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Subex Ltd.

BSE: 532348 Sector: IT
NSE: SUBEX ISIN Code: INE754A01014
BSE LIVE 15:40 | 15 Dec 8.29 0.06
(0.73%)
OPEN

9.09

HIGH

9.10

LOW

8.23

NSE 15:43 | 15 Dec 8.25 0.05
(0.61%)
OPEN

8.30

HIGH

8.40

LOW

8.20

OPEN 9.09
PREVIOUS CLOSE 8.23
VOLUME 522754
52-Week high 12.35
52-Week low 7.70
P/E 15.07
Mkt Cap.(Rs cr) 466
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.29
Sell Qty 26.00
OPEN 9.09
CLOSE 8.23
VOLUME 522754
52-Week high 12.35
52-Week low 7.70
P/E 15.07
Mkt Cap.(Rs cr) 466
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.29
Sell Qty 26.00

Subex Ltd. (SUBEX) - Auditors Report

Company auditors report

To the Members of

Subex Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SubexLimited ("the Company") which comprise the standalone Balance Sheet as at March31 2017 the standalone Statement of Profit and Loss including Other ComprehensiveIncome the standalone Statement of Cash Flows and the standalone Statement of Changes inEquity for the year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true standalone financialposition standalone financial including other comprehensive income standalone cash flowsand standalone changes in equity of the Company in accordance with accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specified133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancialstatements based on our audit. While conducting the audit we have taken intoaccount the provisions of the Act the accounting and auditing standards and matters whichare required to be included in the audit report under the provisions of the Act and theRules made thereunder. We conducted our audit of the standalone Ind AS financialstatements in accordance with the Standards on Auditing issued by the Institute ofChartered Accountants of India as specified 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement. An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the standalone Ind AS financial statements.The procedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk and fair view of the assessments the auditorconsiders internal financial control performance relevant to the Company's preparation ofthe standalone Ind AS financialstatements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of under section accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the standalone state of affairs ofthe Company as at March 31 2017 its standalone loss including other comprehensiveincome its standalone cash flows and the standalone changes in equity for the year thenended.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 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 bestof our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c The standalone Balance Sheet the standalone Statement of Profit and ComprehensiveIncome the standalone Statement of Cash Flows and the standalone Statement of Changes inEquity 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 withthe Accounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 asamended;

(e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of section 164 (2) ofthe Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its standalonefinancial position in its standalone Ind AS financial statements refer note 35(b) to thestandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and including Protection Fund by the Company; and Other

iv. The Company has provided requisite disclosures in note 43 to these standalone IndAS financial statements as to the holding of Specified Bank Notes on November 8 2016 andDecember 30 2016 as well as dealings in Specified Bank Notes during the period fromNovember 8 2016 to December 30 2016.

Based on our audit procedures and relying on the management representation regardingthe holding and nature of cash transactions including Specified Bank Notes we reportthat these disclosures are in accordance with the books of accounts maintained by theCompany and as produced to us by the Management.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

per Rajeev Kumar

Partner

Membership number: 213803

Place: Bengaluru

Date: May 25 2017

Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date

Re: Subex Limited

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment and intangible assets.

(b) Property plant and equipment have been physically verified by the managementduring the year and no material discrepancies were identified such verification .

(c) According to the information and explanations given by the management there are noimmovable properties included in property plant and equipment of the Company andaccordingly the requirements under paragraph 3(i)(Rs.) of the Order are not applicable tothe Company.

(ii) The Company's business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.

(iii) According to the information and explanations given by the management theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013 ("the Act"). Accordingly the provisions ofclause 3(iii) (a) (b) and (Rs.) of the Order are not applicable to the Company and hencenot commented upon.

(iv) In our opinion and according to the information and explanations given by themanagement the Company has complied with the provisions of section 185 and 186 of the Actin respect of grant of loans making investments and providing guarantees and securitiesas applicable. In this regard we also draw attention to note 35(b)(iii) to the standaloneInd AS financial statements relating to recoverable from erstwhile directors of theCompany towards excess managerial remuneration pertaining to the financial year 2012-13which is under litigation.

