Senco Gold

The Company has a strong brand name with heritage / legacy of over five decades;

Largest organised jewellery retail player in the eastern region of India based on number of stores.

Strong `Company Operated Showroom` base;

Established asset-light `franchise` model leading to operating leverage;

Calibrated focus on light, affordable jewellery with the intention to cater to the upwardly mobile and younger generation;

Established Systems and Procedures to mitigate risk and improve efficiencies;

Experienced management team and institutional investor support.

The company face significant competition in the Indian jewellery market, its risk losing substantial portion of the company customers and its market share which will adversely affect its business, financial condition, results of operations and prospects.

The Company requires significant amounts of working capital for continued growth. Its inability to meet the company working capital requirements, on commercially acceptable terms, may have an adverse impact on its business, financial condition and results of operations.

The company obtain gold on loan basis, which remains subject to RBI regulations. Any adverse change in the regulations governing gold on loan basis may adversely affect its financial condition and results of operations.

A significant portion of the company manufacturing work is done by Karigars who do not work exclusively for it which exposes it to any risks/adverse developments affecting the Karigars.

The company has been subject to a `Search and Seizure` operation by the income-tax department in the past, which has resulted in taxation and criminal proceedings being initiated against the Company and its Individual Promoter. The company has also been subject to an on spot search from the Directorate General of Central Excise Intelligence, Kolkata along with show cause notice. Further, a search has been conducted by the customs department at its Registered and Corporate Office in relation to an investigation against one of its Job Worker and vendor and a spot summons was issued to the Company. Any adverse outcome of such proceedings might have an adverse effect on its business, financial condition and results of operations.

The company relies in part on its franchisees, and if its franchisees cannot develop or finance new showrooms or build them on suitable sites, open them on schedule or manage them successfully, or if the company is are unable to renew its existing franchisees or secure new franchisees on commercially acceptable terms, its growth and success may be affected.

The company may not be successful in implementing its brand building, marketing and advertising initiatives for the company brands. Any fall in its brand`s reputation and market perception "Senco Gold and Diamonds", may adversely affect the company business, results of operations and prospects.

The company income and sales are subject to seasonal fluctuations and lower income in a peak season may have a disproportionate effect on its results of operations.

Differing regulatory views on various jewellery purchase schemes initiated by the company may have adverse implications on the Company and/or its Directors under applicable laws; and in particular, the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended.

The non-availability or high cost of quality gold and diamonds may have an adverse effect on its business, results of operations, financial condition and prospects.

Due to the geographic concentration of its sales in the eastern and north eastern regions of India, its results of operations and financial condition are subject to fluctuations in regional economic conditions.

The company, as well as its Directors and Promoters are involved in certain legal and regulatory proceedings that, if decided unfavourably, may adversely affect its business, results of operations and financial condition.

The recent outbreak of the novel coronavirus and any future outbreaks could have a significant effect on its results of operations, and could negatively impact its business, revenues, financial condition and results of operations.

Failure to manage the company inventory could have an adverse effect on its net sales, profitability, cash flow and liquidity.

The company financing agreements contain covenants that limit its flexibility in operating of the business. the company inability to meet its obligations, including financial and other covenants under the company debt financing arrangements could adversely affect its business, credit rating, results of operations and financial condition.

The company individual Promoter and a member of its Promoter Group have extended personal guarantees for certain of the borrowings, which if called upon, could adversely impact their holding in the Company.

The company ability to attract customers is dependent on the success and visibility of the Company Operated Showrooms. Its failure to attract optimal volume of customers to the Company Operated Showrooms could materially and adversely affect its business, financial condition and results of operations.

The company revenues have been significantly dependent on sale of gold jewellery, which accounted for 92.20%, 91.90%, 90.85% and 92.49% of its total revenue from operations for the eight months period ended November 30, 2021 and Fiscals 2021, 2020 and 2019, respectively. Any factors adversely affecting the procurement of gold or the company sales of gold jewellery may negatively impact its business, financial condition, results of operations and prospects.

The company integrated operations and the diversity of the Indian jewellery market expose it to certain risks. If the company is unable to effectively manage its operations or pursue the company growth strategy, its business, financial condition, results of operations and prospects may be adversely affected.

If The company is unable to open new Company Operated Showrooms as per the business plan, it could have a material adverse impact on its business and growth prospects.

The use of the words "Senco" in the corporate and trading names by certain third parties who have the right to use those words in their names may lead consumers to confuse them with the Company and if they experience any negative publicity, it could have an adverse effect on its business, results of operations and financial condition. This confusion might also lead to the Company losing business to such competitors and might adversely affect its goodwill.

The company funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution or any other independent agency and its management will have broad discretion over the use of the Net Proceeds.

Any variation in the utilisation of the Net Proceeds or in the terms of any contract as disclosed in the Draft Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders` approval.

The company require certain approvals, permits and licenses in the ordinary course of business, and any failure or delay to obtain or renew them or to comply with their conditions in the future may adversely affect its operations.

