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The company has certain outstanding litigation against it, an adverse outcome of which may adversely affect its business, reputation and results of operations.
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The company is required to furnish bank guarantees as part of its business. The company`s inability to arrange such guarantees or the invocation of such guarantees may adversely affect its cash flows and financial condition.
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The company derived majority of its revenue from a limited number of clients and the loss of one or more of them could have a material adverse effect on its business, financial condition and results of operations.
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Its current order book may not necessarily translate into future income in its entirety. Some of its current orders may be modified, cancelled, delayed, put on hold or not fully paid for by the company customers, which could adversely affect its business, financial condition, results of operations and future prospects.
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The company depends on various third parties, including its contractors and independent service providers, over whom its may have no control.
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Delays in completion of its current and future projects and time overrun could have adverse effect on the company`s business prospects and results of operations.
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Its revenue and earnings are dependent upon award of new contracts which the company cannot directly control.
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The company is dependent on third parties for the supply of raw materials, services and finished goods and any inability on the part of these third parties to supply such raw materials, services or finished goods could have a material adverse effect on its business, financial condition and results of operations.
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The company generates its major portion of sales from the company operations in certain geographical regions both Domestic and Export
(Including Special Economic Zone). Any adverse developments affecting its operations in these regions could have an adverse impact on its revenue and results of operations.
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In its EPC business, if the company is unable to accurately estimate the overall risks of, income from, or costs of its contracts, or if the company is unable to agree to the pricing of work done pursuant to change orders, its may earn lower than anticipated profits or incur losses on the contracts.
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The restated financial statements have been provided by peer reviewed chartered accountants who is not statutory auditor of the Company.
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Its projects are subject to construction, financing and operational risks.
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Water treatment or reuse and zero liquid discharge technology is subject to rapid change. These changes may affect the demand for its services. If the company is unable to keep abreast of the technological changes and new introductions its business, results of operations and financial condition may be adversely affected.
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The company derives significant portion of its revenue from one of its services; i.e. Effluent Treatment Plant. The company profitability, business and commercial success is significantly dependent on its ability to successfully anticipate the industry and customer requirements and utilize its resources to enhance and provide the company services that efficiently satisfy and meet its client`s specific requirements in a timely manner. Any failure on its part to do so, may have an impact on the reputation of its services, which could have an adverse effect on its revenue, reputation, financial conditions, results of operations and cash flows.
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Changes in government policies related to the environment and water treatment, in particular, may adversely affect its business, financial condition and results of operations.
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Too much concentration of its Business is from sale to government which may impact the company`s Business.
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Its success largely depends upon the knowledge and experience of the company Promoters, Directors, its Key Managerial Personnel and Senior Management as well as the company ability to attract and retain personnel with technical expertise. Any loss of its Promoter, Directors, Key Managerial Personnel, Senior Management or its ability to attract and retain them and other personnel with technical expertise could adversely affect its business, financial condition and results of operations.
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Its business is substantially dependent on the company design and engineering teams to accurately carryout the pre bidding engineering studies for potential projects. Any deviation during the execution of the project as compared to its pre-bid estimates could have a material adverse effect on its cashflows, results of operations and financial condition.
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The Company requires significant amounts of working capital for a continued growth. Its inability to meet the company working capital requirements may have an adverse effect on its results of operations.
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The Company is yet to place orders for 100% of the purchase of office equipment for its proposed object, as specified in the Objects of the Offer. Any delay in placing orders, procurement of the same may delay its implementation schedule and may also lead to increase in price of these equipment, further affecting its revenue and profitability.
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The company relies on effective and efficient project management. Any adverse change in its project management procedures could affect the company`s ability to complete projects on a timely basis or at all, which may cause it to incur liquidated damages for time overruns pursuant to its contracts.
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Bidding for a tender involves various management activities such as detailed project study, cost estimations. Inability to accurately measure the cost may lead to bid amount having margin lower than hurdle rate margin i.e. the expected rate of return.
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Its actual cost in executing WWTPs (Water and Waste Treatment Plants) may vary substantially from the assumptions underlying its bid or estimates. The company 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.
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Its operations are subject to hazards and other risks and could expose it to material liabilities, loss in revenues and increased expenses.
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Its business is subject to seasonal fluctuations that could result in delays or disruptions to the company`s operations during the critical periods of its projects and cause severe damages to the company premises and equipment`s.
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The company failures to recover adequately on claims against project owners for payment could have a material adverse effect on it.
