1. There are certain outstanding legal proceeding involving its Promoter and Promoter Entities which may adversely affect its business, financial condition and results of operations.
2. The company is in the business of distribution of FMCG products including that of tobacco products which are subject to Stringent health and safety laws and regulations as well as governed by stricter consumption policies, which may affect the company's business and financial position.
3. Its distribute products manufactured by third party manufacturers or suppliers. Hence, the company has to relies on third parties for procuring the products sold by the Company. If these manufacturers or suppliers are unable or unwilling to manufacture the products distributed by it, or if these organizations fail to comply with FDA or other applicable regulations or otherwise fail to meet its requirements, its business will be adversely affected.
4. The company has not entered into long-term contracts with its customers and typically operate on the basis of purchase orders, which could adversely impact its revenues and profitability.
5. Its operations are subject to high working capital requirements. Its inability to maintain an optimal level of working capital required for its business may impact the company operations adversely.
6. The company is engaged in distribution of FMCG products manufactured and / or marketed by FMCG Companies. Its Operating Cost comprises of Cost of goods sold, Employee cost and Other operating expenses, any fluctuations in Operating Cost may have impact on the Company's business as well as financial performance.
7. Its Promoter and Managing Director, B. Manjunath Mallya plays key role in its functioning and the company heavily relies on his knowledge and experience in operating its business and therefore, it is critical for its business that its Promoter remain associated with it. The company's success also depends on its key managerial personnel and its ability to attract and retain them. Any loss of its key person could adversely affect its business, operations and financial condition.
8. Substantial portion of its revenues has been dependent upon limited number of customers.
9. The company is dependent upon few suppliers for the material requirements of its business. Further, the company does not have definitive agreements or fixed terms of trade with most of its suppliers. Failure to successfully leverage its relationships with existing suppliers or to identify new suppliers could adversely affect its business operations.
10. Its business requires it to obtain and renew certain registrations, licenses and permits from government and regulatory authorities and the failure to obtain and renew them in a timely manner may adversely affect its business operations.