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Subex Ltd.

BSE:532348  |  NSE:SUBEXEQ  |  58888:subex  |  IND:IT Consulting & Software - Small Cap  |  ISIN code:INE754A01014  |  SECT:IT Software

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You can view full text of the Director's Report for Subex Ltd.
Director Report
Mar2018   Mar 2019

Dear members

The Directors have pleasure in presenting the 25th Annual Report of the Company on the business and operations together with the audited results for the year ended March.31, 2019.

1. FINANCIAL RESULTS

The Company''s financial performance for the year ended March.31, 2019 is summarized as below:

(Rs. in Lakhs)

Particulars

Consolidated

Standalone

2018-19 2017-18

2018-19 2017-18

Total Revenue

34,812

32,432

1,916

17,993

Share of profit/(loss) net

-

-

(1,600)

37

Other Income

101

140

10

66

Finance Cost

216

775

4

547

Profit/(Loss) before Exceptional items & tax expense

4,708

2,275

(2,455)

(200)

Exceptional Items

-

1,166

-

389

Profit/(Loss) before tax

4,708

3,441

(2,455)

189

Tax expenses

2,186

1,373

(2)

157

Profit/ (Loss) after tax

2,522

2,068

(2,453)

32

Other comprehensive income

(428)

(240)

(3)

(8)

a) to be reclassified to profit or loss in subsequent periods

(390)

(210)

-

-

b) not to be reclassified to profit or loss in subsequent periods

(38)

(30)

(3)

(8)

Total comprehensive income for the year

2,094

1,828

(2,456)

24

2. RESULTS OF OPERATIONS

During the financial year ended March.31, 2019, the total revenue on a standalone basis was RS.1,916 lakhs as against the revenue for the previous year which was Rs.17,993 Lakhs. The Company has during the year under review incurred a loss of Rs.2,453 lakhs as against a profit of Rs.32 lakhs in the previous year.

On a consolidated basis, the total revenue stood at Rs.34,812 lakhs as against RS.32,432 lakhs during the previous year. The profit for the financial year 2018-19 was RS.2,522 lakhs as against a profit of RS.2,068 lakhs in the previous year.

3. DIVIDEND

The Directors have not proposed any dividend to be paid for the financial year 2018-19.

4. RESERVES

The Company does not propose to transfer amounts to the general reserve out of the amount available for appropriation. The total earnings of RS.2,094 lakhs available with the Company on a consolidated basis is proposed to be retained in the statement of profit and loss.

5. SHARE CAPITAL

As at March.31, 2019 and as at the date of this report, the authorized share capital of the Company was RS.5,900,000,000 (Rupees Five hundred and ninety crores only) divided into 588,040,000 (Fifty-eight crores, eighty lakhs and forty thousand only) equity shares of RS.10 (Rupees Ten only) each and 2,00,000 (Two Lakhs only) preference shares of RS.98 (Rupees Ninety-Eight only) each.

As at March.31, 2019 and as at the date of this report, the issued, subscribed and paid-up share capital of the Company was RS.5,620,029,350 (Rupees Five hundred and sixty two crores, twenty nine thousand and three hundred and fifty only) divided into 562,002,935 (Fifty six crores, twenty lakhs, two thousand nine hundred and thirty five only) equity shares of RS.10 (Rupees Ten only) each.

6. BUSINESS

Subex is a leading telecom analytics solutions provider, enabling a digital future for global Telco''s. Founded in 1994, Subex has spent over two decades in enabling 3/4th of the largest 50 Communication Service Providers (CSPs) globally achieve competitive advantage. By leveraging data which is gathered across networks, customers, and systems coupled with its domain knowledge and the capabilities of its core solutions, Subex helps CSPs to drive new business models, enhance customer experience and optimize enterprises. Subex leverages its award-winning analytics solutions in areas such as Revenue Assurance, Fraud Management, Asset Assurance and Partner Management "Revenue Management

Services/RMS business" and complements them through its newer solutions such as IoT Security "Digital Business". Subex also offers scalable Managed Services and Business Consulting services. It has more than 300 installations across 90 countries.

