Sahaj Fashions

Continue to optimize its product mix to improve margins

Increase its focus on building its brand

Expansion

Increasing Operational efficiency

Increase sales of its products by reaching out to finished whole sellers and expanding its export markets.

Focus on special product development for Exports:

Experienced Promoters and proficient management team with low attrition rates;

Established growth since the beginning of operations;

Leveraging the experience of its Promoters;

Long standing relationship with the customers & Suppliers;

Location of Manufacturing units;

Quality Assurance & Control.

There are outstanding legal proceedings involving the Company, Promoters and Directors which, may have a material adverse effect on its business, operations and financial condition.

Increase in the cost of, or a shortfall in the availability of the company raw material i.e. yarn could have an adverse effect on its business, operations and financial condition.

The company profits are fluctuating in nature.

Within the parameters as mentioned in the chapter titled `Objects of this Offer` beginning on page 76, The Company`s management will have flexibility in applying the proceeds of this Offer. The fund requirement and deployment mentioned in the Objects of this Offer have not been appraised by any bank or financial institution.

Any delay or default in payment from its customers could result in the reduction of the company profits and affect its cash flows.

The Company is dependent on few numbers of customers. Any loss of top 10 customers will significantly affect its revenues and profitability.

The company business is dependent on its manufacturing facilities and the company is subject to certain risks in its manufacturing process. Any slowdown or shutdown in the company manufacturing operations or under-utilization of its manufacturing facilities could have an adverse effect on the business, operations and financial condition.

Information relating to the company production capacities and the historical capacity utilization of its production facilities included in this Draft Prospectus is based on certain assumptions and has been subjected to rounding off, and future production and capacity utilization may vary.

The company operations are subject to high working capital requirements. If its unable to generate sufficient cash flows to allow it to make required payments, there may be an adverse effect on the company operations.

In case of the company inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate its business it may have a material adverse effect on the company business.

Shareholding of the company Promoter and Promoter Group are shown in Public Category in the records of both the Depositories.

The company lenders have imposed certain restrictive conditions on it under its financing arrangements.

The Company has negative cash flows in some of the previous year(s) as per the Restated Financial Statements.

The company do not own its Registered Office.

The Company has not made provision for Gratuity Payment as required under The Payment of Gratuity Act 1972. The company has not complied with AS-15- Employee Benefits as Issued by ICAI.

The Company had filed Draft Prospectus in the past and after getting in-principle approval from the NSE, the Company shelved the plan to list considering the market condition.

The Company has not filed MSME- 1 form as required under MSME Act, 2006.

The company Restated Financial Statements are Prepared and Signed by a Peer Reviewed Chartered Accountant who is not Statutory Auditor of the Company.

One of the Key Management Personnel are associated with the Company less than one year.

The company face competition in its business from domestic competitors. Such competition would have an adverse impact on the company business and financial performance.

If the company is unable to raise additional capital, its business prospects could be adversely affected.

The Company has availed certain unsecured loans that are recallable by the lenders at any time.

A shortage or non-availability of electricity, fuel or water may adversely affect the company manufacturing operations and may have an adverse effect on its business, results of operations and financial condition.

The company manufacturing activities are dependent upon availability of skilled and unskilled labour.

The average cost of acquisition of Equity Shares by the company Promoter is lower than the Offer price.

Changes in latest technology or requirement of machinery based on business opportunity may adversely affect The Company`s results of operations and its financial condition.

The company has entered into certain transactions with related parties. These transactions or any future transactions with its related parties could potentially involve conflicts of interest.

In addition to normal remuneration, other benefits and reimbursement of expenses some of the company Directors (including its Promoter) and Key Management Personnel are interested in the Company to the extent of their shareholding and dividend entitlement in the Company.

The company success depends largely upon the services of the Management and other Key Managerial Personnel and its ability to retain them. The company inability to attract and retain key managerial personnel may adversely affect the operations of the Company.

Certain documents in relation to educational qualifications and experience of the company Promoters & Directors are not available.

The company operations are subject to environmental, health and safety laws and regulations.

The company inability or failure to maintain a balance between optimum inventory levels and its product offering at the company stores may adversely affect its business, results of operations and financial condition.

The company future funds requirements, in the form of Fresh Issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

The company is subject to risk of fraud, theft, embezzlement by its employees, contractors and customers, employee negligence or similar incidents may adversely affect the company results of operations and financial condition.

Orders placed by customers may be delayed, modified, cancelled or not fully paid by the company customers, which may have an adverse effect on its business, financial condition and results of operations.

There have been some instances of delayed filing of records and returns required to be filed by the Company with various regulatory authorities.

Third party industry and statistical data in this Prospectus may be incomplete, incorrect or unreliable.

Loans availed by the Company have been secured on personal guarantees of its Promoter group. The company business, financial condition, results of operations, cash flows and prospects may be adversely affected in case of invocation of any personal guarantees or collateral securities provided by its Promoter group.

The company lender have charge over its immovable properties in respect of finance availed by it.

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

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

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

The company Promoters and the members of the Promoters Group will continue to retain significant control in its after the Offer, which will enable them to influence the outcome of matters submitted to shareholders for approval. The company Promoters and the members of its Promoter Group may have interests that are adverse to the interests of the company other shareholders and may take positions with which its other shareholders do not agree.

Any future issuance of Equity Shares, or convertible securities or other equity-linked securities by the Company may dilute your shareholding and any sale of Equity Shares by its Promoter or members of the company Promoter Group may adversely affect the trading price of the Equity Shares.

The company 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 the company financing arrangements.

After the Offer, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Offer Price, or at all.

Applicants to this Offer are not allowed to withdraw their Applications after the Offer Closing Date.

The determination of the Offer Price is based on various factors and assumptions and the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares after the Offer.

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

Investors will not be able to sell immediately on an Indian stock exchange any of the Equity Shares they purchase in the Offer.

The requirements of being a publicly listed company may strain its resources.

There is no guarantee that the Equity Shares Issued pursuant to this Offer will be listed on the NSE - Emerge in a timely manner.