Sati Poly

Risks

• Majority of its revenues are generated from state of Uttar Pradesh. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations.

• The company has certain outstanding litigation against it, an adverse outcome of which may adversely affect its business, reputation and results of operations.

• The Company is dependent on few numbers of customers for sales. Loss of any of this large customer may affect its revenues and profitability.

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

• Its business is dependent and will continue to depend on the company`s manufacturing facilities, and the company is subject to certain risks in its manufacturing process such as the breakdown or failure of equipment, industrial accidents, severe weather conditions and natural disasters.

• The Company is reliant on the demand from the food and beverage industry for a significant portion of its revenue. Any downturn in the food and beverage industry or an inability to increase or effectively manage its sales could have an adverse impact on the Company`s business and results of operations.

• Volatility in the supply and pricing of its raw materials, restrictions on import of raw materials or failure by suppliers to meet their obligations, may have an adverse effect on its business, cash flows, financial condition and results of operations.

• The Company does not have any documentary evidence for the education qualifications and work experience of some of its Key managerial Personnel (KMP).

• The company is subject to the restrictive covenants of banks in respect of the Loan/Credit Limit and other banking facilities availed from them. Further as on the date of the Red Herring Prospectus the Company has not received "No objection" certificate from its lender(s) to undertake this issue. Non receipt of such "No- Objection" certificate could lead to non-compliance of the terms of loan agreements entered into by the Company with said lender(s).

• The company has certain contingent liabilities that have not been provided for in the Company`s financials which if materialized, could adversely affect its financial condition.

• Its business is subject to seasonal and cyclical volatility due to which there may be fluctuation in the sales of Products which could lead to higher closing inventory position, which may adversely affect its business.

• The company has not yet applied for registration of its name and logo "SP" and the company does not own the "corporate logo" legally as on date.

• Certain records and regulatory filings of the Company and certain bank statements of its Promoters are not traceable. Further, there are certain discrepancies in documents filed with RoC.

• The company has been in non-compliance of certain provisions of Companies Act, 2013, compounding for which an application has been filed with the ROC.

• The company has working capital requirements. If the company is experience insufficient cash flows to make required payments on its debt or fund working capital requirements, there may be an adverse effect on its results of operations.

• The company has not entered into any technical support service for the maintenance and smooth functioning of its equipment`s and machineries, which may affect the company performance.

• The company does not receive firm and long-term volume purchase commitments from its customers. If the company customers choose not to renew their supply contracts with it or continue to place orders with it, the company`s business and results of operations will be adversely affected.

• Any failures in its quality control processes may adversely affect the company`s business, results of operations and financial condition.

• The Company has adopted an integrated business model and its commercial success is largely dependent upon the company`s ability to develop and design innovative packaging material suitable for the final finished product of its customers. The company`s inability to effectively utilize and manage its R&D and Design Divisions to develop and design innovative packaging products would impact its integrated business model, thereby affecting the utility of its products resultantly impacting its revenue and profitability.

• The company does not own its registered office.

• The company does not own Factory/ Manufacturing unit.

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

• The company has encountered challenges in meeting the designated timelines for filing statutory returns, a circumstance that carries significant implications for its financial standing.

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

• If the company is unable to service its debt obligations in a timely manner or to comply with various financial and other covenants and other terms and conditions of its financing agreements, it may adversely affect the company`s business, prospects, results of operations and financial condition.

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

• The company is dependent on its Promoters, its senior management and other key personnel, and the loss of, or its inability to attract or retain, such persons could affect the company`s business, results of operations, financial condition and cash flows.

• The company relies on third-party transportation providers for procurement of raw materials and for supply of its products and failures by any of the company transportation providers could result in loss in sales.

• Its business is operating under various laws which require it to obtain approvals from the concerned statutory/regulatory authorities in the ordinary course of business and its inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for its business operations could materially and adversely affect its business, prospects, results of operations and financial condition.

• If the Company is unable to continue being creative in its designs it may adversely affect the company`s business, results of operations and prospects. The company also face the risk of its designs getting copied and product being sold at lower prices in the market resulting in it losing out on premium pricing.

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

• Its manufacturing units, warehouses and all the company facilities are currently located in one geographical area. The loss of, or shutdown of, its operations at this manufacturing or any disruption in the operation of its warehouses will adversely affect its business, financial condition and results of operations.

• All its export revenues are generated from Nepal, only. Any adverse development affecting its operations in this region could have an adverse impact on the company`s business, financial condition and results of operations. Further, the company is subject to foreign currency exchange rate fluctuations which could have a material and adverse effect on its results of operations and financial conditions.

• The Company in the past has entered into Related Party Transactions and may continue to do so in future also, which may affect its competitive edge and better bargaining power if entered with non- related parties resulting into relatively more favorable terms and conditions and better margins.

• Its promoters will continue to retain significant control over the Company after the Public Issue.

• Its Promoters, Directors and KMPs may have interest in the Company other than normal remuneration or benefits and reimbursement of expenses incurred.

• The company is heavily dependent on its Promoters and Key Managerial Personnel for the continued success of its business through their continuing services and strategic guidance and support.

• The average cost of acquisition of Equity shares by its Promoters may be lower than the Issue price.

• There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

• Within the parameters as mentioned in the chapter titled "Objects of this Issue" of this Red Herring Prospectus, the Company`s management will have flexibility in applying the proceeds of this 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 has issued Equity Shares during the preceding one year at a price that is below the Issue Price.

• The company may not be sufficiently protected or insured for certain losses that its may incur or claims that the company may face against it.

• The company faces competition from both domestic as well as international markets and its inability to compete effectively may have a material adverse impact on its business and results of operations.

• Industry information included in this Red Herring Prospectus has been derived from industry reports. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

• Increases in interest rates may materially impact its cash flows and results of operations.

• The company could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• The company has not identified any alternate source of raising the funds required for the object of the Issue and the deployment of funds is entirely at its discretion and as per the details mentioned in the chapter titled "Objects of the Issue".

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by its major shareholders may adversely affect the trading price of the company Equity Shares.

• The requirements of being a public listed company may strain its resources and impose additional requirements.

• Third party statistical and financial data in this Red Herring Prospectus may be incomplete or unreliable.

• Third party statistical and financial data in this Draft Red Herring Prospectus may be incomplete or unreliable.