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Subex Ltd.

BSE: 532348 Sector: IT
NSE: SUBEX ISIN Code: INE754A01014
BSE 00:00 | 20 Mar 5.93 0.07
(1.19%)
OPEN

5.87

HIGH

5.95

LOW

5.83

NSE 00:00 | 20 Mar 5.90 0.05
(0.85%)
OPEN

5.80

HIGH

5.95

LOW

5.80

OPEN 5.87
PREVIOUS CLOSE 5.86
VOLUME 128374
52-Week high 8.55
52-Week low 4.40
P/E
Mkt Cap.(Rs cr) 333
Buy Price 5.93
Buy Qty 507.00
Sell Price 5.95
Sell Qty 4279.00
OPEN 5.87
CLOSE 5.86
VOLUME 128374
52-Week high 8.55
52-Week low 4.40
P/E
Mkt Cap.(Rs cr) 333
Buy Price 5.93
Buy Qty 507.00
Sell Price 5.95
Sell Qty 4279.00

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 Statementsof Subex Limited ("the Company") which comprise the Standalone Balance Sheet asat March 31 2018 the Standalone

Statement Profitand Loss including Other Comprehensive

Income the Standalone Statement of Cash Flows and the StandaloneStatement of Changes in Equity for the year then ended and a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the Standalone Ind AS Financial Statements").

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Standalone Ind AS Financial Statements that give a true and fair viewof the standalone Financial position standalone Financial including other comprehensiveincome standalone cash flows and standalone changes in equity of the Company inaccordance with accounting principles generally accepted in India including the

Indian Accounting Standards (Ind AS) specified under section 133 of theAct read with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal Financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind

AS Financial Statements based on our audit. We have taken into accountthe provisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade thereunder. We conducted our audit of the Standalone Ind AS Financial Statements inaccordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India

Those Standards asspecified require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Standalone Ind AS Financial Statements are free from material misstatement. An auditinvolves performing procedures to obtain audit evidence about the amounts and disclosuresin the Standalone Ind AS Financial Statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theStandalone Ind AS Financial Statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal Financial controls relevant to theCompany's preparation of the Standalone Ind AS Financial Statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of 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. Weperformance believe that the audit evidence we have obtained is sufficient and appropriateto provide a 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 theexplanations given to us the Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 its standalone profit including other comprehensive incomeits standalone cash flows and the standalone changes in equity for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the Annexure 1 a Statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act we report that: (a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit of the aforesaidStandalone Ind AS Financial Statements; (b) In our opinion proper books of account asrequired by law have been kept by the Company so far as it appears from our examination ofthose books; (c) The Standalone Balance Sheet the Standalone Statement of Profitand Lossincluding Other Comprehensive

Income the Standalone Statement of Cash Flows and the StandaloneStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account maintained for the purpose of preparation of the Standalone Ind AS FinancialStatements; (d) In our opinion the aforesaid Standalone Ind AS Financial Statementscomply 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 written representations received from the directorsof the Company as on March 31 2018 and taken on record by the Board of Directors of theCompany none of the directors of the Company is disqualified as on March 31 2018 frombeing appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy and the operating effectiveness of theinternal Financial controls over Financial reporting of the Company refer to our separate

Report in "Annexure 2" to this report; and

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous: i. The Company has disclosed the impact of pending litigations on its Financialposition in its Standalone

Ind AS Financial Statements – Refer note 35 (b) to the StandaloneInd AS Financial Statements; ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses; andiii. There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar

Partner

Membership Number: 213803 Place: Bengaluru Date: May 04 2018

Annexure 1 to the Independent Auditor's Report of even date on theStandalone Ind AS Financial Statements of Subex Limited

Statement on the matters specified in paragraph 3 and 4 of theCompanies (Auditor's Report) Order 2016 ("the Order")

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant and equipmentand intangible assets. (b) Property plant and equipment have been physically verified bythe management during the year and no material discrepancies were identified on such

(c) According to the information and explanations given by themanagement there are no immovable properties included in property plant and equipment ofthe Company and accordingly the requirements under paragraph 3(i)

(c) of the Order are not applicable to the Company.

(ii) The Company's business does not involve inventories andaccordingly the requirements under paragraph 3(ii) of the

Order are not applicable to the Company.

(iii) According to the information and explanations given by themanagement the Company has not granted any loans firms limited secured or unsecured tocompanies liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 ("the Act"). Accordingly theprovisions of clause 3(iii) (a) (b) and (c) of the Order are not applicable to theCompany and . hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven by the management the Company has complied with the provisions of section 185 and186 of the Act in respect of grant of loans to directors including entities in which theyare interested and in respect of loans and advances given making investments andproviding guarantees and securities as applicable. In this regard we also draw attentionto note 35(b)(iii) to the Standalone Ind

AS Financial Statements relating to amounts recoverable from erstwhiledirectors of the Company towards excess managerial remuneration pertaining to theFinancial year 2012-13 which is under litigation.

(v) The Company has not accepted any deposits within the meaning ofsections 73 to 76 of the Act and the Companies

(Acceptance of Deposits) Rules 2014 (as amended).

Accordingly the provisions of clause 3(v) of the Order are notapplicable.

