FUTURA POLYESTERS LIMITED - IDBI Capital

RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in
the Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in our
Equity Shares. If any of the following risks actually occur, our business, results of operations and financial
condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment.
The financial and other implications of material impact of risks concerned, wherever quantifiable, have been
disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not
quantifiable and hence the same has not been disclosed in such risk factors.
The Draft Letter of Offer also includes statistical and other data regarding the Indian Manufacturing Industry. This
data was obtained from industry publications, reports and other sources that we and the Lead Manager believe to
be reliable. Neither we nor the Lead Manager have independently verified such data.
Internal Risk Factors:
1. Our Company is involved in certain legal proceedings which could render us liable to liabilities/penalties and
have a material adverse effect on our business and profitability. We have also paid some penalties in the past
Our Company is involved in certain legal proceedings and claims in relation to certain civil, labour, criminal
and taxation matters incidental to our business and operations. These legal proceedings are pending at different
levels of adjudication before various courts and tribunals. Any adverse decision may render us liable to
liabilities/penalties and may adversely affect our business and results of operations. A classification of these
legal and other proceedings instituted against and by our Company is given in the following table:
Type of Legal Proceedings Total number of pending cases Financial
Implications*
Civil 19 Rs. 492 Lacs and USD
6,03,330
Criminal 4 Rs. 44.69 Lacs
Labour 9 Rs. 0.80 Lacs
Tax 58 Rs. 3677.08 lacs
(**excluding Income
Tax cases)
Penalties imposed in the past five years on our Company:
Sr. Amount of Brief particulars regarding penalty Remarks (paid/
No. penalty
payable and
imposed (Rs.)
reasons therefore)
1. Rs. 19,325 Penalty of Rs. 19,325 imposed in the Assessment Year 2005-2006 Paid
by the Commercial Tax Officer, for late payment of monthly sales
tax under the provisions of the Tamil Nadu General Sales Tax Act,
1959.
2. Rs. 21,126 Penalty of Rs. 21,126 imposed in the Assessment Year 2005-2006
by the Commercial Tax Officer for late payment of sales tax under
provisions of the Central Sales Tax Act, 1956 read with Tamil
Nadu General Sales Tax Act, 1959.
Paid
* The amount(s) disclosed in the above tables are the amount(s) expressly claimed, being the liability and financial
impact which may be incurred if unsuccessful in legal proceedings. However, it does not include those penalties,
interests and costs, if any, which may be imposed which may have been pleaded but not quantified in the course of
legal proceedings, or which the Court/Tribunal otherwise has the discretion to impose. The imposition and amount
of such penalties/interests/costs are at the discretion of the court/tribunal where the case is pending. Such liability, if
any, would crystallize only on the order of the court/tribunal where the case(s) is/are pending.
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