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countries and if we export our products to such countries, any revocation or alteration of those bilateral
agreements may also adversely affect our ability to export, and consequently, our business, financial
condition and results of operations.

Additionally, we will be required to procure certifications in addition to other quality standards which
could be necessary for the products to be accepted by customers and the markets in which we export our
products. As such, we may need to obtain and maintain the relevant certifications so that our customers
are able to sell their products, which include components that are manufactured by us, in these countries.
Our inability to secure such license, or any other licenses, certification, registrations and permits in other
jurisdictions in a timely manner or at all, could result in operational delays or suspensions and/or
administrative fines and penalties, which could have a material adverse effect on the overall business,
results of operations and financial condition.

In the event we are unable to meet our export obligations in full, we may be liable to pay duty
proportionate to unfulfilled obligations along with interest. We currently avail benefits under the
EPGG licenses. In order to continuously avail the benefits we are required to export goods of a defined
amount. Any failure in meeting the obligations, may result in adversely affect our business operations
and our financial condition.

Pursuant to our EPCG licenses, we are required to export goods of a defined amount, failing which we
may have to pay the Government, a sum equivalent to the duty benefit enjoyed by us under the EPCG
licenses along with interest. As of December 31, 2020, our pending obligation against the EPCG license
is = 142.69 million. Any reduction or withdrawal of benefits or our inability to meet any of the conditions
prescribed under any of the schemes would adversely affect our business, financial condition, results of
operations and prospects.

We have been unable to locate certain of our corporate records.

We are unable to locate certain of our corporate records with respect to certain transfer of equity shares
to our Promoter in the past, and certain forms filed with the RoC, in respect of increase in the authorized
share capital of our Company. These corporate records include share transfer forms in relation to
acquisition of certain Equity Shares by our Promoter on March 20, 2007, share transfer forms in relation
to acquisition of certain Equity Shares by one of the Selling Shareholders, Form 5 for the increase in the
authorized share capital of our Company during Fiscal 1990 and the Form 23s for the Shareholders’
resolution for increase in the authorized share capital of our Company during Fiscal 1990 and Fiscal
1991. See “Capital Structure — History of Equity Share Capital Build-up, Contribution and Lock-in
of Promoter’s Shareholding” and “History and Certain Corporate Matters - Amendments to our
Memorandum of Association’’on pages 72 and 195, respectively. While we have conducted a search of
our records, at our Company’s offices as well as that of the RoC, we have not been able to trace
the aforementioned corporate records. Accordingly, reliance has been placed on opinions obtained from
third party independent source and confirmations provided by our Company and our Promoter in respect
of the missing corporate records and appropriate disclosures have been made in this Prospectus pursuant
to the due diligence of the other relevant corporate records available with our Company to ascertain the
information sought from the missing corporate records. However, owing to the absence of such corporate
records, we cannot assure that we will not be subject to risks arising from the unavailability of such
corporate records. Although no legal proceedings or regulatory actions have been initiated or pending
against us in relation to such untraceable secretarial and other corporate records and documents, we
cannot assure you that such legal proceedings or regulatory actions will not be initiated against our
Company in future or we will not be subject to penalties imposed by regulatory authorities in this respect.

 

We are exposed to credit risk on account of interest free loans given by our Company to our Subsidiary.

Our Company has given interest free loans to our Subsidiary, Craftsman Europe B.V. Further, a portion
of the loan granted to Craftsman Europe B.V. has been converted into equity by way of investment in
the equity capital pursuant to a resolution passed by our Board of Directors on August 20, 2019. There
is no assurance that we will be able to fully recover such loans from our Subsidiary or that they will settle
such loans in a timely manner or at all. In the event, or to the extent, that any such impairment is realized,
it could have an adverse effect on our business, financial condition, results of operations, and prospects.
See “Financial Statements” on page 225. Also, see “Management’s Discussion and Analysis of
Financial Condition and Results of Operations - Quantitative and Qualitative Disclosure about

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