4.12 Provision, Contingent Liabilities & Contingent Assets
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When
a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.
Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an
outflow of resources embodying economic benefit is remote.
Contingent assets are not recognised in the financial statements. Contingent assets are disclosed in the Standalone
Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
Note:
1. All above investments are in India itself.
*In accordance with the terms of issue of Nil (PY:1,34,336) Unsecured Zero Coupon Compulsorily Convertible Debentures
(CCDs) of Rs. 1000/- each including any amendments thereof from time to time the issuer Company has converted Nil
(PY:1,34,336) each on June 30, 2023 into Nil (PY: 1,34,33,600) equity shares of face value of Rs. 10/- each at the expiry of
its tenure in the ratio of 1:100 i.e. 100 Equity shares of Rs. 10/- each for each CCD of Rs. 1000/- each.
** In accordance with the terms of issue of 3,84,500 (PY:Nil) Unsecured Zero Coupon Compulsorily Convertible Debentures
(CCDs) of Rs. 100/- each including any amendments thereof from time to time the issuer Company has converted 3,84,500
(PY: Nil) each on December 31, 2024 into 38,45,000 (PY: Nil) equity shares of face value of Rs. 10/- each at the expiry of
its tenure in the ratio of 1:10 i.e. 10 Equity shares of Rs. 10/- each for each CCD of Rs. 100/- each.
Note:
(a) The Company incurred Rs. 0.24 Lakhs for the year ended March 31, 2025 (March 31, 2024: Rs. Nil) towards
expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is Rs. 18.97
lakhs for the year ended March 31, 2025 (March 31, 2024: Rs. 17.84 lakhs), including cash outflow of short-term
leases and leases of low-value assets. Interest on lease liabilities for the year ended March 31,2025 is Rs. 3.69 lakhs
(March 31,2024: Rs. 4.67 lakhs).
(b) Lease contracts entered by the Company majorly pertains for buildings taken on lease to conduct its business in the
ordinary course.
(c) The weighted average incremental borrowing rate applied to lease liabilities is 7.10%
(d) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are
sufficient to meet the obligations related to lease liabilities as and when they fall due.
28 Critical accounting estimates and judgments
The estimates and judgements used in the preparation of the said standalone financial statements are continuously
evaluated by the Company, and are based on historical experience and various other assumptions and factors
(including expectations of future events), that the Company believes to be reasonable under the existing circumstances.
The said estimates and judgements are based on the facts and events, that existed as at the reporting date, or that
occurred after that date but provide additional evidence about conditions existing as at the reporting date.
Although the Company regularly assesses these estimates, actual results could differ materially from these estimates
- even if the assumptions under-lying such estimates were reasonable when made, if these results differ from
historical experience or other assumptions do not turn out to be substantially accurate. The changes in estimates are
recognised in the standalone financial statements in the period in which they become known.
The areas involving critical estimates or judgments are:
Note:
1. During the year the Parent Company has given Financial Guarantee of Rs. 9,000 Lakhs (PY: 9,000 Lakhs) on
behalf of nexG Devices Pvt. Ltd. to HDFC Bank and the same has been fair valued and recognized as deferred
financial guarantee obligation.
2. During the year the Parent Company has given Financial Guarantee of Rs. 2,200 Lakhs (PY: 2,200 Lakhs) on
behalf of nexG Devices Pvt. Ltd. to Indusind Bank and the same has been fair valued and recognized as
deferred financial guarantee obligation.
3. During the year the Parent Company has given Financial Guarantee of Rs. 4,000 Lakhs (PY: Rs. 4,000 Lakhs)
on behalf of nexG Devices Pvt. Ltd. to Yes Bank and the same has been fair valued and recognized as deferred
financial guarantee obligation.
4. During the year the Parent Company has given Financial Guarantee of Rs. 8,000 Lakhs (PY: Rs. 5,000) on
behalf of nexG Devices Pvt. Ltd. to Kotak Mahindra Bank and the same has been fair valued and recognized
as deferred financial guarantee obligation.
32. In the opinion of the Board and of the best of their knowledge and belief, the value of realization in respect of the
Current Assets, Loans and advances in the ordinary course of business would not be less than the amount at which
they are stated in the Balance Sheet and the provision for all known and determined liabilities is adequate and not in
excess of amount reasonably required.
33. Segmental Reporting
(a) Primary Segment Information
The Board of Directors are the Company's Chief Operating Decision Maker (CODM) i.e. Board of Directors within the
meaning of Ind AS 108 'Operating Segments'. The Company is mainly engaged in the business of digital media
content and dealing in related activities in media and entertainment industry, etc. which is reviewed by the CODM as
single primary segment. CODM examines the Company's performance, reviews internal management reports,
allocates resources based on analysis of various performance indicator of the Company as a single unit. Therefore,
there is no reportable segment for the Company as per the requirements of Ind AS 108 "Operating Segment".
(b) Secondary segment information
Secondary segment reporting is on the basis of geographical location of the customers. Considering that the Company
caters mainly to the needs of Indian market and the export turnover is NIL for the year ended March 31, 2025
(PY: NIL), there are no reportable geographical segments.
37 The Company is registered with Reserve Bank of India (RBI) vide registration no. 13.01287 dated August 13, 1999
as a NBFC Company. The Company had applied for deregistration as NBFC, however, as per the extant guidelines
of RBI, the Company shall continue as NBFC till the time it reduces its investment below 50% of total assets to qualify
for deregistration and would continue to do compliances of NBFC as applicable. Interest Income for the year
considered as other income being not from the operation of the Company.
