sejal architectural glass limited - Securities and Exchange Board of ...

Risk relating to the project
6. The construction and commencement of commercial operations of our float glass plant (the “Project”)
involve many uncertainties and risks that may have a material adverse effect on our business, results
of operations and financial condition.
A key part of our strategy is dependent upon the timely completion of the Project by March 2009. The
Project involves engineering, construction and other commercial risks, including:
(a) reliance on third parties to construct and complete;
(b) engineering design and technological changes;
(c) mobilizing the required resources;
(d) failure to obtain necessary governmental and other approvals;
(e) changes in management’s views of the desirability of our current plans;
(f) changes in market conditions;
(g) accidents, natural disasters and weather-related delays;
(h) time and cost overruns and unanticipated expenses; and
(i) regulatory changes.
Any significant delay in completing the Project as planned or on schedule may result in SAGL commencing
operations in an increased competitive environment for its products. Such a scenario may have a material
adverse effect on our business, results of operations and financial condition.
7. Our Company proposes to venture into manufacturing of float glass, which is a backward integration
project for us; hence, it may be difficult to estimate our future performance.
Since we are a glass processing company, we have no manufacturing history from which you can evaluate our
future performance. We are going to be a new entrant in the segment of manufacturing float glass; hence,
our revenues and profitability estimates may not be indicative of our future results of operations. Moreover,
we intend to commence our production of float glass in Jhagadia, Gujarat, by March 2009. Therefore our
prospects must be considered in light of the risks and uncertainties encountered in evolving markets and
changing trends where demand and supply for float glass may vary. This may hinder us to execute the project
within preset timelines and budgeted costs. As a result we cannot give any assurance about our business
strategy being successful.
8. We have not yet placed orders for certain plant & machinery required to set up our float glass Project.
We have not yet placed orders for indigenous plant & machinery aggregating Rs. 6727.96 Lacs for our float
glass Project, which constitutes 21.72% of the total plant & machinery required. Further, we are subject to
risks on account of inflation in the price of plant & machinery and other equipments that we require for the
float glass project. Negotiations in respect of technical specifications with some vendors have been
commenced and orders will be placed after the negotiations are completed.
In respect of the plant & machinery / equipment / other Project related services that we propose to
import/procure from overseas, we may be subject to the risks arising out of currency rate fluctuations.
These factors may increase the overall cost of our float glass project, and we may have to raise additional
funds by way of additional debt or equity placement to complete our float glass project, which may have an
adverse effect on our business and results of operations.
9. We have entered into major supply contracts with Stein Heurtey, (France, India & China) Grenzebach
Maschinenbau GmbH, Germany and Zippe Industrieanlagen GmbH for supply of major Plant & Machinery
required for our float glass project. This contract is enforceable in jurisdictions outside India, which
may expose us to higher legal and other costs in case of any disputes with Stein Heurtey, France and/or
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