LAKHOTIA POLYESTERS (INDIA) LIMITED - BSE

11. We do not own the registered office and other premises from which we operate. Any dispute inrelation to the lease of our premises would have a material adverse effect on our business and resultsof operations.We do not own the premises on which our registered office is situated. Our Company operates from rentedand leased premises at various locations. If any of the owners of these premises do not renew theagreements or renews such agreements on terms and conditions that are unfavorable to our Company, itmay suffer a disruption in our operations or we may have to pay increased rentals which could have amaterial adverse effect on our business, financial condition and results of operations. For moreinformation, please refer chapter titled “Business Overview” on page 73 the Draft Prospectus.12. Post this Issue, our Promoters and Promoter Group shareholding will be diluted in our Company.Post this Issue, our Promoters and Promoter Group will collectively own only 31.78% of our Equity Sharecapital. Accordingly, our Company will run the risk of change in control in our Company or prevent achange in control in our Company, facilitate a merger, consolidation, takeover or other businesscombination involving our Company, or encourage potential acquirers from making an offer or otherwiseattempting to obtain control over our Company even if it is not in its best interest.13. We propose to utilise a part of the Net Proceeds for general corporate purpose and our managementwill have the discretion to deploy the funds. In any case, the deployment towards general corporatepurposes out of the IPO proceeds shall not exceed 25% from the said issue.We propose to utilise the Net Proceeds for purposes identified in the section titled “Objects of the Issue”and we propose to utilise the balance portion of the Net Proceeds towards general corporate purposes,namely, including but not restricted to our working capital requirements, bank deposits, deposits forrenting or otherwise acquiring business premises, investment in business venture, strategic alignment,investment in securities, strategic initiatives, expansion into new geographies, brand building exercises,strengthening of our production capabilities, in our operations and other project related investments andcommitments and execution capabilities in order to strengthen our operations. The manner of deploymentand allocation of such funds is entirely at the discretion of our management and our Board, subject tocompliance with the necessary provisions of the Companies Act.14. The total revenues of the Company have decreased substantially in FY 2012.The total revenues of the Company have decreased from Rs. 1,074.50 in FY 2011 to Rs. 796.43 in FY 2012.Further, the total revenues for the six months period ended September 30, 2012 is Rs. 33,476,204. Our financialcondition will be adversely affected if this downtrend continues in future.15. The shortage or non-availability of power may adversely affect the manufacturing processes and ourperformance may be affected adversely.Our manufacturing processes requires substantial amount of power. Our manufacturing facilities may facepower interruptions due to power cuts and as a result our operations or financial condition may beadversely affected. Further the Company does not have any alternate source of power arrangement.16. Our Company has incurred losses in the past.As per the restated Financial Statements our Company incurred a loss of Rs. 2.79 lakhs in the financialyear 2009-10. Our current financial performance does not warrant our future profits. There can be noassurance that we will be able to make profits.17. Our contingent liabilities, not provided for, if crystallized, could adversely affect our financialcondition.We have not provided for certain contingent liabilities for the year ended March 31, 2012 which ifmaterialized could adversely affect our financial position. The details of the same are as under:13