Quadrant Future

Innovation and technological development undertaken by the Company for building Automatic Train Protection Systems.

Entered into an exclusive Memorandum of Understanding with RailTel for delivering the specific targeted opportunities related to KAVACH in Indian Railways and other Countries Railways.

We have in-house design and product development capabilities powering our Rail Signalling Products & Solutions.

Unique technology for the manufacture of cables that meets the stringent requirements for multiple industries, namely Railways, Naval Defence, Renewable Energy & Electric Vehicle sectors.

Advanced manufacturing facilities with a diverse range of power and control cables with focus on innovation and cost competitiveness.

Global emergence of market for irradiated cables in renewable energy and electric vehicles and supply of such irradiated cables to OEMs with high global market penetration.

Experienced Promoters and senior management team.

The Company has passed through an incidence of litigation involving dispute inter-se its Promoters, namely Mohit Vohra, Amit Dhawan, Rupinder Singh, Aikjot Singh, Vishesh Abrol and Vivek Abrol, along with Mohan Krishan Abrol, Vipin Abrol and Parminder Kaur to remove Amrit Singh Randhawa and Rajbir Singh Randhawa from the Board of the Company on charges of carrying out certain competing activities in a company controlled by them (i.e. International Switchgears Private Limited) that poses a conflict of interest to the Company. The matter was escalated to NCLT and subsequently the same was amicably settled between the Promoters and Promoter Group and a settlement agreement was executed. Its cannot assure that such instance will not occur in future, which may adversely affect its business prospects and results of operations.

The Company, alongwith Vivek Abrol, Promoter & Director of the Company and Mohan Krishan Abrol have filed a settlement application under Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 for delayed compliance under Regulation 54 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Any adverse outcome in relation to such settlement application may impact its reputation.

Its business is dependent on the company single manufacturing facility, and its subject to certain risks in its manufacturing process. Any slowdown or shutdown in the company manufacturing operations could have an adverse effect on its business, financial condition and results of operations.

The markets in which its customers operate are characterized by sector specific to the industries which the company cater to, and their rapidly changing preferences, technologies and other related factors including lower manufacturing costs. Accordingly, its may be affected by any disruptions in the industry which can adversely impact the company business, financial condition, results of operations, cash flows and prospects.

The company has only recently expanded its operations into Train Control Systems and it may be difficult to predict and evaluate its performance and future prospects, for which a substantial portion of the Net Proceeds of the Issue shall be deployed since the company is yet to be awarded any contracts. Its Promoters also does not have significant background or experience in the train control systems segment under the railways industry. If the company cannot scale its business or manage its businesses effectively or are unable to successfully implement its strategies, the quality of its product and services and the company results of operations could be adversely affected.

The Company has received a purchase order on December 12, 2024 from Chittaranjan Locomotive Works (CLW) for the supply, installation, testing, and commissioning of On-board Kavach equipment in 1,200 locomotives for a purchase order aggregating to Rs. 9,786.06 million (including taxes). If the company fails to deliver its obligations in a timely manner, including delivery of Kavach equipment or maintenance obligation, its may have a material adverse effect on its business, financial performance, profitability, cash flows and future prospects for participation in similar tenders.

The determination of the Price Band and Issue Price is based on various factors and assumptions and the Issue Price may not be indicative of the Market Price of the Equity Shares after the Issue. Further, there are no listed companies that exclusively undertake the manufacturing of Speciality cables and also Train Controls and Signalling business and therefore qualitative or quantitative peer comparison cannot be undertaken.

There are certain errors noticed in its audited financial statements for the Fiscal 2022 and 2021 which does not require any corrective adjustment in the financial information. Any penalty or action taken by any regulatory authorizes for such erroneous disclosure may lead to penal action against the Company under the provisions of the Companies Act, 2013 for an amount of Rs. 10,000 and in case of continuing contravention of provisions of the Companies Act, 2013, with a further penalty of Rs. 1,000 each day subject to a maximum of Rs. 2,00,000 in case of a company and Rs.50,000 in case of officer in default.

