Gem Enviro Management Ltd

Risks

• There outstanding legal proceeding involving the promoters of the company and its group companies. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.

• 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 is dependent on and derive a substantial portion of its revenue from a limited number of customers. Cancellation by customers or a delay or reduction in their orders could have a material adverse effect on its business, results of operations and financial condition.

• The Company is dependent on few numbers of suppliers for purchase of products. Loss of any of this large Suppliers may affect its business operations.

• The company lack ownership of the registered office and other office used by the company. Any interference with its entitlements as the licensee/lessee or the cancellation of contracts with its licensors/ lessors could have a negative effect on the company activities and, as a result, its overall business.

• 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.

• Its current assets and net worth are significantly influenced by trade receivables. Inadequate management of these receivables poses the risk of negatively impacting its net sales, profitability, cash flow, and liquidity.

• As a component of its expansion strategy, the company plan to diversify its business activities by venturing into EPR compliances and offering consultancy services for the management of E-waste, Tire, and Battery Waste. However, the company cannot guarantee the profitability of these expansion initiatives or that they will not have an adverse impact on its business, operational outcomes, and financial standing.

• The continued success of its business is heavily contingent on the expertise and involvement of its Promoters, senior management and other key personnel. and the loss of, or the company`s inability to attract or retain, such persons could affect its business, results of operations, financial condition and cash flows.

• The company lacks long-term agreements with clients, exposing it to uncertainties in the demand for its services. If the company faces challenges in retaining clients in the future, it could negatively impact its operational results.

• Its reliance on third-party transportation and logistics service providers makes it susceptible to any potential escalation in their charges. Such an increase could have negative repercussions on its business, operational outcomes, and overall 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.

• The Company will not receive any proceeds from the Offer for Sale. The proceeds from the Offer for Sale shall be received directly by the Selling Shareholders.

• 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 relies on third-party service providers in several areas of its operations and may not have full control over the services provided by them to it or to the company customers.

• Its business success relies on the performance and functionality of its information technology systems, which play a crucial role in the company day-to-day operations.

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

• Its service agreements with clients generally include the confidentiality clause, imposing a strict obligation on it to safeguard the confidential information. The breach of the confidentiality clause, whether unintentional or deliberate, expose the company to significant legal and reputational risk.

• The company operates in highly regulated sector. Regulatory Changes in Plastic Waste Management Laws in India pose operational challenges, requiring swift adaptability to ensure compliance and avert financial and operational repercussions for the company.

• The company has contingent liabilities and commitments, and its financial condition could be adversely affected if these contingent liabilities or commitments materialize.

• The company function within a competitive landscape and may encounter challenges in effectively competing, potentially leading to a significant adverse impact on its business, operational outcomes, and financial condition.

• The Company shared its registered office with Promoter Group Companies.

• In the past, its corporate records have encountered occasional delays in submitting statutory forms to the Registrar of Companies (RoC).

• Some of its corporate records are not traceable. Non availability of such records may result in regulatory actions against the Company by regulatory or statutory authorities, which may an adverse impact on its financial condition and reputation.

• In MGT-8 of preceding years of its Promoter Company BLP Equity Research Private Limited and its Promoter Group Company Securocrop Securities India Private Limited, the Practising Company Secretary has made qualification in respect of maintenance of Statutory Registers, minutes and share certificates and loans to the related parties in violation of section 185 of the Companies Act, 2013.

• Its Promoter Company and Promoter Group Company has made certain delay in filings in respect of which additional fees has been imposed on them.

• The company were not able to trace payment of stamp duty statement of the Company. Its cannot assure you that regulatory action will not be taken by the regulatory authority against the Company.

• Reliance has been placed on declarations and affidavits furnished by certain of its promoter for details of their profiles included in this Draft Red Herring Prospectus.

• Its success depends on the company`s ability to develop and maintain successful relationships with merchants. Misconduct by its employees or failure of its internal processes could harm the company by impairing its ability to attract and retain customers.

• Its Promoter, Directors and Key Management Personnel have interest in the Company, other than reimbursement of expenses incurred or remuneration.

• The Objects of the Offer 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".

• Its business relies extensively on the company`s Promoter and Key Managerial Personnel for the ongoing success through their continuous services and strategic guidance and support.

• Its may be unable to attract and retain qualified, skilled employees necessary to manage, maintain and grow its business.

• 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.

• Its operations could be adversely affected by strikes or increased wage demands by its employees or any other kind of disputes with the company`s employees.

• Certain Agreements, deeds or licenses, statutory approvals and certificates may be in the previous name of the company, the company has to update the name of the company in all the statutory approvals and certificates due to the conversion of the Company.

• If the company is unable to expand its business rapidly to keep pace with the increasing demands of its customers, it could negatively impact its operational outcomes.

• Certain of its client contracts can be terminated by the company clients without cause and with limited or no notice or penalty, which could negatively impact its revenue and profitability.

• The company may requires additional funding to support its growth strategies. The inability to secure additional financing could negatively impact its business, operational results, financial condition, and cash flows.

• Failures to establish optimal prices for its services and offerings could have negative consequences on its business, financial condition, and operational results.

• The company cannot assure payment of dividends on the Equity Shares in the future and its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

• Its Promoters are not engaged in similar line of business, However, there can be no assurance that its Promoter or members of the Promoter Group will not compete with the company`s existing business.

• 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 Offer. A deficiency in securing or fulfilling these requirements could have negative consequences on its expansion strategies, day-to-day business activities, and overall financial well-being.

• Any deviation in the utilization of the Net Proceeds is contingent upon meeting specific compliance requirements, which includes obtaining approval from shareholders beforehand. The company cannot assure that we will obtain shareholder`s approval for the deviation in utilization in net proceeds, if proposed.

• Failures to comply with amendments in Safety, Health, and Environmental laws, as well as other relevant regulations, has the potential to negatively impact the Company`s financial condition and operational results.

• The Company does not have any listed peer companies for comparison of performance and therefore, investors must relies on their own examinations of accounting ratios of the Company for the purposes of investment in this Issue.

• The trademarks essential to its businesses are duly registered, and any failure to safeguard or sustain these registrations could negatively impact its competitive standing in the business.

• The company lacks a designated monitoring agency, and the discretion for fund allocation rests with its Management and Board of Directors, under the scrutiny of its Audit Committee.

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

• The weighted average cost of acquisition of Selling Shareholders may be less than the Issue Price.

• The industry information provided in this Draft Red Herring Prospectus has been sourced from various industry reports. It is important to note that there is no guarantee regarding the completeness or accuracy of such third-party statistical, financial, and other industry data.

• Its Equity Shares, having not been publicly traded prior to the Offer, may be susceptible to fluctuations in both price and volume post-Issue, and the development of an active trading market cannot be guaranteed.

• The potential fluctuation in the exchange rate between the Indian Rupee and foreign currencies could negatively impact the value of the Equity Shares, irrespective of its operational performance.

• There is no guarantee regarding the timely listing of Equity Shares on the Stock Exchanges, and investors may face limitations in promptly selling the subscribed Equity Shares on Indian Stock Exchanges.

• Shareholders of Equity Shares may face limitations on exercising pre-emptive rights under Indian law, potentially resulting in the dilution of their ownership positions in the future.

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