Swasth Foodtech

Risks

• The company depends on a few customers for its products, for a significant portion of the company revenue, and any decrease in revenues or sales from any one of its key customers may adversely affect the company business and results of operations.

• The company generates its major portion of sales from its operations in certain geographical regions. Any adverse developments affecting its operations in these regions could have an adverse impact on the company revenue and results of operations.

• The company has a limited operating history in respect of its products, which may make it difficult for investors to evaluate the company business and prospects.

• Its business is dependent on the sale of the company products to certain oil manufacturers with whom the Company has not entered into any long- term agreements purchasing its Rice Bran Oil. The loss of such customers, a significant reduction in purchases by such customers, or a lack of commercial success of their product of which the company is a major supplier could materially adversely affect its business, results of operations and financial condition.

• The company derives significant portion of its revenues from the sale of by-products derived during the processing of rice bran oil and any reduction in demand from its consumers could have an adverse effect on the company business, results of operations and financial condition.

• The company highly depends on its key raw material and a few key suppliers who help it procure the same. The company has not entered into long-term agreements with its suppliers for supply of raw materials. In the event the company is unable to procure adequate amounts of raw materials, at competitive prices its business, results of operations and financial condition may be adversely affected.

• Its products are in the nature of commodities, and their prices are subject to fluctuations that may affect the company profitability.

• All of its experience in respect of the company business operations is limited to manufacturing of rice bran oil and therefore the Company has limited experience of packaging its products and selling them on a retail basis. Hence, the company has limited exposure in operating a packaging line and marketing its products outside to retail customers, which may make it difficult to evaluate its past performance and prospects with respect to the same.

• The Company had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact its growth and business.

• Its Group Company is engaged in a similar line of business as the Company and may compete with it.

• There can be no assurance that the objects of the Issue will be achieved within the time frame anticipated or at all, or that the deployment of the Net Proceeds in the manner intended by it will result in any increase in the value of your investment. Further, the plan for deployment of the Net Proceeds has not been appraised by any bank or financial institution.

• The Company is yet to place orders for 100% of the plant and machinery. Any delay in placing orders or procurement of such plant and machinery or variation in foreign exchange rate, may further delay the schedule of implementation and increase the cost of commissioning the manufacturing unit.

• There have been instances of delays in payment of statutory dues, i.e. GST by the Company. In case of any delay in payment of statutory due in future by the Company, the Regulatory Authorities may impose monetary penalties on it or take certain punitive actions against the Company in relation to the same which may have adverse impact on its business, financial condition and results of operations.

• If the Company is unable to protect its intellectual property, or if the Company infringes on the intellectual property rights of others, its business may be adversely affected.

• The company Promoters and members of the Promoter Group have significant control over the Company and have the ability to direct its business and affairs; their interests may conflict with your interests as a shareholder.

• There have been instances of delays in payment of statutory dues, i.e. ESIC by the Company. In case of any delay in payment of statutory due in future by the Company, the Regulatory Authorities may impose monetary penalties on it or take certain punitive actions against the Company in relation to the same which may have adverse impact on its business, financial condition and results of operations.

• There have been instances of delays in payment of statutory dues, i.e. Provident Fund by the Company. In case of any delay in payment of statutory due in future by the Company, the Regulatory Authorities may impose monetary penalties on it or take certain punitive actions against the Company in relation to the same which may have adverse impact on its business, financial condition and results of operations.

• There have been instances of delays in filings of certain forms which were required to be filed as per the reporting requirements under the Companies Act, 2013 to ROC.

• The improper handling, processing or storage of its raw materials or products, or spoilage of and damage to such raw materials and products, or any real or perceived contamination in its products, could subject us to regulatory action, damage the company reputation and have an adverse effect on its business, results of operations and financial condition.

• If the company is not able to obtain, renew or maintain its statutory and regulatory licenses, registrations and approvals required to operate the company business, it may have a material adverse effect on its business, results of operations and financial condition.

• The company continued operations are critical to its business and any shutdown of the company manufacturing unit may adversely affect its business, results of operations and financial condition.

• Any failures in its quality control processes may adversely affect the company business, results of operations and financial condition. Its may facea product liability claims and legal proceedings if the quality of its products does not meet the company customers` expectations.

• Unfavourable local weather patterns may have an adverse effect on its business, results of operations and financial condition.

