Subex Ltd Management Discussions

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 Companys growth strategy, dependency on certain clients, availability of qualified technical personnel and other factors discussed in this report.

COMPANY OVERVIEW

Subex is a telecom AI solutions Company enabling Communications Service Providers (CSP) across the globe to create connected experiences for their customers. Founded in 1994, Subex has spent over 30 years helping CSPs maximize their revenues and profitability. With a legacy of having served the market through its world-class solutions for business optimization and analytics, Subex is now leading the way by leveraging AI to create connected experiences in the business ecosystems of its customers. Through their HyperSense line of offerings, Subex empowers communications service providers and enterprise customers to make faster, better decisions by leveraging AI across the data value chain. Subex leverages its award-winning product portfolio in areas such as Business Assurance, Fraud Management, Partner Ecosystem Management and Enterprise Asset Management to help CSPs reduce risk, combat fraud, and thereby ensure profitability. Subex also offers scalable Managed Services and Business Consulting services. Subex has more than 300 installations across 100+ countries. 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.

Key Trends Shaping the Future of Telecommunications

• Rising Threat of Smishing, Phishing, Synthetic ID & ATO: Persistent, evolving fraud types directly targeting subscribers remain a critical challenge. Sophisticated smishing/phishing campaigns, the use of synthetic identities to fraudulently obtain services, and persistent account takeover attempts (via SIM swap, credential theft) cause direct financial loss and erode customer trust, demanding robust, real-time identity verification and communication channel monitoring solutions.

• AI/ML Permeation (Offense & Defense): AI/ML is becoming crucial for optimizing operations, enabling dynamic pricing, personalized offers, and predictive revenue assurance. However, fraudsters also increasingly use AI for sophisticated attacks. This necessitates equally advanced, AI-driven vendor solutions to protect revenues and detect complex threats in real-time, turning AI into both a vital tool and a vector to defend against.

• Telco Platform & API Economy Growth: As telcos expose network capabilities via APIs (CPaaS), new B2B platform revenues emerge. This demands meticulous tracking, rating, and assurance for API consumption and partner sharing agreements. These valuable API endpoints also become prime targets for abuse, requiring strong security and fraud controls to safeguard these growing income sources.

• Monetizing Complex 5G, IoT & Edge Services: Telcos are increasingly leveraging advanced 5G (Standalone, Slicing) and Edge capabilities for sophisticated Enterprise solutions and massive IoT deployments. This shift creates high-value, complex revenue streams requiring precise assurance for intricate SLAs, diverse usage metering (compute, latency, devices), and partner settlements, while simultaneously expanding the attack surface for novel fraud across network slices, edge nodes, and vast IoT device fleets.

• Heightened Focus on Trust, Security & Privacy: Driven by regulations and customer expectations, secure and privacy-compliant operations are paramount across the entire revenue lifecycle. This means fraud detection must be effective yet privacy-respecting, billing transparent and accurate to foster trust (impacting churn/CLV), and overall system security robust to prevent costly breaches, directly influencing financial health and brand reputation.

OUR PORTFOLIO

Subexs portfolio is a comprehensive suite of AI-powered solutions designed to empower Communications Service Providers (CSPs) and enterprise customers in the telecommunications industry. Leveraging our award-winning expertise in Business Assurance and Fraud Management, Subex has integrated AI through HyperSense to deliver cutting-edge solutions. These solutions help CSPs combat fraud, mitigate risks, and optimize their business operations, ultimately enhancing profitability. With a focus on creating connected experiences and leveraging AI across the data value chain, Subex enables its customers to make faster, better decisions, stay ahead of the curve, and thrive in the dynamic telecom landscape.

HyperSense Business Assurance

HyperSense Business Assurance, a product of over 25 years of industry experience, is the telecom industrys most comprehensive AI/ML-powered solution. It empowers CSPs to proactively mitigate revenue leakages, assess business impacts in near real-time, and navigate dynamic risk landscapes. By enabling collaboration and knowledge management, HyperSense enhances risk mitigation and decision-making. Additionally, it provides AI-driven predictive and prescriptive business insights for CXOs across various verticals, solidifying its position as a trusted solution among CSPs.

