Monolithisch India Ltd

Risks

• We depend on certain key suppliers to procure a significant portion of our raw materials. We do not enter into longterm agreements with these suppliers and any denial of supplies or loss of the relationship with them could result in disruption in our operations, which could have an adverse effect on our business, financial condition, results of operations and cash flows.

• Conflicts of interests may arise with one of its Group Company i.e. Mineral India Global Private Limited.

• If our plant faces outage due to failure of machinery or any slowdown or shutdown in our manufacturing operations or underutilization of our manufacturing facility could impact our production and ultimately can impact our financial condition, business operations and cash flows.

• Our operations are subject to various hazards and could expose us to the risk of liabilities, loss of revenue and increased expenses.

• Our long-term growth and competitiveness are dependent on our ability to control costs and pass on any increase in operating expenses to customers, while continuing to offer competitive pricing.

• We have experienced significant growth in the past few years, and if we are unable to sustain or manage our growth, our business, results of operations and financial condition may be adversely affected.

• We rely on third-party transportation providers for both procurements of our raw materials and distribution of our products. Any failures by any of our transportation providers to deliver our raw materials or our products on time, or in good condition, or at all, may adversely affect our business, financial condition and results of operations.

• Our Company is currently a regional player and derives substantial revenue from West Bengal, Odisha and Jharkhand and hence faces geographical concentration related risks.

• Any failure to protect or enforce our rights to own or use trademarks or brand names could have an adverse effect on our business and competitive position.

• Under-utilization of our manufacturing capacities and an inability to effectively utilize our expanded manufacturing capacities could have an adverse effect on our business, future prospects and future financial performance.

• Our inability to accurately forecast demand or price for our products and manage our inventory may have an adverse impact on our business, results of operations and financial conditions.

• Our proposed expansion plans w.r.t our new manufacturing facility being set up are subject to the risk of unanticipated delays in implementation and cost overruns.

• We have not yet placed orders in relation to the capital expenditure to be incurred for the proposed expansion. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the machines and equipments in a timely manner, or at all, may result in time and cost over-runs and our business, prospects and results of operations may be adversely affected.

• Strikes, work stoppages or increased wage demands by our employees or any other kind of disputes with our employees could adversely affect our business and results of operations.

• The demand for our product is dependent on growth in the metal and specifically in the iron and steel industry, that may contribute to fluctuations in our results of operations and financial condition.

• We have not entered into any definitive arrangements to utilize certain portions of the Net Proceeds of the Issue towards investment in Subsidiary, the costs to be incurred in relation to such Objects are based on the quotations received from the vendors or estimates of the management.

• We require certain approvals and licenses in the ordinary course of business and are required to comply with certain rules and regulations to operate our business, and the failure to obtain, retain and renew such approvals and licenses in timely manner or comply with such rules and regulations or at all may adversely affect our operations.

• We have in the past entered into related party transactions and may continue to do so in the future.

• One of the member of our Promoter Group have entered into a settlement with SEBI with respect to certain past non compliances with respect to disclosure of their holding in a listed company.

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

• Our Company operations requires significant amount of working capital for a continuing growth. Our inability to meet our working capital requirements may adversely affect our results of operations.

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

• Our Promoters have provided personal guarantees for our borrowings to secure our loans. Our business, financial condition, results of operations, cash flows and prospects may be adversely affected by the revocation of all or any of the personal guarantees provided by our Promoter and members of Promoter Group in connection with our Company`s borrowings.

• Failure in maintaining the requisite standard for products could have a negative effect on our business.

• Information relating to our production capacities and the historical capacity utilization of our production facility included in this Draft Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and thus our future production and capacity utilization may vary.

• Our failure to identify and understand evolving industry trends and preferences and to develop new products to meet our end customers` demands, which may materially adversely affect our business.

• Our business is dependent on the volume of the goods we sell to achieve the optimum level of profits, if we are not able to achieve the volumes we will end up incurring losses on account of fixed cost.

• We are exposed to the high holding period for debtors for the finished goods supplied which can impact our working capital requirement and also impacts our cash flows.

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

• We do not have agreements/commitment on part of our customers to purchase or place orders with us, also we do not have any price agreement with our customers. If our customers select some other vendors/ competitors for their requirement, it may have adverse effect on our business.

• Our Contingent Liability and Commitments could affect our financial position.

• In addition to normal remuneration, other benefits and reimbursement of expenses of some of our directors (including our Promoter) and Key Management Personnel are interested in our Company to the extent of their shareholding and dividend entitlement in our Company.

• Changes in technology may render our current technologies obsolete or require us to undertake substantial capital investments, which could adversely affect our results of operations.

• Any Penalty or demand raised by statutory authorities in future may adversely affect our financial position of the Company.

• We may face competition from a number of organized and unorganized players, which may adversely affect our market position and business.

• Some of our borrowings carry restrictive covenants or conditions and could affect our ability to manage our business operations.

• Conflicts of Interests may arise with our Promoter Group Entities.