There had been sudden change in the profit after tax of the Company during the Fiscal 2024, 2023 and 2022 and also the Company has incurred loss during the six months period ended September 30, 2024. Further, some of the financial ratios of the Company for the said period have variation of more than 20%. Any further sudden changes in profit after tax of the Company or significant variation in the ratios may have material adverse effect on its business, results of operations, financial condition, cash flows and future prospects.

There have been some instances of delayed filing with the Registrar of Companies and other noncompliances including errors and comissions under the Companies Act in the past which may attract penalties.

Certain of its Promoter and Promoter Group shareholders have sold in aggregate 20,00,000 Equity Shares of face value Rs. 10 each at a consideration of Rs. 240 per Equity Shares on October 25, 2024. The price of sale of such Equity Shares by the Promoter and Promoter Group may be lower than the Issue Price of Rs. [*] per Equity Share, which is at a discount of [*]% to the Issue Price.

The success of its business and growth depends substantially on the company management team and operational workforce. Its inability to retain them could adversely affect the company businesses.

The Company, its Directors and its Promoters are party to certain legal and regulatory proceedings, including criminal proceedings against Aikjot Singh, one of the Promoter and Non Executive Director, in the matter relating to accidental death on road. These legal and regulatory proceedings are pending at different levels of adjudication before various courts and regulatory authorities. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.

One of its Promoters, Aikjot Singh, who is also a Non Executive Director on the Board of the Company, is party to criminal proceedings and if convicted, its business and reputation could be adversely affected.

The company has entered into, and will continue to enter into, related party transactions that may involve conflict of interest.

The company depends on third party suppliers for primary requirement of raw materials which are on a purchase order basis. Further, the costs of the raw materials which its use in the company manufacturing process are subject to volatility in prices in domestic and international market/s. Such suppliers may not perform, or be able to perform their obligations in a timely manner, or at all and any delay, shortage, interruption, reduction in the supply of or volatility in the prices of raw materials on which its relies may have a material adverse effect on the company business, results of operations, financial condition, cash flows and future prospects.

The company is dependent on and derives a substantial portion of its revenue from a limited number of customers. Cancellation or orders by customers or delay or reduction in their orders could have a material adverse effect on its business, results of operations and financial condition.

Under-utilization of its Speciality cable manufacturing capacity and an inability to effectively utilize its existing manufacturing capacity could have an adverse effect on the company business, future prospects and future financial performance. Further, information relating to its production capacities and the historical capacity utilization of its manufacturing facility included in the Red Herring Prospectus is based on various assumptions and estimates and is certified by third party and capacity utilization may vary.

The company has experienced negative cash flows from operating activities during the Fiscal 2022 and may experience similar earnings declines or operating losses or negative cash flows from operating activities in the future.

There are certain defaults / delay in payment of statutory dues by it. Any further default / delay in payment of statutory dues may attract financial penalties and / interest on delayed payments from the respective government authorities and in turn may have a material adverse impact on its financial condition and cash flows.

Its Audit Report for the Fiscal 2022 has a qualified opinion.

The company present business operations and revenues comprising of speciality cables and the proposed business operations under Train Control Products and Solutions are substantially dependent on Indian Railways and Naval (Defence) manufacturing units aggregating to 44.09%, 69.60%, 73.36% and 56.87% for the six months period ended September 30, 2024 and the Fiscal ended 2024, 2023 and 2022 respectively. Any adverse change in policy of the Ministry of Railways may adversely affect its business and results of operations.

The company do business with its customers on purchase order basis or through tenders issued by them from time to time and does not have long-term contracts with most of them. Further, its business in the speciality cables division tends to vary from quarter to quarter based on the timing of release of various tenders.

