sound management of our operations, safekeeping of its assets, optimal utilization of resources, reliability of its
financial information and compliance. The systems and procedures are periodically reviewed and routinely tested
and cover all functions and business areas.

While we believe that we have adequate controls, we are exposed to operational risks arising from the potential
inadequacy or failure of internal processes or systems, and our actions may not be sufficient to guarantee effective
internal controls in all circumstances. Given the size of our operations, it is possible that errors may repeat or
compound before they are discovered and rectified. Our management information systems and internal control
procedures that are designed to monitor our operations and overall compliance may not identify every instance of
non-compliance or every suspicious transaction. If internal control weaknesses are identified, our actions may not
be sufficient to correct such internal control weakness. These factors may have an adverse effect on our reputation,
business, results of operations, cash flows and financial condition.

36. Significant disruptions of information technology systems or breaches of data security could adversely
affect our business.

Our business is dependent upon information technology systems, including internet-based systems, to support
business processes. For instance, our facilities are connected to our central IT network that facilitates monitoring of
our operations and management of supply chain. We also utilize an enterprise resource planning solution which
covers production, finance, sales, marketing logistics, purchase and inventory, across all our manufacturing facilities.
The complexity of our computer systems may make them potentially vulnerable to breakdown, malicious intrusion
and computer viruses. For instance, our Company was a victim of a cyber-crime in 2019, when one of our suppliers’
email address was hacked. An email with the details of a fake bank account was sent to our email address from the
suppliers’ email address requesting to make the balance payment for the order placed earlier with the supplier. Our
Company paid the order amount to the fake bank account and considered the order payment closed. Subsequently,
upon further correspondence with the supplier, it was found that the bank details were fake and that the amount paid
to the fake bank account was untraceable. We had also lodged a complaint with the Cyber Crime Cell, Chennai in
this regard. While we have since obtained cyber-crime insurance, there can be no assurance that such insurance will
cover all losses incurred due to such incidents. In particular, there can be no assurance that we will not encounter
disruptions to our information technology systems in the future and any such disruption may result in the loss of key
information or disruption of our business processes, which could adversely affect our business and results of
operations. In addition, our systems are potentially vulnerable to data security breaches that may expose sensitive
data to unauthorized persons. Such data security breaches could lead to the loss of trade secrets or other intellectual
property, or could lead to the public exposure of personal information (including sensitive personal information) of
our employees, customers and others. Any such security breaches could have an adverse effect on our business and
reputation.

37. Our sales are subject to seasonal variations that could result in fluctuations in our results of operations.

As an apparel retailer, we see an increase in our business before Diwali and during end of season sales. We are
therefore impacted by seasonal variations in sales volumes, which may cause our revenues to vary between
different quarters in a Fiscal. Our results of operations and cash flows across quarters in a Fiscal may not be
comparable and any such comparisons may not be meaningful or may not be indicative of our annual financial
results or our results in any future quarters or periods.

Fluctuations in the apparel retail market affect the inventory owned by apparel retailers, since merchandise
usually must be manufactured in advance of the season and frequently before fashion trends are evidenced by
customer purchases. In addition, the cyclical nature of the retail apparel business requires us to carry a significant
amount of inventory, especially prior to peak selling seasons when we build up our inventory levels. As a result,
we will be vulnerable to demand and pricing shifts and to suboptimal selection and timing of merchandise
production. If sales do not meet expectations, too much inventory may lower planned margins. Our brand image
may also suffer if customers believe we are no longer able to offer the latest fashion. The occurrence of these
events could adversely affect our cash flows, financial condition and business operations.

38. If we are subject to any fraud, theft, or embezzlement by our employees, contractors or dealers, it could
adversely affect our reputation, results of operations and financial condition.

Our business and the industry we operate in is subject to incidents of vendor/ dealer/ employee fraud, theft, or

embezzlement. While there have been certain instances where our employees have engaged in pilferage of our
products, however, none of these instances have been material or had any financial impact on our operations. In

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