• Some of our business operations are being conducted on leased / rented premises. Our inability to seek renewal or extension of such leases may materially affect our business operations.

• Our success depends largely upon the services of our Directors, Promoters and other Key Managerial Personnel and our ability to attract and retain them and hire new talent. Demand for key managerial personnel in the industry is intense and our inability to attract and retain key managerial, may affect the business and operations of our Company.

• Failure to deal effectively with any fraudulent transactions and illegal activity by Suppliers, Customers, Service providers, workers and our employees could harm our business and reputation and expose us to liability.

• We could be adversely affected by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect our financial condition, results of operations and reputation.

• The average cost of acquisition of Equity Shares by our Promoter, are lower than the face value of Equity Share.

• Our Promoter Group will continue to retain majority shareholding in our Company after this Issue which will allow them to exercise significant influence over us.

• We rely on contract labour for carrying out certain of our operations and we 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, which could have an adverse effect on our results of operations and financial condition.

• Our insurance coverage may not be adequate to protect us against certain operating hazards and this may have a material adverse effect on our business and financial conditions.

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by our major shareholders may adversely affect the trading price of our Equity Shares.

• The Issue Price of our Equity Shares may not be indicative of the market price of our Equity Shares after the Issue and the market price of our Equity Shares may decline below the Issue Price or you may not be able to sell your Equity Shares at or above the Issue Price.

• Significant differences exist between Indian GAAP and other accounting principles, such as Ind AS, IFRS and U.S. GAAP, which may be material to investors` assessments of our financial condition, result of operations and cash flows.

• We may be subject to surveillance measures, such as the Additional Surveillance Measures (ASM) and the Graded Surveillance Measures (GSM) by the Stock Exchanges which may adversely affect trading price of our Equity Shares.

• Any actual or perceived cybersecurity, data or privacy breach could interrupt our operations and adversely affect our reputation, brand, business, financial condition and results of operations.

• We are not able to guarantee the accuracy of third party information included in this Draft Red Herring Prospectus.

• We have not identified any alternate source of funding and hence any failure or delay on our part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.

• 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 our profitability adversely.

• 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 our Company.

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

• The company depends on certain key suppliers to procure a significant portion of its raw materials. The company does not enter into long-term agreements with these suppliers and any denial of supplies or loss of the relationship with them could result in disruption in its operations, which could have an adverse effect on its business, financial condition, results of operations and cash flows.

• The company depends on a limited number of customers for its revenue from operations, the loss of any of these customers individually or severally could have a material adverse effect on its business, operations and could have impacted its financial strength.

• Its operations are subject to various hazards and could expose it to the risk of liabilities, loss of revenue and increased expenses, suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect business, results of operations, cash flow and financial condition.

• If its plant faces outage due to failures of machinery or any slowdown or shutdown in its manufacturing operations or underutilization of its manufacturing facility could impact its production and ultimately can impact its financial condition, business operations and cash flows.

• Its long-term growth and competitiveness are dependent on its ability to control costs and pass on any increase in operating expenses to customers, while continuing to offer competitive pricing.

• The company has experienced significant growth in the past few years, and if the company is unable to sustain or manage its growth, the company business, results of operations and financial condition may be adversely affected.

• The company relies on third-party transportation providers for both procurements of its raw materials and distribution of its products. Any failures by any of its transportation providers to deliver its raw materials or the company products on time, or in good condition, or at all, may adversely affect its business, financial condition and results of operations.

• The Company is currently a regional player and derives substantial revenue from West Bengal, Odisha and Jharkhand and hence faces geographical concentration related risks.

• Its directors have no prior experience in managing a listed company, which may pose challenges in complying with regulatory requirements.

• The company has encountered challenges in meeting the designated timelines for filing statutory returns, which may subject it to penalty under the relevant laws.

• Its subsidiary may not be able to avail benefits under the Banglashree Scheme, which may affect cost efficiencies and profitability.

• Any failures to protect or enforce its rights to own or use trademarks or brand names could have an adverse effect on its business and competitive position.

• Strikes, work stoppages or increased wage demands by its employees or any other kind of disputes with its employees could adversely affect its business and results of operations.

• The company does not have agreements/commitment on part of its customers to purchase or place orders with it, also the company does not have any price agreement with its customers. If the company customers select some other vendors/competitors for their requirement, it may have adverse effect on its business.

• A substantial portion of revenue is derived from the sale certain grades of products and loss of sales due to reduction in demand for such products would have a material adverse effect on its business, financial condition, results of operations and cash flows.

• The demand for its product is dependent on growth in the metal and specifically in the iron and steel industry, that may contribute to fluctuations in its results of operations and financial condition.

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

• One of the member of its Promoter Group have entered into a settlement with SEBI with respect to certain past non compliances with respect to disclosure of their holding in a listed company.

• 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 its financial position to that extent.

• The company has not entered into any definitive arrangements to utilize certain portions of the Net Proceeds of the Issue towards investment in Subsidiary, the costs to be incurred in relation to such Objects are based on the quotations received from the vendors or estimates of the management.

