Transteel Seatin

Risks

• There are outstanding legal proceedings involving the Company, Promoters and Directors. Any adverse decision in such proceeding may have a material adverse effect on its business, results of operations and financial condition.

• Its Registered Office, Factory, Showroom and our Warehouses are not owned by it. The same are occupied by it on a lease basis. Disruption of its rights as lessee or termination of the agreements with the lessor would adversely impact the company operations and, consequently, its business.

• The company product is subject to frequently changing designs, patterns, customer requirements and tastes, its inability to meet such needs or preferences may affect the company business.

• The Company`s failure to maintain the quality standards of the products could adversely impact its business, results of operations and financial condition.

• The company face competition in its business from domestic competitors. Such competition would have an adverse impact on the business and financial performance.

• The company is dependent on various kinds of Supplier for the supply of raw materials, services and finished goods.

• Its ability to remain competitive may be adversely affected by rapid technological changes and its ability to access such technology.

• The company`s business involves usage of manpower and any unavailability of the employees or shortage of contract labour or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing contractual labour may have an adverse impact on its cash flows and results of operations.

• Its business is capital intensive. If its experience insufficient cash flows to meet required payments on the company debt and working capital requirements, there may be an adverse effect on its operations.

• Heavy dependence on the Promoters for the continued success of its business through his continuing services, strategic guidance and support.

• The Company does not have any long-term agreements with their clients and is subject to uncertainties in demand for its services.

• There are certain discrepancies / errors noticed in some of the corporate records relating to forms filed with the Registrar of Companies and other provisions of Companies Act, 1956 / 2013. Any penalty or action taken by any regulatory authorizes in future for non-compliance with provisions of corporate and other law could impact the financial position of the Company to that extent.

• The company requires several approvals, NOCs, licenses, registrations and permits in the ordinary course of its business. Some of the approvals are required to be transferred in the name of "Transteel Seating Technologies Limited" from "Transteel Seating Technologies Private Limited" pursuant to name change of the company and any failure or delay in obtaining the same in a timely manner may adversely affect the company operations.

• The company face significant risk with regard to length of time needed to complete each project and there could be unscheduled delays and cost overruns in relation to the ongoing and future projects.

• Significant security breaches in the computer systems and network infrastructure and fraud could adversely impact its business.

• Its inability to obtain no objections from its lenders for the Issue, in a timely manner or at all could adversely affect raising of funds..

• The company`s business is subject to various operating risks at its sites, the occurrence of which can affect the company results of operations and consequently, financial condition of the Company.

• The Company will not receive the entire proceeds from the Offer. Further, the Promoter Selling Shareholder will receive the proceeds from the Offer for Sale (after deducting applicable Offer-related expenses and taxes).

• The average cost of acquisition of Equity Shares by the Promoters, including the Promoter Selling Shareholder may be less than the Offer Price.

• Some of the details mentioned in the respective KYC Documents of the Promoters and Directors are not same in all KYC documents.

• The company`s success depends in large part upon the qualified personnel, including the senior management, directors and key personnel and its ability to attract and retain them when necessary.

• The company continue to explore the diversification of its business and the implementation of new services. These diversifications and the company other strategic initiatives may not be successful, which may adversely affect its business and results of operations.

• The company will continue to be controlled by the Promoters and certain related entities after the completion of the Issue.

• The company is dependent on third party vendors for delivery of materials required to it from the suppliers and delivery of the products to its clients. Any failure on part of such vendors to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.

• The shortage or non-availability of power facilities may adversely affect its business and have an adverse impact on the company results of operations and financial condition.

• The company`s business may be affected by severe weather conditions and other natural disasters.

• The company funding requirements and the deployment of Net Proceeds are based on management estimates and have not been independently appraised.

• Brand recognition is important to the success of the business, and its inability to build and maintain the company brand names will harm its business, financial condition and results of operation.

• The company face competition in the business from organized players, which may adversely affect its business operation and financial condition.

• General economic and market conditions in India and globally could have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.

• Major fraud, lapses of internal control or system failures could adversely impact the company`s business.

• The company continue to explore the diversification of the business and the implementation of new products. These diversifications and its other strategic initiatives may not be successful, which may adversely affect the company business and results of operations.

• Its inability to manage growth could disrupt its business and reduce the profitability. The company propose to expand its business activities in coming financial years.

• The Company has a negative cash flow in its operating activities in the year 2023 and in the investing activities in the year 2023, 2022 and 2021 details of which are given below. Sustained negative cash flow could impact our growth and business.

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

• If the company is unable to source business opportunities effectively, its may not achieve the financial objectives.

• The nature of its business exposes it to liability claims and contract disputes and the company indemnities may not adequately protect it. Any liability in excess of the reserves or indemnities could result in additional costs, which would reduce its profits.

• Employee fraud or misconduct could harm it by impairing its ability to attract and retain clients and subject it to significant legal liability and reputational harm.

• The company operations may be adversely affected in case of industrial accidents at its working sites.

• The company operating expenses include overheads that may remain fixed in the medium term. In case there is any decline in its operating performance, the company may be unable to reduce such expenses.

• Delays or defaults in payments from the clients could result into a constraint on the company cash flows. The efficiency and growth of its business depends on timely payments received from the clients.

• The company insurance coverage may not adequately protect it against losses, and successful claims against it that exceed the company insurance coverage could harm its results of operations and diminish the financial position.

• There are no alternate arrangements for meeting our requirements for the Objects of the Issue. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• The company actual results could differ from the estimates and projections used to prepare the company financial statements.

• Guarantees from Promoters & Directors as well as others have been taken in relation to the debt facilities provided to it.

• The company ability to pay dividends in the future will depend upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in the financing arrangements.

• Any future acquisitions, joint ventures, partnerships, strategic alliances, tie-ups or investments could fail to achieve expected synergies and may disrupt the company business and harm the results of operations and its financial condition.

• The company future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

• Some of the KMPs is associated with the company for less than one year.

• There is no guarantee that the Equity Shares will be listed on the Stock Exchanges in a timely manner or at all.

• The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.

• Negative publicity could adversely affect the revenue model and profitability.

• Furniture Industry information included in this Draft Red Herring Prospectus has been derived from industry reports commissioned by it for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

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