Apex Ecotech Ltd

Risks

• The Company has allotted Equity Shares during the preceding one year from the date of the Draft Red Herring Prospectus which may be lower than the Issue Price.

• The company has certain outstanding litigation involving the company, promoters, directors. Any adverse outcome of which may adversely affect its business, reputation and results of operations.

• Its dependence on key industries, such as Food Processing & Beverages, Oil & Edibles, and Metals & Mining, for an insignificant portion of its sales may pose a risk to the company`s business.

• Its revenue from operations is largely dependent on a few key customers who contribute a substantial portion of its total revenue. The loss of any of its major customers due to any adverse development may adversely affect its business, financial condition, results of operations and future prospects.

• The company requires sizeable amounts of working capital for its continued operation and growth. its inability to meet the company working capital requirements could have a material adverse effect on its business, results of operations and financial condition.

• The company relies on its in-house designing, engineering and construction teams for project execution. Loss of employee(s) may have an adverse effect on the execution of its projects.

• For some its projects, the company relies on various third parties in the civil construction activities of installing its WWTPs and factors affecting the performance of their obligations could adversely affect its projects.

• There are certain instances of delays in payment of statutory dues by it. Any further delays in payment of statutory dues may attract financial penalties from the respective government authorities and in turn may have a material adverse impact on its financial condition and cash flows.

• The company does not own the premises of its Registered, Corporate Office and Godowns.

• The company deploy advanced technologies in the designing and installation of WWTPs. Any incapability to adopt a new technology or change in the requirement of a particular technology by the Industries may affect its position for WWTPs.

• Its operations are subject to environmental and workers` health and safety laws and regulations. Its may have to incur material costs to comply with these regulations or suffer material liabilities or damages in the event of an incidence or non-compliance of environment and other similar laws and regulations which may have a material adverse effect on its reputation, business, financial condition and results of operations.

• Its actual cost in executing WWTPs may vary substantially from the assumptions underlying its estimates. The company may be unable to recover all or some of the additional costs and expenses, which may have a material adverse effect on its results of operations, cash flows and financial condition.

• The company does not have long term contracts or exclusive arrangements with any of its suppliers, and a significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials could have an adverse effect on its business and results of operations.

• The company has in the past entered into related party transactions and its may continue to do so in the future.

• The company relies on the state of Maharashtra for the procurement of raw materials. Any shortages in the supply of components and raw materials, or increases in their costs, could adversely affect the pricing and availability of its products. Such issues may impact the company`s business operations, financial performance, and overall financial condition.

• If the company fails to perform O&M works or if there are any service deficiencies in the projects The company install according to the relevant contracts, its could face penalties or contract termination. This could seriously harm its reputation, business, financial condition, operational results, and cash flow.

• Its future funds requirements, in the form of 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.

• If there is a shortage in the supply of its components and raw materials, or if their costs increase, it could negatively impact the pricing and availability of its products. This could harm its business, operational results, and financial condition.

• The Company has reported negative cash flows in the recent period. Negative cash flows in the future could adversely affect its results of the company operations and financial condition.

• Its Promoters have provided personal guarantees to secure certain of the company fund facilities, which if revoked or invoked may require alternative guarantees, repayment of amounts due or termination of the facilities.

• Changes in government policies related to the environment and water treatment, in particular, may adversely affect its business, financial condition and results of operations.

• After conversion of Company into public limited the company is required to update the name of the company in some of the statutory approvals, certificates, licenses and registrations due to the change of Status of the Company.

• The company is dependent on third party transportation and logistics service providers. Any increase in the charges of these entities could adversely affect its business, results of operations and financial condition.

• Certain delays and discrepancies have been detected in its statutory records, as well as in records related to the submission of returns and statutory expenses to the concerned Registrar of Companies.

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

• If the Company is unable to protect its intellectual property, its business may be adversely affected.

• The company faces foreign exchange risk, which may negatively affect its business, financial condition and results of operations.

• The company has been recently converted into public limited company and any non-compliance with the provisions of Companies Act, 2013 may attract penalties against the Company which could impact its financial and operational performance and reputation.

