Rulka

Risks

• Its business is dependent on a few customers and the loss of, or a significant reduction in award of contracts by such customers could adversely affect its business.

• Its under-construction projects may be subject to cost overruns or delays.

• The company requires certain approvals and licenses in the ordinary course of business and the failure to successfully obtain/renew such registrations would adversely affect its operations, results of operations and financial condition.

• Majority of its revenue from operations are generated from India. Any adverse development affecting its operations in India could have an adverse impact on its business, financial condition and results of operations.

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

• The operation and maintenance of its electrical services involves significant risks that may cause injury to people or property and that may lead to significant disruption to its business and consequent decreases in the company revenues.

• The company is subject to performance risk from third-party contractors, and operational risks associated with the engagement of third-party contractors and its employees.

• Opposition from local communities and other parties may adversely affect its financial condition, results of operations and cash flows.

• Its top ten customers contribute majority of the company revenues from operations. Any loss of business from one or more of them may adversely affect its revenues and profitability.

• Its failure to perform in accordance with the standards prescribed in work order of its client could result in loss of business or payment of liquidated damages and any delay in the schedule of its under-construction projects may be subject to cost overruns and can impact its reputation and future projects.

• Its revenues are highly dependent on the company operations in geographical region of State of Maharashtra. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations.

• Due to the long construction periods of its projects, the operation and maintenance costs of its projects may change significantly after commissioning of the assets. As the terms and conditions, including the fee structure are generally fixed, its may not be able to offset increases in costs, including operation and maintenance costs.

• The company sources a large part of its new orders from its relationships with corporates and other customers, both present and past. Any failure to maintain its long-standing relationships with its existing customers or forge similar relationships with new ones would have a material adverse effect on its business operations and profitability.

• Its business is manpower intensive and any unavailability of its employees or shortage of contract labour or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing contractual labour may have an adverse impact on its cash flows and results of operations.

• The company has a substantial amount of outstanding indebtedness, which requires significant cash flows to service and are subject to certain conditions and restrictions in terms of its financing arrangements, which restricts its ability to conduct the companyy`s business and operations in the manner the company desire.

• There have been certain instances of regulatory non-compliances or delays or errors in the past. Its may be subject to regulatory actions and penalties for any such past or future non-compliance or delays or errors and its business, financial condition and reputation may be adversely affected.

• Its current Order Book does not guarantee full realization of future income. Some orders may be subject to modifications, cancellations, delays, holds, or partial payments by customers, which could have adverse effects on its operational results.

• Reliance has been placed on affidavits furnished by its directors for details of their profiles included in this Draft Red Herring Prospectus.

• Its inability to effectively manage the company`s growth or to successfully implement its business plan and growth strategy could have an effect on its business, results of operations and financial condition.

• The company is exposed to the risk of delays or non-payment by its clients and other counterparties, which may also result in cash flow mismatches.

• The unsecured loan availed by the Company from NBFCs and Director may be recalled at any given point of time.

• The company depends on skilled personnel and if the company is unable to recruit and retain skilled personnel, its ability to operate or grow its business could be affected.

• Misconduct or errors by manpower engaged by it could expose its to business risks or losses that could affect the company`s business prospects, results of operations and financial condition.

• Its top ten suppliers contribute majority of the company`s purchases. Any loss of business with one or more of them may adversely affect its business operations and profitability.

• Any failure to comply with financial and other restrictive covenants imposed on it under its financing agreements may affect the company operational flexibility, business, results of operations and prospects.

• The company has entered into and may enter into related party transactions in the future also.

• The property used by the Company for the purpose of its operations is not owned by it. Any termination of the relevant rent agreement in connection with such property or its failure to renew the same could adversely affect the company operations.

• The company has significant ongoing funding requirements and may not be able to raise additional capital in the future. As a result, the company may not be able to respond to business opportunities, challenges or unforeseen circumstances.

• Its contingent liabilities as stated in the company Restated Financial Statements could affect its financial condition.

• Changes in technology may render its current technologies obsolete or require the company to make substantial investments.

• The company may not be able to prevent unauthorised use of trademarks obtained/ applied for by third parties, which may lead to the dilution of its goodwill.

• Its success is dependent on the company Promoters, senior management and skilled manpower. Its inability to attract and retain key personnel or the loss of services of its Promoters or Managing Director and Whole Time Directors may have an adverse effect on its business prospects.

• If there is a change in policies related to tax, duties or other such levies applicable to it, it may affect its results of operations.

• The company has experienced negative cash flows in the past. Any such negative cash flows in the future could affect its business, results of operations and prospects.

• Its Promoters and Executive Directors hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

• Its lenders have charge over the company immovable properties in respect of finance availed by it.

• The company is subject to the risk of failure of, or a material weakness in, its internal control systems.

• There may be potential conflicts of interest if its Promoters or Directors are involved in any business activities that compete with or are in the same line of activity as its business operations.

• Its insurance coverage may not be adequate to protect the company against all potential losses to which its may be subject and this may have a material effect on the company`s business and financial condition.

• Its success depends on stable and reliable logistics and transportation. Disruption of logistics and transportation services could impair the ability of its suppliers to deliver materials or the company`s ability to deliver project to its customers and/ or increase its transportation costs, which may adversely affect the company`s operations.

• Its business is substantially affected by prevailing economic, political and other prevailing conditions in India.

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

• The company has not independently verified certain data in this Red Herring Prospectus.

• The company is susceptible to risks relating to unionization of its employees employed by the company.

• Any Penalty or demand raised by statutory authorities in future will affect its financial position of the Company.

• The company has not identified any alternate source of raising the working capital mentioned as its "Objects of the Offer`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• Any variation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.

• Portion of its Offer Proceeds are proposed to be utilized for general corporate purposes which constitute [*] of the Offer Proceed. As on date the company has not identified the use of such funds.

• The Company`s management will have flexibility in utilizing the Net Proceeds from the Issue. The deployment of the Net Proceeds from the Issue is not subject to any monitoring by any independent agency.

• The company has in the last 12 months issued Equity Shares at a price that may be at lower than the Offer Price.

• The average cost of acquisition of Equity Shares by its Promoters could be lower than the Offer Price.

• The company has not paid any dividends in the past Financial Years. Its ability to pay dividends in the future will depends 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 Offer, which will allow them to influence the outcome of matters submitted for approval of its shareholders.

• Its Equity Shares have never been publicly traded and may experience price and volume fluctuations following the completion of the Offer, an active trading market for the Equity Shares may not develop, the price of its Equity Shares may be volatile and you may be unable to resell your Equity Shares at or above the Offer Price or at all.

• Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

• The Offer Price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Offer and the market price of its Equity Shares may decline below the Offer Price and you may not be able to sell your Equity Shares at or above the Offer Price.

• A third party could be prevented from acquiring control of the Company because of anti-takeover provisions under Indian law.

• The requirements of being a listed company may strain its resources and distract management.

• The company may requires further equity issuance, which will lead to dilution of equity and may affect the market price of its Equity Shares or additional funds through incurring debt to satisfy its capital needs, which the company may not be able to procure and any future equity offerings by it.