HyperSense Fraud Management

Built on 30 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 Subexs comprehensive fraud management system, operators can detect more than 350 types of fraud in all telecom environments.

This year, we are refocusing our mission: to empower every digital journey to be fearless, seamless, and resilient. This bold vision is being realized through our deep investments in Generative AI and the emerging power of Agentic AI.

Our AI Agents are grounded in the telecom domain, with a deep understanding of fraud, behavior patterns, and contextual reasoning. They dont just detect—they anticipate, adapt, and respond. As machines increasingly fuel fraudulent activity, we are building intelligent machines that can outthink, outmaneuver, and outpace them.

Enterprise Asset Management

Subexs Enterprise Asset Management provides CSPs with the necessary framework and controls to make the best use of their assets, thereby helping to 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.

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.

• Wholesale Billing and Routing

Get a holistic view of your entire range of partner relationships, covering services such as voice, SMS, and data- manage roaming, routing, content settlements, as well as MVNO and other B2B relationships with our wholesale billing solution. We drive efficiencies into your businesses via process automation to gain operational insight to support critical decision-making activities and enable you to achieve a competitive advantage. It covers Interconnect Billing & Settlement, Reconciliation and Dispute Management, OBR, Route Optimization, Contract Lifecycle Management.

• Enterprise Billing

Subex offers a next-gen end-to-end enterprise billing system that provides unmatched rating and billing capabilities for CSPs. Its 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.

Consulting & Advisory Services

With over 30 years of telecom experience and a proven track record of successful strategy implementation, Subex is the ideal consulting and assessment partner for global telecom operators. Our expertise extends from strategy definition to execution, utilizing tools compliant with renowned industry standards like TM Forum and CFCA. These services include benchmarking and enhancing Business Assurance processes, identifying and addressing gaps in RAFM processes and technology, proactive risk management in revenue streams, optimizing business processes, ensuring smooth system transitions, assessing profitability across the service and product portfolio, and formalizing control measures for accurate revenue reporting.

Managed Services

Subex Managed Services drive outcome and protect revenues by enhancing customer experience, optimizing cost, quality, time-to-market, and capabilities. Leveraging robust technology, we offer flexible engagement models tailored to service providers specific needs, delivering both strategic and tactical value, improving operational efficiency, service agility, and profitability. Service providers can choose from various options based on scope, BSS/OSS domains, and on-site support requirements.

Key Announcements in FY25

One more telco selects Subexs AI-First Fraud Management Solution for Advanced Fraud Defence

Subex has announced a multi-year deal with one of Europes leading telecom operators, to deploy its AI-first Fraud Management solution on HyperSense. The centralized system, based in Sweden, will support fraud management operations across Sweden, Latvia, Estonia, and Lithuania. Designed for scalability and future-readiness, the solution will help the telco to combat evolving threats while streamlining operations and reducing complexity. Leaders from both companies emphasized the strategic importance of this partnership in strengthening the telcos fraud defenses and enabling secure, rapid innovation across markets.

Tier 1 European Operator Extends Strategic Partnership with

Subex, Reinforcing Long-Term Confidence

Subex has announced a multi-year extension of its strategic partnership with a Tier-1 European telecom operator. This renewal reinforces a long-standing collaboration focused on driving digital transformation, operational efficiency, and customer experience. The operator, known for its innovation and infrastructure leadership, will continue leveraging Subexs solutions across Business Assurance, Fraud Management, and Partner Settlement to enhance revenue protection and partner ecosystem efficiency. The three-year extension reflects both companies shared vision of enabling secure, intelligent, and future-ready digital connectivity across the region.

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 so we can better understand their needs and we have opportunity to educate them on our offerings and skills.