(vi) To the best of our knowledge and as explained the Central

Government has not specifiedthe maintenance of cost records undersection 148(1) of the Act for the products/services of the Company.

(vii)(a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident fund employees'state insurance income-tax sales-tax service tax duty of custom duty of excise valueadded tax goods and services tax cess and other material statutory dues applicable toit.

(b) According to the information and explanations given by themanagement no undisputed amounts payable in respect of provident fund employees' stateinsurance income-tax sales- tax service tax duty of customs duty of excise valueadded tax goods and services tax cess and other material statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(c) According to the records of the Company there are no dues ofincome-tax sales-tax service tax duty of customs duty of excise value added taxgoods and services tax and cess which have not been deposited on account of any disputeexcept the following:

Name of the Statute Nature of the dues Disputed Amount Period to whichForum where dispute is pending amount* paid/ refund the amount relates

( ( Rs in Lakhs) adjusted ( Financial Year) under protest

( ( Rs in Lakhs)

Income Tax Act Adjustment for 3382 724 2012-13 Income Tax AppellateTribunal 1961 transfer pricing (‘ITAT') Bangalore # disallowances 379 30 2010-11Hon'ble High Court of Karnataka under section 10 - 2009-10 Commissioner of Income Tax 10Aand other (Appeals) Bangalore disallowances 346 - 2006-07 Commissioner of Income Tax(Appeals) Bangalore

4 4 2005-06 Deputy Commissioner of Income Tax (Appeals) Bangalore

80 141 2004-05 Hon'ble High Court of Karnataka 211 212 2003-04 Hon'bleSupreme Court of India Finance Act 1994 Service tax 1004 924 April 2006 to CentralExcise and Service Tax October 2007 Appellate Tribunal Bangalore 3608 - April 2006 toJuly Commissioner of Service Tax 2009 Bangalore

* Excluding penalty and interest from the date of Order to March 312018.

# In respect of amount disputed for the year 2012-13 the Company hasobtained a stay order from ITAT.

(viii) In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto a Financial institution bank or government or dues to debenture holders. (ix)According to the information and explanations given by the management the Company has notraised any money by the way of initial public offer / further public offer (including 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 ofreporting the true and fair view of the Standalone Ind AS Financial Statements andaccording to the information and explanations given by the management we report that nofraud by the Company or no fraud on the Company by its officers or employees has beennoticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct. In this regard we also draw attention to note 35(b)(iii) to the Standalone Ind ASFinancial Statements relating to amounts recoverable from erstwhile directors of theCompany towards excess managerial remuneration pertaining to the Financial year 2012-13which is under litigation.

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

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of the Act where applicable and the details have been disclosed in the notes to theStandalone Ind AS Financial Statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations given by themanagement and on an overall examination of the balance sheet the Company has compliedwith provisions of section 42 of the Act in respect of the preferential allotment/ privateplacement of shares and amounts raised have been used for the purposes for which thefunds were raised. Further the Company has not made any preferential allotment/ privateplacement of fully or partly convertible debentures during the year under review.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given by themanagement the provisions of section 45-IA of the Reserve Bank of India Act 1934 are notapplicable to the 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 04 2018

Annexure 2 to the Independent Auditor's Report of even date on theStandalone

Ind AS Financial Statements of Subex Limited

Report on the internal Financial Controls under clause (i) ofsub-section 3 of section 143 of the Companies Act 2013 ("the Act")

We have audited the internal Financial controls over Financialreporting of Subex Limited ("the Company") as of and for the year ended March31 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements ofthe Company as of and for the year then ended.

Management's Responsibility for internal Financial Controls

The Company's Board of Directors is responsible for establishing andmaintaining internal Financial controls based on the internal controls over Financialreporting criteria established 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 Chartered Accountants of India (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal Financial controls that were operating effectively for business ensuring theorderly and efficient including adherence to the Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable Financialinformation as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalFinancial controls over Financial reporting audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing as specified

143(10) of the Act to the extent applicable to an audit of internalFinancial controls both applicable to an audit of internal Financial

Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal Financial controls over Financial reporting were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal Financial reporting and their operating effectiveness. Ouraudit of internal Financial controls over Financial an understanding of internal Financialcontrols over reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal controls based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the Standalone Ind AS FinancialStatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the

Company's internal Financial controls over Financial reporting.

Meaning of internal Financial Controls Over Financial Reporting

A company's internal Financial controls over Financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of Financialreporting and the statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal Financial controls over Financial reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflectthe transactions and dispositionof the assets of the Company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of Financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorisations of management and directorsof the Company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the Company's assets thatcould have a material effect on the Financial statements.

Inherent Limitations of internal Financial Controls Over Financial

Reporting controls over Financial Because of the inherentlimitations of internal Financial over Financial reporting included obtaining reportingFinancial or improper management override of controls material misstatements due to erroror fraud may occur and not be detected.

Also projections of any evaluation of the internal Financial controlsover Financial reporting to future periods are subject to the risk that the internalFinancial controls over Financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has maintained in all material respectsadequate internal Financial controls over Financial reporting and such internal Financialcontrols over Financial reporting were operating effectively as at March 31 2018 basedon the internal Financial controls over Financial reporting criteria established by theCompany considering the essential components preparation of Financial of internal controlsstated in the Guidance Note.

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 04 2018