C2C Advanced Systems Ltd

Risks

• Its business has a significant proportion of the company domestic revenues dependent on contracts from the GoI and associated entities including defence public sector undertakings and government organizations involved in Defence. Reprioritization of requirements based on government priorities may have a material adverse effect on its business.

• The company depends on a limited number of customers for a significant portion of its revenue. The loss of any of its major customers due to any adverse development or significant reduction in business from its major customers may adversely affect the company`s business, financial condition, results of operations and future prospects.

• A major portion of its revenue is from projects undertaken with Government entities or agencies, contracts of which usually contain terms that favour the clients. Such project / contracts are awarded on the basis of certain pre-qualification criteria and competitive selection process and are usually in a standard form, restricting its ability to negotiate the terms and conditions. Any change in the Government policies or focus and/or the company is unable to recover payments in a timely manner, would adversely affect its business and result of operation.

• The company is subject to strict quality requirements, customer inspections and audits, and any failures to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact its reputation and the company`s business and results of operations and future prospects.

• Any failures to comply with the provisions of the contracts entered with its customers, especially the GoI Entities, could have an adverse effect on its business operations, financial conditions and results of the company`s operations. Additionally, imposition of liquidated damages and invocation of performance bank guarantees / indemnity bonds by its customers could impact its results of operations and the company may faces potential liabilities from lawsuits and claims by customers in the future.

• The company has a history of net losses in 2 out of the last 3 financial years and any losses or its inability to achieve profitability may have an adverse effect on its operations.

• The company has significant working capital requirements. If its experience insufficient cash flows from the company operations or are unable to borrow to meet its working capital requirements, it may materially and adversely affect its business, cash flows and results of operations.

• The amount of orders the company has received in the past, its current order book and the company`s growth rate may not be indicative of the number of orders its will receive in the future.

• If the company is unable to manage its growth effectively, its business, future financial performance and results of operations could be materially and adversely affected.

• The company does not own its Registered Office from where the company operates.

• If the company does not continue to innovate and further develop its business, or the company is not able to keep pace with technological developments, its may not remain competitive and its business and results of operations could suffer.

• Its success depends significantly on its Promoters, Key Management Personnel and other senior management and skilled personnel. The loss of their services may have a material adverse effect on its business, financial condition and results of operations.

• The Company has experienced negative cash flow in the past and may continue to do so in the future, which could have a material adverse effect on its business, prospects, financial condition, cash flows and results of operations.

• The company is having a high trade receivable days and high trade payables days in the last 2 financial years and such high receivables and payables days could have an adverse impact on liquidity position of its business.

• The company is yet to identify the premises at Bengaluru for the expansion of its existing activities and at Dubai for the new Experience Centre that is to be set up at Dubai, United Arab Emirates.

• The Company has availed unsecured loan from its Promoters and others, which is repayable on occurrence of certain conditions.

• The company depends on exports for a significant portion of its revenue. Restrictions on the export of the company products and other regulations could adversely affect its business, results of operations and financial condition.

• There have been instances of delay in the filing of Forms with the MCA in the recent past.

• The objects of the Issue have not been appraised by any bank or financial institution. Its funding requirements and proposed deployment of the Net Proceeds are based on management estimates and may be subject to change based on various factors, some of which are beyond its control. Any variation in the utilization of the Net Proceeds or in the terms of the conditions as disclosed in this Prospectus would be subject to certain compliance requirements, including prior shareholders` approval.

• The company is yet to place Orders for the fixed assets for its existing operations at Bengaluru and the Experience Centre at Dubai.

• The company has in the past entered into related party transactions and may continue to do so in the future.

• The company has trade receivables amounting to Rs. 3,182.90 Lakhs which are more than 6 months old as at the end of September 30, 2024.

• The company has certain contingent liabilities, which, if they materialize, may affect its results of operations, financial condition, and cash flows.

• The company has paid or filed GST returns with a delay and have also filed a late fee on the same.

• The company has a large number of employees, resulting in fixed costs to the Company. In the event the company is not able to generate adequate cash flows, it may have a material adverse impact on its operations.

• The company has had a fluctuating attrition rate amongst its employees in the last 3 years. Its business depends substantially on the continued efforts of the company qualified personnel, and its operations may be disrupted if the company lose their services.

• The company operates in a competitive market and faces competition from other Defence suppliers. Any increase in competition may adversely affect its business and financial condition.

• Its insurance may be insufficient to cover all losses associated with the company`s business operations.

• If the Company is unable to protect its intellectual property, or if the Company infringes on the intellectual property rights of others, its business may be adversely affected.

• The company has not commissioned an industry report for the disclosures made in the chapter titled "Industry Overview" and made disclosures on the basis of the data available on the internet and such data has not been independently verified by the company.

• Its Promoters, certain of the company`s Directors, the company`s Key Managerial Personnel and Senior Managerial Personnel hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

• The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.

• The company has not identified any alternate source of raising the funds required for the object of the Issue and the deployment of funds is entirely at its discretion and as per the details mentioned in the section titled "Objects of the Issue.

• The company has issued Equity Shares during the last 12 months at a price which may be below the Issue price.

• The average cost of acquisition of Equity Shares by its Promoters is lower than the price determined at time of registering the Prospectus.

• The Company is involved in certain legal proceedings, which, if determined adversely, may adversely affect its business and financial condition.

• There has been a delay in the deposit of statutory dues in the recent past.

• There has been a delay in the deposit of Tax Deducted at Source.

• Its Group Company Realtime Tech Solutions Limited has an outstanding amount of employee provident fund dues and as been declared as a defaulter.

• Its Director and CFO Murtaza Ali Soomar has been associated with Companies which have been compulsorily struck off by the RoC.

• The company has appointed independent directors who has not registered themselves on the Independent Directors Data Base.

• The company has issued shares in the physical form after conversion of the company into a public limited company. The company has further made further allotments without completing the earlier allotments.

• Cyber-attacks or other security breaches could have a material adverse effect on its business, results of operation or financial condition.

• Its business, results of operation and financial conditions could be materially and adversely affected if any fault of its causes any accidents at the company`s customers` units.

• The company could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• The company faces foreign exchange risks, primarily in its export and procurement operations that could adversely affect its results of operations.

• The Company is dependent on third party transportation for the delivery of its finished products and any disruption in their operations or a decrease in the quality of their services could affect the Company`s reputation and results of operations.

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

• Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

• Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under Indian law and thereby may suffer future dilution of their ownership position.

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

• There is no guarantee that its Equity Shares will be listed in a timely manner or at all.

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

• Any future issuance of Equity Shares, or convertible securities or other equity-linked securities by it may dilute your shareholding and any sales of the Equity Shares by its major shareholders may adversely affect the trading price of the Equity Shares.