RISKS AND CONCERNS

As our valued investor, we are certain you understand our business environment, prevailing economic conditions, geo- political circumstances, and other specific risks that may affect our future business decisions and financial performance. It is not possible to detail out every risk since we operate in a very competitive and rapidly changing global environment. In the fiscal year 2024-25, we continued to navigate through evolving risk landscapes. The year continued to present significant challenges amid an increasingly complex global environment. Geopolitical tensions, including the ongoing Ukraine-Russia conflict and the escalating crisis in the Middle East, have contributed to heightened global uncertainty and volatility. These events, coupled with persistent inflationary pressures, disruptions in global supply chains, and rising cybersecurity threats, have created a challenging operating landscape for businesses worldwide. These dynamic forces underscore the importance of our adaptive strategies and resilience in addressing emerging risks and ensuring sustained business performance. 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 Subexs business. We are providing some information on several risks which we are aware of and they are stated herein: (a) reduction in consumer and business purchasing; (b) consolidation of our customer base; (c) dependence on communications, service providers as our major customers; (d) security; (e) improper disclosure of personal data could result in liability and harm to our reputation; (f) technology changes and obsolescence may impact our business; (g) recruiting and retention of personnel is challenging; (h) adequately protecting our intellectual property may not be possible; (i) allegations of infringement of third-party intellectual property poses risks; (j) variability of our quarterly operating results makes comparisons difficult; (k) non-compliance with statutory obligations may result in fines and penalties; (l) non-compliance with environmental regulations may lead to fines and penalties; (m) foreign exchange fluctuations may lead to variability in our revenue; (n) SEZ related taxation benefits may be uncertain; (o) failure to fulfill contractual obligation may lead to claims; and (p) debt obligations. Below, we will discuss each of these risks in some more detail. There are, of course, additional risks faced by us, which are not specified here.

Reduction in Consumer and Business Purchasing

We depend on our customers – primarily 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.

Additionally, any conflicts has a significant impact on businesses around the world. The conflict may result in a slowdown of global economic activity and has disrupted trade flows and made it difficult for businesses to operate in the affected regions. This may lead to decreased revenue and profitability.

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 customers 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.

Improper disclosure of personal data could result in liability and harm our reputation

You are probably aware of the global trend towards more sensitivity regarding improper disclosure of personal data. This global trend has a number of impacts on us. There are additional laws and regulations in many jurisdictions. This not only leads to increased administrative costs of compliance and increased difficulties in doing business but violations of these laws and regulations involve higher and higher fines and penalties. At the same time, we are storing and processing increasingly large amounts of personal data which leads to increased potential exposure.

We take what we consider to be appropriate steps to provide for the security and protection of all data including personal data. But, despite these efforts, it is possible our practices may not prevent the improper disclosure of personal data. Improper disclosure of this information could harm our reputation, lead to legal exposure, lead to claims against us by customers including claims for indemnification or subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue.

It is important to note that our potential liability for customer financial damages associated with losses of personal data is generally not limited by limitation of liability provisions in customer contracts.

In addition to the risks associated with improper disclosure of personal data, organizations like Subex face increasing regulatory complexity due to the introduction of new data privacy and AI-related laws across multiple jurisdictions. A significant development in India is the enactment of the Digital Personal Data Protection (DPDP) Act, 2023, which imposes stringent obligations on the collection, processing, and transfer of personal data.

Similarly, the European General Data Protection Regulation (GDPR), which has been in force since May 2018, continues to set a global benchmark for data privacy compliance. Moreover, emerging regulations focused on Artificial Intelligence (AI), such as the European Unions AI Act and evolving frameworks in other regions, are introducing new layers of compliance requirements related to the ethical and transparent use of AI technologies. Ensuring compliance with these diverse and evolving regulatory frameworks is a significant undertaking for Subex. These efforts require substantial operational, legal, and technical resources and may divert management attention from other critical business activities. Non-compliance — even in the absence of any actual breach or improper disclosure of data — could expose Subex to substantial financial penalties, legal liabilities, and reputational damage.

Furthermore, heightened customer awareness and sensitivity around data privacy, security, and AI regulation compliance may lead to delays in contracting processes, increased scrutiny during sales cycles, or in some cases, jeopardize potential deals or the deployment of Subexs products and solutions.

