Shri Techtex

Risks

• Details Provided in chapter The Promoters and Promoter Group are limited to information provided by company.

• The Company, Promoters, Directors and group Companies are involved in certain litigations including tax related litigations, which if determined against them/us, can affect financial conditions of the company.

• The Company is dependent on few numbers of customers & Group Companies for sales. Loss of any of these large customers may affect its revenues and profitability.

• The Company is dependent on few numbers of suppliers for purchase of product. Loss of any of this large supplier may affect its business operations.

• In addition to normal remuneration, other benefits and reimbursement of expenses to the Promoters and Directors; they are interested to the extent of their shareholding and dividend entitlement thereon in the Company and for the transactions entered into between the Company and themselves as well as between the Company and the Group Companies/Entities.

• Out of total estimated cost of Machinery to be purchased, The company is yet to place order for purchase of Machinery worth Rs. 608.57 Lakhs which constitutes 73.01% of the total estimated cost of Plant & Machinery. Its are subject to risk arising from foreign exchange fluctuation and as well as part of Machinery to be purchased are second hand.

• There may be potential conflicts of interest if the Promoters, Promoters` Group entities who are involved in same business activities that compete with or are in the same line of activity as its business operations.

• The company business and the demand for its products is reliant on the success of the customers` products with end consumers and any decline in the demand for the end products could have an adverse impact on the business, results of operations, cash flows and financial condition.

• The company business is dependent on the manufacturing facilities and its are subject to certain related risks. Unplanned slowdowns, unscheduled shutdowns or prolonged disruptions in its manufacturing operations or under - utilization of the manufacturing capacities could have an adverse effect on the company business, results of operations, cash flows and financial condition.

• Any increase in the cost of the raw material or other purchases or a shortfall in the supply of the raw materials, may adversely affect the pricing and supply of the products and have an adverse effect on the company business, results of operations and financial condition.

• The company do not have long-term agreements with its suppliers or customers and the loss of one or more of them or a reduction in their demand for the company products could adversely affect the business, results of operations, financial condition and cash flows. Further, the company inability to accurately forecast demand for its products or manage the inventory or working capital requirements may have an adverse effect on the company business, results of operations and financial condition.

• The company operations depend on the availability of timely and cost-efficient transportation and other logistic facilities and any prolonged disruption may adversely affect its business, results of operations, cash flows and financial conditions.

• The company inability to manage the expansion of the products range and manufacturing capacities and execute its growth strategy in a timely manner or within budget estimates, or the company inability to meet the expectations to track the changing preferences of the customers or other stakeholders could have an adverse effect on its business, results of operations and financial condition.

• The company business requires it to obtain and renew certain registrations, licenses and permits from government and regulatory authorities and the failure to obtain and renew them in a timely manner may adversely affect its business operations.

• The company insurance coverage may not be sufficient or adequate to protect it against all material hazards or business losses, which may adversely affect its business, results of operations and financial condition.

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

• Any defaults or delay in payment by a significant portion of the company customers, may have an adverse effect on its cash flows, results of operations and financial condition.

• The company face foreign exchange risks that could adversely affect its results of operations and cash flows.

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

• Fraud, theft, employee negligence or similar incidents may adversely affect the company results of operations and financial condition.

• Changes in technology may affect the company business by making our equipment or products less competitive or obsolete.

• Significant disruptions of information technology systems or breaches of data security could adversely affect its business.

• The company Object has not been appraised by any Bank or Financial Institution. Any significant deviation in the Object could adversely impact its operations and sustainability in absence of any independent monitoring agency.

• The company depend on certain brand names and the corporate name and logo that its may not be able to protect and/or maintain.

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

• The company Promoters have provided their personal guaranties to certain loan facilities availed by it, which if revoked may require alternative guarantees, repayment of amounts due or termination of the facilities.

• 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.

• The company is subject to the restrictive covenants of banks in respect of the Loan/Credit Limit and other banking facilities availed from them.

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

• The company lenders have charge over its movable and immovable properties in respect of finance availed by it.

• The company Promoters and Promoter Group will continue to exercise control post completion of the Issue and will have considerable influence over the outcome of matters.

• The company may require additional financing for its business operations and the failure to obtain additional financing on terms commercially acceptable to it may adversely affect the company ability to grow and its future profitability. Further, fluctuations in interest rates could adversely affect its results of operations.

• In the past the Company had suffered due to accidental fire and have incurred heavy losses and there have been considerable delays in recovery of claims.

• 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 the company financing arrangements.

• The company success largely depends on the Board and Key Managerial Personnel and its ability to attract and retain them. Any loss of the director and key managerial personnel could adversely affect the business, operations and financial condition.

• The company has not made any alternat arrangements for meeting its capital requirements for the Objects of the issue. Further the company has not identified any alternate source of financing the "Objects of the Issue". Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• Certain information contained in this Draft Red Herring Prospectus is based on management estimates and the company cannot assure you of the completeness or accuracy of the data.

• 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 of this Issue which would in turn affect the company revenues and results of operations.

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

• Portion of the company Issue Proceeds are proposed to be utilized for general corporate purposes which constitute [0]% of the Issue Proceed. As on date the company has not identified the use of such funds.

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

• The requirements of being a listed company may strain our resources and distract management.