Most of its customer agreements generally contains a liquidated damage charges clause for delay or non delivery of the Speciality Cables. The company has in the past incurred additional costs or liquidated damages for an amount of Rs. 2.47 million, Rs. 13.15 million, Rs. 14.33 million and Rs. 3.01 million during the six months period ended September 30, 2024 and the Fiscal ended 2024, 2023 and 2022 respectively and may also incur similar cost in the event of disputes, claims, defects or delays in future, which could adversely affect its business, financial condition, profitability and cash flows.

The company is subject to strict quality requirements, customer inspections and audits, and any failures to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact its reputation and its business and results of operations and future prospects.

Its TCAS platform may require frequent modifications or upgradations with continuous advancement in internet connectivity protocols at present and in the future which may not be compatible with the present TCAS platform and any failure to adapt its technology platform to new or upgraded technologies in future may impact its business and results of operations.

Its programming and software development under Train Control & Signalling division is complex and technologically advanced and could have unknown defects or errors as the same is yet to undergo and complete field trial requirement of RDSO. Any failure to achieve desired results under field trails may result in dis-qualification of its product developed and may require us to undertake fresh investments for rectification of the errors which may adversely impact its financial position.

Any asset impairment could adversely affect its financial condition and results of operations.

Its failures to keep technical knowledge confidential could erode our competitive advantage

If the company is unable to use software licensed from third parties to it or if the company make use of open source software under license terms that interfere with its proprietary rights it could disrupt the company business.

The company has incurred a significant amount as capital expenditure during the last three Fiscal Years for development of platform for train control systems and its intangible asset developed towards Train Collision Avoidance System Software represents 30.95%, 36.85%, 40.78% and 27.51% of the total assets of the Company during the period ended September 30, 2024 and Fiscal 2024, 2023 and 2022, respectively. Its investments in technology, especially its research and development activities, may not yield the intended results in a timely manner or at all, which may adversely affect its financial condition and results of operations. Further, its may requires financing for the company business operations and planned capital expenditure and the failures to obtain additional financing on terms commercially acceptable to it may adversely affect its ability to grow and our future profitability. Further, the amount proposed to be utilised for investment in product development in Fiscals 2025 and 2026 is based on management estimates.

The Company has a high working capital requirement and working capital projections made by the Company are based on its management`s assumptions. The company may requires alternate funding in Fiscal 2025 and Fiscal 2026 post the utilization of Net Proceeds and if the Company is unable to raise sufficient working capital, the operations of the Company will be adversely affected.

The threats and challenges in the Indian train control system, specialty cable industry and interconnect items may have a material adverse effect on its business, financial condition, cash flows and results of operations.

Its historical performance is not indicative of the company future growth or financial results and its may not be able to sustain its historical growth rates. The company inability to effectively manage its growth or implement its growth strategies may have a material adverse effect on its business prospects and future financial performance.

Its funding requirements and proposed deployment of the Net Proceeds of the Issue have not been appraised by a bank or a financial institution and if there are any delays or cost overruns, its business, financial condition and results of operations may be adversely affected. Further, any variation in the utilization of its Net Proceeds as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

The company has incurred indebtedness and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company business and financial condition. Under its financing arrangements, its required to obtain the prior, written lender consent for, among other matters, changes in its capital structure, formulate a scheme of amalgamation or reconstruction and entering into any other borrowing arrangement.

Its contingent liabilities which have not been provided for in the company financial statements, if materialize, may impact its financial condition.

Its Group Companies are involved or authorised to undertake business similar to its business activities, which could create conflicts of interest which may have an adverse effect on its business. The company cannot assure that its Promoter will not favour the interests of that company over its interest or that the said entities will not expand which may increase its competition, which may adversely affect business operations and financial condition of the Company.

The Company has availed unsecured loans from promoters / Directors which are repayable on demand. Any demand from lenders for repayment of such unsecured loans, may adversely affect its cash flows.

The trade payables by the Company which are outstanding for more than one year constitutes 23.20%, 18.92%, 15.16% and 2.64% of its total trade payables as on September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022, respectively. Any delay in making payment of such dues may result in initiation of litigation(s) against it by any of such creditor(s) of the Company.