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

Subexs 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, leveraging multiple social media platforms and events, channel partners, referral campaigns, campus placements, and internal job postings. We were successfully able to hire close to 99 Subexians under for vanilla, niche and strategic positions. We follow various interview models, such as virtual and in-person hiring processes with minimum vendor support. The following steps have been taken to improve the quality of hire:

• Training & upskilling the recruitment team

• Streamline recruitment process

• POFU (Post offer follow up)

• Train and deployment model

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.

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 and 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 through managed services.

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. Asset related to IT i.e Laptop, servers etc. are disposed to Authorized E-waste Vendor only.

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 the 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, 2025.

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").

Pursuant to the provisions of Section 134(5)(f) of the Companies Act, 2013, 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 Subexs Business objectives.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(Rs. in Lakhs)

Financial Highlights/Year Ending 31st March	2024-25		2023-24
	Consolidated	Standalone	Consolidated	Standalone
Revenue from operations	28,561	26,881	30,972	26,901
Total Income	29,256	27,100	31,645	27,052
Earnings Before Interest, Exceptional Items & Taxes (EBIT)	(2,877)	(2,442)	(3,125)	(3,906)
Profit/(Loss) before Exceptional items & tax	(2,404)	(5,001)	(2,715)	(5,004)
Exceptional Items	422	422	(14,795)	(14,795)
Profit/(Loss) before tax	(1,982)	(4,579)	(17,510)	(19,799)
Tax expense	1,162	399	1,663	1,526
Profit/ (Loss) after tax	(3,144)	(4,978)	(19,173)	(21,325)
Other comprehensive income	152	(12)	14	(1)
Equity dividend %	Nil	Nil	Nil	Nil
Share Capital	28,100	28,100	28,100	28,100
Reserves & Surplus	2,348	(11,613)	5,251	(6,712)
Net worth	30,448	16,487	33,351	21,388
Gross Property, Plant & equipment, right-of-use asset and other intangible assets	6,756	11,390	9,002	11,170
Net Property, Plant & equipment, right-of-use asset and other intangible assets	2,087	2,141	3,171	3,149
Total Assets	48,696	29,977	52,972	34,661
Key Financial Ratios (Consolidated)	2025	2024	Change
Return on Capital Employed (RoCE) %	(14.51%)	(13.25%)	10%
Return on Net Worth (RoNW)%	(9.86%)	(44.83%)	(78%)
Basic EPS (/Share)	(0.57)	(3.47)	(84%)
Debtors turnover (Days)	114	113	1%
Inventory turnover (Days)		Not Applicable
Interest coverage ratio	(6.8)	(65.97)	(90%)
Current ratio	2.12	2.39	(11%)
Debt equity ratio	0.06	0.08	(25%)
Operating Profit Margin (%)	2.26%	(3.05%)	(174%)
Net Profit Margin (%) or sector-specific equivalent ratios, as applicable details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof	(11.01%)	(61.90%)	(82%)

The return on net worth has increased mainly due to decrease in loss in the current year.

Key Financial Ratios (Standalone)	2025	2024	Change
Return on Capital Employed (RoCE) %	(27.79%)	(20.88%)	33%
Return on Net Worth (RoNW)%	(26.29%)	(66.88%)	(61%)
Basic EPS (/Share)	(0.90)	(3.86)	(153%)
Debtors turnover (Days)	89	125	(29%)
Inventory turnover (Days)		Not Applicable
Interest coverage ratio	(18.13)	(83.28)	(78%)
Current ratio	0.80	0.94	(15%)
Debt equity ratio	0.11	0.12	(8%)
Operating Profit Margin (%)	(9.13%)	(12.10%)	(25%)
Net Profit Margin (%) or sector-specific equivalent	(18.52%)	(79.27%)	(77%)
details of any change in Return on Net Worth as compared to the immediately	The return on net worth has increased mainly due to decrease
previous financial year along with a detailed explanation thereof	in loss in the current year.

COMMENTARY ON FINANCIAL STATEMENTS Share Capital

As on March 31, 2025, the issued, subscribed and paid-up share capital of the Company was Rs. 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 Rs. 5 (Rupees five only) each. The Company has not allotted equity shares in FY 2024-25.

