You are here » Home » Companies » Company Overview » SRS Ltd

SRS Ltd.

BSE: 533569 Sector: Consumer
NSE: SRSLTD ISIN Code: INE219H01039
BSE 00:00 | 18 Jul 0.46 -0.02
(-4.17%)
OPEN

0.46

HIGH

0.46

LOW

0.46

NSE 00:00 | 18 Jul 0.40 0
(0.00%)
OPEN

0.45

HIGH

0.45

LOW

0.40

OPEN 0.46
PREVIOUS CLOSE 0.48
VOLUME 14959
52-Week high 3.34
52-Week low 0.44
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 0.46
CLOSE 0.48
VOLUME 14959
52-Week high 3.34
52-Week low 0.44
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SRS Ltd. (SRSLTD) - Auditors Report

Company auditors report

TO THE MEMBERS OF SRS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SRS Limited("the Company") which comprise the Balance Sheet as at March 312017 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlow and the Statement of Changes in Equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash Flow andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safe guarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act and the Rules made there underincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalonefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditors' judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

Cash Credit and Demand Loan facilities from consortium of banks the aggregateoutstanding of which amounts to Rs. 878 crore as on 31st March 2017 are irregular andclassified as NPA mainly due to non-servicing of interest and related charges.

Our opinion is not modified in respect to above matter.

Basis for Qualified Opinion

1. Foreign Trade Receivables aggregating Rs. 30619 lacs (as on 31st March 2017) onaccount of sale during the FY 2015-16 and 2016-17 in UAE (including Rs. 13899 lacs out ofsale to parties from inventories sent through NSEZ unit of the Company located in India toUAE Branch through Branch transfer) are unsecured i.e. not backed up by any security.Out of aforesaid Trade Receivables the Company has recovered Rs. 9315 lacs subsequent to31st March 2017 (refer Note 3.43 to financial statements).

We are unable to comment on the recoverability and any further impact on the Company'sfinancials forthe year ended 31st March 2017.

2. Deposit Repayment Reserve Account for the Fixed deposits at the close of FY 2016-17required under Section 73(2)(c) of the Companies Act 2013 equal to 15% of the depositsmaturing in the year & year following were found short by Rs.855 lacs (short amount ason 31st March 2017).We are unable to comment on the financial implications in respect ofthe same.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion Paragraph the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2017 and its profit/ loss (including othercomprehensive income) its cash Flow and the changes in equity for the year ended on thatdate.

Other Matters

a) In terms of the Joint Responsibility Statement (as per Standards on Auditing-299)forming part of the Engagement Letter:

i. Audit of Retail Segment Cinema Segment and part of un-allocable segment whosefinancial statements reflect total assets of Rs. 13044 lacs as at 31st March 2017 andtotal revenue of Rs. 31513 lacs for the year ended on that date has been carried out byM/s SVP & Associates; and

ii. Audit of Gold & Jewellery Segment Corporate & Other Segment and part ofun-allocable segment whose financial statement reflect total assets of Rs. 156024 lacs asat 31st March 2017 and total revenue of Rs. 68575 lacs for the year ended on that datehas been carried out by M/s Oswal Sunil & Co.

Refer segment information in the statement of standalone audited results for the yearended 31st March 2017.

b) The financial information of the Company for the year ended March 312016 and thetransition date opening balance sheet as at April 12015 included in these standalonefinancial statements are based on the previously issued statutory financial statementsfor the years ended March 31 2016 and March 31 2015 prepared in accordance with theCompanies (Accounting Standards) Rules 2006 (as amended) which were not audited by us onwhich we received a modified opinion and an unmodified opinion respectively dated June 82016 and May 22 2015 respectively from other Auditors. The adjustments to thosefinancial statements for the differences in accounting principles adopted by the Companyon transition to Indian Accounting Standards have been audited by us.

Our opinion is not modified in respect to above matters.

Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section(11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure A a statement on the matters specified in paragraphs 3 and4 of the Order.

