Financial Analyst Summary: SAB Events & Governance Now Media Limited Regulatory Response

Company Communication Overview

SAB Events & Governance Now Media Limited submitted a formal response to the National Stock Exchange of India Limited dated July 07, 2025, addressing a regulatory query regarding their financial results submission.

Date and Nature of Exchange Query

The communication references an email from NSE dated July 01, 2025, which raised a specific clarification regarding the company's financial results submission. The exchange noted that the 'Financial results submitted is not as per format prescribed by SEBI Balancing figures note missing'.

Company's Clarification on Compliance Issue

The company acknowledged that the mandatory note regarding balancing figures as required by SEBI's prescribed format was inadvertently omitted from their initial results submission. However, they clarified that the numerical effect of this note was already reflected in the financial statements. The company submitted revised financial results that incorporate the requisite note to ensure full compliance with SEBI formatting requirements.

Financial Results Performance

The audited financial results for the quarter and year ended March 31, 2025 show:

Quarter Ended March 31, 2025 (Audited):

  • Total Income: ₹57.01 lakhs
  • Total Expenditure: ₹87.18 lakhs
  • Loss before tax: ₹(30.17) lakhs
  • Net Loss after tax: ₹(29.96) lakhs
  • Basic EPS: ₹(0.29)

Year Ended March 31, 2025 (Audited):

  • Total Income: ₹214.81 lakhs
  • Total Expenditure: ₹288.62 lakhs
  • Loss before tax: ₹(73.81) lakhs
  • Net Loss after tax: ₹(73.61) lakhs
  • Basic EPS: ₹(0.70)

Balance Sheet Position as of March 31, 2025:

  • Total Assets: ₹124.32 lakhs
  • Total Equity: ₹(199.26) lakhs (negative)
  • Total Liabilities: ₹323.58 lakhs
  • Current Assets: ₹57.31 lakhs
  • Current Liabilities: ₹288.35 lakhs

Auditor Qualifications and Findings

The statutory auditors, P. Parikh & Associates, issued a qualified opinion with two significant findings:

1. Goodwill Impairment Concern: The company carries goodwill of ₹62.23 lakhs from previous demerger activities. Given the consistent losses (₹74.74 lakhs in FY25) and business challenges, auditors identified strong indicators of impairment but the company had not conducted impairment testing as required by IND-AS 36.

2. Non-provision of Interest Expense: The company had not provided for interest expenses amounting to approximately ₹23.93 lakhs for FY25 on outstanding loans, contrary to IND-AS 109 requirements. This understates expenses and current borrowings. No interest provision had been made on these loans from October 2022 to March 2024.

Going Concern Uncertainty

The auditors highlighted material uncertainty regarding the company's ability to continue as a going concern based on:

  • Current liabilities exceeding current assets by 5.03 times
  • Inability to service debt obligations
  • Substantial losses incurred in current and previous financial years
  • Negative total equity of ₹199.26 lakhs

Regulatory Compliance Reference

The company specifically references compliance with Regulation 30 of SEBI Listing Obligations and Disclosure Requirements through their submission of revised financial results that address the formatting deficiency identified by the exchange.

Management Response to Qualifications

Regarding the interest expense qualification, management stated that supporting documents don't indicate any interest/penal interest charges, hence no provision was made. For the goodwill impairment, management needs to conduct proper impairment testing.

Adjusted Financial Impact

If both auditor qualifications were fully accounted for, the adjusted figures would show:

  • Total Expenditure: ₹371.78 lakhs (vs. reported ₹288.62 lakhs)
  • Net Loss before tax: ₹159.97 lakhs (vs. reported ₹(73.81) lakhs)
  • EPS: ₹(1.53) (vs. reported ₹(0.70))
  • Total Assets: ₹62.09 lakhs (vs. reported ₹124.32 lakhs)
  • Net Worth: ₹285.42 lakhs negative (vs. reported ₹199.26 lakhs negative)

Topic Tags: Regulatory Response, Financial Results Clarification, Auditor Qualifications, Going Concern Uncertainty, SEBI Compliance, Interest Expense Provision, Goodwill Impairment