Reserves and Surplus Securities premium

On standalone and consolidated basis, the balance of security premium as on March 31, 2025, amounted to Rs. 16,657 lakhs. There is no movement during the year 2024-25.

Retained Earnings

On a standalone basis, as on March 31, 2024, there was a deficit balance in retained earnings amounting Rs. 28,048 lakhs. As on March 31, 2025, the deficit balance has increased to Rs. 33,038 Lakhs.

On a consolidated basis, as on March 31, 2024, there was deficit in retained earnings amounting Rs. 2,647 lakhs. As on March 31, 2025, the deficit balance has increased to Rs. 5,802 Lakhs.

Exchange differences on translating the financial statements of a foreign operation

As on March 31,2024 the balance of Foreign Currency Translation Reserve of Rs. (10,661) Lakhs has been included in the Reserves and Surplus to bring it in line with Schedule III of the Act. As on March 31,2025 the balance of Foreign Currency Translation Reserve of Rs. (10,498) Lakhs has been included in the Reserves and Surplus to bring it in line with Schedule III of the Act.

Total equity attributable to equity holders of the Company

On a standalone basis, the total equity attributable to equity holders of the Company has decreased to Rs. 16,487 lakhs as on March 31, 2025 from Rs. 21,388 lakhs as on March 31, 2024. The movement was primarily on account of loss during the year.

On a consolidated basis, the total equity attributable to equity holders of the Company has decreased to Rs. 30,448 lakhs as on March 31, 2025 from Rs. 33,351 lakhs as on March 31, 2024. The movement was primarily on account of loss during the year.

Employee Stock Options Plan

Under the Subex Employees Stock Option Scheme-2018 Company has granted 1,50,000 options during the year ended March 31, 2025 as compared to 12,00,000 options during the year ended March 31, 2024. The net amount carried in respect of stock options outstanding on March 31, 2025 amounts to

315 Lakhs (Previous year: Rs. 343 Lakhs).

Property, plant, equipment, right-of-use asset and other intangible assets

During the year, the Company added Rs. 371 Lakhs on consolidated basis and Rs. 258 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 on March 31, 2025, the balance in right-of-use asset stands at Rs. 1,640 Lakhs on consolidated basis and Rs. 1,561 lakhs on standalone basis. Refer note 29 of consolidated financial statement and note 28 of standalone financial statement for further details.

During the year ended March 31 2024, based on the valuation assessment carried out by an external expert in respect of carrying value of intangibles and considering the significant investment required to keep the pace with the transformation in telecom sectors, the management made an impairment provision of Rs. 29 Lakhs towards intangibles in the standalone financial statement. The same is disclosed as an exceptional item in the financial results for the year ended March 31, 2024. The Companys net block of property, plant and equipment, right-of- use asset and other intangible assets was Rs. 2,087 Lakhs (Previous year Rs. 3,171 Lakhs) on consolidated basis and

2,141 Lakhs (Previous year Rs. 3,149 Lakhs) on standalone basis.

Goodwill

During the year ended March 31, 2025, based on an updated valuation assessment carried out by an external expert which is dependent on the achievement of future growth and profitability as considered in the valuation assessment, the management is confident that the carrying value of goodwill is appropriate as at March 31, 2025.

During the previous year ended March 31, 2024, based on the valuation assessment carried out by an external expert in respect of carrying value of goodwill and considering the significant investment required to keep the pace with the transformation in telecom sectors, the management made an impairment provision of Rs. 14,795 lakhs towards such goodwill. The same was disclosed as an exceptional item in the statement of consolidated financial results for the year ended March 31, 2024.

On a consolidated basis, carrying value of goodwill as on March 31, 2025 stood at Rs. 19,614 Lakhs (Previous year Rs. 19,614 Lakhs).

Investments

During the year ended March 31, 2025, based on an updated valuation assessment carried out by an external expert which is dependent on the achievement of future growth and profitability as considered in the valuation assessment, the management is confident that the carrying value of intangible assets and investments in subsidiaries is appropriate as at March 31, 2025.