• Any failures of diversification into additional oils may adversely affect the company business, results of operations and financial condition.

• Any delays and/or defaults in payments could result in increase of working capital investment and/or reduction of the Company`s profits, thereby affecting its operation and financial condition.

• The Company requires significant amount of working capital for a continuing growth. Its inability to meet the company working capital requirements may adversely affect its results of operations.

• The company is dependent on information technology systems in carrying out its business activities and it forms an integral part of the company business. Further, if its unable to adapt to technological changes and successfully implement new technologies or if the company faces failures of its information technology systems, the company may not be able to compete effectively which may result in higher costs and would adversely affect its business and results of operations.

• The company is dependent on third party transportation providers for delivery of raw materials to it from the company suppliers and delivery of its products to the company customers. Its has not entered into any formal contracts with the company transport providers and any failures on part of such service providers to meet their obligations could adversely affect its business, financial condition and results of operation.

• The Company has availed certain unsecured loans which may be recalled at any time.

• Failures to identify and effectively respond to changing consumer preferences and spending patterns in a timely manner, may adversely affect the demand for its products, causing the company`s business, results of operations, financial condition and cash flows.

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

• Its business may expose it to potential product liability claims and recalls, which could adversely affect the company results of operation, goodwill and the marketability of its products.

• The company has significant power requirements for continuous running of its manufacturing unit. Any disruption to the company operations on account of interruption in power supply or any irregular or significant hike in power tariffs may have an effect on its business, results of operations and financial condition.

• The company operates in a competitive business environment and its inability to compete effectively may adversely affect the company business, results of operations, financial condition and cash flows.

• Its Promoter, Directors and Key Managerial Personnel have interests in the Company other than reimbursement of expenses incurred or normal remuneration or benefits.

• Stringent food safety, consumer goods, health and safety laws and regulations may result in increased liabilities and increased capital expenditures.

• The company has not made any alternate 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.

• The company success largely depends upon the knowledge and experience of its Promoter, Directors, and the company Key Managerial Personnel. Loss of any of its Directors and key managerial personnel or the company ability to attract and retain them could adversely affect its business, operations and financial condition.

• The Company has issued Equity Shares in the last one year at a price which is lower that the Issue Price.

• There are outstanding litigations involving its Promoters which, if determined adversely, may affect the company business and financial condition.

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

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

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

• The company Promoters have extended personal and corporate guarantees and collateral securities with respect to various loan facilities availed by the Company. Revocation of any or all of these personal guarantees or withdrawal of the collateral securities may adversely affect its business operations and financial condition.

• Its agreements with lenders for financial arrangements contain restrictive covenants for certain activities and if the company is unable to get their approval, it might restrict its scope of activities and impede the company growth plans.

• In addition to its existing indebtedness for the company existing operations, its may incur further indebtedness during the course of business. The company cannot assure that its would be able to service its existing and/ or additional indebtedness.

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

• 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 Company.

• Any variation in the utilisation of the Net Proceeds or in the terms of any contract as disclosed in the Prospectus would be subject to certain compliance requirements, including prior shareholders` approval.

• Its inability to procure and/or maintain adequate insurance cover in connection with the company business may adversely affect its operations and profitability.

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

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

• The Equity Shares have never been publicly traded and the Issue may not result in an active or liquid market for the Equity Shares.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME Platform of BSE Limited in a timely manner or at all.

• There is no existing market for its Equity Shares, and the company does not know if one will develop to provide you with adequate liquidity. Further, an active trading market for the Equity Shares may not develop and the price of the Equity Shares may be volatile.

• The price of the Equity Shares may be highly volatile after the Issue.

• You will not be able to sell immediately on the Stock Exchanges any of the Equity Shares you purchase in the Issue.

• There are restrictions on daily movements in the trading price of the Equity Shares, which may adversely affect a shareholder`s ability to sell Equity Shares or the price at which Equity Shares can be sold at a particular point in time.

• The price of the Equity Shares may be volatile, which could result in substantial losses for investors acquiring the Equity Shares in the Issue.

• Any future issuance of Equity Shares, or convertible securities or other equity-linked securities by the Company may dilute your shareholding and any sale of Equity Shares by its Promoters or members of the company Promoter Group may adversely affect the trading price of the Equity Shares.

• Sale of Equity Shares by its Promoters or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

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