Subex Ltd has informed BSE that in the limited review report of the Company for the quarter ended December 31, 2007, the Auditors of the Company have made the following observations:

“As explained in Note 10 of the statement the Company has filled a Scheme of arrangement with the Honorable High Court of Karnataka for the transfer of it’s Services Business to Subex Technologies Ltd., a wholly owned subsidiary, with an Appointed Date of September 01, 2007 (the Scheme). On the Scheme being effective, the excess of the carrying value of the net assets of the Services business over its estimated Enterprise value. is proposed to be debited to the share Premium Account of the Company, rather than being written off to the Profit & Loss Account for the period. As per the valuation report provided to us, such excess is estimated to be Rs 398.6 million. Pending approval of the Scheme by the Honorable High Court, no adjustments have been made in the books of account.”