1. In the past, one of its Promoters, C Mruthyunjaya Swamy, in the capacity as a secretary of the Public Works Department, Karnataka, has been subjected to enquiry by the Lokayukta Police, Bangalore ("Lokayukta") and initiation of certain legal proceedings by the Enforcement Directorate against him, which was subsequently disposed off. Although Mr. C Mruthyunjaya Swamy is currently retired from the services of Government of Karnataka, there is no assurance that legal proceedings will not be reopened by Lokayukta or any other relevant authority against him. Any further development in the above-mentioned legal proceedings or other authorities may adversely affect its business, results of operations and financial condition.
2. Certain untraceable persons have filed complaints with SEBI and other authorities against the
Company and its Promoter, C Mruthyunjaya Swamy, with allegations including indulging in corrupt
practices, misusing of authority by its Promoter while being in public service and influencing the
government officers in awarding the contracts to the Company, among others. There is no assurance
that the Company or SEBI or other authorities does not receive similar complaints in future. Any further development in similar complaints filed with SEBI or other authorities may adversely affect its business, results of operations and financial condition.
3. Its revenue contribution from government clients has increased from 18.25% in FY 2023 to 63.40% as
of FY 2024, and the company currently relies substantially on its government clients for the company revenues.
4. The Company relies heavily on the Government of Karnataka for its business. 83.98% of its revenue
from operations in six months period ended September 30, 2024, is from Government of Karnataka.
5. Delays in completion of its current and future projects and time overrun could have adverse effect on its business prospects and results of operations.
6. The company is significantly dependent on the procurement of projects. Its revenue and earnings are dependent upon award of new contracts which the company cannot directly control. If its fail to secure new contracts on a continual basis, the company operating results may be materially and adversely affected, and its may be unable to secure projects or maintain the company growth it may impact the company profitability and subsequently its revenues, and business operations.
7. Contracts awarded by the Government of Karnataka ("GoK') may provide GoK with the right to
terminate the contract for convenience, without any reason which may impact its business operations, profitability and results of operations.
8. There is an outstanding litigation against its Promoter, Sowbhagyamma. Any adverse decision in such proceedings may render it / them liable to liabilities / penalties and may adversely affect its business, results of operations and financial condition.
9. The immediate relatives of its promoters, who are deemed to be a part of the Promoter Group under
the SEBI ICDR Regulations have not provided consent, information or any confirmations or
undertakings pertaining to themselves which are required to be disclosed as part of the Promoter Group in this Red Herring Prospectus.
10. The company has experienced high attrition rate in respect of its Directors and Key Managerial Personnel. In particular, two Chief Financial Officers have resigned in the past one year. Its may not be able to retain such persons in future which could adversely affect the company business, results of operations, financial conditions and cash flows.