Energy-Mission

Risks

• The company derived a significant portion of its revenue from the sale of its key product i.e. CNC press brake machines. Any decline in the sales of its key product could have an adverse effect on the company`s business, results of operations and financial condition.

• The company does not have firm commitment long-term supply agreements with its customers. If its customers choose not to source their requirements from it, there may be a material adverse effect on its business and results of operations.

• The Company does not have long-term agreements with suppliers for its input materials and a significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials could have an adverse effect on its business and results of operations.

• The company operates in a highly competitive industry and increased competition may lead to a reduction in its revenues, reduced profit margins or a loss of market share.

• Its business is dependent on the performance of the Application Industries. Any downturn in the Application Industries can adversely impact its business, results of operations, cash flow and financial condition of the Company.

• Its Statutory Auditor have included certain qualifications in their Audit Report(including CARO Report) for financial statements pertaining to F.Y. 2020-21, 2021-22 and 2022-23 and tax audit reports for the same financial years.

• Failure to innovate its product offerings and adapting to technological advancements and changes may have an adverse effect on its business and results of operations.

• There are outstanding legal proceedings involving the Company, its Directors and the company Promoters. Any adverse decisions could impact its cashflows and profit or loss to the extent of demand amount, interest and penalty, divert management time and attention and have an adverse effect on its business, prospects, results of operations and financial condition.

• The company requires certain approvals, licenses, registrations and permits to operate its business, and failure to obtain or renew them in a timely manner or maintain the statutory and regulatory permits and approvals required to operate its business may adversely affect the company operations and financial conditions.

• The company is subject to strict quality requirements and any failure to comply with quality standards may lead to cancellation of existing and future orders, product recalls, product liability, warranty claims and other disputes and claims.

• The company is exposed to foreign currency fluctuation risks, particularly in relation to import of raw materials and export of products, which may adversely affect its results of operations, financial condition and cash flows.

• Its inability to accurately forecast demand for the company products, and accordingly manage its inventory, may have an adverse effect on its business, cash flows, financial condition and results of operations.

• The company relies on outsourcing a certain proportion of its production processes and activities to third-parties, without exclusivity arrangements. Any inability to obtain sufficient quantities of processed material of the requisite quality in a timely manner and at acceptable prices, or a slowdown, shutdown or disruption in such third parties` operations and performance, could adversely affect its business, results of operations and financial condition.

• 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.

• Its continued operations at the company`s manufacturing facility are critical to its business and any disruption, breakdown or failure of machinery, disruption to power sources or any temporary shutdown of its manufacturing facility, may have a material adverse effect on its business, results of operations, financial condition and cash flows.

• Its business operations are majorly concentrated in certain geographical regions and any adverse developments affecting its operations in these regions could have a significant impact on its revenue and results of operations.

• The Company is in use of trademark, which is not registered under the Trademarks Act, 1999 as on date of Draft Red Herring Prospectus. Thus, the company may be subject to claims alleging breach of third party intellectual property rights.

• Its proposed expansion plans relating to the company`s manufacturing facility are subject to the risk of unanticipated delays in implementation and cost overruns.

• Its intend to utilise a portion of the Net Proceeds for funding its capital expenditure requirements. The company is yet to place orders for such capital expenditure machinery.

• 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.

• Trade receivables form a major part of its current assets and net worth. Failure to manage the company trade receivables could have an adverse effect on its net sales, profitability, cash flow and liquidity.

• There are certain discrepancies/errors noticed in some of its corporate records relating to forms filed with the Registrar of Companies and certain non-compliances of provisions of Companies Act, 2013. Any penalty or action taken by any regulatory authorizes in future, for non-compliance with provisions of corporate or any other law could impact the financial position of the Company to that extent.

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

• If the company is not able to successfully manage its growth, the company`s business and results of operations may be adversely affected.

• Changes in technology may render its current technologies obsolete or requires the company to make substantial investments.

• Adverse publicity regarding its products could negatively impact the company.

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

• The company does not own the Administration office of the Company. In case of non-renewal of rent agreement or dispute in relation to use of the said premise, its business and results of operations can be adversely affected.

• The Company has unsecured loans which are repayable on demand. Any demand from lenders for repayment of such unsecured loans may adversely affect its cash flows.

• Its industry is labour intensive and the company business operations may be materially adversely affected by strikes, work stoppages or increased wage demands by it employees or those of the company suppliers.

• The company is entirely dependent on third-party logistics service providers for the transportation of raw materials and finished products.

• The company`s 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.

• Its operations are subject to high working capital requirements. The company inability to maintain an optimal level of working capital required for its business may impact the company`s operations adversely.

• The company`s Contingent Liability and Commitments could affect the company financial position.

• The Promoters (including Promoter Group) and Directors hold almost 100% of the Equity Shares of the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

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

• Loans availed by the Company has been secured on personal guarantees of its Promoters. 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 Promoters.

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

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

• The company is subject to the restrictive covenants of banks in respect of the Loans/ Credit Limits and other banking facilities availed from them.

• 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, are based on its management estimates and have not been appraised by any bank or financial institution or any independent agency.

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

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

• Certain key performance indicators for certain listed industry peers included in this Draft Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.

• There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

• Its Promoter 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.

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by its major shareholders may adversely affect the trading price of its Equity Shares.

• The company cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian economy and industry in which the company operates contained in the Draft Red Herring Prospectus.

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