Kalahridhaan

Risks

• The company does not own its registered office.

• The top ten Buyers of its Product and top ten suppliers for raw material contribute majority of revenue and source of Raw Material. The company does not have long term agreement with the customer or supplier. The loss of any Customer or a decrease in the volume of order by any customer or any disruption in supply of raw material by any supplier may adversely affect its revenues and profitability.

• There are outstanding litigations by and against the Company which if determined against it, could adversely impact financial conditions.

• There have been instances of delay in filing of Goods and Service Tax (GST) returns and return of Tax Deducted at Source (TDS) dues.

• Its business is dependent on its manufacturing facilities and the company is subject to certain related risks; Unplanned slowdowns, unscheduled shutdowns or prolonged disruptions in its manufacturing operations or under - utilization of its manufacturing capacities could have an adverse effect on its business, results of operations, cash flows and financial condition.

• At present, its promoter group companies Shree Laxminarayan Weaving Private Limited, Aadi Texworld Private Limited and Katex Exim Limited have similar objects to deal in the products in which issuer company is engaged which may create a conflict of interest. Further, the company does not enjoy contractual protection by way of a non-compete or other agreement or arrangement with its group companies.

• The company has not executed any agreement with any of its labours who are on Job work basis.

• Its business is manpower intensive and any unavailability of its employees or shortage of labour or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing hiring of labour may have an adverse impact on its cash flows and results of operations.

• Its business and the demand for its products is reliant on the success of its customers` products with end consumers and any decline in the demand for the end products could have an adverse impact on its business, results of operations, cash flows and financial condition.

• Any increase in the cost of its raw material or other purchases or a shortfall in the supply of its raw materials, may adversely affect the pricing and supply of its products and have an adverse effect on its business, results of operations and financial condition.

• The brand name has been registered under the name of the Company name. Any failure to protect its intellectual property could have a material adverse effect on its business.

• Its operations depends on the availability of timely and cost-efficient transportation and other logistic facilities and any prolonged disruption may adversely affect its business, results of operations, cash flows and financial conditions.

• Its inability to manage the demand of existing product range and its manufacturing capacities and execute its growth strategy in a timely manner or within budget estimates, or its inability to meet the expectations to track the changing preferences of its customers or other stakeholders could have an adverse effect on its business, results of operations and financial condition.

• Its Group Companies have incurred losses in the past.

• Its insurance coverage may not be sufficient or adequate to protect it against all material hazards or business losses, which may adversely affect its business, results of operations and financial condition.

• The Company has unsecured loans, which are repayable on demand. Any demand from lenders for repayment of such unsecured loans, may adversely affect its business operations and financial condition of the Company.

• In addition to normal remuneration, other benefits and reimbursement of expenses to its Promoters and Directors; they are interested to the extent of their shareholding and dividend entitlement thereon in the Company and for the transactions entered into between the Company and themselves as well as between the Company and its Group Companies/Entities.

• Its future success depends significantly on the continued service of its promoters, management team and other key personnel.

• The Company is subject to high working capital requirements and its inability to fund these requirements in a timely manner may adversely impact its financial performance.

• Any defaults or delay in payment by a significant portion of its customers, may have an adverse effect on its cash flows, results of operations and financial condition.

• The company has experienced negative cash flows in previous years / periods. Any operating losses or negative cash flows in the future could adversely affect its results of operations, liquidity and financial condition.

• Changes in technology may affect its business by making its equipment or products less competitive or obsolete.

• Significant disruptions of information technology systems or breaches of data security could adversely affect its business.

• Its Object has not been appraised by any Bank or Financial Institution. Any significant deviation in the Object could adversely impact its operations and sustainability in absence of any independent monitoring agency.

• The company operates in a competitive business environment. Competition from existing players and new entrants and consequent pricing pressures may adversely affect its business, financial condition and results of operations.

• Portion of its Issue Proceeds are proposed to be utilized for general corporate purposes which constitute 25% of the Issue Proceed. As on date the company has not identified the use of such funds.

• There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of its Management and its Board of Directors, though it shall be monitored by its Audit Committee.

• The company is subject to the restrictive covenants of banks in respect of the Loan/Credit Limit and other banking facilities availed from them.

• Its Promoters and Promoter Group will continue to exercise control post completion of the Issue and will have considerable influence over the outcome of matters.

• Its may requires additional financing for its business operations and the failure to obtain additional financing on terms commercially acceptable to it may adversely affect its ability to grow and its future profitability. Further, fluctuations in interest rates could adversely affect its results of operations.

• Its ability to pay dividends in the future will depend upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

• The company has not made any alternate arrangements for meeting its capital requirements for the Objects of the issue. Further the company has not identified any alternate source of financing the "Objects of the Issue".

• Certain information contained in this Draft Prospectus is based on management estimates and its cannot assure you of the completeness or accuracy of the data.

• In the event there is any delay in the completion of the Issue, there would be a corresponding delay in the completion of the objects of this Issue which would in turn affect its revenues and results of operations.

• Any variation in the utilization of the Net Proceeds as disclosed in this Draft Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.

• The average cost of acquisition of Equity Shares by its Promoters is lower than the Issue Price.

• The company has been recently converted into public limited company and any non-compliance with the provisions of Companies Act, 2013 may attract penalties against the Company which could impact its financial and operational performance and reputation.

• The requirements of being a listed company may strain its resources and distract management.