• Contingent liabilities could adversely affect its financial condition. Crystallization of any of these contingent liabilities may adversely affect its financial condition.

• The company has total indebtedness of Rs. 121.13 lakhs. If its unable to service its debt obligations in a timely manner or to comply with various financial and other covenants and other terms and conditions of its financing agreements, it may adversely affect the company`s business, credit rating, reputation, prospects, results of operations, cash flows and financial condition.

• Its business is substantially dependent on the company design and engineering teams to accurately carry out the pre-bidding engineering studies for potential projects. Any discrepancies between these pre-bid estimates and the actual project execution could significantly impact its cash flows, operational results, and financial condition.

• Water reuse and zero liquid discharge technology is evolving rapidly. These advancements could impact the demand for its services and products. If the company fails to keep up with these technological changes and new product developments, its business, operational results, and financial condition could suffer.

• Its Promoters and Directors have interest in the Company, other than reimbursement of expenses incurred or remuneration.

• Its Promoters and members of the Promoter Group have significant control over the Company and have the ability to direct its business and affairs; their interests may conflict with your interests as a shareholder.

• The average cost of acquisition of Equity Shares held by its Promoters may be less than the Issue Price.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and any bank or financial institution or any independent agency has not appraised the same. The deployment of funds in the project is entirely at its discretion, based on the parameters as mentioned in the chapter titles "Objects of the Issue".

• The company has not made any alternate arrangements for meeting its capital requirements for the Objects of the issue. Further the company has not identified any alternate source of financing the `Objects of the Issue`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• Misconduct by its employees or failures of the company internal processes could harm it by impairing its ability to attract and retain customers.

• Its on-going projects are exposed to various implementation risks & uncertainties and may be delayed, modified or cancelled for reasons beyond its control which may materially and adversely affect the company`s business, prospects, reputation, profitability, financial condition and results of operation.

• The company has projects in diverse geographical regions which may expose it to various challenges.

• The company failures to manage growth effectively may adversely impact its business, results of operations and financial condition.

• 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 failure to obtain, retain and renew such approvals and licences in timely manner or comply with such rules and regulations or at all may adversely affect its operations.

• The company relies on effective and efficient project management. Any adverse change in its project management procedures could affect the company ability to complete projects on a timely basis or at all, which may cause its to incur liquidated damages for time overruns pursuant to its contracts.

• The insurance coverage taken by it may not be adequate to protect against certain business risks and this may have an adverse effect on the business operations.

• Improper handling of its products, or spoilage of and damage to the company products, could damage its reputation and have an adverse effect on its business, results of operations and financial condition.

• The Company has not entered any long-term contracts with any of its customers and the company typically operates based on Contracts/ orders. Inability to maintain regular order flow would adversely impact its revenues and profitability.

• The Company failures to maintain the quality standards of the Service could adversely impact its business, results of operations and financial condition.

• The completion of its projects can be delayed on account of the company dependency on its contracted labour force. Also, the company results of operations could be adversely affected by strikes, work stoppages or increased wage demands by its employees or other disputes with the company employees or its contractors` employees.

• The company operates in a highly competitive environment. Any failures to compete effectively could harm its business, future prospects and financial stability.

• The company is exposed to the risk of delays or non-payment by its clients and other counter parties, which may also result in cash flow mismatches.

• The company may not be successful in implementing its business strategies.

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

• If the company is unable to source business opportunities effectively, its may not achieve the company financial objectives.

• Its ability to pay dividends in the future will depends upon the company future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

• Industry information included in this Red Herring Prospectus has been derived from industry reports. There can be no assurance that such third-party statistical, financial, and other industry information is either complete or accurate.

• The Equity Shares have never been publicly traded, and, after the Issue, 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 Issue Price, or at all.

• The sale of Equity Shares by its Promoters or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

• There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholder`s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.

• Its may need additional capital and the company may not be able to obtain it, which could adversely affect its liquidity and financial position.

• Failures to maintain confidential information of its customers could adversely affect the company results of operations or damage its reputation.

• If the company is unable to establish and maintain an effective system of internal controls and compliances, its business and reputation could be adversely affected.