M & B Engineering Ltd IPO

The company business is dependent on and will continue to depends on its Manufacturing Facilities, and the company is subject to certain risks in its manufacturing process due to the usage of heavy machinery in the company manufacturing operations. In the past, there have been four instances of death in the course of its operations at the company project sites. Any slowdown or shutdown in its manufacturing operations or strikes or work stoppages could have an adverse effect on the company business, cash flows, financial condition and results of operations.

The company derives a majority portion of its revenues from the design, manufacture and installation of pre-engineered buildings. Loss or decline in the demand of pre-engineered buildings may result in an adverse effect on the company business, revenue from operations and financial condition.

The company is measured against high quality standards and stringent performance requirements by its customers. Any failures by the company to comply with these standards or performance requirements may lead to the cancellation of existing and future orders, recalls, liquidated damages, invocation of performance bank guarantees or warranty and indemnity or liability claims, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

Its net cash flow from operating activities has reduced over Fiscal 2023 to Fiscal 2024. If the cash flow from operations continues to remain subdued, the company may have to curtail our scale of business, and its may be unable to meet the company financial obligations which may impact its overall financial stability and performance.

Some of its Directors and Promoters may have interest in entities, which are in businesses similar to its and this may result in conflict of interest with the company. Further, its Subsidiaries are in the same line of business as it, which may result in a conflict of interest.

The company derives a portion of its revenues from few customers and repeat orders which the company identify as orders placed by customer groups that have placed orders with the Company previously. For Fiscal 2025, 57.32% of its consolidated revenue from operations was derived from repeat customers, and 42.64% was contributed by its top five customer groups. Any loss of, or a reduction in the repeat orders received by it could adversely affect the company business, results of operations, financial condition and cash flows.

Its raw material cost constitutes a majority percentage of the company total expenses. During Fiscal 2025, 82.69% of its raw materials were procured from the company top five suppliers, calculated as a percentage of the total cost of materials consumed, including changes in inventories of finished goods, stock in trade, and work in progress. Any increase in the prices, availability and quality of raw materials could adversely affect its reputation, business, results from operations, financial conditions and cash flows. The company relies on limited suppliers for the company primary raw material steel, loss of these suppliers may have an adverse effect on its business, results of operations and financial conditions.

Its business is dependent on the company design and engineering teams to accurately carryout the pre-approval engineering studies for potential orders. Inability of its design and engineering teams to accurately estimate the cost of the project and to execute an order would have an adverse impact on the company business, results of operations, financial condition and cash flows.

Its Subsidiary, Phenix Construction Technologies Inc. has incurred losses in Fiscal 2023 and 2024 and may do so in the future, which could have a material adverse effect on the company business, prospects, financial condition, cash flows and results of operations.

The company has not yet placed orders in relation to the capital expenditure for the purchase of equipment and machinery, building works, solar rooftop grid and transport vehicles at its Manufacturing Facilities. In the event of any delay in placing the orders, or in the event the vendor is not able to provide the equipment and machinery, building works, solar rooftop grid and transport vehicles in a timely manner, or at all, it may result in time and cost overruns and its business, prospects and results of operations may be adversely affected. Further, such proposed capital expenditure may not result in an increase in revenue from operations for the Company.