Jewellery purchases are discretionary and often perceived as luxury purchases. Any factor negatively impacting discretionary spending by consumers may adversely affect its business, results of operations, financial condition and prospects.

If the company is were to lose the services of members of its senior management team or key management personnel, its business and prospects may be adversely affected. Moreover, its failure to attract, motivate and retain sufficient skilled designers and sales personnel may adversely affect its business, results of operations, financial condition and prospects.

If the company is unable to continue to develop innovative, fashionable and popular designs, demand for its jewellery may decrease, adversely affecting its revenues and financial condition.

Volatility in the market price of gold and diamonds has a bearing on the value of its inventory and may affect its income, profitability and scale of operations.

Some of its corporate records and statutory filings as well as certain educational qualifications and documents in relation to past experiences of its Directors are lost or not traceable in relation to certain disclosures made in this Draft Red Herring Prospectus.

The company agreements with DeBeers India Private Limited ("DeBeers") for supply of diamonds and sale of `Forevermark` diamonds, studded in jewellery impose restrictive covenants on it that may limit its ability to control its operations for certain of the company brands and subject it to penalties for violation of licensing terms, which in turn may affect the company profitability and future prospects.

The company ability to access capital depends on its credit ratings. Non availability of credit ratings or a poor rating may restrict the company access to capital and thereby adversely affect its business and results of operations.

The company has experienced negative cash flows from operating and investing activities in previous periods and cannot assure you that its will not experience negative cash flows in future periods. Negative cash flows may adversely affect its financial condition, results of operations and prospects.

The company has entered into transactions with related parties. These or any future related party transactions may potentially involve conflict of interest and there can be no assurance that its could not have achieved better terms, had such arrangements been entered into with unrelated parties.

The company has not registered certain trademarks used by it for its business and the company inability to obtain or maintain these registrations may adversely affect its competitive business position. The company inability to protect or use its intellectual property rights may adversely affect the company business.

The activities of its franchisees could have a material adverse effect on its goodwill and the "Senco Gold and Diamonds" brand and also expose it to risks associated with reliance on third parties.

Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.

Purported irregularities related to minimum value addition, differential to maximum wastage permitted or any other export compliance by the Bank of Nova Scotia may result in further claim, obligation, liability or indebtedness in future on the Company which in turn may adversely impact its results of operations and profitability.

Any failure or disruption or change of its information technology systems may adversely impact its business and operations.

The company insurance policies may not adequately cover it against certain risks and hazards, which may have an adverse effect on its business.

Any labour disputes, strikes or work stoppages may lead to lost production and/or increased costs, which may adversely affect its business, results of operations and financial condition.

Certain sections of this Draft Red Herring Prospectus disclose information from the industry report which has been commissioned and paid for by it exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

The company manufacturing facility and most of the Company Operated Showrooms are located on premises leased to it by third parties. If the company is unable to renew its existing leases or secure new leases on commercially acceptable terms, or if the company fail to comply with the terms and conditions of its leases, resulting in termination of the company leases, the compnay business, financial condition and results of operations may be adversely affected. Further, in the event the land on which its manufacturing units and the Company Operated Showrooms are situated are subject to irregularities in title, the company operations may be impaired.

Successful operations of its new Company Operated Showrooms are dependent on a number of factors, some of which may be beyond its control. Its inability to successfully operate its new Company Operated Showrooms may adversely affect its business, financial condition and results of operation.

Past sales in the Company Operated Showrooms may not be comparable to and indicative of future sales from the Company Operated Showrooms and there can be no assurance that the opening of proposed new Company Operated Showrooms will result in increased profitability.

Potential legal proceedings in relation to the land its acquire or any adverse development relating to the landlord`s title or ownership rights of the parcels of land and other matters related thereto, including the non-registration of the land in the name of the Company, from where its manage and operate the Company Operated Showrooms could affect the Company`s business, results of operations and financial condition.

The company has a number of contingent liabilities, and its profitability could be adversely affected if any of these contingent liabilities crystallizes.

The Company has prepared financial statements under Ind AS. Significant differences exist between Ind AS and other accounting principles, such as Indian GAAP, IFRS and U.S. GAAP.

The company is subject to data protection laws and any changes in regulations pertaining to collection, storage and usage of personal data of customers could require it to invest significant resources which in turn may adversely impact its results of operations and profitability.

The company may face risks associated with implementation of regulatory oversight on the purchase and sale of gold through digital media, which in turn may subject it to regulatory action, penalties and negative publicity.

Certain of the company Directors, its individual Promoter, members of the Promoter Group, Subsidiary and Key Management Personnel may have interests other than reimbursement of expenses incurred and normal remuneration or benefits in the Company.

Inability to appropriate the advances received from customers under jewellery purchase schemes.

The company has issued Equity Shares in the past 12 months from the date of this DRHP, which may be at a price lower than the Offer Price.