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The company could be adversely affected if its fails to keep pace with technical and technological developments.
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The company operations are dependent on a significant number of contract labour and an inability to access adequate labour at reasonable costs at its project sites across India may adversely affect the company`s business prospects and results of operations.
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The Company logo "EFFWA" is not registered with Registrar of Trademark; any infringement of its
brand name or failures to get it registered may adversely affect the company`s business. Further, any kind of negative publicity or misuse of its brand name could hamper the company`s brand building efforts and its future growth strategy could be adversely affected.
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The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely Impact its results of operations.
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The company has contingent liabilities, and its financial condition could be adversely affected if any of these contingent liabilities materializes.
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The company failures to accurately forecast and manage inventory could result in an unexpected shortfall and/ or surplus of raw materials, equipment and manpower, which could affect its business and financial condition.
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The Company had negative cash flows in the past years from investing activities, details of which are given below. Sustained negative cash flow could impact its growth and business.
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There are certain discrepancies and non- compliances noticed in some of its financial reporting and/or records relating to filing of returns and deposit of statutory dues with the taxation and other statutory authorities.
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The Company has entered into related party transactions in the past and may continue to enter into related party transactions in the future, which may potentially involve conflicts of interest with the equity shareholders.
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The Company is subject to foreign exchange control regulations which can pose a risk of currency fluctuations.
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Any inability to maintain its equipment assets or manage the company`s employees or inadequate workloads may cause underutilization of its workforce and equipment, and such underutilization could reduce its ability to efficiently utilize its assets which may have an impact on the company profitability.
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Its insurance coverage may not adequately protect the company against all losses or the insurance coverage may not be available for all the losses as per the insurance policy, which could adversely affect business, financial condition and results of operations.
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Certain premises including its registered office, and branch offices are not owned by it and the company has only lease rights over such premises. In the event its lose such rights or are required to negotiate it, the company cash flows, business, financial conditions and results of operations could be adversely affected.
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There may be potential conflict of interests between the Company and other venture or enterprises promoted by its promoter or directors.
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The company cannot assure you that its will be able to secure adequate financing in the future on acceptable terms. Its failures to obtain sufficient financing could result in delay or abandonment of the company`s business plans and this may have an adverse effect on its growth and operations.
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Its inability to respond adequately to increased competition in the company`s business may adversely affect its business, financial condition and results of operations.
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An inability to comply with repayment and other covenants in the financing agreements or otherwise meet its debt servicing obligations could adversely affect its business, financial condition, cash flows and credit rating.
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Unsecured loans taken by it can be recalled at any time.
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Any increase in interest rates would have an adverse effect on its results of operations and will expose the Company to interest rate risks.
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The company has taken guarantees from its directors in relation to debt facilities provided to it.
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In case of its inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate its business it may have a material adverse effect on the company`s business.
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If the company is unable to source business opportunities effectively, its may not achieve the company financial objectives.
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The company faces certain competitive pressures from the existing competitors and new entrants in both public and private sector. Increased competition and aggressive bidding by such competitors are expected to make its ability to procure business in future more uncertain which may adversely affect its business, financial condition and results of operations.
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The company is subject to risks associated with expansion into new geographic regions.
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The deployment of funds raised through this Offer shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.
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Within the parameters as mentioned in the chapter titled "Objects of this Offer" beginning on page 78 of this Draft Red Herring Prospectus, the Company`s management will have flexibility in applying the proceeds of the Offer. The fund requirement and deployment mentioned in the Objects of this Offer have not been appraised by any bank or financial institution.
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Industry information included in this Draft Red Herring Prospectus has been derived from industry reports. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.
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Its ability to pay dividends will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and other factors.
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Its Promoters and Promoter Group will continue to retain significant control in the Company after the offer which will allow them to influence the outcome of matters submitted to shareholders for approval. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control.
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The average cost of acquisition of Equity Shares by its Promoters and Selling Shareholder could be lower than the price determined at time of registering the Prospectus.
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Its Promoters, certain of the company Directors hold Equity Shares in the Company and are therefore interested in the Company`s performance other than remuneration and reimbursement of expenses.
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Its employees may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
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Its Promoters and Promoter Group Members have provided guarantees for loans availed by it, and in the event the same is enforced against them, it could adversely affect its Promoters` ability to manage the affairs of the Company.
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If the company is unable to establish and maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.
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The company is exposed to the risks of malfunctions or disruptions of information technology systems.
