Basilic Fly Stud

Risks

• The Company has delayed in compliances with some statutory provisions of the Companies Act. and delayed compliance may attract penalties against the company which could impact the financial position of it to that extent.

• The Company operates in the constantly evolving VFX market, which is subject to rapidly changing clients` behaviour and tastes, and depends on audience acceptance of content for which the Company provides VFX services and the long-term popularity of the brands.

• The company has issued Equity Shares during the last one year at a price that may be below the Issue Price.

• Any non-compliance or delays in GST Return Filings and EPF Payments may expose it to penalties from the regulators.

• There are outstanding litigations involving the Company, Promoters and Directors which, if determined adversely, may affect its business and financial condition.

• The Company is subject to foreign exchange control regulations and foreign currency transactions which can pose a risk of currency fluctuations.

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

• The company business is dependent on the contractual arrangements entered into by it. Many of its client contracts can be terminated with or without cause by providing notice and without termination-related penalties.

• The Company requires several statutory and regulatory permits, licenses and approvals for its operations. The company inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate its business may have a material adverse effect on the business & operations.

• The company Auditor has not considered the audited financials for the audit report year ending on March 31st 2023 for one of its foreign material subsidiaries.

• The company depends on its relationships with production house and film directors and other industry participants to exploit the company film content.

• The company ability to remain competitive may be adversely affected by rapid technological changes and its ability to access such technology.

• Intensified competition may restrict the company ability to access content and/or talent.

• The company operate in an industry which is highly sensitive with regard to maintenance of secrecy of the projects and its contents. Any failure on the part to maintain secrecy of the projects, will have an adverse effect on the company results of operations and financial condition.

• The company Promoters and members of the Promoter Group will continue jointly to retain majority control over the Company even after the Issue which will allow them to determine the outcome of matters submitted to shareholders for approval.

• The company may require additional working capital in the future. A failure in obtaining such additional financing at all or on terms favourable to it could have an adverse effect on the company results of operations and financial condition.

• The company is heavily dependent on its Promoters and Key Managerial Personnel for the continued success of the business through their continuing services and strategic guidance and support.

• If the company is unable to attract new clients or its existing clients do not renew their contract, the growth of the business and cash flows will be adversely affected.

• The company may not be able to sustain effective implementation of its business and growth strategy.

• The company Promoters, Directors and Key Management Personnel have interest in the Company and its on subsidiaries, other than reimbursement of expenses incurred or remuneration.

• 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 has not identified any alternate source of funding and hence any failure or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.

• The company Promoters are not engaged in similar line of business, However, there can be no assurance that its Promoter or members of the Promoter Group will not compete with the company existing business.

• The company insurance coverage may not be adequate to protect it against certain operating hazards and this may have a material adverse effect on its business.

• The average cost of acquisition of Equity Shares by the company Promoters could be lower than the issue price.

• The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

• The company has not made any dividend payments in the past and its ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants in its financing arrangements.

• In case of any inability arise to source business opportunities effectively, Its may not achieve the company financial objectives.

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

• The Objects of the Issue for which funds are being raised, are based on the company management estimates and any bank or financial institution or any independent agency has not appraised the same. The deployment of funds in the project is entirely at its discretion, based on the parameters as mentioned in the chapter titles "Objects of the Issue".

• There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of the Management and its Board of Directors, though it shall be monitored by the company Audit Committee.

• The company future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

• The requirements of being a public listed company may strain its resources and impose additional requirements.

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

• The company growth will depend on the ability to build its brand and failure to do so will negatively impact of the ability to effectively compete in this industry.

• The company operations could be adversely affected by disputes with employees.

• Interest rate fluctuations may adversely affect the Company`s business.

• Industry information included in this Draft Red Herring Prospectus has been derived from industry reports commissioned by it for such purpose. There can be no assurance that such third-party statistical financial and other industry information is either complete or accurate.

• If the company is unable to source business opportunities effectively, Its may not achieve of the financial objectives.

• The company inability to manage growth could disrupt the company business and reduce profitability.

• The price of the company Equity Shares may be volatile, or an active trading market for its Equity Shares may not develop.