Prominent Notes: - Securities and Exchange Board of India

estrictions and incidents occur, or if we are unable to procure the requisite quantities of raw materials
in time and at commercially acceptable prices, the performance of our business and results of
operations may be adversely affected.
25. The conditions and restrictions imposed by our lenders could restrict our ability to expand our
business and operations.
As on December 31, 2010 we have availed an aggregate of `1187.02 Lacs as secured loans from
various banks and other entities. Most of our loans are secured by way of mortgage of fixed assets and
hypothecation of current assets both present and future. In case we are not able to pay our dues in time,
the same could adversely impact our operations. In addition to the above, our financing arrangements
also include conditions and covenants that require us to obtain consents of our lenders prior to carrying
out certain activities and entering into certain transactions. Failure to obtain such consents can have
significant consequences on our capacity to expand and therefore adversely affect our business and
operations. We cannot assure you that we have requested or received all consents from our lenders that
are required by our financing documents. As a result, it is possible that a lender could assert that we
have not complied with all terms under our existing financing documents. Any failure to comply with
the requirement to obtain a consent, or other condition or covenant under our financing agreements that
is not waived by our lenders or is not otherwise cured by us, may lead to a termination of our credit
facilities, acceleration of all amounts due under such facilities and trigger cross default provisions
under certain of our other financing agreements and may adversely affect our ability to conduct our
business and operations or implement our business plans.
26. Some of our Promoters had pledged and have agreed to pledge some of their Equity Shares in the
Company subsequent to the Issue to the State Bank of India to secure the financial obligations of the
Company.
Three of our Promoters, Mr. Jayanti Sanghvi, Mr. Babulal Sanghvi and Mr. Naresh Sanghvi had
pledged 13,39,140 equity shares held by them in our Company constituting 16.03% of the pre-issue
paid-up capital in favour of State Bank of India in order to secure the financial obligations of the
Company. By a letter dated April 11, 2011, State Bank of India has revoked the said pledge on the
Equity Shares. However, the said shares would be repledged in their favour only after listing of the
Equity Shares of the Company on the Stock Exchanges but before disbursement of the new term loan.
In the event of default or a breach of the covenants, the bank shall have the right to enforce the pledge
which may result in substantial reduction of the shareholding of the Promoters in the Company and
may adversely affect the shareholding and/or management structure of the Company. For further
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27. Our Promoters and Promoter Group will continue to retain significant control in our Company after
the Issue, which will allow them to influence the outcome of matters submitted to shareholders for
approval in their favour.
After this Issue, our Promoter and Promoter group will beneficially own approximately 56.8 % of our
post-Issue Equity Share Capital. As a result, they will have the ability to exercise significant influence
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significant corporate transactions. The Promoter and Promoters Group will also be in a position to
influence any shareholder action or approval requiring a majority vote, except where they are required
by applicable laws to abstain from voting. Such a concentration of ownership may also have the effect
of delaying, preventing or deterring a change in control.
28. Impairment of assets of our Company can adversely affect our results of operations
Our Company has provided for impairment to its assets in the Fiscal 2009-2010 to the extent of 2.07
Lacs on account of obsolete assets. Any future susbstantial impairment may adversely impact the
results of our operations.
29. There are certain audit qualifications in ��������������������������������������������������������������
Our auditors have qualified the financial statements for FY 2005-2006, FY 2006-2007, FY 2007-08
and FY2008-09 with regard to non-compliance of AS-15- Employee Benefits. These audit
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