During the year ended March 31, 2024, based on the valuation assessment carried out by an external expert in respect of carrying value of intangible assets and investments in subsidiaries and considering the significant investment required to keep the pace with the transformation in telecom sectors, the management made an impairment provision of

29 Lakhs and Rs. 14,766 Lakhs towards such intangible assets and investments in subsidiaries respectively. The same was disclosed as an exceptional item in the statement of standalone financial results for the year ended March 31, 2024.

Further, during the year 2024-25, the Company withdrew

2,700 lakhs from its investment in Subex Assurance LLP.

On a standalone basis, the total investment value as on March 31, 2025 and as on March 31, 2024 stood at Rs. 15,526 Lakhs and

17,616 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 on March 31, 2025, on a standalone basis trade receivable amounted to Rs. 5,533 lakhs (previous year

7,501 lakhs) net of provision for doubtful debts of Rs. 6,328 lakhs (previous year Rs. 5,013 lakhs).

On a consolidated basis trade receivable amounted to Rs. 7,762 lakhs (previous year Rs. 10,155 lakhs) net of provision for doubtful debts of Rs. 6,714 lakhs (previous year Rs. 4,604 lakhs).

Cash and Cash Equivalents

On a standalone basis, balance in current, EEFC, mutual funds and term deposit accounts stood at Rs. 3,412 lakhs as on March 31, 2025, as compared to Rs. 1,853 lakhs as on March 31, 2024. On a consolidated basis, balance in current, EEFC, mutual funds and term deposit accounts stood at Rs. 10,474 lakhs as on March 31, 2025, as compared to Rs. 10,393 lakhs as on March 31, 2024.

Borrowings

On a consolidated basis, short-term borrowings as on March 31, 2025 was Nil (Previous year Nil).

Income

The Company is engaged in the business of software products and related services, which are monitored as a single segment by the Chief Operating Decision Maker, accordingly these are considered to constitute one segment and hence the Company has not made any additional segment disclosures.

Telco Revenues stood Rs. 28,016 lakhs for FY 2024-25, which broadly remained flat, as compared to Rs. 27,999 lakhs for FY 2023-24. Non Telco Revenues stood Rs. 545 lakhs for FY 2024-25 as compared to Rs. 2,972 lakhs for FY 2023-24.

Geographically, the Company earns income from export of software products and related services to Americas, EMEA, India & Asia Pacific.

Other Income

Other income consists of income derived by the Company from interest on deposits from banks, Gain or loss on mutual funds and refund of research and development expense.

Expenditure

The employee benefits expenses decreased to Rs. 18,518 Lakhs compared to previous year from Rs. 20,900 Lakhs on consolidated basis. The decrease on consolidated basis was due to Headcount optimization and reduction in sales commission.

Operating Profits

During the year, on consolidated basis, the Company earned an Operating Profit/(loss) before interest, depreciation, Impairment allowance for trade receivables, tax and exceptional items of

645 Lakhs being 2.26% of total revenue as against Rs. (946) Lakhs at (3.05%) of total revenue during the previous year. This is mainly due to Telco Business margins improved to 4% in FY 2024-25 compared to (4%) in FY 2023-24.

On a standalone basis, the Company earned an Operating Profit/ (loss) before interest, depreciation, Impairment allowance for trade receivables, tax and exceptional items of Rs. (2,453) Lakhs being (9.13)% of total revenue as against Rs. (3,255) Lakhs at (12.10%) of total revenue.

Interest

During the year ended March 31, 2025, Company recognized interest expense totaling to Rs. 222 Lakhs (Previous year Rs. 263 Lakhs) on a consolidated basis and Rs. 194 lakhs (Previous year

237 Lakhs) on a standalone basis.

For the year ended March 31, 2025, expenditure includes interest on Lease liability recognized as per Ind AS 116, Leases amounting Rs. 196 Lakhs (Previous year Rs. 241 lakhs) and Rs. 186 Lakhs (Previous year Rs. 226 lakhs) on a consolidated and standalone basis respectively.

