Due to complete closure of business amid nationwide lockdown since March, there are no cash inflows generated for last three months. The company has to meet fixed expenses in the form of Rent, Common Area Maintenance, Electricity of Leased Premises, salaries of staff, statutory dues and such other expenses to keep the company as going concern. The liabilities against such expenses continue to accumulate.
The company rues that there is lot of uncertainty regarding opening of cinemas considering the day to day rising cases of Covid-19.
“There is no clear date as to when the cinemas shall resume the operations. Even though the cinemas are allowed to start their operations, it will take long time for the cinema business to get back normalcy at same level as that during pre-Covid. This shall have an impact on the future earnings as they shall nut he same as the revenue generated prior to Covid,” company said.
SRS Limited has not been able to pay complete salaries for the lockdown period due to liquidity crisis.
“The overall financial impact of the closure of business amid Covid-19 is material and shall spread across the FY2019-2020 and 2020-21 and is not immediately assessable,” it added.
SRS Limited is engaged into the business of exhibition of Cinemas. The Cinemas has been under a mandatory closure since Mid of March 2020 as per the orders of the various State Governments for containment of the Corona Virus (Covid-19).
Oowing to certain relaxation by the State government the company after taking the required approval has opened the back office in Faridabad on May 17, 2020, to carry out the administration work with the limited permitted staff. The Cinema business and Mall, however, are still closed and shall be opened after the orders from the government.