Swashthik

Risks

• The Company, its Promoters, its Directors and its Group Companies 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.

• Its success mainly depends on sectors specific to PET bottle industry in which the company cater to and therefore as a result its may be affected by any disruptions in the industry. Any failure on its part to do so, may have an impact on the reputation of its products, which could have an adverse effect on the company revenue, reputation, financial conditions, results of operations and cash flows.

• Concerns over Plastic Ban and Environment for packaged water bottles.

• Its third-party suppliers, on whom its relies for the raw material, may fail to deliver raw material of sufficient quality or in a timely manner, which could adversely affect its reputation, net sales and profitability.

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

• The industry in which its operate, requires labour/ manpower and the company operations may be materially adversely affected by strikes, work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees.

• The company does not have any documents evidencing certain information included in the Director biographies for some of its Directors under the section "Its Management" of this Draft Red Herring Prospectus.

• The company face competition in its business from organized and unorganized players, which may adversely affect its business operation and financial condition.

• The company is dependent on third party transportation providers for the delivery of its raw material and Finished products. Accordingly, continuing increases in transportation costs or unavailability of transportation services for them, as well the extent and reliability of Indian infrastructure may have an adverse effect on its business, financial condition, results of operations and prospects.

• There have been some instances of delays in the past with certain statutory authorities and non-compliances with certain provision of statutory regulations applicable to it. If the authorities impose monetary penalties on its or take certain punitive actions against the Company in relation to the same, its business, financial condition and results of operations could be adversely affected.

• Its existing manufacturing facility are concentrated in a single region i.e., Puducherry, Pondicherry and the inability to operate and grow its business in this particular region may have an adverse effect on its business, financial condition, results of operations, cash flows and future business prospects.

• Improper handling of its products, or spoilage and damage to its products, could damage its reputation and may have an adverse effect on the company`s business, results of operations and financial condition.

• Its insurance coverage may not adequately protect it against all material hazards, which may adversely affect its business, results of operations and financial condition.

• If the company is unable to source business opportunities effectively, its may not achieve its financial objectives.

• The Company if not able to manage its growth or to successfully implement its business plan could have an effect on the company`s business, results of operations and financial condition.

• The property used by the Company for the purpose of its operations is not owned by it. Any termination of the relevant rent agreement in connection with such property or its failure to renew the same could adversely affect its operations.

• The company depends on the success of its relationships with its customers. The company derives a significant part of its revenue from its top 10 customers and the company does not have long term contracts with these customers. If one or more of such customers choose not to source their requirements from it, its business, financial condition and results of operations may be adversely affected.

• Its top ten suppliers contribute majority of its purchases. Any loss of business with one or more of them may adversely affect its business operations and profitability.

• The company requires certain approvals and licenses in the ordinary course of business and the failure to successfully obtain such registrations would adversely affect its operations, results of operations and financial condition.

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

• The company has a substantial amount of outstanding indebtedness, which requires significant cash flows to service and are subject to certain conditions and restrictions in terms of its financing arrangements, which restricts its ability to conduct its business and operations in the manner the company desire.

• The Company logo is not registered with Registrar of Trademark; any infringement of its brand name or failure to get it registered may adversely affect its business. Further, any kind of negative publicity or misuse of its brand name could hamper its brand building efforts and the company future growth strategy could be adversely affected.

• The unsecured loan availed by the Company from Director; Promoter group other parties may be recalled at any given point of time.

• Any deficiency in its products could make the Company liable for client claims, which in turn could affect the Company`s results of operations.

• The company does not have any long-term agreement or contract of supply of raw materials and consequently are exposed to price and supply fluctuations for its raw materials.

• Certain relevant copies of educational qualification of one of its Promoters is not traceable.

• Its inability to manage inventory in an effective manner could affect its business.

• Any failure to comply with financial and other restrictive covenants imposed on it under its financing agreements may affect the company operational flexibility, business, results of operations and prospects.

• There may be potential conflicts of interest if its Promoters or Directors are involved in any business activities that compete with or are in the same line of activity as its business 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.

• Within the parameters as mentioned in the chapter titled "Objects of this Issue" beginning on page 81 of this Draft Red Herring Prospectus, the Company`s management will have flexibility in applying the proceeds of the Issue. The fund requirement and deployment mentioned in the Objects of this Issue have not been appraised by any bank or financial institution.

• The Company is yet to place orders for of the capital expenditure for its proposed object, as specified in the Objects of the Issue. Any delay in placing orders, procurement of such infrastructure may delay its implementation schedule and may also lead to increase in price of these plant & machineries, further affecting its revenue and profitability.

• The company have significant ongoing funding requirements and may not be able to raise additional capital in the future. As a result, its may not be able to respond to business opportunities, challenges or unforeseen circumstances.

• If there is a change in policies related to tax, duties or other such levies applicable to the company, it may affect its results of operations.

• Its ability to pay dividends in the future may be affected by any material adverse effect on its future earnings, financial condition or cash flows.

• The company have experienced negative cash flows in the past. Any such negative cash flows in the future could affect its business, results of operations and prospects.

• Its Promoter and Executive Directors hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

• Its Promoters and members of the Promoter Group will continue jointly to retain majority control over the Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

• The company is subject to the risk of failure of, or a material weakness in, its internal control systems.

• Major fraud, lapses of internal control or system failures could adversely impact the company`s business.

• The future operating results are difficult to predict and may fluctuate or adversely vary from the past performance.

• The company has not independently verified certain data in this Draft Red Herring Prospectus.

• Employee misconduct including misuse of confidential data and failure to maintain confidentiality of information could harm it and is difficult to detect and deter.

• Any Penalty or demand raise by statutory authorities in future will affect its financial position of the Company.

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

• The Company`s management will have flexibility in utilizing the Net Proceeds from the Issue. The deployment of the Net Proceeds from the Issue is not subject to any monitoring by any independent agency.

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

• The company have in the last 12 months issued Equity Shares at a price that may be at lower than the Issue Price.

• The average cost of acquisition of Equity Shares by its Promoter could be lower than the Issue Price.

• The company will continue to be controlled by its Promoter and Promoter Group after the completion of the Issue, which will allow them to influence the outcome of matters submitted for approval of its shareholders.

• Its Equity Shares have never been publicly traded and may experience price and volume fluctuations following the completion of the Issue, an active trading market for the Equity Shares may not develop, the price of its Equity Shares may be volatile and you may be unable to resell your Equity Shares at or above the Issue Price or at all.

• Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

• The Issue Price of its Equity Shares may not be indicative of the market price of its Equity Shares after the Issue and the market price of its Equity Shares may decline below the Issue Price and you may not be able to sell your Equity Shares at or above the Issue Price.

• A third party could be prevented from acquiring control of the Company because of anti-takeover provisions under Indian law.

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