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the customer’s ability to avail finance resulting in decline in the demand for residential or other real estate
projects. This in turn will adversely affect Our Company’s business, financial condition and results of
operation.
27.
We have not paid dividends in the past and any material adverse effect on our future earnings, financial
condition, cash flows will affect our ability to pay dividends in the future.
Our Company has never paid dividends to preference shareholders and equity shareholders in the past. Our
ability to pay dividends in the future will depend on the earnings, financial condition and capital
requirements. Our business is capital intensive and we may plan to make additional capital expenditure to
complete various real estate projects that we are developing. Our ability to pay dividends is also restricted
under certain financing arrangements. We may be unable to pay dividends in the near or medium term, and
our future dividend policy will depend on our capital requirements and financing arrangements in respect of
our real estate projects, financial condition and results of operations.
28.
Our success depends in large part upon our promoters, senior management, directors and key personnel
and our ability to retain them and attract new key personnel when necessary.
Our senior management and key personnel collectively have many years of experience and would be
difficult to replace. We cannot assure you that we will continue to retain any or all of our senior
management or the key members of our management or that we will continue to benefit from the experience
of our Promoters. Any loss of our Promoters, senior managers or other key personnel or the inability to
recruit further senior managers or other key personnel could impair our future by impairing our day-to-day
operations, hindering our development of new projects and harming our ability to develop, maintain and
expand client relationships.
29.
Our Company has entered into and will continue to enter into, related party transactions.
Our Company has entered into transactions with related parties that include its Promoters, Directors and
their relatives, key management personnel and companies forming part of its Promoter Group. While Our
Company believes that all such transactions have been conducted on an arm’s length basis, there can be no
assurance that Our Company could not have achieved more favorable terms had such transactions been
entered into with unrelated parties. Furthermore, it is likely that Our Company may enter into related party
transactions in the future. There can be no assurance that such transactions, individually or in the aggregate,
will not have an adverse effect on Company’s financial condition and results of operations.
30.
Our Company’s inability to manage growth could disrupt its business and reduce its profitability.
Our Company has embarked on a growth strategy, which involves a substantial expansion of Our
Company’s current business lines, in terms of size and geographical scope. The growth strategy will place
significant demands on Our Company’s management, financial and other resources. It will require Our
Company to continuously develop and improve its operational, financial and internal controls. Continuous
expansion increases the challenges involved in financial management, recruitment, training and retention of
high quality human resources, preserving Our Company’s values and entrepreneurial environment and
developing and improving its internal administrative infrastructure. If Our Company is unable to manage its
growth effectively, its business and financial results could be adversely affected.
31.
Environmental problems could adversely affect our Company’s projects.
An environmental assessment for any real estate project above a threshold limit is a must for the purpose of
obtaining regulatory approval. The assessment is necessary as it would reveal material environmental
problems which if discovered during or after the development of the project, substantial liabilities would
have to be incurred. There would be reduction in the value of the relevant property which would eventually
lead in delay of the project.
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32.
Our insurance policies provide limited coverage, potentially leaving us uninsured against some business
risks.
The occurrence of an event that is uninsurable or not fully insured could have a material adverse effect on
our business, financial condition, results of operations or prospects. We maintain insurance on property and
equipment in amounts believed to be consistent with industry practices but we may not be fully insured
against some business risks. Accordingly, we obtain comprehensive insurance coverage for each project
during its construction phase. Our insurance coverage for each project includes insurance against fire and
related risks and earthquakes. We also maintain workmen's compensation policies.
However, we do not maintain directors' and officers' liability insurance, nor any insurance for loss of profit,
if any, suffered by us or any of our customers. Our insurance coverage also does not include insurance
against third party risks. Further, we do not maintain "key man" insurance for our Promoters, our senior
managers or other key personnel.
33.
We do not own the “Rodium” trademark but are dependent on it.
The trademark “Rodium” is owned by one of the Promoter of Our Company viz. Mr. Deepak Chheda. As
on the date of filing this Draft Letter of Offer, we have not entered into any written agreement with Mr.
Deepak Chheda for use of the “Rodium” trademark in our business. Our business depends on the “Rodium”
trademark as we market all our real estate projects under the Rodium trademark. The right to trademark is a
crucial factor in marketing our projects. In case, our Promoter viz. Mr. Deepak Chheda withdraws the NOC
for use of Trademark or demands royalty from Our Company, we would not be able to use the “Rodium”
Trademark and, if we are not able to create new trademarks or brands successfully, we could experience a
material adverse effect on our business, financial condition and results of operations. In addition, if any
third party uses the trade name in ways that adversely affect such trademark, our reputation could suffer
damage, which in turn could have a material adverse effect on our business, financial condition and results
of operations.
34.
Labour unrest or shortage problems may significantly affect our business and if our employees unionise,
we may be subject to, slowdowns and increased wage costs.
India has stringent labour legislation that protects the interests of workers, including legislation that sets
forth detailed procedures for the establishment of unions, dispute resolution and employee removal and
legislation that imposes certain financial obligations on employers upon retrenchment. In addition, we may
be unable to mobilize the required number of labourers to carry out the construction on our project sites.
Although our employees are not currently unionized, there can be no assurance that they will not unionise
in the future. If our employees unionise, it may become difficult for us to maintain flexible labour policies
or we face labour shortages, and our business, financial condition and results of operations may be
adversely affected.
35.
We are dependent on our IT systems for the execution and management of our projects.
We use information and communication technologies extensively to manage and execute our projects and to
improve our overall efficiency. Our design and architectural team use technologically advanced tools and
processes like Macintosh based high end management, visual and designing software like Archi CAD,
Artlantis, etc. In addition, our project management team uses software, such as Microsoft Project, to review
the progress of each project and monitor cost and time overruns, if any.
Any delay in implementation or any disruption in the functioning of our IT systems could have a material
adverse effect on our business if it causes loss of data or affects our ability to track, record and analyze the
progress of our projects, process financial information, manage our creditors and debtors, or engage in
normal business activities.
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