Subex has received numerous awards jointly with its customers. The recent awards include:

- Pipeline Innovation Awards 2018 under "Managed Services" category & "Innovations in Security & Assurance" and ''Big Data & Analytics''

- Aegis Graham Bell Award 2017 for Innovation in ROC Insights under "Data Science" Category

- Global Telecoms Business Innovation Award 2017 with Saudi Telecom Company.

7. SUBSIDIARIES (WHOLLY OWNED AND OTHER SUBSIDIARIES)

As on March.31, 2019, the Company has 9 subsidiaries.

SUBEX ASSURANCE LLP AND ITS SUBSIDIARIES

For the year ended March.31, 2019, Subex Assurance LLP earned a net income of RS.30,133 lakhs as against a net income of RS.12,813 Lakhs in the previous year and a net profit of RS.165 Lakhs, as against a net profit of RS.635 lakhs in the previous year

As at March.31, 2019, Subex Limited held more than 99.99 % of the capital in Subex Assurance LLP and the balance is held by Subex Digital LLP.

- For the year ended March.31, 2019, the Standalone income of Subex (UK) Limited was RS.18,803 Lakhs as against RS.16,401 Lakhs in the previous year, and a net gain of RS.1,370 Lakhs as against a net loss of RS.8,197 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, 2019, the Standalone income of Subex (Asia Pacific) Pte. Limited was RS.3,952 Lakhs as against RS.2,997 lakhs in the previous year, and a net gain of RS.18 lakhs as against a net loss of RS.644 Lakhs in the previous year.

- Subex Inc.is a wholly owned subsidiary of Subex (UK) Limited. For the year ended March.31, 2019, the Standalone income of Subex Inc. was RS.9,839 lakhs as against RS.9,353 Lakhs in the previous year, and the net gain was RS.117 lakhs as against a net gain of RS.78 Lakhs in the previous year.

- As on March.31, 2019, Subex (UK) Limited holds 8 common shares (7.41%) in the capital of Subex Americas Inc.

- Subex Middle East (FZE) is a wholly owned subsidiary of Subex Assurance LLP. For the year ended March.31, 2019, the standalone income of Subex Middle East (FZE) was RS.1,388 lakhs as against RS.1,132 Lakhs in the previous year and a net gain of RS.60 lakhs as against a loss of RS.14 Lakhs in the previous year.

SUBEX DIGITAL LLP

For the year ended March.31, 2019, Subex Digital LLP earned an income of RS.438 Lakhs as against RS.33 Lakhs in the previous year, and a net loss of RS.1,765 Lakhs as against a net loss of RS.598 Lakhs in the previous year.

As at March.31, 2019, Subex Limited held more than 99.99% of the capital in Subex Digital LLP and the balance is held by Subex Assurance LLP

SUBEX TECHNOLOGIES LIMITED

For the year ended March.31, 2019, Subex Technologies Limited incurred a net loss of RS.4 Lakhs as against a net loss of RS.1 Lakh in the previous year. Subex Technologies Limited is a wholly owned subsidiary of Subex Limited.

SUBEX AMERICAS INC.

For the year ended March.31, 2019, the standalone income of Subex Americas Inc. was RS.957 Lakhs as against RS.851 Lakhs in the previous year, and the net profit was RS.96 Lakhs as against a net profit of RS.6,271 Lakhs in the previous year.

Subex Azure Holding Inc., is a wholly owned subsidiary of Subex Americas Inc. There were no transactions during the year under review.

As on March.31, 2019, Subex Limited holds 100 common shares (92.59%) in the capital of Subex Americas Inc.

The above-mentioned numbers are as per the audited financial statements of respective subsidaries.

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://subex.com/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://subex.com/shareholder-services/. These documents will also be available for inspection during business hours at the registered office of the Company at Bengaluru, India.

