16.

17.

18.

19.

 

Market Risks — Foreign exchange rate risk” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations - Quantitative and Qualitative Disclosure about
Market Risks — Credit risk” on pages 319 and 320, respectively.

Our Company is in the process of winding down its Singapore operations which may adversely affect
our business and results of operations.

The board of directors of our subsidiary, Craftsman Automation Singapore Pte. Ltd. at their meeting held
on September 30, 2020 approved the declaration of solvency of Craftsman Automation Singapore Pte.
Ltd. Accordingly, Craftsman Automation Singapore Pte. Ltd. has filed a declaration of solvency with the
Accounting and Corporate Regulatory Authority, Singapore dated September 30, 2020. The winding up
of Craftsman Automation Singapore Pte. Ltd. is currently under process. As on December 31, 2020,
Craftsman Automation Singapore Pte. Ltd. was not operational. Craftsman Automation Singapore Pte.
Ltd. was established in 2008 and was set up as a strategic overseas sourcing hub in Singapore, primarily
for the procurement of aluminium, which is one of our key raw materials. However, for operational
efficiencies, the Subsidiary was proposed to be wound up. We cannot assure you that winding down of
our subsidiary, Craftsman Automation Singapore Pte. Ltd., will not adversely affect our business and
results of operations and that in future, similar reasons or other reasons may lead to winding up of our
other subsidiary in Netherlands.

Our Company has made investments in Bhatia Coke & Energy Limited and such investments may not
be recovered.

Our Company had made investments of 2 11.00 million in Bhatia Coke & Energy Limited, which is
under the “Corporate Insolvency resolution process”. Further, the management of Bhatia Coke & Energy
Limited has been taken over by an insolvency professional appointed by the National Company Law
Tribunal, Division bench, Chennai, with effect from May 22, 2019. We have valued the investment made
in Bhatia Coke & Energy Limited to 2 Nil as of December 31, 2020. The fair value loss of = 11.00 million
has been recognised in the other comprehensive income for the period ended December 31, 2020. Any
such instances where we are unable to recover our investments made by us will cause losses.

Our Promoter has provided personal guarantees to certain loan facilities availed of by us, which if
revoked may require alternative guarantees, repayment of amounts due or termination of the facilities,
which in turn may adversely impact our cash flow, business and result of operations.

As on December 31, 2020, our Promoter has provided personal guarantees as security to secure some of
our existing borrowings and may continue to provide such guarantees post consummation of the Offer.
In case of a default under our loan agreements, any of the personal guarantees provided by our Promoter
may be invoked and/or the security may also be enforced, which could negatively impact the reputation
and net worth of our Promoter. In addition, our Promoter may be required to liquidate his shareholding
in our Company to settle the claims of the lenders, thereby diluting his shareholding in our Company.
Lenders for such facilities may require alternate guarantees, repayment of amounts outstanding under
such facilities, or may even terminate such facilities. We may not be successful in procuring alternative
guarantees satisfactory to the lenders, and as a result may need to repay outstanding amounts under such
facilities or seek additional sources of capital, which may not be available on acceptable terms or at all
and any such failure to raise additional capital could affect our operations and our financial condition.

We have not incurred certain allocated portions of our profits towards corporate social responsibility
(“CSR”) requirements under the Companies Act 2013.

The Companies Act 2013 stipulates the requirement of formulation of a corporate social responsibility
policy and mandates our Board of Directors to ensure that our Company spends, in each Fiscal, at least
two percent of the average net profits of our Company during the three immediately preceding Fiscals,
in accordance with its CSR policy. For Fiscals 2020, 2019 and 2018, while our Company has made
profits and accordingly allocated certain portion of such profits towards CSR activities formulated under
our CSR policy, our Company has not incurred the requisite portion of the expenditure towards such
activities in Fiscals 2020 and 2018. The details with respect to the amount allocated towards CSR
activities and our actual expenditure, during Fiscals 2020, 2019 and 2018 are set out below:

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