SRS Limited (RHP) - Karvy

SRS Limited2. Certain Promoters and Promoter Group Companies were prohibited by SEBI from accessingand being associated with the capital markets in the past.One of the Promoter Group Companies, namely SRS Real Infrastructure Limited (earlier known asManu Finlease Limited) came with an IPO in the year 1995. After the public issue, Securities andExchange Board of India (SEBI), on the grounds of alleged malpractices in the public issue orderedinvestigations to be conducted to ascertain the truth of allegations. The Chairman of SEBI passed anorder dated November 29, 2002, whereby M/s. Manu Finlease Limited, Mr. Anil Kumar Jindal, Mr.J.K. Garg, Mr. P.K. Kapoor and Mrs. Ritu Garg were debarred from accessing and being associatedwith the capital market for a period of 5 years (i.e., upto November 28, 2007). In this regard, an appealwas filed against the said order before the Securities Appellate Tribunal (SAT) in 2003. The appeal wasdismissed by the SAT vide order dated October 27, 2003. Further, an appeal was filed before theSupreme Court. The Supreme Court vide its order dated April 18, 2006 reduced the period ofdebarment by approximately one year and one month (i.e. upto October 31, 2006). The relevantextracts of the said Supreme Court order are as follows:“Without expressing any view regarding the merits of the respective contentions of the respectiveparties as to the correctness of the order and leaving the questions of law open, the Court directs thatin the facts and circumstances of this case M/s. Manu Finlease Limited, Anil Kumar Jindal, J.K.Garg and P.K. Kapoor and Ritu Garg will not access or be associated with the capital market uptoOctober, 2006. The civil appeals are disposed of accordingly. No order as to costs.”31 stPresently, none of the Promoters or the Promoter group entities is debarred from accessing and beingassociated with the capital markets. For further details please refer “Other Regulatory and StatutoryDisclosures” on page 411 of this Red Herring Prospectus.3. In case of proposed public issue of one of the erstwhile Group Companies, the SEBI haswithdrawn its acknowledgement card in 1996.Bansla Finlease Limited (later known as S.B.S Finance limited) merged with SRS Finance Limited, agroup company of the issuer had received SEBI acknowledgement card no. 5/1116/96/NRO/2351 datedJune 29, 1996 in respect of its proposed public issue. However, SEBI subsequently withdrew the saidacknowledgement card stating that the Draft Prospectus filed by Bansla Finlease Limited did notclearly bring out the irregularities in the public issue of Manu Finlease Limited (now SRS RealInfrastructure Limited), a group company. Bansla Finlease Limited did not proceed with the publicissue subsequent to filing of Draft Prospectus with the Registrar of Companies, NCT of Delhi &Haryana.4. Contingent liability as on March 31, 2011As per the Restated Financial Statements, the Company has certain contingent liabilities which, ifdetermined against the Company in future, may impact its financial position adversely. Details of thecontingent liabilities of the Company as on March 31, 2011 are given in the following table:(Rs. in millions)Particulars As at March 31,2011Claims against Company not acknowledged as debt (excluding interest &5.16penalty, if any) for Legal Cases*Total Contingent Liabilities 5.16*For further details, see “Outstanding Litigation and Material Developments” on page 320.5. Of the proposed area of 1,800 sq. mts. for setting up of its jewellery manufacturing unit at NoidaSpecial Economic Zone, the Company proposes to apply shortly for the leasehold rights of landmeasuring 1,155 sq. mtr. Any delay or failure in obtaining the approval for remaining 1,155 sq.mtr. of land may adversely affect the business strategy of the Company.The Company has received approval for setting up its jewellery manufacturing unit on 645 sq. mts. atNoida Special Economic Zone and started commercial operations thereof. The Company proposes toapply shortly for the leasehold rights for land measuring 1,155 sq. mtr.xiv