8. DEPOSITS

Your Company has not accepted any deposits from the public during the year and there are no deposits which remain unclaimed or unpaid as at the end of the year and, as such, no amount of principal or interest was outstanding as of the date of the Balance sheet.

9. EMPLOYEE STOCK OPTIONS SCHEMES

All the schemes 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 ESOP schemes. Additional details have also been disclosed under Note 36 to the standalone financial statements which form part of the Annual Report.

Details of the Company''s Employee Stock Option Plans and a summary disclosure in compliance with the 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) Regulation, 2014 are available on the Company''s website https:// subex.com/shareholder-services/.

a. EMPLOYEE STOCK OPTION PLAN-2005 (ESOP-III)

Under this scheme, an initial corpus of 5,00,000 options was created for grant to the eligible employees, with each option convertible into one fully paid-up equity share of RS.10/-. This scheme was formulated in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The corpus of the scheme was further enhanced by 15,00,000 options during the financial year 2007-08. The Company has obtained the requisite in-principle approvals from the Stock Exchanges for the listing of equity shares arising out of exercise of options granted under the scheme.

The tenure for grant of stock options under ESOP 2005 scheme has expired in 2015 and the Company is only administering the outstanding stock options issued under the scheme.

b. EMPLOYEE STOCK OPTION PLAN-2018 (ESOP-V)

The Company pursuant to resolutions passed by the Board and the Shareholders dated June 26, 2018 and July 31, 2018, respectively, has adopted the Subex Employees Stock Option Scheme-2018 ("ESOP - V" or "Plan")

The Board authorized the Nomination & Remuneration Committee or such other person(s) as maybe authorised by the Nomination & Remuneration Committee for the superintendence and administration of the Plan. The ESOP Plan would be implemented through the Subex Employee Welfare and ESOP Benefit Trust, "ESOP Trust", by acquiring the equity shares of the Company from the secondary market. Total number of Options to be granted under the Scheme shall not exceed 5% (Five percent) of the paid- up equity capital as on March.31, 2018.

10. 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 number 34 (b) (iv) to the Standalone Financial Statements.

11. MATERIAL CHANGES AND COMMITMENTS, EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE REPORT.

The Board at its meeting held on May 13, 2019, appointed Mr. George Zacharias as an Additional Independent Director, to hold office until the date of the 25th Annual General Meeting (AGM).

There have been no material changes for the period between end of the financial year 2018-19 and the date of this report effecting the financial position of the company

12. 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 sustainable 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 and customers and is committed to maintaining the highest level of transparency, accountability and equity in its operations. It always strives to follow the path of good governance through a broad framework of various processes.

Your Company has complied with the conditions of Corporate Governance as stipulated in the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, "SEBI (LODR), Regulations, 2015", as amended from time to time. The Auditor''s certificate on compliance with respect to the same is annexed herewith as "Annexure B". In addition, it has documented its internal policies in line with the Corporate Governance guidelines.

13. MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion & Analysis report is presented in a separate section forming part of this Annual Report.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per Section 152 of the Companies Act, 2013, at least two-thirds of the Directors shall be subject to retirement by rotation. One-third of such Directors must retire from office at each AGM of the shareholders and a retiring Director is eligible for re-election. Accordingly, Mr. Vinod Kumar Padmanabhan, retires by rotation and being eligible, has offered to be re-appointed at the ensuing AGM.

Pursuant to the recommendations of the Nomination & Remuneration Committee, the Board at its meeting held on MarcRs. 21, 2018, appointed Mr. Vinod Kumar Padmanabhan as the Managing Director & CEO of the Company effective from April 01, 2018, for a tenure of three years. The said appointment was approved by the members at the 24th AGM of the Company held on July 31, 2018.

Mr. Ashwin Chalapathy, Non-Independent, Non-Executive Director, resigned from the Board with effect from May 04, 2018.

APPOINTMENT

Pursuant to the recommendations of the Nomination & Remuneration Committee, the Board at its meeting held on May 13, 2019, appointed Mr. George Zacharias as an Additional Independent Director of the Company and he shall hold office until the date of the 25th AGM. His appointment for a period of five years is being placed before the members for their approval at the ensuing AGM.

