Trom

Risks

• Its revenues are highly dependent on the company`s operations in geographical region of state of Gujarat. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations.

• Government may commence assembling the solar water pumps/products and may start providing products at cheaper rates.

• Solar pump consumption will be reducing due to constructions of more dams by Government.

• The company has not entered into any long-term agreements with its suppliers for supply of items and accordingly may face disruptions in supply from its current suppliers.

• The company may continue to derives a material portion of its revenue from the company`s top five customers and its financial dependence on the company`s top five customer poses a potential risk. A reduction in business from these top five customers or any other major clients could have negative implications for both its revenue and profitability.

• Its Registered Office and warehouse from where the company operates is not owned by it.

• The company is involved in a writ petition, Trom Industries Limited vs. The State of Assam and Ors. Petition no. 1191 of 2022 before the Hon`ble Guwahati High Court.

• The Company is involved in a writ petition, Trom Industries Limited vs. The State of Assam and Ors. Petition no. 1196 of 2022 before the Hon`ble Guwahati High Court.

• The company may not be successful in bidding for and winning bids for solar EPC projects to grow its business.

• Unfavourable solar weather conditions could impact its business, financial condition and results of operations.

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

• Its operations may cause injury to people or property and therefore could subject it to significant disruptions in its business, legal and regulatory actions, costs and liabilities which could materially and adversely affect its business, financial condition and results of operations.

• The company has experienced negative cash flows from investing and financing activities in the past.

• Its Contingent Labilities could affect the company`s business, results of operations and financial condition.

• The Company has availed unsecured loan which are repayable on demand. Any demand from the lenders for repayment of such unsecured loan may affect its financial condition.

• 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 100% of the Solar Power Plant, as specified in the Objects of the Issue chapter. Any delay in procurement of such solar power system may delay the schedule of implementation and may also lead to increase in cost of these solar power system, further affecting its revenue and profitability.

• Its indebtedness, including various conditions and restrictive covenants imposed on it under the company financing agreements and could adversely affect its ability to grow the company`s business or react to changes in its business environment.

• The company requires certain approvals, licenses, registrations and permits for its business and the failure to obtain or renew them in a timely manner may adversely affect its operations.

• The Company does not adhere to some part of their Memorandum of Association.

• Most of its revenue originally came from EPC models, however, recently most of revenue is generated from Trading.

• There may be potential conflicts of interest if the company Promoter or Directors get involved in any business activities that compete with or are in the same line of activity as its business operations.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and any bank or financial institution or any independent agency has not appraised the same. The deployment of funds in the project is entirely at its discretion, based on the parameters as mentioned in the chapter titles "Objects of the Issue".

• The company has working capital requirements and may requires additional financing to meet those requirements, which could have an adverse effect on its business, results of operations, financial condition and cash flows.

• Any variation in the utilisation of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

• Several of its key raw materials and components are sourced from a limited group of third-party suppliers giving rise to supplier concentration risks. Any restrictions in supply or defects in quality could cause delays in project construction or implementation and impair its ability to provide the company services to customers at a price that is profitable to it, which could have a material adverse effect on its business, financial condition and results of operations.

• Disruption of logistics and transportation services could impact the ability of its suppliers to deliver raw materials or the company ability to deliver products to its customers and/ or increase its transportation costs, which may adversely affect the company`s operations.

• Any non-compliance or delays or non-payment of statutory dues payments may expose it to penalties from the regulators.

• There have been instances in the past where the company has not made certain regulatory filings with the RoC and there were certain instances of discrepancies in relation to certain statutory filings and corporate records of the Company.

• The company is dependent on its management team and key personnel /senior managerial personnel and the loss of any key team member may adversely affect its business performance.

• Its insurance coverage may not be adequate to protect the company against certain operating hazards and this could effect its business.

• The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest.

• The company has not made any dividend payments in the past and its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and expansion of business.

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

• Its business activities are exposed to fluctuations in the prices of raw materials.

• Its Promoters and members of the company`s Promoter Group will continue to retain majority control in the Company after the Issue, which will enable them to influence the outcome of matters submitted to shareholders for approval.

• The company may not be successful in implementing its business strategies.

• 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.

• Lockdown and suspension of commercial operations will affect the growth of its business and cash flows.

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

• You may be subject to Indian taxes arising out of capital gains on sale of Equity Shares.

• The price of its Equity Shares may be volatile, or an active trading market for its Equity Shares may not develop.

• The company is subject to having higher liability towards non-performance.

• Adding the retail sale & supply of solar products alongside the EPC business model.

• The company cannot assure you that its equity shares will be listed on the SME platform of NSE in a timely manner or at all, which may restrict your ability to dispose of the equity shares.

• Sale of Equity Shares by its Promoters or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

• After this Issue, the price of the Equity Shares may be subject to change, or an active trading market for the Equity Shares may not develop.

• 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.