1. A significant portion (more than 94%) of our total revenue from operations in each of the last three Fiscals is attributable to the aerospace sector wherein we manufacture products pertaining to aero engine tooling and airframe tooling. Any adverse changes in the aerospace sector could adversely impact our business, results of operations and financial condition.
2. We are dependent on our top 10 customers who contribute more than 95% of our total revenue from operations in each of the last three Fiscals and the loss of any of these customers or a significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition.
3. There have been certain instances of delays in payment of statutory dues by our Company and our Material Subsidiary in the past. Any delay in payment of statutory dues by our Company and our Material Subsidiary in future, may result in the imposition of penalties and in turn may have an adverse effect on our Company's business, financial condition, results of operation and cash flows.
4. Our principal types of coverage include among others, protection from fire, earthquake, burglary, and fraudulent and dishonest acts committed by an employee or any other person, employee insurance policies such as medical and personal accident insurance policies and general liability insurance. We may not have sufficient insurance coverage to cover our economic losses as well as certain other risks, including those pertaining to litigation and claims by third parties. The occurrence of an event that causes losses in excess of the limits specified in our policies, or losses arising from events not covered by insurance policies, could materially harm our financial condition and future results of operations.
5. A significant part of our operations are conducted through our Subsidiary, Innomech Aerospace Toolings Private Limited ("Innomech"), and we are dependent on the operating income and cash flows generated by Innomech. Any loss or reduction in the business attributable to our subsidiary, or a change in our shareholding in Innomech, could have a material adverse effect on our business, prospects, results of operations, cash flows and financial condition on a consolidated basis.
6. Our products might require return and re-work The financial burden associated with managing these returns and re-work, coupled with potential delays in delivery schedules, can adversely affect our operational efficiency and overall financial performance.
7. Our business is dependent on exports and the performance of geographies where we supply our products. More than 90% of our total revenue from operations in each of the last three Fiscals came from export. Any adverse changes in the conditions affecting the industries in global markets in which our products are supplied, including our key markets such as United States and Germany, can adversely impact our business, cash flows, results of operations and financial condition.
8. There are outstanding legal proceedings involving our Company, Subsidiaries, Directors (other than promoters) and Promoters. Any adverse outcome in such proceedings may have an adverse impact on our reputation, business, financial condition, results of operations and cash flows.
9. We may not be able to adequately protect our intellectual property. While our Company has registered three trademarks in India, and may register our other intellectual property in the future, if we fail to register the appropriate intellectual property, or our efforts to protect relevant intellectual property prove to be inadequate, the value attached to our brand and proprietary property could deteriorate, which could have a material adverse effect on our business growth and prospects, financial condition, results of operations, and cash flows.
10. Our Company uses a variety of standard tools and parts in all the manufacturing processes some of which are imported. There is no certainty that we may not experience volatility in the cost or availability of such standard parts. Our business, financial condition and results of operations could be adversely affected by volatility in the price or availability of standard parts and tools required for our manufacturing processes.