GP Eco

Risks

• The Company has availed Bank Guarantees of Rs. 320.00 Lakh vide dated July 22, 2022 and Rs. 80.00 Lakh vide dated August 17, 2022 in favour of M/s Sungrow India Private Limited pertaining to facilities for the procurement and distribution of products obtained from M/S Sungrow India Private Limited. The company cannot assure that there will be no default done by the company in the future.

• Its lenders have charged over the company fixed assets and book debts in respect of finance availed by it.

• The company depends on third parties for the supply of its products and such third parties could fail to meet their obligations, which may have a material adverse effect on its business, results of operations and financial condition.

• The company has not entered into any long-term agreements with its vendors and any shift in their decisions could adversely affect its business. Additionally, the company is dependent upon its vendors for fulfilment of needs of the company customers. Its inability to maintain relationships with the company vendors or deficiency in the goods provided by such vendors may adversely affect its business, results of operations, cashflow and profitability.

• Its top ten clients contribute approximately 33.20%, 57.01%, and 51.76% of its revenues from operations for the year ended March 31, 2023, March 31, 2022 and March 31, 2021 respectively. Any loss of business from one or more of them may adversely affect its revenues and profitability.

• A significant portion of its revenue is derived from Rajasthan, Haryana, Uttar Pradesh, and Delhi, and any adverse developments in these states could adversely affect its business.

• Its results of operations and financial condition are subject to fluctuations in regional economic conditions due to the geographic concentration of our sales in the northern region of India.

• Significant portion of its revenues is dependent upon sale of Solar Inverters. The loss of the company product or a decrease in the supply or volume of such product, will materially and adversely affect its revenues and profitability.

• The company does not own the premises in which its registered office is located and the same is on lease arrangement. Any termination of such lease/license and/or non-renewal thereof and attachment by Property Owner could adversely affect its operations.

• The company has experienced negative cash flows in the past. Any such negative cash flows in the future could adversely affect its business, results of operations and prospects.

• Unsecured loans of Rs. 850.17 Lakh taken by the Company from various financial institutions, can be recalled at any time.

• There are certain discrepancies and non- compliances noticed in some of its corporate records relating to forms filed with the Registrar of Companies, taxation authorities and other public authorities.

• Orders placed by customers may be delayed, modified or cancelled, which may have an adverse effect on its business, financial condition and results of operations. Further any defaults or delays in payment by a significant portion of its customers, may have an adverse effect on cash flows, results of operations and financial condition.

• The company requires certain approvals, licenses, registrations and permits to operate its business, and failure to obtain or renew them in a timely manner or maintain the statutory and regulatory permits and approvals required to operate its business may adversely affect the company operations and financial conditions.

• The company may not be able to maintain its current levels of profitability due to increased costs or reduced trading spreads or margins.

• 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.

• Failures to manage the company inventory could have an adverse effect on its net sales, profitability, cash flow and liquidity.

• Change in technology, evolving customer requirements and emerging industry trends may affect its business, may render the company current technologies obsolete and may require it to make substantial capital investments.

• The company has not made any alternate arrangements for meeting its regular working capital requirements. If the company operations does not generate the necessary cash flow, its working capital requirements may negatively affect its operations and financial performance.

• Its growth will depend on the company ability to build its brand and failure to do so will negatively impact its ability to effectively compete in this industry.

• Its success depends on stable and reliable logistics and transportation. Disruption of logistics and transportation services could impair the ability of its suppliers to deliver raw materials or the company ability to deliver products to its customers and/ or increase its transportation costs, which may adversely affect its operations. The company`s success depends on stable and reliable logistics and transportation. Disruption of logistics and transportation services could impair the ability of its suppliers to deliver raw materials or its ability to deliver products to its customers and/ or increase the company transportation costs, which may adversely affect its operations.

• Its insurance coverage may not be adequate to protect the company against certain operating hazards and this may have a material adverse effect on its business.

• Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.

• The outbreak of COVID-19 or outbreak of any other severe communicable disease could have a potential impact on its business, financial condition and results of operations.

• The average cost of acquisition of Equity Shares by its Promoters could be lower than the issue price.

• The company has issued Equity Shares during the last one year at a price that may be below the Issue Price.

• Its Promoters and members of the Promoter Group will continue jointly to retain majority control over the Company even after the Issue which will allow them to determine the outcome of matters submitted to shareholders for approval.

• There may be potential conflicts of interest if its Promoters or Directors get involved in any business activities that compete with or are in the same line of activity as its business operations.

• Its Promoter is involved in certain legal proceeding(s) potential litigations. Any adverse decision in such proceeding(s) may render it/them liable to liabilities/penalties and may adversely affect its business and results of operations.

• Its success will depends on the company ability to attract and retain its key managerial personnel, its design and engineering team and other key personnel. Failure to do so may have a material adverse effect on its business, financial condition and results of operations.

• The Company has in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on the Company`s financial condition and results of operations.

• Its business, financial condition and results of operations could be materially and adversely affected by strikes, work stoppages and/or increased wage demands by its employees or any other kind of dispute with the company employees and other workers.

• The company is subject to foreign currency exchange rate fluctuations which could have a material and adverse effect on its results of operations and financial conditions.

• In addition to normal remuneration, other benefits and reimbursement of expenses to some of its Promoters who are directors as well, hold Equity Shares in the Company and may be interested in the Company to the extent of interest received on loan given, their shareholding and dividend entitlement in the Company.

• The company has not made any dividend payments in the past 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 in its financing arrangements.

• The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.

• There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

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

• The price of its Equity Shares may be volatile, or an active trading market for the company Equity Shares may not develop.

• The company cannot assure you that its equity shares will be listed on the Emerge Platform of NSE in a timely manner or at all, which may restrict your ability to dispose of the equity shares.

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

• After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.

• The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.

• The company is entering into a new line of business involving assembly of Solar Hybrid Inverters through its Subsidiary, Invergy India Private Limited ("IIPL"). Since the company has no prior experience in this field, it could adversely affect its business if the operations are not managed properly.

• Its subsidiary company "IIPL" has limited Source of origin of goods for procurement of hybrid solar inverters and lithium ferro phosphate batteries.