(v) The Company has not accepted any deposits from the public. (vi) To the best of ourknowledge and as explained the Central Government has not specifiedthe maintenance ofcost records under Section 148(1) of the Act for the products/ services of the Company.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand other material statutory dues applicable to it. With regard to withholding tax dueswe also refer to note 47 to the standalone Ind AS financial statements.

(b) According to the information and explanations given by the management noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax sales- tax service tax duty of customs duty of excise value added taxcess and other material statutory dues were outstanding at the year end for a period ofmore than six months from the date they became payable.

(c) According to the records of the Company there are no dues of income-taxsales-tax service tax duty of customs duty of excise value added tax and cess whichhave not been deposited on account of any dispute except the following:

Name of the Statute Nature of the dues Disputed amount ( Rs. in Lakhs) Amount paid under protest ( Rs. 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 1780.76 - 2011-12 Income Tax Appellate Tribunal Bangalore
379.01 30.00 2010-11 Income Tax Appellate Tribunal Bangalore
1254.56 200.00 2009-10 Hon'ble High Court of Karnataka
10.03 - 2009-10 The Company is in the process of filing an appeal with Commissioner of Income Tax (Appeals)
504.90 - 2008-09 Hon'ble High Court of Karnataka
346.47 - 2006-07 Commissioner of Income Tax (Appeals) Bangalore
162.88 - 2005-06 Hon'ble High Court of Karnataka
79.73 60.24* 2004-05 Hon'ble High Court of Karnataka
211.28 211.65** 2003-04 Hon'ble Supreme Court of India
0.04 - 2001-02 Hon'ble High Court of Karnataka
Finance Act 1994 Service tax 1003.66 924.12 April 2006 to October 2007 Central Excise and Service Tax Appellate Tribunal Bangalore
Finance Act 1994 Service tax 3607.60 - April 2006 to July 2009 Commissioner of Service Tax Bangalore

* Represents adjustment of C60.24 Lakhs by the Asst. Commissioner of Income TaxBangalore against the refund relating to Financial Year 2007-08.

** includes C55.95 Lakhs adjusted by the Asst. Commissioner of Income Tax Bangaloreagainst the refund relating to Financial Year 2007-08.

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or debenture holders.

(ix) According to the information and explanations given by the management the Companyhas not raised any money by the way of initial public offer / further public offer / debtinstruments and term loans during the year. Hence reporting under paragraph 3(ix) of theOrder is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone Ind AS financial statements and according to the informationand explanations given by the management we report that no fraud by the Company or nofraud on the Company by its officers or employees has been noticed or reported duringgovernment or dues to the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act. Inthis regard we also draw attention to note 35(b)(iii) to the standalone Ind AS financialstatements relating to amounts recoverable from erstwhile directors of the Company towardsexcess managerial remuneration pertaining to the financial year 2012-13 which is underlitigation.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theAct where applicable and the details have been disclosed in the notes to the standaloneInd AS financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given by the management and on anoverall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) of the Orderare not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Act.

(xvi) According to the information and explanations given by the management theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

per Rajeev Kumar

Partner

Membership number: 213803

Place: Bengaluru

Date: May 25 2017

Annexure 2 to the Independent Auditor's Report of even date on the Standalone Ind ASFinancial Statements of Subex Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of The Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SubexLimited ("the Company") as of and for the year ended March 31 2017 inconjunction with our auditofthe reporting standalone Ind AS financial statements of theCompany as of and for the year then ended.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal controls over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of reporting were established CharteredAccountantsofIndia. Theseresponsibilities include controls over financial the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financialinformation as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's based on ourinternalfinancialcontrols over financial audit. We conducted our audit in accordance withthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial included obtainingan understanding of internal financial controls over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalpolicies financial controls over financial and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and disposition of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financialcontrols overfinancialreporting including the possibility of collusion or improper management overrideof controls material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financialreporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has maintained in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls reportingwere operating effectively as at March 31 2017 based on the internal control overfinancial preparation of established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Financial ControlsOver Financial statements in Reporting issued by the Institute of Chartered Accountants ofIndia.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar

Partner

Membership number: 213803

Place: Bengaluru

Date: May 25 2017