Shri Balaji

Risks

• The company has a history of net losses in one of the year out of the last 3 financial years and any losses or its inability to achieve profitability may have an adverse effect on the company operations.

• The business in the Company has been started post the purchase of assets and liabilities from the M/s Balaji Enterprises and M/s Shrinivas Engineering (Proprietorship firm of its Promoters) thus the company have limited operating history as a Company which may make it difficult for investors to evaluate its historical performance or future prospects.

• Any increase in the cost of its raw material or other purchases or a shortfall in the supply of its raw materials, may adversely affect the pricing and supply of the company products and have an adverse effect on its business, results of operations and financial condition.

• Its top five customers contribute majority of its revenues from operations. Any loss of business from one or more of them may adversely affect the company revenues and profitability.

• The company is planning to expand its operations at its new plant constructed at Chakan Industrial area (Pune). Further, its propose to shift the existing forging facility to the said new plant. the company may face business or financial challenges which may adversely affect its profitability and results of operations.

• In case of its inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate its business it may have a material adverse effect on the company business.

• The Company is dependent upon few suppliers for purchase of major portion of its raw material. Any loss of business with one or more of them may adversely affect its business operations and profitability.

• The company failure to adapt to technological developments or industry trends could affect the performance and features of its products, and reduce the company attractiveness to its customers.

• The company has not placed orders for the purchase of plant and machinery for which part of the funds are being raised through the Issue.

• The company has had certain inaccuracy in relation to regulatory filings and the company has made non-compliances of certain provision under applicable law.

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

• The company has not registered the trademarks which its using for the company business. If its unable to protect its intellectual property against third party infringement or are found to infringe on the intellectual property rights of others, it could have a material adverse effect on its business, results of operations and financial condition.

• The company face foreign exchange risk, which may negatively affect its business, financial condition and results of operations.

• The company has had negative net cash flows in the past and may continue to have negative cash flows in the future.

• Some of its business operations are being conducted on leased premise. The company inability to seek renewal or extension of such leases may materially affect its business operations.

• The company`s inability to meet its obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business and results of operations.

• Any loss of or breakdown of its machineries, at any of the company manufacturing facility may have an adverse effect on business, financial condition and results of operations.

• Intense competition in the market of valve components could affect its pricing, which could reduce its share of business from clients and decrease the company revenues and profitability.

• The company Directors and Promoters 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`s inability to effectively manage its growth could have an adverse effect on its business, results of operations and financial condition.

• The valve components the company manufacture are required to strictly comply with the customer specification, in case they do not comply with the customer`s requirement it may have an adverse effect on business, financial condition and results of operations.

• The Company is dependent on third party transportation for the delivery of raw materials and any disruption in their operations or a decrease in the quality of their services could affect the Company`s reputation and results of operations.

• Its manufacturing activities are dependent upon availability of skilled and unskilled labour.

• The company relies on contract labour for carrying out certain of its operations and the company may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations and financial condition.

• Misconduct or errors by manpower engaged by it could expose it to business risks or losses that could affect the company business prospects, results of operations and financial condition.

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

• Non-compliance with and changes in, safety, health and environmental laws and other applicable regulations, may adversely affect its business, results of operations and financial condition.

• The unsecured loan availed by the Company from Directors may be recalled at any given point of time.

• Any failure to comply with financial and other restrictive covenants imposed on it under the company financing agreements may affect its operational flexibility, business, results of operations and prospects.

• The company operations are labour intensive and its manufacturing operations may be materially adversely affected by strikes, work stoppages or increased wage demands by the company employees or those of its suppliers.

• The company have entered into and may enter into related party transactions in the future also.

• The company`s success is dependent on its Promoter, senior management and skilled manpower. its inability to attract and retain key personnel or the loss of services of the company Promoter or Managing Director and Whole Time Directors may have an adverse effect on its business prospects.

• The company`s insurance coverage may not be sufficient or may not adequately protect it against all material hazards, which may adversely affect its business, results of operations and financial condition.

• The Company has issued Equity Shares in the last 12 months at a price which may be lower than the Issue Price.

• The company ability to pay dividends in the future will depends on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of the company financing arrangements.

• The company will continue to be controlled by its Promoters after the completion of the Issue.

• The company Promoter and Promoter Group members has provided personal guarantees and mortgage personal property for loans availed by the Company. Its business, financial condition, results of operations, cash flows and prospects may be adversely affected by the invocation of all or any personal guarantees provided by its Promoter and Promoter Group members.

• The company have not received NOC from one of its lender for undertaking the initial public offer of equity shares.

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

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

• 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.

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

• 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.

• 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.

• The company has not independently verified certain data in this Draft Red Herring Prospectus.