Depreciation

During the year ended March 31, 2025, depreciation expense amounted to Rs. 1,412 Lakhs (Previous year Rs. 1,559 Lakhs) on consolidated basis and Rs. 1,266 Lakhs (Previous year Rs. 1,350 Lakhs) on standalone basis.

FortheyearendedMarch31,2025,depreciationandamortization include depreciation on right of use asset recognized as per Ind AS 116- Leases, amounting Rs. 1,015 Lakhs (Previous year

1,006 lakhs) and Rs. 864 Lakhs (Previous year Rs. 825 lakhs) on a consolidated and standalone basis respectively.

Tax Expense

For the year ended March 31, 2025, there was a tax expense of

399 Lakhs (Previous year Rs. 1,526 Lakhs) on a standalone basis.

During the year ended March 31, 2025, tax expense include provision for foreign WHT of Rs. 263 Lakhs and MAT credit reversal of Rs. 136 Lakhs. On a consolidated basis, tax expense was Rs. 1,162 Lakhs (previous year Rs. 1,663 Lakhs). Tax expense for the year March 31, 2025 includes tax charge of Rs. 141 Lakhs (Previous year Rs. 75 Lakhs), deferred tax charge of Rs. 158 lakhs (Previous year Rs. 836 Lakhs), provision for foreign WHT of Rs. 863 Lakhs (Previous year Rs. 752 Lakhs).

Net Profit

On consolidated basis, the net loss of the Company amounted to Rs. 3,144 Lakhs as against a net loss of Rs. 19,173 Lakhs during the previous year. Total Comprehensive loss for the year is Rs. 2,992 Lakhs as compared to loss of Rs. 19,159 Lakhs during previous year. On standalone basis, the net loss of the Company amounted to

4,978 Lakhs as against net loss of Rs. 21,325 Lakhs during the previous year. Total Comprehensive loss for the year is Rs. 4,990 Lakhs as compared to total comprehensive loss of Rs. 21,326 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 Rs. (0.57) per share (Previous year Rs. (3.47) per share) on a consolidated basis and loss of Rs. (0.90) per share [Previous year Rs. (3.86) per share] on a standalone basis.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED Subexians

"In FY25, we experienced a period of stabilization thereby embracing a hybrid work model. We aimed to empower all Subexians to work efficiently and productively throughout the year.

Our primary goal was to enrich the Subexian journey across various stages, including recruitment, onboarding, performance management, learning and development, and offboarding. As an organization, we take pride in ensuring a positive and meaningful experience for every Subexian.

With our workforce dispersed globally, our main office hubs are located in Bengaluru, London, Denver, Dubai, and Singapore. As of March 31, 2025, we employed 731 full-time Subexians worldwide.

Human Resources operations are centralized at our corporate headquarters in Bengaluru, supported by regional HR teams aligned with our global HR strategy. This function plays a crucial role in driving talent development initiatives, supporting the Companys growth trajectory.

Our current HR policies remain in place, including hybrid working model, loans, sabbaticals, certifications, and team outings, all designed with the employees well-being in mind. Recognizing the prevalence of remote work as the new norm, we continue to adapt to evolving work trends."

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. Addressing this need, we frequently update the 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 with up-to-date information.

Key hires for the year

We have hired Mr. Ramu Akkili, Company Secretary, as one of our key hire in this FY.

Recruitment

The recruitment team demonstrated adaptability by conducting both virtual and in-person interviews to accommodate the hybrid work environment. To enhance the rigor and effectiveness of our recruitment efforts, we implemented measures aimed at quantifying the impact on workforce growth and quality. We continued to leverage established processes such as utilizing social media platforms and participating in industry events to stay abreast of industry trends. Furthermore, we successfully executed our campus recruitment and internship programs, recognizing the importance of bringing fresh perspectives and innovative thinking into Subex. These initiatives ensure that we continue to evolve and thrive in a dynamic business landscape.

Subexian Onboarding

Subex onboarding process remains highly regarded and valued, characterized by its robustness and comprehensiveness aimed at delivering an exceptional day-one experience. Emphasizing efficiency, all paperwork is completed online before the joining date, significantly reducing the time required for new joiners to settle into Subex.

