Plada Infotech S

Risks

• The company fails to perform in accordance with the standards prescribed in its client contracts could result in loss of business or payment of liquidated damages.

• Uncertainty of Client Commitment and Potential Contract Termination.

• The company recent rapid growth may not be indicative of its future growth, and, if the continue to grow rapidly, the company may not be able to manage its growth effectively.

• The company`s business is subject to extensive government regulation, which may restrict the types of services the company is permitted to issue or result in additional tax or other costs that reduces the company revenues and earnings. Its inability to receive or renew the necessary licenses, approvals and registrations in a timely manner or at all may lead to interruption of the Company`s operations.

• The company may fails to attract and retain sufficiently trained employees to support its operations, as competition for qualified personnel is intense and the company experience significant employee turnover rates.

• The Company has not made provision for gratuity as per AS 15 - Employee Benefits issued by ICAI in its books relating to certain employees of the Company given the contractual arrangement with client for providing Gratuity reimbursement along with Employee Compensation.

• The company has not consolidated the financial statement of its assoicate Company for certain years.

• The Company has availed moratorium facility from certain banks/ financial institution during the Covid-19 Period.

• Due to the nature of the staffing services business, its may be exposed to employee-related risks, claims and losses that could have an adverse effect on the company business and reputation.

• The company offices are located on leased premises and there can be no assurance that these leases will be renewed upon termination or that the company will be able to obtain other premises on lease on same or similar commercial terms.

• There is an outstanding legal proceeding involving the Company. Any adverse decision in such proceeding may have a material adverse effect on its business, results of operations and financial condition.

• The Company has not made provision for contingent liability in its book.

• The Company has filed certain forms with the Registrar of Companies, Maharashtra, Mumbai (ROC) beyond the statutory time period and in respect of certain transactions Company has not filed the forms with the ROC. If the ROC impose monetary penalties on it or take certain punitive actions against the Company in relation to the same, its business, financial condition and results of operations could be adversely affected.

• An application for adjudication of stamp duty on share transfer deed executed by the Company has been filed and pending before the Collector of Stamps, Andheri.

• If the company existing clients do not renew their agreements with it, or expand the scope of services the company provide to them, or if its long-term relationships with some of the company largest clients are impaired or terminated, its revenue could decline, and the company results of operations would be adversely impacted.

• 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.

• Certain relevant copies of educational qualification and experience certificates of the company Promoter/ Director are not traceable.

• The company have not received "No Objection certificate" (NOC) from some of the lenders of secured and unsecured loans to the company.

• The company registered office from where its operations are carried out is shared between the Company with its subsidiary Company and Group Companies.

• The company`s success depends largely upon the services of its Directors, Promoters and other Key Managerial Personnel and the company ability to attract and retain them. Demand for Key Managerial Personnel in the industry is intense and the company inability to attract and retain Key Managerial Personnel may affect the operations of the Company.

• The company Promoters and Executive Directors hold Equity Shares in the Company and are therefore interested in it performance in addition to their remuneration and reimbursement of expenses.

• The company insurance coverage may not adequately protect it against potential risk and this may have a material adverse effect on its business.

• The future operating results are difficult to predict and may fluctuate or adversely vary from the past performance.

• The Company`s management will have flexibility in utilizing the Net Proceeds from the Issue. Any variation in the utilization of the Net Proceeds as disclosed in this Draft Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.

• A Portion of the company Issue Proceeds are proposed to be utilized for general corporate purposes which constitute 24% of the Issue Proceed. As on date the company have not identified the use of such funds.

• The company has not paid any dividends in the past Financial Years. Its ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• The company will continue to be controlled by its Promoter and Promoter Group after the completion of the Issue, which will allow them to influence the outcome of matters submitted for approval of the company shareholders.

• The company may need to seek additional financing in the future to support its growth strategies. Any failure to raise additional financing could have an adverse effect on the company business, results of operations, financial condition and cash flows.

• If the company does not set optimal prices for its service offerings, the company business, financial condition, and results of operations could be adversely affected.

• If the company has unable to attract new customers, retain customers at existing levels or sell additional services to its existing customers, the company revenue growth will be adversely affected.

• The Company proposes to utilize part of the Net Proceeds for repayment or pre-payment, in full or in part, of all or certain borrowings availed by the Company from various Banks and NBFCs, accordingly, the utilization of that portion of the Net Proceeds will not result in creation of any tangible assets.

• The company funding requirements and proposed deployment of the Net Proceeds have not been appraised by a bank or a financial institution and if there are any delays or cost overruns, the company may have to incur additional cost to fund the objects of the Issue because of which its business, financial condition and results of operations may be adversely affected.

• The company have not made any alternate arrangements for meeting its capital requirements for the Objects of the Issue. Further, the company has not identified any alternate source of financing the `objects of the Issue. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.