication regarding Share certificates, updation of records, e-mail id’s, etc. may be addressed to:
KFin Technologies Limited,
Selenium Building, Tower-B,
Plot No- 31 & 32, Financial District,
Nanakramguda, Serilingampally,
Hyderabad, Telangana - 500032
Tel Nos. +91 40 6716 2222, 3321 1000
E-mail: einward.ris@kfintech.com
Website: https://www.kfintech.com/
SHARES HELD IN PHYSICAL AND DEMATERIALISED FORM
As on March 31, 2022, 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, 2022, the outstanding GDRs were 2,43,207. There are no outstanding convertible instruments in the company.
LOCATIONS
Westminster, 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 RTA 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, 2021 to March 31, 2022 are
as stated below. Additionally, the Company has attended to all the investor grievances/correspondence received through E-mails or telephone
on a timely manner.
Sl. No Nature of Compliants
Received
Closed
1
2
3
4
5
6
7
Non-receipt of Securities
Non Receipt of Annual Reports
Request for Correction / Duplicate / Revalidation of Dividend Warrant
Investors complaints through Stock Exchanges
Investors complaints through SEBI
Non Receipt of Dividend Warrant
Compliant regarding Demat / Remat
Total
2
3
46
0
6
112
0
169
2
3
46
0
6
112
0
169
Subex Annual Report 2021-22
216
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Subex Annual Report 2021-22
ADDRESS FOR CORRESPONDENCE
For any queries, please write to:
Mr. G V Krishnakanth
Company Secretary,
Subex Limited, Pritech Park – SEZ, Block-09,
4th Floor, B Wing, Survey No. 51 to 64/4,
Outer Ring Road, Bellandur Village,
Varthur Hobli, Bangalore, Karnataka-560103. 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 2021-22
218
219
Subex Annual Report 2021-22
NOTES
Subex Annual Report 2021-22
218
219
Subex Annual Report 2021-22
NOTES
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