Asarfi Hospital

Risks

• The hospital, Directors and Promoters are parties to certain legal proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, result of operations and financial conditions.

• The hospital do not hold, or may not be able to prove that its hold, good title to the leasehold land situated at Ranguni, Dhanbad on which the company cancer hospital and educational institute building has been constructed.

• The hospital is highly dependent on its healthcare professionals, including doctors, nurses that its engage on a consultancy basis, and the hospital business and financial results could be impacted if its not able to attract and retain such healthcare professionals.

• The hospital industry is highly regulated and requires it to obtain, renew and maintain statutory and regulatory permits, accreditations, licenses and comply with applicable safety, health, environmental, labour and other governmental regulations. Any regulatory changes or violations of such rules and regulations may adversely affect its business, financial condition and results of operations.

• The hospital ability to provide affordable healthcare depends on the maintenance of a high volume of patients, occupancy rates, managing operating & project costs and effective capital management. Any increase in such costs could adversely affect its business, financial condition and results of operations.

• The hospital derive a significant portion of its revenues from its tie up arrangements with Governmental organizations, insurance companies, third party administrators and corporations. The loss of any one or more of its major customers would have a material effect on its business operations and profitability.

• Setting up of a new cancer hospital and educational institute requires substantial capital outlay before the realize any benefits or returns on investments. Its may be unsuccessful in implementing its growth plans of expansion in a timely manner or at all, which may have an adverse effect on its business, financial condition and results of operations.

• If the hospital do not receive payments on time from its payers, its business, financial condition and results of operations may be adversely affected.

• The hospital has been certain instances of non-compliances/ discrepancies, including with respect to certain secretarial/ regulatory filings for corporate actions taken by the Company in the past. Consequently, its may be subject to regulatory actions and penalties for any such non-compliance/ discrepancies and its business, financial position and reputation may be adversely affected.

• If the hospital is unable to maintain bed occupancy rates at sufficient levels, its may not be able to generate adequate returns on its capital expenditure, could adversely affect its operating efficiencies and its profitability.

• The hospital is exposed to legal claims and regulatory actions arising from the provision of healthcare services and may be subject to liabilities arising from claims of malpractice and medical negligence which could materially and adversely affect its reputation and prospects.

• The hospital is dependent on certain field of specialty for a substantial portion of its revenue, i.e. cardiology, neurosciences and general medicine. Any material impact on the company earnings from these fields will impact its financial condition and results of operations significantly.

• The hospital face intense competition from other healthcare service providers. If it is unable to compete effectively, its business, results of operations and cash flows may be materially and adversely affected.

• If the hospital is unable to keep pace with technological changes, new equipment and service introductions, changes in patients` needs and evolving industry standards, the hospital business and financial condition may be adversely affected.

• The hospital revenues are significantly dependent on its single hospital in Dhanbad (Jharkhand). Any change in the economic or political circumstances in or around the areas of Dhanbad, could aterially affect the hospital business, financial condition and results of operations.

• The hospital is dependent on limited number of external suppliers for its medicine and consumables requirements. Any delay or failure on the part of such suppliers to deliver products at acceptable prices, may adversely affect its business, profitability and reputation.

• In the past, its Group Company, Asap Impact Private Limited has defaulted on payment of interest and repayment of loan.

• The hospital relies on third party suppliers and manufacturers for its supplies and equipment. Failure of such third parties to meet their obligations could adversely affect its business, results of operations and cash flows.

• Certain of the hospital properties are taken by its on lease basis for a fixed term and is subject to several terms and conditions. In the event of non-compliance with such conditions or if the hospital are unable to execute or renew the lease agreement or if such agreement is terminated, its may suffer a disruption in the hospital operations and financial condition.

• The hospital face several risks associated with the development of proposed Cancer Hospital, for which its intend to utilize a portion of the net proceeds, which could hamper its growth, prospects, cash flows and business and financial condition.

• The hospital had negative cash flow in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact the hospital business, financial condition and results of operations.

• The average cost of acquisition of Equity Shares by the hospital Promoters is lower than the Issue Price.

• The hospital have issued Equity Shares in the last 12 (twelve) months at a price which is lower than the Issue Price.

• The hospital has certain contingent liabilities, which, if materialized, may affect its financial condition and results of operations.

• The hospital indebtedness and the conditions and restrictions imposed by the hospital financing arrangements may limit its ability to grow its business and adversely impact its business.

• The hospital has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

• If the hospital fail to achieve favourable pricing on medical consumables, pharmacy items, drugs, and surgical instruments from its suppliers or are unable to pass on any cost increases to its payers, the hospital profitability could be materially and adversely affected.

• The hospital could be exposed to risks relating to the handling of personal information, including medical data.

• The hospital is dependent on a number of key personnel, including its Promoters and senior management, and the loss of or its inability to attract or retain such persons could adversely affect its business, financial condition, results of operations and cash flows.

• The hospital insurance coverage may not adequately protect it and this may have an adverse effect on its business and revenues.

• Pricing regulations and reforms in the healthcare industry and the uncertainty associated with pharmaceutical pricing and other matters could adversely affect its business, results of operations and cash flows.

• The hospital is vulnerable to failures of its information technology system, which could adversely affect its business.

• There may be potential conflict of interests between its, Promoter Group Entities, Group hospital and other venture or enterprises promoted by its promoter or directors.

• The hospital may not be able to protect its brand name and trademarks.

• The hospital operations are subject to high working capital requirements. Its inability to maintain an optimal level of working capital required for its business may impact the hospital operations adversely.

• The hospital has not identified any alternate source of funding and hence any failure or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.

• The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.

• The hospital may require additional funding to finance its operations, which may not be available on terms acceptable to it, or at all, and if the hospital is unable to raise funds, the value of your investment in it may be negatively impacted.

• The hospital may be subject to worker unrests and increased wage expenses which could materially and adversely affect its business, financial condition, results of operations and cash flows.

• The hospital is yet to place orders for some of the machineries for the proposed Cancer Hospital at Ranguni. Any delay in placing orders or procurement of such machinery may delay the schedule of implementation and possibly increase the cost of commencing operations.

• The hospital ability to pay dividends in the future will depend on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

• Certain of its individual Promoters, Directors and Key Managerial Personnel hold Equity Shares in the hospital and are therefore interested in its performance in addition to their remuneration and reimbursement of expenses.

• The hospital Promoters and members of its Promoter Group will continue to retain control over the hospital after completion of the Offer, which will allow them to influence the outcome of matters submitted for approval of its shareholders.

• The hospital is susceptible to risks arising on account of fire and other incidents.

• If the hospital is unable to establish and maintain an effective internal control, its business and reputation could be adversely affected.

• The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the hospital.

• In the event there is any delay in the completion of the Issue, there would be a corresponding delay in the completion of the objects / schedule of implementation of this Issue which would in turn affect its revenues and results of operations.

• Certain key performance indicators for certain listed industry peers included in this Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.

• Any future issuance of Equity Shares may dilute your shareholding and sale of Equity Shares by the Promoters may adversely affect the trading price of the Equity Shares.

• The Equity Shares have never been publicly traded, and, after the Offer, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Offer Price, or at all.

• Requirements of being a listed company may strain the hospital resources.

• The hospital cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian economy and industry in which its operate contained in the Draft Red Herring Prospectus.