LAKHOTIA POLYESTERS (INDIA) LIMITED - BSE

employed by us. Further, the costs in upgrading our technology and modernizing the plant and machineriesare significant which could substantially affect our finances and operations.40. Our failure to comply with existing and future environmental laws could adversely affect ourbusiness and results of operations.Our Company is currently involved in activities which require compliance with various environmentalstatutes. As a result, we are subject to various environmental laws and governing regulations. In case ofnon-compliance, additional costs and liabilities related to these laws and regulations are an inherent part ofour business. Further, while we currently intend to continue to comply with applicable environmentallegislation and regulatory requirements, however, in case of any changes in the applicable laws andregulations in the future, there can be no assurance that we may be able to comply with such changes in atime bound manner which may adversely affect our business operations.41. We could be harmed by employee misconduct or errors that are difficult to detect and any suchincidences could adversely affect our financial condition, results of operations and reputation.Employee misconduct or errors could expose us to business risks or losses, including regulatory sanctionsand serious harm to our reputation. There can be no assurance that we will be able to detect or deter suchmisconduct. Moreover, the precautions we take to prevent and detect such activity may not be effective inall cases. Our employees and agents may also commit errors that could subject us to claims andproceedings for alleged negligence, as well as regulatory actions on account of which our business,financial condition, results of operations and goodwill could be adversely affected.42. We are subject to risks arising from exchange rate fluctuations.The exchange rate between the Rupee and other currencies is variable and may continue to fluctuate in thefuture. Fluctuations in the exchange rates may affect the Company to the extent of cost of imported rawmaterial, machinery, etc. being bought from overseas vendors as well as goods exported by our Companyat any point of time. Any adverse fluctuations with respect to the exchange rate of any foreign currency forIndian Rupees may affect the Company’s profitability and results of operations.43. We have applied for registration of our name and logo but do not own the trademark legally as ondate. We may be unable to adequately protect our intellectual property. Furthermore, we may besubject to claims alleging breach of third party intellectual property rights.We have applied for registration of our name and logo under the provisions of the Trademarks Act, 1999and do not own the trademark as on date. As such, we do not enjoy the statutory protections accorded to aregistered trademark as on date. There can be no assurance that we will be able to register the trademarkand the logo in future or that, third parties will not infringe our intellectual property, causing damage to ourbusiness prospects, reputation and goodwill. Further, we cannot assure you that any application forregistration of our trademark in future by our Company will be granted by the relevant authorities in atimely manner or at all. Our efforts to protect our intellectual property may not be adequate and may leadto erosion of our business value and our operations could be adversely affected. We may need to litigate inorder to determine the validity of such claims and the scope of the proprietary rights of others. Any suchlitigation could be time consuming and costly and the outcome cannot be guaranteed. We may not be ableto detect any unauthorized use or take appropriate and timely steps to enforce or protect our intellectualproperty. For further details please refer to chapter titled “Government and Other Approvals” beginning onpage 155 of the Draft Prospectus.44. We may decide not to proceed with the Issue at any time before Allotment. If we decide not toproceed with the Issue after the Bid/Issue Opening Date but before Allotment, the refund of BidAmounts deposited will be subject to us complying with our obligations under applicable laws.We, in consultation with the Lead Manager, reserve the right not to proceed with the Issue at any timebefore the Allotment. If we withdraw the Issue after the Bid/Issue Opening Date, we will be required torefund all Bid Amounts deposited within 8 days of the Bid/Issue Closing Date. We shall be required to payinterest at the rate of 15% per annum on the Bid Amounts received if refund orders are not dispatchedwithin 8 days from the Bid/Issue Closing Date. Notwithstanding the foregoing, the Issue is also subject to18