relating to the textile industry in general. Although there have not been any instances in the past where we have
faced a shortage of raw materials, we cannot assure you that we will always be able to meet our raw material
requirements at prices acceptable to us, or at all, or that we will be able to pass on any increase in the cost of raw
materials to our customers. Any inability on our part to procure sufficient quantities of raw materials, on
commercially acceptable terms, may lead to a decline in our sales volumes and profit margins and adversely affect
our results of operations.

19. We have an agreement which confers nomination rights to certain of our existing shareholders.

Pursuant to the Amendment Agreement, details of which appear in the section “History and certain corporate
matters”, (i) our existing shareholder, Sequoia Capital India Investments IV, has the right to nominate one director
on the Board of our Company as long as it holds at least 10% of the share capital of the Company (on a fully
diluted basis), and (ii) our existing shareholders, India Advantage Fund $4 I and Dynamic India Fund $4 US I,
together, have the right to nominate one director, as long as they together hold at least 10% of the share capital of
the Company (on a fully diluted basis). These nomination rights are subject to approval of the shareholders in the
first general meeting convened after listing of the Equity Shares on the Stock Exchanges. For details, see ‘History
and certain corporate matters - Summary of Key Agreements and Shareholders’ Agreements’ on page 190.

20. Our business, results of operations and financial condition may be adversely affected if operations at the
manufacturing facilities of our job workers or raw material suppliers are disrupted.

The manufacturing facilities of our job workers and raw material suppliers are subject to various operating risks,
including some of which are beyond their control, such as the breakdown and failure of equipment, industrial
accidents, employee unrest, severe weather conditions and natural disasters. Further, since a significant majority of
our job workers’ facilities are located in a particular region in India, any significant disruption, including due to
social, political or economic factors or natural calamities or civil disruptions, impacting this region may adversely
affect operations at our job workers’ facilities. Further, if our suppliers or third-party manufacturers fail to comply
with applicable laws, including environmental laws, they risk having their facilities shut down, which may
adversely affect our operations.

 

 

We also source raw materials and certain garments from vendors outside India. As of September 30, 2021, we
sourced raw material and garments from five vendors outside India. Although we have not faced significant
disruptions in the procurement of raw materials in the past, the COVID-19 pandemic temporarily affected our
ability to source raw materials from vendors outside India who were unable to transport raw materials to us. In
particular, purchase of raw materials from our suppliers outside India may be hampered due to supply chain issues,
change in government policies, and international geo-political situations or any other circumstances, which are
beyond our reasonable control. The occurrence of any such event may adversely affect our business, results of
operations and financial condition.

We cannot assure you that we will always be able to arrange for alternate manufacturing capacity, or alternate
sources of our raw materials, at prices acceptable to us, or at all, or that we will be able to pass on any increase in
cost to our customers, although we endeavor to do so. Any inability on our part to arrange for alternate
manufacturing capacity or sources for raw materials, on commercially acceptable terms, may have an adverse
effect on our business, results of operations and financial condition.

21. We are dependent on sales through large format stores, multi-brand outlets, our franchisees, and online
retailers for a significant portion of our revenues. Our business, results of operations and financial condition
could suffer if we fail to maintain relationships with such third parties.

We rely on third parties such as LFSs, franchisees, distributors for MBOs and online retailers, for a significant
portion of our sales and revenues. Sales of products through LFSs, franchisees, MBOs and online retailers,
represented 22.00%, 1.31%, 2.86% and 4.76%, respectively, of our total revenue from operations in Fiscal 2021,
and represented 13.44%, 0.84%, 1.25% and 6.45% of our total revenue from operations in the three months ended
June 30, 2021, respectively.

We enter into agreements with LFSs, franchisees, and online retailers to sell our products. Counterparties under
these agreements typically have the right to terminate agreements without cause. While there have been no
termination of agreements in Fiscal 2019 and 2020, and in the three months ended June 30, 2021, in Fiscal 2021,
one of the LFS terminated their arrangement with us to retail our products at their stores. The arrangement was
terminated as the LFS intended to expand on its own brand portfolio. We generated revenues of 2 109.56 million,

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