Spinaroo Comm.

Risks

• Its Directors, Promoters and Group Companies are parties to certain legal proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.

• There is a risk in the Procurement and Storage of Aluminium Reels in larger quantity for a longer period without proper protection and suitable environment.

• Its ability to anticipate changes in consumer preference, and industry trends and to meet customers` demands is a significant factor to remain competitive, any failures to identify and understand the trends may materially adversely affect its business.

• The Company had negative cash flow in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition and results of operations.

• The company has issued Equity Shares in the last 12 (twelve) months at a price which is lower than the Issue Price.

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

• The company also deal in trading of machineries related to its industry which is very infrequent and opportunity based resulting into volatility of Revenue from trading segments.

• The Company maintains high level of inventory for uninterrupted production activities.

• Its business operations are majorly concentrated in certain geographical regions and any adverse developments affecting its operations in these regions could have a significant impact on the company revenue and results of operations.

• There are certain instances of delays in the past with ROC/Statutory Authorities.

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

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

• Delays or defaults in customer payments could adversely affect its financial condition.

• The company has not entered into any long-term contracts with any of its clients.

• There have been some instances of delayed filing of returns and depositing of statutory dues with regulatory authorities"

• Its may face significant competition in the company business. An inability to compete effectively may lead to a lower market share or reduced operating margins.

• Its Factory Premises (Unit II) is not owned by it and the company has only leave and license rights over them. In the event its lose such rights, the company business, financial condition and results of operations, and cash flows could be adversely affected.

• Substantial portion of its revenues has been dependent upon few customers. The loss of any one or more of the company major customers would have a material effect on its business operations and profitability.

• 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.

• Conflicts of interest may arise out of common business objects shared by the Company and its Promoter Group Entity.

• The company`s business is dependent on certain suppliers and the loss of one or more of them would have a material adverse effect on the business.

• Its Business operation is Labour-Intensive and any disruption such as strikes, lockouts, or industrial action, could have a considerable negative impact on its business.

• As the company continue to grow, its may not be able to effectively manage the company growth and the increased complexity of its business, which could negatively impact the company brand and financial performance.

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

• The Company has availed certain unsecured loan which can be recalled at any time.

• Its continued success is dependent on the company senior management and skilled manpower. Its inability to attract and retain key personnel may have an adverse effect on the company business prospects.

• Any failures on its part to effectively manage the company inventory may result in an adverse effect on its business, revenue from manufacturing operations and financial condition.

• Its business is subject to seasonal and other fluctuations that may affect the company cash flows and business operations.

• Its may not be successful in implementing the company business strategies.

• The Company has significant portion of Property Plant and Equipment. Any destruction, breakdown, theft of its major plants or equipment or failures to repair or maintain the same may adversely affect its business, cash flows, financial condition and results of operations.

• Orders placed by customers may be delayed, modified, cancelled or not fully paid for by its customers, which may have an adverse effect on the company business, financial condition and results of operations.

• General economic and market conditions in India and globally could have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.

• Its business requires the company to obtain and renew certain licenses and permits from government, regulatory authorities and other national/ international corporations and the failures to obtain or renew them in a timely manner may adversely affect its business operations.

• The intellectual Property Rights used by the company are registered in the name of the company, but any infringement of third-party intellectual property rights or failures to protect its intellectual property rights may adversely affect its business.

• Some of the approvals are required to be updated consequent to the change in the name of the Company.

• Its insurance coverage may not be adequate to protect the company against certain operating hazards and this may have a material adverse effect on its business.

• The company Directors and certain Key Management Personnel hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

• The company could become liable to customers, suffer adverse publicity and incur substantial costs as a result of defects in its products /services, which in turn could adversely affect the value of its brand, and the company sales could be diminished if its associated with negative publicity.

• Brand recognition is important to the success of its business, and the company inability to build and maintain its brand names will harm the company business, financial condition and results of operation.

• An inability to manage its growth could disrupt the company business and reduce its profitability.

• Its management will have broad discretion in how the company apply the Net Proceeds of the Issue and there is no assurance that the Objects of the Offer will be achieved within the time frame expected, or at all, or that the deployment of Net Proceeds in the manner intended by it will result in an increase in the value of your investment.

• The company is subject to risks arising from interest rate fluctuations, which could adversely affect its business, financial condition and results of operations.

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

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

• Portion of its Issue Proceeds are proposed to be utilized for general corporate purposes amounting to Rs. 200.00 lakhs which constitute 19.67% of the total Issue Proceeds.

• In addition to its existing indebtedness for the company operations, the company may be required to obtain further loan during the course of business. There can be no assurance that the company would be able to service its existing and/or additional indebtedness.

• Its lenders have charge over the company movable properties, book debts, stocks in respect of finance availed by it and the company has excessive dependence on ICICI Bank Limited in respect of Loan facilities obtained by the Company.

• Its debt financing agreements contain certain restrictive covenants that may adversely affect the Company`s business, credit ratings, prospects, results of operations and financial condition.

• The company has not made any alternate arrangements for meeting its regular working capital requirements. If the company is unable to manage/arrange funds (including at short notice) to meet its working capital requirements, there may be an adverse effect on its results of operations and financial performance.

• Its operations are subject to high working capital requirements. If the company is unable to generate sufficient cash flows to allow it to make required payments, there may be an adverse effect on its results of operations.

• The company Promoters have provided personal guarantees for loans availed by the Company. Its business, financial condition, results of operations, cash flows and prospects may be adversely affected by the invocation of all or any personal guarantees provided by its Promoter.

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

• One of its KMPs is associated with the Company for less than one year.

• 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 is dependent on third party transportation providers for procuring raw material from its suppliers and delivery of products to the company clients. Any failures on the part of such service providers to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.

• Any reduction in the demand for its products could lead to underutilisation of the company manufacturing capacity.

• The Company does not have any listed peer companies for comparison of performance and therefore, investors must relies on their own examination of accounting ratios of the Company for the purposes of investment in the Issue.

• Industry information included in this 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.

• An inability to renew quality accreditations in a timely manner or at all, or any deficiencies in the quality of its products may adversely affect the company business prospects and financial performance.

• 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.

• 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 its revenues and results of operations.

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

• The Issue Price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue.

• After this Issue, the price of its Equity Shares may be volatile, or an active trading market for the company Equity Shares may not be sustained.

• The investors will not be able to sell immediately on an Indian stock exchange any of the Equity Shares they purchase in the Issue.

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

• Any future issuance of Equity Shares may dilute the investors` shareholdings or sales of its Equity Shares by the company Promoters or Promoter Group may adversely affect the trading price of its Equity Shares.

• You may be subject to Indian taxes arising out of capital gains on sale of Equity Shares.

• Applicants to this Issue are not allowed to withdraw their Applications after the Issue Closing Date.

• Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

• The investors may be restricted in their ability to exercise pre-emptive rights under Indian law and may be adversely affected by future dilution of their ownership position.

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

• Its Equity Shares are quoted in Indian Rupees in India, and therefore investors may be subject to potential losses arising out of exchange rate risk on the Indian Rupee and risks associated with the conversion of Indian Rupee proceeds into foreign currency.