1. Its business has a significant proportion of the company domestic revenues dependent on contracts from the GoI and associated entities including defence public sector undertakings and government organizations involved in Defence. Reprioritization of requirements based on government priorities may have a material adverse effect on its business.
2. The company depends on a limited number of customers for a significant portion of its revenue. The loss of any of its major customers due to any adverse development or significant reduction in business from its major customers may adversely affect the company's business, financial condition, results of operations and future prospects.
3. A major portion of its revenue is from projects undertaken with Government entities or agencies, contracts of which usually contain terms that favour the clients. Such project / contracts are awarded on the basis of certain pre-qualification criteria and competitive selection process and are usually in a standard form, restricting its ability to negotiate the terms and conditions. Any change in the Government policies or focus and/or the company is unable to recover payments in a timely manner, would adversely affect its business and result of operation.
4. The company is subject to strict quality requirements, customer inspections and audits, and any failures to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact its reputation and the company's business and results of operations and future prospects.
5. Any failures to comply with the provisions of the contracts entered with its customers, especially the GoI Entities, could have an adverse effect on its business operations, financial conditions and results of the company's operations. Additionally, imposition of liquidated damages and invocation of performance bank guarantees / indemnity bonds by its customers could impact its results of operations and the company may faces potential liabilities from lawsuits and claims by customers in the future.
6. The company has a history of net losses in 2 out of the last 3 financial years and any losses or its inability to achieve profitability may have an adverse effect on its operations.
7. The company has significant working capital requirements. If its experience insufficient cash flows from the company operations or are unable to borrow to meet its working capital requirements, it may materially and adversely affect its business, cash flows and results of operations.
8. The amount of orders the company has received in the past, its current order book and the company's growth rate may not be indicative of the number of orders its will receive in the future.
9. If the company is unable to manage its growth effectively, its business, future financial performance and results of operations could be materially and adversely affected.
10. The company does not own its Registered Office from where the company operates.