Khyati

Risks

• The Company may have potential Conflicts of interest with its Promoter Group Entities as they are engaged in similar line of business.

• 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 failures to obtain, retain and renew such approvals and licenses or comply with such rules and regulations, and the failure to obtain or retain them in a timely manner or at all may adversely affect its operation.

• The company derives majority of its revenue from export of its products. Loss of orders from the foreign country and change in their requirement or fall in budget will have material adverse effect on its business, financial condition and result of operation.

• The Company, Group Companies, Promoters and Directors are parties 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.

• The company has reported negative net cash flows in the past and may do so in the future.

• The company is significantly dependent on few customers for its revenue in a particular financial year. The loss of any one or more of such customer may have a material effect on its business operations and profitability.

• The company faces foreign exchange risks, primarily in its export business that could adversely affect the company results of operations.

• Trade Receivables, Inventories and advances to suppliers form a substantial part of its current assets and net worth. Failures to manage its trade receivables and advances could have an adverse effect on its net sales, profitability, cash flow and liquidity.

• In addition to normal remuneration, other benefits and reimbursement of expenses its directors (including the company Promoters) and Key Management Personnel are interested in the Company to the extent of their shareholding and dividend entitlement in the Company. Further its promoter has interest in our property and in past the company has entered in related party transaction with them.

• Its Promoters and Key Managerial Person play key role in the company functioning and its heavily relies on their knowledge and experience in operating its business and therefore, it is critical for the company`s business that they remain associated with the company.

• The average shelf life of its products ranges from six months to two years. Any actual or alleged contamination could lead to legal liability, damage to brand reputation, and adverse impact on its business, results of operations, financial condition and cash flows.

• Its products are semi-perishable in nature and the average shelf life of its products ranges from six months to two years. Inaccurate demand forecasting for the company semi-perishable product can result in excess inventory and waste which, in turn, could have an adverse effect on its business, financial condition, results of operations and cash flows.

• Restrictions on the export of its products and other regulations could adversely affect the company`s business, results of operations and financial condition.

• The company has offered Equity Shares during the last one year at a price below the Issue Price.

• The compan has applied for few trademarks which are pending registration, and few trademarks are registered in name of its promoter. A delay in, or failures to obtain, registration or may result in its inability to adequately defend intellectual property rights.

• There have been past instances of delays in making payment of the Tax Deposited at Source during Fiscals 2024, 2023, 2022 and for the period ended June 30, 2024 is approximately Rs. 2.51 lakhs. Any future instances of such delays may result in levy of penalties on the Company from the government authorities and in turn may have a material adverse impact on its financial condition and cash flows.

• Reliance has been placed on Physical Search Report prepared by Practicing Company Secretary dated March 27, 2024 for documents unable to be traced on MCA Portal for data of the Company prior to year 2005.

• The market for FMCG product food stuff and non-food stuff is large and intensely competitive.

• The Company has availed unsecured loans which are repayable on demand.

• The deployment of the Net Proceeds from the Fresh Issue are based on management estimates and have not been independently appraised by any bank or financial institution and is not subject to any monitoring by any independent agency and the Company`s management will have flexibility in utilizing the Net Proceeds from the Fresh Issue.

• The company is dependent on third party transportation providers for the delivery of its products to the company customers.

• Its Warehouse, Guest House and some of the company some of its business offices are not owned by it and the company has only leasehold rights. In the event its lose or are unable to renew such leasehold rights, the company`s business, results of operations, financial condition and cash flows may be adversely affected.

• The Company has limited storage capacity which can result in stock out cost and loss of customer adversely affecting its business and results of operations.

• The company has incurred indebtedness which exposes it to various risks which may have an adverse effect on its business and results of operations. The company may also be unable to obtain future financing to fund its operations, expected capital expenditure and working capital requirements on favourable terms, or at all.

• Employee misconduct, errors or fraud could expose it to business risks or losses that could adversely affect its business prospects, results of operations and financial condition.

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

• The Company does business with customers on Purchase Order basis and does not enter into any agreement with its customer and the company has not have fixed customer base.

• Any delay or defaults in receipt of payments or dues from its customers could result in a reduction of the company profits.

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

• The business operates on a high volume, low margin model, as evidenced by its average PAT (Profit after Tax) margin of less than 4% based on Restated Financial Statements, any economic downturns or market fluctuations, will have potentially impact its ability to generate returns for investors & company`s growth.

• Non-compliance with and changes in safety, health and other applicable regulations, might adversely affect the Company`s results of operations and its financial condition.

• The company has not made any alternate arrangements for financing the `objects of the Issue`. Any short fall in raising or meeting the same could adversely affect its growth plans, operations and financial performance.

• Its Promoter and their relatives has extended personal guarantees in connection with certain of its debt facilities.

• There is no existing market for its Equity Shares, and the company does not know if one will develop. Its stock price may be highly volatile after the Issue and, as a result, you could lose a significant portion or all of your investment.

• Investors can be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

• The ability of Indian companies to raise foreign capital may be constrained by Indian law.

• Any downgrading of India`s debt rating by a domestic or international rating agency could adversely affect the Company`s business.

• Conditions in the Indian securities market and stock exchanges may affect the price and liquidity of its Equity Shares.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME Platform of BSE in a timely manner, or at all.