Pattech Fitwell

Risks

• The company is highly dependent on its suppliers for uninterrupted supply of raw-materials. The company is not entered into any long-term supply agreement for the major raw materials required for manufacturing of its products. Also, volatility in the prices and non-availability of these raw materials may have an adverse impact in its business prospects, results of operations and financial condition.

• The Company, Promoter and Directors are involved in certain litigation which is currently pending at various stages. Any adverse decisions in these cases against the Company, Promoter and Director. may impact business and operations of the Company.

• In case of its inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate the company business it may have a material adverse effect on its business.

• The company has made an application with the Registrar of Trade Marks for registration of the logo and same has been under the status of send to Vienna Codification. Any delay in receiving the approval and/or granting registration or in obtaining registration could result in loss of logo & brand equity and the Company right to use the said logo.

• The company is depend on a limited number of customer for a significant portion of its revenue from engineering business. The loss of any of its major customer due to any adverse development or significant reduction in business from its major customer may adversely affect its business, financial condition, results of operations, cash flow and future prospects.

• The company has experienced negative cash flows in previous years. Any operating losses or negative cash flows in the future could adversely affect its results of operations and financial conditions.

• Any failure to adapt to industry trends and evolving technologies to meet its customers` demands may adversely affect the company business and results of operations.

• The Company requires significant amounts of working capital for a continued growth. Its inability to meet its working capital requirements may have an adverse effect on its results of operations.

• The company propose to utilize a portion of the Net Proceeds for funding working capital requirements of the Company.

• Any non-compliance or delay in RoC filings may expose it to penalties from the regulators.

• The objects of the Offer include funding working capital requirements of the Company, which are based on certain assumptions and estimates.

• Any variation in the utilization of the Net Proceeds as disclosed in this Prospectus shall be subject to certain compliance requirements, including prior shareholders` approval.

• The Company has incurred substantial indebtedness which exposes it to various risks which may have an adverse effect on its business and results of operations. Its financing agreements impose certain restrictions on the company operations, and its failure to comply with operational and financial covenants may adversely affect its reputation, business and financial condition.

• The price, at which its able to obtain the raw material for manufacture of the company finished products depend largely on prevailing market prices. Increase in costs of its raw materials could have a material adverse effect on the Company`s sales, profitability and results of operations.

• The Company have unsecured loans that may be recalled by the lenders at any time.

• The company has issued Equity Shares in last twelve (12) months at a price lower than the issue price (other than bonus).

• If the price of energy sources increases, its operating expenses could increase significantly and its results of operations and cash flows could be materially and adversely affected.

• Loan facilities availed through borrowings from banks are required to be updated consequent to the conversion from firm into the Company and pendency of filing of creation of charges with Roc.

• The company has not identified any alternate source of raising the funds mentioned as its `objects of the Issue`. Any shortfall or delay in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• Changes in technology may render its current technologies obsolete or require it to make substantial capital investments.

• The company insurance coverage may not adequately protect it, which may adversely affect its business, results of operations and financial condition.

• If the company is subject to any frauds, theft, or embezzlement by its employees, suppliers, contractors, it could adversely affect its reputation, results of operations, financial condition and cash flows.

• The Company is dependent on third party transportation providers for the delivery of its products and any disruption in their operations or a decrease in the quality of their services could affect the Company`s reputation and results of operations.

• The company is subject to strict quality requirements and are consequently required to incur significant expenses to maintain its product quality. Any failure to comply with such quality standards may lead to cancellation of existing and future orders which may adversely affect its reputation, financial conditions, cash flows and results of operations.

• Information in relation to its installed capacity and capacity utilization of the company manufacturing facility included in this Prospectus is based on various assumptions and estimates, and future production and capacity utilization may vary.

• The company future funds requirements, in the form of issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

• The company do not hold any patents or other form of intellectual property protection in relation to its manufacturing processes, and its inability to maintain the integrity and secrecy of the company manufacturing processes may adversely affect its business.

• The company Manufacturing Facility is located at Vadodara in Gujarat exposing it to regulatory and other geography specific risks such as weather and natural occurrences as well as regulatory, economic, demographic and other changes in Gujarat.

• The company business operations may be disrupted by an interruption in power supply, which may impact its business operations.

• Delays or defaults in client payments could affect its operations.

• Failure to manage its inventory could have an adverse effect on the company net sales, profitability, cash flow and liquidity.

• The company has a history of losses and have experienced negative cash flows from operating, investing and financing activities in the past.

• Any adverse changes in regulations governing its business operations or products or the products of its end-customers, may adversely impact the company business, prospects, results of operations and cash flows.

• The company Promoter and the Promoter Group will jointly continue to retain majority shareholding in the Company after the issue, which will allow them to determine the outcome of the matters requiring the approval of shareholders.

• The company generally do business with its customers on purchase order basis and do not enter into long term contracts with most of them.

• The company ability to pay dividends in the future will depend upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

• The company funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution or any other independent agency and its management will have broad discretion over the use of the Net Proceeds.

• The company success depends largely upon the services of its Directors, Promoters and other Key Managerial Personnel and its ability to attract and retain them. Demand for Key Managerial Personnel in the industry is intense and its inability to attract and retain Key Managerial Personnel may affect the operations of the Company.

• The company has not commissioned an industry report for the disclosures made in the section titled ndustry Overview` and made disclosures on the basis of the data available on the internet and such data has not been independently verified by the company.

• Certain data mentioned in this Prospectus has not been independently verified.

• The company Promoters, Directors and Key Management Personnel may have interests in it other than reimbursement of expenses incurred and normal remuneration or benefits.

• The company has in the past entered into related party transactions and may continue to do so in the future.

• Conflicts of interest may arise out of common business objects between the Company and certain of its promoter group entity which are in the same line of activity or business as that of the Company.

• There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of its management and the company board of Directors, though it shall be monitored by its Audit Committee.

• The company operation is labour intensive and its business operations may be materially adversely affected by strikes, work stoppages or increased wage demands by its employees or those of the company suppliers.

• The company future fund requirements, in the form of further issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the Shareholders depending upon the terms on which they are eventually raised.