New Swan

Risks

• The company depends significantly on the performance of automotive sector (particularly two-wheelers) and agricultural sector in India for sale of its products. Any adverse change in performance of these sectors could adversely affect its business and profitability.

• The company`s business is dependent on the sale of its products to few key customers. The loss of any of these customers or loss of revenue from sales to these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.

• The cyclical and seasonal nature of automotive sales and production could adversely affect its auto-components business.

• Its agricultural implements business is subject to climatic conditions and is cyclical in nature. Seasonal variations and unfavourable local and global weather patterns may have an adverse effect on its business, results of operations and financial condition.

• The company depends on third parties for the supply of raw materials and certain finished products and such third parties could fail to meet their obligations, which may have a material adverse effect on its business, results of operations and financial condition.

• The company does not have firm commitment long-term supply agreements with our 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.

• Pricing pressure from customers may affect its gross margin, profitability and ability to increase its prices.

• Its Promoter Group Entities and Group Companies are engaged in similar line of business. There are no non - compete agreements between the Company and such Promoters Group entities and Group Companies. Its cannot assure that its Promoters will not favor the interests of such Companies over its interest or that the said entities will not expand which may increase its competition, which may adversely affect business operations and financial condition of the Company.

• The company derives a substantial portion of its revenue from the auto-components segment as compared to agricultural implements segment. Further, the company has witnessed declining trend in revenue from agricultural implements segment. its dependency on auto-components or continuous decline in revenue of agricultural implements can have a material adverse effect on its business, financial condition, results of operations and cash flows.

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

• 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.

• The company is subject to strict quality requirements and any failure by it or its suppliers 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.

• Its Statutory Auditor have included emphasis of matters and 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 F.Y. 2020-21 and 2021- 22.

• Its Promoters and Directors, namely Upkar Singh, Barunpreet Singh Ahuja and Kanwardeep Singh were appearing in the MCA list of disqualified directors in 2011.

• Its failure to identify and understand evolving industry trends and preferences and to develop new products to meet its customers` demands may materially adversely affect its business.

• There are outstanding legal proceedings involving the Company, its Directors and its Promoters. Any adverse decisions could impact the company 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 its operations and financial conditions.

• Its inability to accurately forecast demand for our products, and accordingly manage its inventory, may have an adverse effect on the company`s 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 its existing manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.

• The company continued operations at its manufacturing facilities 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 Subsidiary Company does not have any revenue from operations in F.Y. 2021-22 and 2022-23 and the company has written off the investment made in Subsidiary on account of loss in Subsidiary Company.

• 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 may be unsuccessful in protecting its intellectual property rights. Unauthorised use of its intellectual property may result in the development of technology, products or services which compete with its products, and may adversely impact its business prospects, reputation and goodwill.

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

• The company 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 Promoter 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.

• The company has not complied with certain statutory provisions of the Companies Act, 2013. Such non-compliance may attract penalties against the Company which could impact the financial position of it to that extent.

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

• The Company had negative operating cash flow in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition and results of operations.

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

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

• Adverse publicity regarding its products could negatively impact it.

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

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

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

• The company has not received NOC from two of its lenders for undertaking the initial public offer of equity shares.

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

• Dependence upon transportation services for supply and transportation of its products are subject to various uncertainties and risks, and delays in delivery may result in rejection of products by customer.

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

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

• The company Contingent Liability and Commitments could affect its financial position.

• Some of the documents pertaining to certain litigations are not traceable.

• 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 Director. Its 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.

• 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.

• 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 depend 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 Our 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.

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

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