• Compliance with, and changes in, safety, health and environmental laws and labour regulations may adversely affect its business, prospects, financial condition and results of operations.

• If the company fails to maintain an effective system of internal controls, its may not be able to successfully manage or accurately report its financial risk. Such failures of its internal processes or procedures could harm it by impairing its ability to attract and retain clients and subject it to significant legal liability and reputational harm.

• Failures in maintaining the requisite standard for products could have a negative effect on its business.

• Under-utilization of its manufacturing capacities and an inability to effectively utilize its expanded manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.

• Its inability to accurately forecast demand or price for the company products and manage its inventory may have an adverse impact on its business, results of operations and financial conditions.

• Its proposed expansion plans w.r.t its new manufacturing facility being set up are subject to the risk of unanticipated delays in implementation and cost overruns.

• The company has not yet placed orders in relation to the capital expenditure to be incurred for the proposed expansion. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the machines and equipments in a timely manner, or at all, may result in time and cost over-runs and its business, prospects and results of operations may be adversely affected.

• 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 failures to obtain, retain and renew such approvals and licenses in timely manner or comply with such rules and regulations or at all may adversely affect its operations.

• The Company operations requires significant amount of working capital for a continuing growth. Its inability to meet the company working capital requirements may adversely affect its results of operations.

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

• Its Promoters have provided personal guarantees for the company borrowings to secure its loans. The company business, financial condition, results of operations, cash flows and prospects may be adversely affected by the revocation of all or any of the personal guarantees provided by its Promoter and members of Promoter Group in connection with the Company`s borrowings.

• Information relating to its production capacities and the historical capacity utilization of its production facility included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and thus its future production and capacity utilization may vary.

• The company failures to identify and understand evolving industry trends and preferences and to develop new products to meet its end customers` demands, which may materially adversely affect its business.

• Its business is dependent on the volume of the goods we sell to achieve the optimum level of profits, if the company is not able to achieve the volumes the company will end up incurring losses on account of fixed cost.

• Some of its borrowings carry restrictive covenants or conditions and could affect its ability to manage the company business operations. Further its may incur additional indebtedness in comparison to its existing indebtedness for meeting its future obligations.

• We are exposed to the high holding period for debtors for the finished goods supplied which can impact our working capital requirement and also impacts our cash flows.

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

• We do not have agreements/commitment on part of our customers to purchase or place orders with us, also we do not have any price agreement with our customers. If our customers select some other vendors/competitors for their requirement, it may have adverse effect on our business.

• Failure to deal effectively with any fraudulent transactions and illegal activity by Suppliers, Customers, Service providers, workers and our employees could harm our business and reputation and expose us to liability.

• The company could be adversely affected 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.

• Its Contingent Liability and Commitments could affect the company financial position.

• In addition to normal remuneration, other benefits and reimbursement of expenses of some of its directors (including the company Promoter) and Key Management Personnel are interested in the Company to the extent of their shareholding and dividend entitlement in the Company.

• Changes in technology may render its current technologies obsolete or require it to undertake substantial capital investments, which could adversely affect its results of operations.

• 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 and financial conditions.

• Any Penalty or demand raised by statutory authorities in future may adversely affect its financial position of the Company.

• Its may faces competition from a number of organized and unorganized players, which may adversely affect its market position and business.

• Some of its business operations are being conducted on leased / rented premises. Its inability to seek renewal or extension of such leases may materially affect its business operations.

• Its success depends largely upon the services of the company Directors, Promoters and other Key Managerial Personnel and its ability to attract and retain them and hire new talent. Demand for key managerial personnel in the industry is intense and its inability to attract and retain key managerial, may affect the business and operations of the Company.

• The average cost of acquisition of Equity Shares by its Promoter, are lower than the face value of Equity Share.

• Its Promoter Group will continue to retain majority shareholding in the Company after this Issue which will allow them to exercise significant influence over the company.

• The company relies on contract labour for carrying out certain of its operations and its 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, which could have an adverse effect on its results of operations and financial condition.

• 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.

• The Issue Price of its Equity Shares may not be indicative of the market price of its Equity Shares after the Issue and the market price of its Equity Shares may decline below the Issue Price or you may not be able to sell your Equity Shares at or above the Issue Price.

• Significant differences exist between Indian GAAP and other accounting principles, such as Ind AS, IFRS and U.S. GAAP, which may be material to investors` assessments of its financial condition, result of operations and cash flows.

• Its may be subject to surveillance measures, such as the Additional Surveillance Measures (ASM) and the Graded Surveillance Measures (GSM) by the Stock Exchanges which may adversely affect trading price of its Equity Shares.

• Its may be subject to surveillance measures, such as the Additional Surveillance Measures (ASM) and the Graded Surveillance Measures (GSM) by the Stock Exchanges which may adversely affect trading price of its Equity Shares.

• The company is not able to guarantee the accuracy of third party information included in this Red Herring Prospectus.

• The company has not identified any alternate source of funding and hence any failures or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.

• 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.

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