The details regarding the familiarization program for Independent Directors is available on the website of your Company under the link https://www.subex.com/shareholder-services/

CHANGES IN THE KEY MANAGERIAL PERSONNEL

Ms. Mehernaz Dalal resigned from the position of Chief Financial Officer w.e.f. November 30, 2018. Mr. Venkatraman G S was appointed as the Chief Financial Officer of the Company w.e.f. November 30, 2018.

Mr. G V Krishnakanth was appointed as the Company Secretary of the Company w.e.f July 10, 2018 and Compliance Officer w.e.f. July 19, 2018.

15. BOARD MEETINGS

During the year, 7 Board Meetings were convened and held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR), Regulations, 2015. The dates on which meetings were held are as follows:

Board Meeting Number

Date of Meeting

1/2018-19

May 04, 2018

2/2018-19

June 26, 2018

3/2018-19

July 19, 2018

4/2018-19

July 31, 2018

5/2018-19

September 10, 2018

6/2018-19

October 31, 2018

7/2018-19

January 29, 2019

The details of the attendance of the Directors is provided in the Corporate Governance Report.

16. 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 29, 2019 carried out an annual performance evaluation of its own performance, 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 Corporate Governance Report.

17. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION POLICY OF THE COMPANY

The Policy on Appointment of Directors and the Remuneration Policy of the Company forms a part of this report in "Annexure E". and the Details / Disclosures of Ratio of Remuneration to each Director to the median employee''s remuneration as "Annexure G".

18. AUDIT COMMITTEE

As on March.31, 2019, the Audit Committee had four Directors as its members viz. Mr. Anil Singhvi, Chairman & Independent Director, Ms. Nisha Dutt, Independent Director, Ms. Poornima Prabhu, Independent Director and Mr. Vinod Kumar Padmanabhan, Managing Director & CEO. The role, terms of reference, the 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 thereon. Further details of the Audit Committee have been provided in the report on Corporate Governance forming part of this Annual Report.

19. 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

S. R. Batliboi & Associates LLP, Chartered Accountants, Bengaluru (Firm Registration Number 101049W/E300004), the Statutory Auditors of the Company were appointed for a term of 5 years at the AGM held on June 19, 2015. The requirement for ratification of appointment of auditors by the members at every AGM is done away with, vide the Ministry of Corporate Affairs notification dated May 07, 2018.

There are no qualifications, reservations or 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 V. Sreedharan & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure C".

The Secretarial Audit Report for the year ended March.31, 2019 does not contain any qualification, reservation or adverse remark.

20. PARTICULARS OF EMPLOYEES

The particulars of employees required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been provided as they are not applicable to the Company. None of the employees of the Company, draw remuneration in accordance with the limits prescribed under the said Rules. Hence the details of the top 10 (ten) employees under the said Rules have not been stated.

21. 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 scarce resources and minimize waste.

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 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. Though Subex does not fall under the category of manufacturing products and services impacting the 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, ensuing continued savings through this initiative.

Suppliers delivering the products to Subex with regard to lighting, diesel generators etc, abide by the guidelines laid out by the government.

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 water and energy reduction in waste along with an increase in amount of waste that is recycled/ reused etc.

iii. Increasing the awareness on environment safety and engagement of employees.

iv. Adopting sustainable practices designed to ensure the health and safety of Subex''s employees, stakeholders and the environment.

v. Operating its business in compliance of environmental laws and regulations.

22. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

Your Company has a strong Research & Development Division responsible for developing technologies for its products in the telecom domain. The telecommunications domain, in which your Company operates, is subject to rapid technological changes, introduction of new services and intense competition. Your Company has developed inherent skills to keep pace with these changes. Since software products are the significant line of business of your Company, the Company incurs expenditure on product related Research & Development on a continuous basis. These expenses are charged to revenue under the respective heads and are not segregated and accounted separately.

23. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year 2018-19 total foreign exchange inflow and outflow is as follows:

i) Foreign Exchange earnings RS.2,178 Lakhs (Previous Year RS. 16,240 Lakhs)

ii) Foreign Exchange outgo RS.678.44 Lakhs (Previous Year RS.9,592 Lakhs)

24. CORPORATE SOCIAL RESPONSIBILITY

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, 2019.

Composition

Category

Mr. Anil Singhvi (Chairman)

Independent Director

Mr. Vinod Kumar Padmanabhan

Managing Director & CEO

Ms. Nisha Dutt

Independent Director

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 are given in "Annexure H" to the Boards'' report.

The CSR Committee charter and the CSR Policy of the Company are available in the website under the below link https://www.subex. com/shareholder-services/.

SUBEX CHARITABLE TRUST

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 amongst the employees of the Company. During the year, it has provided active support to the Prerana Resource Centre for providing vocational training to visually impaired and disabled orphan teenage girls. As part of this program, 25 girls have been provided vocational training to enable them to attain work opportunities across various industries. The SCT has also provided its support for the education of economically challenged meritorious students as part of the Nurture Merit Programme. Further details have been provided in a separate section in this Annual Report as "Annexure H ".

25. RISK MANAGEMENT POLICY & IMPLEMENTATION

The Risk Management Committee has been constituted as required under Regulation 21 of the SEBI (LODR) Regulations, 2015, voluntarily by the Company. According to Regulation 21 (5), the provisions of Risk Management Committee shall be applicable to top 500 listed entities, determined on the basis of 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.

26. HUMAN RESOURCE MANAGEMENT

Detailed report on Human Resource management is given in the Management Discussion and Analysis section of the Annual report.

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

In accordance with the provisions of Section 134(5) 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("IndAS").

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 efficacy 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 9001:2008 (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, the emphasis was more towards reviews and updates on processes for projects and organization, alignment to the new organization structure. Identification and involvement of process owners to review processes and make it relevant and align it to the organization. Some of the requirements which were specific to customer were customized, with audits conducted for some of the accounts.

28. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has implemented a vigil mechanism policy to deal with instance 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/shareholder-services/. There were no complaints during the year 2018-19.

29. 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

30. DECLARATION FROM INDEPENDENT DIRECTORS

All Independent Directors have given declarations under Section 149 (7) to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

31. 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-a-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, are 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.

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/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 in "Annexure F".

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

33. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure D".

The annual return for the financial year 2017-18 pursuant to section (3) of section 92 has been placed on the website of the Company, www.subex.com.

34. LISTING WITH STOCK EXCHANGES

The Company has paid the Annual Listing Fees for the year 201819 to the National Stock Exchange of India Ltd (''NSE'') and BSE Ltd (''BSE'') where the Company''s shares are listed.

35. MAINTENANCE OF COST RECORDS

Maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is not applicable to the Company as the Company operates out of a Special Economic Zone (SEZ) .

36. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provision of Section 134(3)(c) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and belief, affirms:

a) In the preparation of the annual accounts for the financial year ended March.31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) That the accounting policies have been selected and applied consistently and it has made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March.31, 2019 and of the loss 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, 2019 have been prepared on a going concern basis;

e) That internal financial controls have been laid down to be followed by the Company and such internal financial controls were adequate and were operating effectively.

f) That systems to ensure compliance with the provisions of all applicable laws were in place and such systems were adequate and operating effectively.

37. 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 the 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, the Ministry of Commerce and Industry, Ministry of Labour and employment, Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Ltd, National Securities Depository Limited and Central Depository Services (India) Limited 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, cooperation and support, as they are instrumental in your Company scaling new heights, year after year.

For Subex Limited For Subex Limited

Anil Singhvi Vinod Kumar Padmanabhan

Chairman & Independent Director Managing Director & CEO

DIN:00239589 DIN:06563872

Bengaluru, India

May 13, 2019

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