Our onboarding efforts extend beyond the initial day, with quantifiable processes in place to guide new joiners through their 30-60-90 training plan. Regular polls and interventions are conducted to gauge employee engagement and ensure alignment with organizational goals. Following structured training sessions, new joiners receive on-the-job training to reinforce and apply the knowledge and skills acquired during their initial training period. This holistic approach ensures that new employees are well-equipped to contribute effectively to Subex from the outset.

Performance Management

Throughout this year, our emphasis remained on fostering and nurturing high performance to cultivate a culture of meritocracy. Collaborating closely with business leaders, the HR Business Partnering team spearheaded various high performance initiatives aimed at recognizing and rewarding exceptional performers. These programs involved offering enhanced roles and incentive benefits to individuals who consistently demonstrated outstanding performance. By championing meritocracy, we aim to not only motivate our employees but also drive sustained organizational success through the cultivation of top talent.

Learning & Growth

At Subex, Learning and Development (L&D) is a strategic priority designed to align talent capabilities with the evolving needs of the business. In our pursuit of fostering a high-performance culture, we have taken deliberate steps to consolidate all learning initiatives under a unified platform ensuring consistency, accessibility, and impact across the organization. Building on the strong foundation laid in previous years such as the implementation of a Skill and Competency Matrix, we continued to evolve our learning strategy with a more curated and targeted curriculum. A significant milestone this year was the integration of global digital learning platforms like LinkedIn Learning and Udemy into our L&D framework. These platforms empower Subexians to take charge of their development through on-demand, self-paced learning, spanning a wide array of topics from technical skills and business strategy to leadership and innovation. By enabling continuous, self-directed learning, we are actively nurturing a culture of agility, curiosity, and lifelong learning.

In addition, flagship initiatives such as the Mentorship and Manager Development Program saw enthusiastic participation from across the organization, including active involvement from the leadership team. These initiatives play a critical role in building future-ready leaders and equipping employees with the skills required to thrive in a dynamic and competitive landscape.

Through these concerted efforts, we continue to invest in our people, ensuring that learning remains a catalyst for individual growth and organizational excellence.

Rewards & Recognition

Reward and recognition are integral components of fostering a positive and motivated work environment. They serve as powerful tools for managers and leaders to acknowledge and appreciate the hard work and accomplishments of their employees. At Subex, we have recently revitalized our rewards and recognition program, incorporating additional features to streamline and enhance the process, thereby fostering a culture of appreciation and acknowledgment.

While implementing a recognition program incurs costs, the benefits are substantial. Some advantages include:

• Encourages the repetition of desired behaviors, aligning individuals with organizational goals.

• Enhances employee job satisfaction.

• Promotes team spirit and camaraderie.

• Improves retention rates: Employees who feel valued and recognized are more likely to remain with the organization.

• Reduces turnover rates, serving as a retention tool.

• Bolsters the employer brand, showcasing the organization as an attractive place to work.

• Complements HR processes, aiding in meeting learning and development goals.

In addition to ongoing initiatives we have introduced Subexian profiling platforms through our internal communications channels. These platforms celebrate and communicate the contributions of Subexians across the organization, further reinforcing our culture of recognition and appreciation.

Compensation

Employee retention is significantly influenced by compensation, and at Subex, we deeply understand its importance. We are dedicated to the growth and advancement of our employees and remain committed to investing in their well-being through a comprehensive approach.

When it comes to compensation, we take a holistic view at Subex, offering a balanced combination of fixed salary, variable salary, benefits, health and disability insurance, and employee assistance programs. Our aim is to ensure that our compensation packages are competitive and aligned with industry standards. To achieve this, we continually monitor industry trends and benchmark compensation, striving to maintain a fair and balanced compensation structure. Our process involves conducting thorough job matching, Compensation Benchmarking, data validation, and quality audits to determine the appropriate salary bands for Subexians. By adopting this meticulous approach, we aim to provide our employees with compensation packages that reflect their skills, contributions, and market value.