(ii) Subject to matters stated in 'Basis for Qualified Opinion as required by Section143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Cash Flow and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312017 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B.

(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March312017 on its financial position in its standalone financial statements.

ii. The Company has made provision as at March 312017as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March312017.

iv. The Company has provided disclosures in its financial statements as to holdings aswell as dealings in Specified Bank Notes during the period from 8th November 2016 to 30thDecember 2016. However we are unable to obtain sufficient and appropriate audit evidenceto report on whether the disclosures are in accordance with books of account and recordsmaintained by the Company and as produced to us by the Management - Refer Note 3.42 tofinancial statements.

For SVP & Associates For Oswal Sunil & Company
(Chartered Accountants) (Chartered Accountants)
Firm Regn. No. 003838N Firm Regn. No. 016520N

 

(CA Pankaj Kumar) (CA Naresh Kumar)
Partner Partner
M. No. 091822 M. No. 085238
Place: Faridabad Place: Faridabad
Date: 30th May 2017 Date: 30th May 2017

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

(As referred in paragraph (1) 'Report on Other Legal and Regulatory Requirements 'ofour report to the members of SRS Limited on the accounts for the year ended March 312017)

(i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) As explained to us the company has a regular program of physical verification ofits fixed assets by which fixed assets are verified in a phased manner over a period ofthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. In accordance with the program fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties heldare in the name of the Company.

(ii) The inventory has been physically verified by the management at reasonableintervals during the year. As far as we could ascertain and according to the informationand explanations given to us no material discrepancies were noticed between the physicalstock and the book records.

(iii) The Company has granted unsecured loan to one company covered in the registermaintained under Section 189 of the Companies Act 2013 ('the Act').

(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted were not prima facie prejudicial to the interest of the Company.

(b) The principal and interest amount is repayable as per stipulations.

(c) Since the principal & interest amount is repayable as per stipulationsprovisions of clause (3)(iii)(c) of the order are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Act withrespect tothe loans and investments made.

(v) In our opinion and according to the information and explanations given to usthe Company has not complied with the directives issued by the Reserve Bank of India andthe provisions of Section 73 to 76 or any other relevant provisions of the Companies Act2013 and the rules framed there under with regard to Deposits accepted from the public inrespect of maintenance of liquid assets (refer para 2 of 'Basis for Qualified Opinion'forming part of the main report) and in respect of provisions regarding acceptancerepayment of deposits and payment of interest.

As per information and explanations given to us with regard to Deposits accepted fromthe public no order has been passed by Reserve Bank of India or any Tribunal other thanNational Company Law Tribunal (NCLT). In respect of orders issued by Courts as perinformation and explanations given to us the orders were in the course of compliance.However the Order/s for extension in repayment of deposits and payment of interest issuedby NCLT was/were not fully complied with. The amounts involved and impact thereof are notascertainable in view of the Order/s providing for staggered payments over the periodending June 2017/ Dec 2017.

(vi) According to information and explanations given to us the Central Governmenthas not prescribed maintenance of cost records under sub-section (1) of section 148 of theCompanies Act 2013. Therefore provisions of Clause 3 (vi) ofthe order are not applicableto the company.

(vii) (a) The Company has been generally regular in depositing with appropriateauthorities undisputed statutory dues including

Provident Fund Employees' State Insurance Income Tax Sales Tax Service Tax Duty ofCustoms Duty of Excise Value Added Tax Cess and any other material statutory duesapplicable to it though there has been a slight delay in a few cases. According toinformation and explanations given to usno undisputed amounts payable in respect ofProvident Fund Employees' State Insurance Income Tax Sales TaxService Tax Duty ofCustoms Duty of Excise Value Added Tax and Cess were in arrears as at March 312017 fora period of more than six months from the date they became payable.

