Danish Power

Risks

• The company significantly depends upon few of the raw material suppliers for its manufacturing activities. Volatility in the supply and pricing of the company raw materials may have an adverse effect on its business, financial condition and results of operations.

• Its may not be able to realize the amounts, partly or at all, reflected in the company Order Book which may materially and adversely affect its business, prospects, reputation, profitability, financial condition and results of operation.

• Under-utilization of its manufacturing capacities and an inability to effectively utilize the company existing manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.

• The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failures by the company to comply with these performance requirements may lead to the cancellation of existing and future orders, recalls or warranty and liability claims.

• Substantial portion of its revenues has been dependent upon few customers. The loss of any one or more of the company major customer would have a material adverse effect on its business, cash flows, results of operations and financial condition.

• Product designing is very important part for its equipment for which the company relies on its team. Any loss or error by these employees may have an adverse effect on its equipment and operations.

• Any failures to protect or enforce its rights to own or use trademarks and brand names and identities could have an adverse effect on the company`s business and competitive position.

• The Company has encountered certain issues and discrepancies in its corporate records and regulatory compliance, which present potential risks.

• The restated financial statements have been provided by peer reviewed chartered accountant who is not statutory auditor of the Company.

• Demand for its transformers and relay panels business is dependent on growth in the power generation, transmission and distribution industry & infrastructure, that may contribute to fluctuations in its results of operations and financial condition.

• Certain of its corporate records relating to forms filed with the Registrar of Companies prior to the year 2002 in respect of Increase in Authorised Capital, Allotment of Equity Shares, Sub-division of shares, appointment of Statutory Auditor, appointment & resignation of directors (if any), filing of financial statements etc. and other certain records are not traceable.

• Its business and the company financial condition would be materially and adversely affected if the company fails to obtain new purchase orders and contracts.

• The Company is party to certain legal proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.

• Fluctuations in the exchange rate of foreign currencies could result in currency transactions losses.

• The company deploy advanced technologies in the manufacturing, designing and installation of transformers. Any incapability to adopt a new technology or change in the requirement of a particular technology by the government authorities may affect its position.

• The company depends on the large industries, EPC service providers, public utilities for selling of its products which may effects the company revenue from operation and profits.

• Its objects of the issue includes capital expenditure, which will take a period of time for set up and become operational.

• The Company operations requires significant amount of working capital for a continuing growth. Its inability to meet the company working capital requirements may adversely affect its results of operations.

• The company has pending export obligation, in case the Company fail to meet export obligations its may be liable to payments of duty along with interest to the department.

• The factory of the Company operates from a premise taken by it on lease basis. If the company is unable to comply with the terms of the lease deed, the same may adversely affect the Company`s ability to operate its current operations thus affecting its financial performance.

• One of its subsidiaries namely Evernest Shelter Private Limited, has taken on lease certain premises on which its business is dependent. Any termination of the lease agreement which adversely affect its operations and profitability.

• The company has not made any provisions for decline in the value of investments made by the Company. Any continuous decline in the value of investments made by the company may impact its financial results and condition.

• Certain documents in relation to educational qualification for one of its Director are not available and reliance has been made on declarations and affidavits furnished by such Director for details of their profiles included in this Red Herring Prospectus.

• Its major revenue is sourced from sale of the company products which is transformers. Its inability or failures to manage and attract more clients in this regards could adversely affect the company`s business.

• Its profitability and business operations is significantly dependent on the company ability to successfully anticipate the industry and client requirements. Any failures on its part to do so, may have an impact on the company operations, which could have an adverse effect on its revenue, reputation, financial conditions, results of operations and cash flows.

• The Company has not yet placed orders for the civil work, some of the machineries and equipment required by it for expansion of the company manufacturing facility. Any delay in placing the orders or supply of plant and machinery may result in time and cost overruns, and may affect its profitability.

• Activities involving its manufacturing process can be dangerous and can cause injury to people or property in certain circumstances. A significant disruption at its manufacturing facilities may adversely affect the company production schedules, costs, sales, and ability to meet customer demand.

• A shortage or non-availability of electricity or power may adversely affect its manufacturing operations and have an adverse effect on the company`s business, results of operations and financial condition.

• If the company fails to maintain an effective system of internal controls, its may not be able to successfully manage or accurately report the company`s financial risk.

• If the company is unable to retain and hire skilled employees, or to maintain good relations with its workforce, the company`s business and financial condition may be adversely affected.

• The Company operates under several statutory and regulatory permits, licenses and approvals. Its inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate the company`s business may have an adverse effect on its business & operations.

• The company operates in competitive markets and may face competition from different players in the market which may have an adverse effect on its business, cash flows, financial condition and results of operations.

• The company has experienced significant growth in the past few years, and if the company is unable to sustain or manage its growth, the company`s business, results of operations and financial condition may be adversely affected.

• The company has incurred indebtedness which exposes it to various risks which may have an adverse effect on its business and results of operations.

• Loans availed by the Company has been secured on personal guarantees of its Director. The company`s business, financial condition, results of operations, cash flows and prospects may be adversely affected in case of invocation of any personal guarantees provided by its Directors.

• Ineffective execution of marketing programs and reduced marketing expenditure could have an adverse effect on its sales.

• Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.

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

• The Company in the past has entered into Related Party Transactions and may continue to do so in future also, which may affect its competitive edge and better bargaining power if entered with non-related parties resulting into relatively more favourable terms and conditions and better margins.

• Information relating to its production capacities and the historical capacity utilization of the company production facilities included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and thus its future production and capacity utilization may vary.

• The company depends on third-parties for its transportation needs. Any disruptions may adversely affect its operations, business and financial condition.

• The company is subject to restrictive covenants under its credit facilities that limit the company operational flexibility.

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

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

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

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

• The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.

• The company`s ability to pay any dividends will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• The average cost of acquisition of Equity Shares by its Promoters, is lower than the face value of Equity Share.

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

• Its Promoters and the Promoter Group will jointly continue to retain majority shareholding in the Company after the issue, which will allow them to determine the outcome of the matters requiring the approval of shareholders.

• The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its 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.

• Certain data mentioned in this Red Herring Prospectus has not been independently verified.

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

• Significant differences exist between Indian GAAP and other accounting principles, such as Ind AS, IFRS and U.S. GAAP, which may be material to investors` assessments of its financial condition, result of operations and cash flows.

• Its may be subject to surveillance measures, such as the Additional Surveillance Measures (ASM) and the Graded Surveillance Measures (GSM) by the Stock Exchanges which may adversely affect trading price of its Equity Shares.

• After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.