Shivam

Risks

• The company derives revenue from distribution of animal feed nutrients and chemical products with preserving quality of the highest international standards and any reduction in demand or in the production of such products could have an adverse effect on its business, results of operations and financial condition.

• 100% Trading activities till FY 22-23 in holding company and started manufacturing activity in its wholly owned subsidiary company from FY 23-24, diversification into manufacturing could lead to increased costs, resource allocation issues, and potential conflicts of interest between the two entities.

• Manufacturing activity is carried out by the subsidiary company & they have recently started its manufacturing activity of producing hydrated lime product.

• Its subsidiary`s company`s Manufacturing activity are Capital intensive.

• Capacity utilization will gradually increase Year over Year and any inability to fully utilize the capacity could have an adverse effect long-term profitability, business & financial condition.

• The company is trading in many products, for details you can refer its business chapter, however major revenues which account for more than 20% of revenue for FY 22-23 are generated from Animal Feed Supplement Di-Calcium Phosphate, Di Calcium Phosphate and Poultry Feed Supplement. Any adverse changes in market conditions, such as a decline in demand or increased competition for those specific products, could significantly impact the company`s revenue and profitability.

• The company Shivam Chemicals Limited has concentrated customer base, making it significantly dependent on few customers for its revenue. The loss of any one or more of such customer may have a material effect on its business operations and profitability.

• The deployment of the Net Proceeds from the Issue are based on management estimates and have not been independently appraised by any bank or financial institution and is not subject to any monitoring by any independent agency and the Company`s management will have flexibility in utilizing the Net Proceeds from the Issue.

• Its Promoters, certain of the company`s Directors, Key Managerial Personnel and Senior Managerial Personnel are interested in the Company`s performance in addition to their remuneration, salary and reimbursement of expenses.

• The company has reported negative net cash flows in the past and may do so in the future.

• The Company, its Directors, the company`s Subsidiaries, Promoters and certain of its Group Companies are involved in certain legal proceedings. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business and results of operations.

• The company requires certain approvals and licenses in the ordinary course of business and are required to comply with certain rules and regulations to operate its business, and the failure to obtain, retain and renew such approvals and licenses or comply with such rules and regulations, and the failure to obtain or retain them in a timely manner or at all may adversely affect its operation.

• The company has significant working capital requirements. If its experience insufficient cash flows to fund the company working capital requirements or if its not able to provide collateral to obtain letters of credit and bank guarantees in sufficient quantities, there may be an adverse effect on its business, cash flows and results of operations.

• The company has not commissioned an industry report for the disclosures made in the section titled ,Industry Overview` and made disclosures on the basis of the data available on the internet and such data has not been independently verified by the company.

• The company is dependent on third party transportation providers for the delivery of its products to the company customer.

• The business operates on a high volume, low margin model, as evidenced by its average PAT (Profit after Tax) margin of less than 2% based on Restated Consolidated Financial Statements, any economic downturns or market fluctuations, will have potentially impact its ability to generate returns for investors & company`s growth.

• The company might have to change the name of its Group Company namely Superior Lime Private Limited (SIPL) which could hamper its business reputation which lead it to business risks or losses that could adversely affect its business prospects, results of operations and financial condition.

• Some of its Promoters Group and Group Companies have similar objects and have engaged in the line of business similar to the Company. There are no non-compete agreements between the Company and such Promoters Group and Group Companies.The company 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 the company competition, which may adversely affect business operations and financial condition of the Company.

• Its Promoters Sanjiv Vasant, Shivam Vasant and Soham Vasant has provided personal guarantees to lenders for certain loan facilities availed of by its subsidiary company, also Company has extended guarantee on behalf of its subsidiary Shivam Chemicals & Minerals Private Limited to lenders for certain loan facilities availed of by its subsidiary company, which if invoked may adversely affect his ability to manage the affairs of the Company and which in turn may adversely impact its business and operations.

• The company has incurred substantial indebtedness in the company which exposes it to various risks which may have an adverse effect on its business and results of operations. The company may also be unable to obtain future financing to fund its operations, expected capital expenditure and working capital requirements on favorable terms, or at all.

• The Company has availed certain unsecured loans from Promoter & Promoter Group that may be recalled by them at any time.

• Its success significantly depends upon the services of the company`s Promoters and other Key Managerial Personnel and its ability to retain them. The company`s inability to attract, hire, train and retain key managerial personnel may adversely affect the operations of the Company.

• The company is dependent on a few suppliers for supply of trading item and any major disruption to the timely and adequate supplies of its trading item could adversely affect the company`s business, results of operations and financial condition.

• The Company does business with customers on Purchase Order basis and does not enter into any agreement with its customer and its not have fixed customer base.

• If the company is unable to accurately identify customer demand and currently the company is not maintaining an optimal level of inventory in its stores, the company`s business, results of operations and cash flows may be adversely affected.

• Its industry is highly competitive, with the potential to adversely affect its pricing ability and disrupt the company sales. Its inability to compete effectively may adversely affect its business and results of operations.

• The company does not own its registered office which is being used by the company currently.

• The company`s logo is not registered "SHIVAM CHEMICALS LTD".

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

• Its subsidiary company is dependent on the continuing operation of the company manufacturing facilities.

• Industrial accidents at its manufacturing facility may adversely affect its operation.

• Any delay or defaults in receipt of payments or dues from its customers could result in a reduction of the company profits.

• Its insurance coverage may not be sufficient or may not adequately protect it against any or all hazards, which may adversely affect its business, results of operations and financial condition.

• Employee misconduct, errors or fraud could expose it to business risks or losses that could adversely affect its business prospects, results of operations and financial condition.

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

• As part of its regular business operations, the company requires certain lease renewals for its Guest House and Branch office; failing to renew a lease on time or at all could have a negative impact on its operations.

• Its operations are prone to chemical and could expose the company to the risk of liabilities, lost revenues and increased expenses.

• Non-compliance with and changes in, safety, health and environmental laws and other applicable regulations, might adversely affect the Company`s results of operations and its financial condition.

• The outbreak of COVID-19 or outbreak of any other severe communicable disease could have a potential impact on its business, financial condition and results of operations.

• There is no existing market for its Equity Shares, and the company does not know if one will develop. Its stock price may be highly volatile after the Issue and, as a result, you could lose a significant portion or all of your investment.

• Investors can be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

• The ability of Indian companies to raise foreign capital may be constrained by Indian law.

• Any downgrading of India`s debt rating by a domestic or international rating agency could adversely affect the Company`s business.

• Conditions in the Indian securities market and stock exchanges may affect the price and liquidity of its Equity Shares.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME Platform of BSE in a timely manner, or at all.