Name of the statute Nature of dues Amount payable (

Rs. in Lacs)

Period to which the amount relates
Income Tax Act 1961 Income Tax 153.39 AY 2016-17

(b) According to the information and explanations given tous there are no dues ofIncome Tax Sales Tax Service TaxDuty of Customs Duty of Excise & Value Added Taxwhich have not been deposited on account of any dispute except as given below:

Name of the statute Nature of dues Demand amount (

Rs. in Lacs)

Amount paid (

Rs. in Lacs)

Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 636.33 174 AY 2012-13 CIT (Appeals)
Faridabad
Income Tax Act 1961 Income Tax 614.63 AY 2013-14 CIT (Appeals)
Faridabad

(viii) In our opinion and according to the information & explanations given tous the company has not defaulted in repayment of loan or borrowings to any banks andfinancial institutions as at balance sheet date except in the below mentioned cases:

Interest amount:

Name of the Lender Nature of Borrowings Amount of default as at Balance Sheet date (

Rs. in Lacs)

Period of default
State Bank of India Interest on Cash Credits and Demand Loan 4436.39 >3 months
Bank of India Interest on Cash Credits 1550.91 >3 months
Union Bank of India Interest on Cash Credits 1084.16 >3 months
Oriental Bank of Commerce Interest on Cash Credits 423.07 >3 months
Syndicate Bank Interest on Cash Credits 124.29 >3 months

Principal amount:

Name of the Lender Nature of Borrowings Amount of default as at Balance Sheet date (

Rs. in Lacs)

Period of default
State Bank of India Cash Credits and Working Capital Demand Loan 46636.94 >3 months
Bank of India Cash Credits 17114.10 >3 months
Union Bank of India Cash Credits 9708.40 >3 months
Oriental Bank of Commerce Cash Credits 5217.22 >3 months
Syndicate Bank Cash Credits 993.30 >3 months

The Company does not have any debentures loans or borrowings from the government.

(ix) The Company has not raised money by way of initial public offer or furtherpublic offer (including debt instruments)during the year. The term loans have been appliedfor the purposes for which they were raised.

(x) Based upon the audit procedure performed for the purpose of reporting the trueand fair view and on the basis of the information and explanations given by themanagement were port that no fraud on or by the company has been noticed or reportedduring the course of our audit.

(xi) According to the information and explanations given to usand based on ourexamination of the records of the Companythe Company has paid/provided formanagerialremuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act.

(xii) In our opinion and according to the information and explanations given to usthe Company is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) As per the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with Section 177 and 188 of the Companies Act 2013 wherever applicable andthe details have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to usand based on ourexamination of the records of the Companythe Company has not entered into non-cashtransactionswith directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under Section45-IA of theReserve Bank of India Act 1934.

For SVP & Associates For Oswal Sunil & Company
(Chartered Accountants) (Chartered Accountants)
Firm Regn. No. 003838N Firm Regn. No. 016520N
(CA Pankaj Kumar) (CA Naresh Kumar)
Partner Partner
M. No. 091822 M. No. 085238
Place: Faridabad Place: Faridabad
Date: 30th May 2017 Date: 30th May 2017

ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF SRS LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SRS Limited("the Company") as of March 312017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company' sinternal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10)of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding there liability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified as at March 31 2017:

The Company's UAE Branch did not have an appropriate internal control system for creditappraisal and ultimate collection from the trade debtors.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reportingsuch that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.In our opinion except for the possibleeffects of the material weakness described above on the achievement of the objectives ofthe control criteria the Company has maintained in all material respects adequateinternal financial controls over financial reporting and such internal financial controlsover financial reporting were operating effectively as of March 312017 based on'theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India! We have considered the material weakness identified and reportedabove in determining the nature timing and extent of audit tests applied in our audit ofthe March 312017 financial statements of the Company and the possible impact due toaforesaid material weakness has been appropriately reflected in our qualified opinion onthe standalone financial statements of the Company in respect of the same.

For SVP & Associates For Oswal Sunil & Company
(Chartered Accountants) (Chartered Accountants)
Firm Regn. No. 003838N Firm Regn. No. 016520N
(CA Pankaj Kumar) (CA Naresh Kumar)
Partner Partner
M. No. 091822 M. No. 085238
Place: Faridabad Place: Faridabad
Date: 30th May 2017 Date: 30th May 2017