38 Financial Risk Management Objectives and Policies
The Company's principal financial liabilities comprise trade and other payables, lease liabilities and financial guarantee
contracts. The main purpose of these financial liabilities is to finance the Company's operations and to provide
guarantees to support its subsidiaries operations. The Company's principal financial assets include cash and cash
equivalents that derive directly from its operations.
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The
Company is exposed to market risk, credit risk and liquidity risk.
The Company's business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit
risk. The Company's senior management has the overall responsibility for the establishment and oversight of the
Company's risk management framework. The Company's risk management policies are established to identify and
analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence
to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and
the Company's activities.
Management of Liquidity Risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The
Company's approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due
without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.
Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its financing activities (primarily trade
receivables) and from its financing activities, including deposits with banks and other financial instruments.
Trade Receivables
Customer credit risk is managed by each business unit subject to the Company established policy, procedures and
control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive
credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer
receivables are regularly monitored. As at March 31, 2025, the Company does not have any outstanding customers.
Financial Instruments and Cash Deposits
Credit risk from balances with banks and financial institutions is managed by the management in accordance with the
Company's policy. Counterparty credit limits are reviewed by the management on an annual basis, and may be
updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial
loss through counterparty's potential failure to make payments.
The Company's maximum exposure to credit risk for the components of the balance sheet at March 31, 2025 and
March 31, 2024 is the carrying amounts as illustrated in Note 5.
Management has assessed that Cash and cash equivalents, Other balances with banks, Loans, Trade receivables,
Other financial assets, Lease liabilities, Trade payables and Other financial liabilities carried at amortized cost (Level
3) approximate their carrying amounts largely due to the short-term maturities of these instruments.
B Fair value hierarchy :
The financial instruments are categorized into three levels based on the inputs used to arrive at fair value
measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Valuation Methodology
All financial instruments are initially recognized and subsequently re-measured at fair value as described below :
(a) Trade receivables, cash and cash equivalents, trade payables and other financial assets and liabilities
approximate the carrying value due to their short term maturities. Fair value is included at the amount at which
the instrument could be exchanged in a current transaction between willing parties, other than in forced or
liquidation sale.
(b) The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. The Company uses its judgement to select a variety of methods and make assumptions that are
mainly based on market conditions existing at the end of each reporting period.
(c) Fair value of the remaining financial instruments is determined using discounted cash flow analysis, unless the
carrying value is considered to approximate to fair value.
Notes:
(i) The disclosures as above shall be based on the sector-wise and industry-wise bank credit (SIBC) return
submitted by scheduled commercial banks to the Reserve Bank and published by the Reserve Bank as
'Sectoral Deployment of Bank Credit'.
(ii) In the disclosures as above, if within a sector, exposure to a specific sub- sector/industry is more than 10
percent of Tier 1 capital of an NBFC, the same shall be disclosed separately within that sector. Further, within a
sector, if exposure to specific sub-sector/industry is less than 10 percent of Tier 1 capital, such exposures
shall be clubbed and disclosed as “Others” within that sector.
1.4. Intra-group exposures
The Company does not have any intra-group loan exposure as on March 31, 2025 (as on March 31, 2024 Nil)
1.5. Unhedged foreign currency exposure
The Company does not have any foreign currency exposureas on March 31,2025 (as on March 31, 2024 Nil)
The Company is regsitered with Reserve Bank of India (RBI) as a Non-deposit accepting Non-Banking Finance
Company (NBFC), hence these ratios are not applicable to the Company (also refer to note no. 37).
47. Other Statutory Information
i) The Company do not have any immovable property. In respect of land and building taken on lease disclosed in the
standalone financial statements as Right of Use Assets, the lease agreements are duly executed in favour of the
Company.
ii) The Company doesn't have any intangible assets. The Company has not revalued its property, plant and equipment
(including right-of-use assets) during the current or previous year.
iii) The Company does not have any investment in properties.
iv) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
v) The Company has not advanced any loans or advances in the nature of loans to specified persons viz. promoters,
directors, KMPs, related parties; which are repayable on demand or where the agreement does not specify any terms
or period of repayment.
vi) The Company has not raised any borrowings from Banks during the year.
vii) The Company don't have borrowings from banks or financial institutions on the basis of security of current assets.
viii) The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as
a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when
standalone financial statements are approved.
ix) The Company does not have any transactions with struck-off companies.
x) The Company does not have any transaction which is not recorded in the books of accounts but has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or
survey or any other relevant provisions of the Income Tax Act, 1961).
xi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
xii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies
Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
xiii) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies
(ROC) beyond the statutory period.
xiv) The Company has not filed any scheme of arrangements in terms of section 230 to 237 of the Companies act, 2013
during the year
xv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
xvi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
48. (i) Previous year's figures have been regrouped and reclassified wherever necessary to confirm current year
classification/presentation.
(ii) Figures represnting 0.00 lakhs are below R 500
As per our report of even date For and on behalf of the Board of Directors
For SGN & C°. Sunil Batra Sandeep Jairath
Chartered Accountants (Director) Whole-time Director cum
Firm Registration IMo. 134565W Din: 02188254 Chief Financial Officer
Mohan Kheria M M e . DIN: 05300460
(Partner) Mohd Sag'r
Membership No. 543059 Company Secretary
Membership No. F11061
Place: Gurugram Place: Gurugram
Date: May 29, 2025 Date: May 29, 2025
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