Karnika Industri

Develop cordial relationship with its Suppliers, Customer and employees.

Optimal Utilization of Resources.

Enhance product quality.

Creativity.

To Build-Up a Professional Organization.

Leveraging its Marketing skills and Relationships.

Invest in infrastructure and technology.

Diversified Product Portfolio.

Consistency in Quality and Service Standards.

Cost effective production and timely fulfilment of orders.

Scalable Business Model.

Organizational stability along with management expertise.

Existing client relationship.

High level of customer satisfaction.

The loss, shutdown or slowdown of operations of the facility or the under-utilization of any such facility may have a material effect on the company results of operations and financial condition.

The company has significant power requirements for continuous running of the factories. Any disruption to its operations on account of interruption in power supply or any irregular or significant hike in power tariffs may have an effect on the company business, results of operations and financial condition.

The company is dependent on Job work for manufacturing of its Products, any disruption to the operations on account of Job work may have an effect on the business, results of operations and financial condition.

The company`s business is manpower intensive and any unavailability of the 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.

There are outstanding legal proceedings involving the Company and Group Company. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.

The restated financial statements have been provided by peer reviewed chartered accountants who is not statutory auditor of the Company.

The property used by the Company for the purpose of its operations is not owned by it. Any termination of the relevant rent agreement in connection with such property or its failure to renew the same could adversely affect the company operations.

The company top ten customers contribute majority of the revenues from operations. Any loss of business from one or more of them may adversely affect its revenues and profitability.

The company top ten suppliers contribute majority of the purchases. Any loss of business with one or more of them may adversely affect its business operations and profitability.

Its may not be able to adapt to changing market trends and customer requirements in the fashion market in a timely manner, or at all.

The company requires certain approvals and licenses in the ordinary course of business and the failure to successfully obtain such registrations would adversely affect its operations, results of operations and financial condition.

Any change in the consumer`s likes, preferences or a change in their perception regarding the quality of the products may negatively affect the image and the company reputation and in turn affect its revenues and profitability.

The company has a substantial amount of outstanding indebtedness, which requires significant cash flows to service and are subject to certain conditions and restrictions in terms of the financing arrangements, which restricts its ability to conduct the company business and operations in the manner itsdesire.

The company inability to effectively manage its growth or to successfully implement of the business plan and growth strategy could have an effect on the company business, results of operations and financial condition.

The unsecured loan availed by the Company from Director, Promoter group other parties may be recalled at any given point of time.

Any deficiency in its products could make the Company liable for client claims, which in turn could affect the Company`s results of operations.

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 company does not have any long-term agreement or contract of supply of raw materials and consequently are exposed to price and supply fluctuations for its raw materials.

The Company has not entered into any long-term contracts with any of the customers and its typically operate on the basis of purchase orders. Inability to maintain regular order flow would adversely impact the company revenues and profitability.

The company is subject to foreign currency exchange rate fluctuations which could have a material and adverse effect on its results of operations and financial conditions.

Its may not be able to prevent unauthorised use of trademarks obtained/ applied for by third parties, which may lead to the dilution of the goodwill.

There have been some instances of delays in the past with certain statutory authorities and non-compliances with certain provision of statutory regulations applicable to it. If the authorities impose monetary penalties on it or take certain punitive actions against the Company in relation to the same, its business, financial condition and results of operations could be adversely affected.

The company inability to manage inventory in an effective manner could affect its business.

The company director and Promoters have provided personal guarantees and Personal Property for loans availed by the Company. Its business, financial condition, results of operations, cash flows and prospects may be adversely affected by the invocation of all or any personal guarantees and personal property.

The company face competition in the business from organized and unorganized players, which may adversely affect its business operation and financial condition.

Any failure to comply with financial and other restrictive covenants imposed on it under the company financing agreements may affect its operational flexibility, business, results of operations and prospects.

The company operating results could be adversely affected by weakening of economic conditions due to lock-down in all parts of India and other parts of world & other situation due to pandemic Covid-19.

The company depends on third parties for a major portion of the transportation needs. Any disruptions may affect its operations, business and financial condition.

The marketing and advertising campaigns may not be successful in increasing the popularity of the products and offerings. If its marketing initiatives are not effective, this may adversely affect the company business and results of operations.

There may be potential conflicts of interest if the Promoters or Directors are involved in any business activities that compete with or are in the same line of activity as its business operations.

The company has entered into and may enter into related party transactions in the future also.

The company`s success is dependent on the Promoter, management team and skilled manpower. Its inability to attract and retain key personnel or the loss of services of the Promoter or Managing Director and Whole Time Director may have an adverse effect on the business prospects.

Its failure to adapt to technological developments or industry trends could affect the performance and features of the products, and reduce the company attractiveness to its customers.

The present promoters of the Company are first generation entrepreneurs.

The company has significant ongoing funding requirements and may not be able to raise additional capital in the future. As a result, its may not be able to respond to business opportunities, challenges or unforeseen circumstances.

If there is a change in policies related to tax, duties or other such levies applicable to it, it may affect the company results of operations.

The company ability to pay dividends in the future may be affected by any material adverse effect on its future earnings, financial condition or cash flows.

The company has experienced negative cash flows in the past. Any such negative cash flows in the future could affect its business, results of operations and prospects.

Any customer dispute regarding its performance or workmanship may amount in delay or withholding of payment to it.

The company Promoter and Executive Directors hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

The company is subject to the risk of failure of, or a material weakness in, its internal control systems.

Major fraud, lapses of internal control or system failures could adversely impact the company`s business.

The company insurance coverage may not be adequate to protect us against all potential losses to which its may be subject and this may have a material effect on the business and financial condition.

The company`s business is substantially affected by prevailing economic, political and other prevailing conditions in India.

The future operating results are difficult to predict and may fluctuate or adversely vary from the past performance.

The company has not independently verified certain data in this Draft Prospectus.

The company is susceptible to risks relating to unionization of its workers employed by it.

Any Penalty or demand raise by statutory authorities in future will affect its financial position of the Company.

The company has not identified any alternate source of raising the working capital mentioned as the "Objects of the Issue`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

The Company`s management will have flexibility in utilizing the Net Proceeds from the Issue. The deployment of the Net Proceeds from the Issue is not subject to any monitoring by any independent agency.

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.

Portion of the company Issue Proceeds are proposed to be utilized for general corporate purposes which constitute [0] of the Issue Proceed. As on date its have not identified the use of such funds.

The company has in the last 12 months issued Equity Shares at a price that may be at lower than the Issue Price.

The average cost of acquisition of Equity Shares by the Promoter could be lower than the Issue Price.

The company will continue to be controlled by the Promoter and Promoter Group after the completion of the Issue, which will allow them to influence the outcome of matters submitted for approval of the shareholders.

The company Equity Shares have never been publicly traded and may experience price and volume fluctuations following the completion of the Issue, an active trading market for the Equity Shares may not develop, the price of the Equity Shares may be volatile and you may be unable to resell your Equity Shares at or above the Issue Price or at all.

Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

The Issue Price of the company Equity Shares may not be indicative of the market price of its Equity Shares after the Issue and the market price of the Equity Shares may decline below the Issue Price and you may not be able to sell your Equity Shares at or above the Issue Price.

A third party could be prevented from acquiring control of the Company because of anti-takeover provisions under Indian law.

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