The company has delayed in complying with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and may be subject to regulatory action by the governmental authorities, which could affect its business and operations.

Its operations are subject to environmental and workers` health and safety laws and regulations. The company may have to incur material costs to comply with these regulations or suffer material liabilities or damages in the event of an incidence or non-compliance of environment, health and safety and other similar laws and regulations which may have a material adverse effect on its reputation, business, results of operations and financial condition.

The company is subject to various laws, regulations, approvals and licenses required in the ordinary course of business. Any failures to obtain or retain them in a timely manner may materially adversely affect its operations.

Its exposure to performance guarantees, could negatively impact the company business, results of operations and financial condition.

Significant shortages of, or delay or disruption in the supply of raw materials for Train Collision Avoidance could affect its estimated costs, expenditures and timelines which may have a material adverse effect on its business, financial condition, results of operations and cash flows.

The company operates in a competitive environment and an inability to compete effectively may adversely affect its results of operations, financial condition and business prospects.

The company has significant power requirements and in particular to run and operate 2.5 MeV Electron Beam Accelerator for irradiation of Polymers used in cable Insulation & Sheathing. Any disruption of power facilities may affect its manufacturing processes adversely negatively impacting the company manufacturing capacity, results of operations and financial condition.

Its may be subject to labour unrest, slowdowns and increased wage costs, which may adversely affect its business, results of operations and financial condition.

The company will be subject to risks associated with the performance of contractors, sub- contractors and consultants being involved in its projects relating to Train Control & Signalling division. Despite its best efforts for supervision and quality assurance plans, its may face the risk of delays, quality of work, cost overruns in respect of work performed by contractors, subcontractors and consultants which could result in a negative impact on its business, reputation, financial condition and results of operations.

The company relies on third-party transportation providers for both procurement of its raw materials and distribution of the company products. Disruption in transportation or 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.

Inability to maintain adequate internal controls may affect its ability to effectively manage the company operations, resulting in errors or information lapses.

The company does not have certain documents evidencing the biographies and / or educational qualifications of certain of its Directors, Key managerial Personnel and Senior Management Personnel and have relied on the statement of marks and provisional certificate / affidavits submitted by such personnel for details of their profile included under the section "its Management" of the Red Herring Prospectus.

Its insurance coverage may not adequately protect the company against all losses or the insurance cover may not be available for all the losses as per the insurance policy, which could adversely affect business, results of operations and financial condition.

Its manufacturing facility owned by the Company has been mortgaged in favour of HDFC Bank Limited. Its inability to comply with repayment and other covenants in its financing agreements could have an adverse effect on the company`s business and financial condition.

Its Railway Signalling & Embedded System Design centre based at Bengaluru, Karnataka and Hyderabad, Telangana are operated through leased premises. If its unable to renew existing leases or relocate the company operations on commercially reasonable terms, there may be an adverse effect on its business, financial condition and operations.

Its may not be able to protect the company intellectual property rights and prevent the unauthorized use of its intellectual property, which could harm the company business and competitive position.

Certain sections of the Red Herring Prospectus contain information from the CareEdge Report which its commissioned and paid for and any reliance on such information for making an investment decision in the Issue is subject to inherent risks.

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

All the Independent Directors on its Board, except Pramod Jain, and also Satish Gupta who is director on Board another listed Company since July 29, 2024, have no previous experience of being independent director in any other listed entity within India, therefore, they will be able to provide limited guidance in relation to affairs of the Company post listing.

After the completion of the Issue, its Promoters along with the Promoter Group will continue to collectively hold substantial shareholding in the Company.

Grants of stock options under its employee stock option plan may result in a charge to the company profit and loss account and, to that extent, reduce its profitability and financial condition.

Its ability to pay dividends in the future will depends on its future cash flows, working capital requirements, capital expenditures and financial condition.

Significant differences exist between Ind AS and other accounting principles, such as IFRS and U.S. GAAP, which may be material to investors` assessment of its financial condition.