S J Logistics (I

Risks

• The company is heavily dependent on third party service providers and suppliers to effectively carry on its logistics operations. Any deficiency in services provided by them or failure to maintain relationships with them could result in disruption in its operations, which could have an adverse effect on the company`s business, financial condition, results of operations and cash flows.

• Its logistic and freight business is largely dependent on the company customers engaged in the business of manufacturing and export of yarn and yarn commodities, any adverse impact on the yarn industry may have an adverse effect on its results of operations and financial condition.

• The Company does not have Custom House Agent license.

• Its long-term growth and competitiveness are dependent on the company`s ability to control costs and pass on any increase in operating expenses to customers, while continuing to offer competitive pricing.

• The Company may not be able to deliver the cargo on timely basis due to which its could become liable to claims by its customers, suffer adverse publicity and incur substantial cost as result of deficiency in its service which could adversely affect its results of operations.

• Breakdown, mishaps or accidents could result in a loss or slowdown in operations and could also cause damage to life and property.

• Any disruptions which affect its ability to utilize the transportation network in an uninterrupted manner could result in delays, additional costs or a loss of reputation or profitability.

• Its business operations depend on its ability to generate sufficient volumes to achieve acceptable profit margins or avoid losses.

• The company has recently entered into the business of warehousing and may face several risks associated with the new venture, which could hamper its growth, cash flows and business and financial condition.

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

• The company is also engaged in the business of ODC, heavy lift transportation and project cargo. In case of non-identification of efficient method of transporting or not obtaining statutory permissions in this regard, its operations and profitability could be adversely affected.

• The company is susceptible to risks relating to fluctuations in currency exchange rates.

• Substantial portion of its revenues has been dependent upon few customers. The loss of any one or more of its major customer would have a material adverse effect on its business, cash flows, results of operations and financial condition.

• The company is exposed to the risk of delays or non-payment by its clients and other counterparties, which may also result in cash flow mismatches.

• The Company is party to certain legal proceedings, any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.

• There are certain discrepancies/errors noticed in some of its corporate records relating to forms filed with the Registrar of Companies and other provisions of Companies Act, 1956/2013. Some of our corporate records are not traceable. Any penalty or action taken by any regulatory authorities in future, for non-compliance with provisions of corporate and other law could impact the reputation and financial position of the Company to that extent.

• The Company had negative cash flow in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition and results of operations.

• Foreign Trade restrictions could materially and adversely affect its business, financial condition and results of operations.

• The company does not own registered office and other offices from where its carry out the company`s business activities. Any dispute in relation to use of the premises could have a material adverse effect on its business and results of operations.

• If the company is unable to manage its growth effectively or if its estimates or assumptions used in developing the company strategic plan are inaccurate or its unable to execute the company strategic plan effectively, its business and prospects may be materially and adversely affected.

• The Company has not made any provision for decline or revalued in value of Investment of the Company.

• The company requires certain approvals and licenses in the ordinary course of business and are required to comply with certain rules and regulations to operate its business, and the failure to obtain, retain and renew such approvals and licenses in timely manner or comply with such rules and regulations or at all may adversely affect its operations.

• Its Contingent Liability and Commitments could affect the company financial position.

• Changes in technology may render its current technologies obsolete or require it to undertake substantial capital investments, which could adversely affect its results of operations.

• Any Penalty or demand raised by statutory authorities in future may adversely affect its financial position of the Company.

• The company does not verify the contents of the cargo transported by it, thereby exposing the company to the risks associated with the transportation of goods in violation of applicable regulations.

• Its may face competition from a number of international and domestic third-party logistics companies, which may adversely affect its market position and business.

• Its success depends largely upon the services of the company`s Directors, Promoters and other Key Managerial Personnel and its ability to attract and retain them. Demand for key managerial personnel in the industry is intense and its inability to attract and retain key managerial, may affect the business and operations of the Company.

• The company could be adversely affected by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• Failure in maintaining the requisite standard for storage of perishable and other products transported by it could have a negative effect on its business.

• The Company has during the preceding one year from the date of the Draft Red Herring Prospectus have allotted Equity Shares at a price which may be lower than the Issue Price.

• The average cost of acquisition of Equity Shares by its Promoter, are lower than the face value of Equity Share.

• Its Promoter Group will continue to retain majority shareholding in the Company after this Offer which will allow it to exercise significant influence over it.

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by its major shareholders may adversely affect the trading price of the company Equity Shares.

• The Issue Price of its Equity Shares may not be indicative of the market price of its Equity Shares after the Issue and the market price of its 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.

• The company has in the past entered into related party transactions and may continue to do so in the future.

• Loan availed by the Company has been secured on personal guarantees of its Directors. The company`s business, financial condition, results of operations, cash flows and prospects may be adversely affected in case of invocation of any personal guarantees provided by its Directors.

• The company has incurred substantial indebtedness which exposes it to various risks which may have an adverse effect on its business and results of operations.

• The Company has taken unsecured loans that may be recalled by the lenders at any time and the Company may not have adequate working capital to make timely payments or at all.

• Its insurance coverage may not be adequate to protect it against certain operating hazards and this may have a material adverse effect on its business and financial conditions.

• The company is not able to guarantee the accuracy of third party information included in this Draft Red Herring Prospectus.

• The company has not identified any alternate source of funding and hence any failure or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.

• The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.

• The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.

• There are certain restrictive covenants in the agreements that the Company has entered into with Banks.

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