1. The company bid for projects funded by the Central and State Governments and derive its revenues from the work orders awarded to it. Any reduction in budgetary allocation to its industry sector may affect the number of projects that the government
authorities/bodies may plan to develop in a particular period. Its business is directly and significantly dependent on projects awarded by them.
2. Its projects are awarded through the competitive bidding process by government authorities/bodies. The company may not be able to qualify for, compete and win future projects, which could adversely affect its business and results of operations.
3. The company relies on its in-house designing and engineering team for project execution. Loss of employee(s) may have an adverse effect on the execution of its projects.
4. Its business is working capital intensive. If the company experience insufficient cash flows to meet required payments on its working capital requirements, there may be an adverse effect on the results of its operations.
5. Its Order Book may not be representative of the company future results and its actual income may be significantly less than the estimates reflected in its Order Book, which could adversely affect the company's results of operations.
6. Delays in the completion of current and future projects could lead to termination of engineering, procurement and construction ("EPC") agreements or cost overruns, which could have an adverse effect on its cash flows, business, results of operations and financial condition.
7. Projects sub-contracted or undertaken through a joint venture may be delayed on account of the performance of the joint venture partner, principal or sub-contractor, resulting in delayed payments.
8. Increase in the prices of raw materials and labour could have an adverse effect on its business, results of operations and financial condition.
9. Its actual cost in executing Projects may vary substantially from the assumptions underlying its bid or estimates. Its may be unable to recover all or some of the additional costs and expenses, which may have a material adverse effect on its results of operations, cash flows and financial condition.
10. The Company has not adequately complied with some of the provisions of Companies Act, 2013. There are certain discrepancies/errors noticed in some of its corporate records relating to forms filed with the Registrar of Companies and other provisions of Companies Act, 2013. Any penalty or action taken by any regulatory authorities in future, for noncompliance with provisions of corporate and other law could impact the reputation and financial position of the Company to that extent.