RED HERRING PROSPECTUS Dated August 24 ... - Globus Spirits

2. Entry of more domestic and multinational players in the IMFL industry may force
the Company to reduce the prices of its products which may reduce its revenues
and margins which could have a materially adverse effect on its business, financial
condition and results of operation.
3. The IMFL industry has negative perception in the Indian cultural context. This
leads to circumstances like ban on advertising of alcoholic beverages in the
print/TV media, which is not conducive to business development.
Management Perception
This is a risk applicable to the entire industry and many players have responded by methods
like surrogate advertising. With the globalization and opening of the economy, the
perception of the consumer is gradually changing. Nonetheless the industry is registering a
positive growth year on year, in spite of ban on advertising alcohol products.
4. The Company may not be able to keep pace with changing consumer preferences
and new product introductions which may consequently have an adverse impact on
the Company’s business and growth. In addition, products developed by competing
companies may make the Company’s products less competitive.
Management Perception
This is a risk applicable to the entire liquor industry. The Company constantly endeavours to
keep pace with the latest developments in the industry and is gradually strengthening its
position to enhance its market share by introducing new products, appointing new
distributors, extending geographical coverage etc.
5. A slowdown in economic growth in India could cause the Company’s business to
suffer. Any slowdown in the Indian economy and the consequent impact on
disposable income could adversely affect the Company’s sales and consequently
affect the results of operations.
6. Any change in the policies of the countries, in terms of tariff and non-tariff
barriers, from which the Company imports or intends importing its raw materials
and/or to which its products may be exported in future, will have an impact on the
Company’s profitability. Similarly, any adverse movement in the exchange rate
may have a corresponding effect on the export realization/cost of imports and
consequently affect the Company’s profitability.
Management Perception
Whenever such policy changes affect the Company’s business, the Company would work
towards complying with or reckoning the policy changes and adopt appropriate strategies to
sustain the effect on its business.
7. Natural calamities such as floods, earthquakes, terrorist attacks and other acts of
violence or war/destruction involving India and other countries could adversely
affect the Country’s business and economy. These acts may also result in a loss of
business confidence, make travel and other services more difficult and ultimately
affect the Company’s business, financial conditions and results of operations.
Management Perception
The operations of the manufacturing facilities are dependent on the Company’s ability to
protect its properties from any natural calamity such as fire, earthquakes, flood, natural and
similar events. The consequences of any of the above are unpredictable and the Company
may not be able to foresee events and the occurrence of a natural disaster or other
unanticipated problems at its production facilities that can cause interruptions in its
operations, which could have a negative impact on its profitability and financial condition.
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