Utssav CZ Gold Jewels Ltd

Risks

• Significant portion of its revenues is concentrated from a limited number of clients. The loss of any of the company significant clients may have an adverse effect on its business, financial condition and result of operations.

• The company has certain outstanding litigation against it, an adverse outcome of which may adversely affect its business, reputation and results of operations.

• The unexpected loss, shutdown or slowdown of operations at its manufacturing plant could have a material adverse effect on the company results of operations and financial condition.

• The Company requires significant amount of working capital for continued growth. Its inability to meet the company working capital requirements, on commercially acceptable terms, may have an adverse impact on its business, financial condition and results of operations.

• Its business, operating performance, and financial situation could negatively impact the company capacity to adapt quickly to shifts in consumer expectations and market trends, as well as by the company failures to diversify its product offering.

• Its CZ gold jewellery business faces risks from market volatility and changing consumer preferences. Fluctuations in commodity prices like gold could impact its costs and profitability. Evolving consumer tastes influence product demand, necessitating continuous adaptation to remain competitive.

• The company has availed unsecured loans from Promoters and third parties that are recallable, at any time.

• The company has experienced negative cash flows in the past, and its may have negative cash flows in the future.

• The company may faces significant competition in its business. An inability to compete effectively may lead to loss of business or reduced operating margins.

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

• In the past, there have been discrepancies in filings with the Registrar of Companies (RoC) and other non-compliances under the Companies Act, which may result in penalties.

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

• Its insurance may be insufficient to cover all losses associated with the company business operations.

• Its may incur losses if the company competitors imitate its designs due to the failures to register the company jewellery design under the Designs Act, 2000.

• The company is subject to gold price fluctuations and its might not be able to procure gold at competitive prices for use in the company manufacturing.

• The company trademark "UTSSAV CZ GOLD JEWELS Celebrations Forever" logo status is currently under objection. Failures to obtain the trademark registration could lead to difficulties in identification or mistaken association if the trademark is not officially registered under its name. This could potentially result in brand confusion, loss of market recognition, and legal challenges regarding the use of its logo.

• The company operates its business from rented premises. Non-renewal of rent agreements could adversely impact the operations of the Company.

• The company is required to obtain, renew or maintain certain statutory and regulatory permits and approvals required to operate its business. Non-compliance with existing or changes to environmental, health and safety, labour laws and other applicable regulations by it may adversely affect the company`s business, financial condition, results of operations and cash flows.

• If the company is 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, prospects, results of operations and financial condition.

• Its manufacturing process requires deployment of skilled labour and designers with knowledge of CAD. In case of unavailability of such personnel, its business operations could be affected.

• Changes in technology may render its current technologies obsolete or require the company to make substantial investments.

• The company is dependent on its Promoters, Key management personnel and senior management personnel and the loss of, or its inability to attract or retain, such persons could affect the company`s business, results of operations, financial condition and cash flows.

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

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

• Its ability to pay any dividends will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• Its Promoter and the Promoter Group will jointly continue to retain majority shareholding in the Company after the offer, which will allow them to determine the outcome of the matters requiring the approval of shareholders.

• Any variation in the utilization of the Net Proceeds as disclosed in this the Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.

• Its Promoters and Directors have provided personal guarantees for financing facilities availed by the Company and may in the future provide additional guarantees and any failures or default by the Company to repay such facilities in accordance with the terms and conditions of the financing agreements could trigger repayment obligations on them, which may impact their ability to effectively service their obligations as its Promoters and Directors and thereby, adversely impact the company`s business and operations.

• If the company fails to procure the necessary raw materials, such as gold bars, alloys, and CZ stones, its may encounter delays that could impact the company market reputation. This situation could result in financial and operational losses, affecting its overall business performance.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and the same have not been appraised by any bank or financial institution or any independent agency. The deployment of funds is entirely at its discretion, based on the parameters as mentioned in the chapter "Objects of the Issue" on page 74.

• The Company has not received the appropriate documentary evidence regarding the qualification certificates of its promoters, nor the experience certificate of one of the company`s Senior Management Personnel (SMP).

• Non-availability of credit ratings or a poor rating may restrict its access to capital and thereby adversely affect the comkpany`s business and results of operations.

• The company has contingent liabilities as stated in the Restated Financial Statement, and in the event, they materialize it could adversely affect its financial condition.

• The Company has delayed in payment of statutory dues in the past under the statutory provisions of the Goods and Services Tax Act, 2017, the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and for Employee State Insurance Act, 1948. Such non-compliance and delayed compliance may result in penalties, potentially affecting its financial position.

• Its Group Companies are engaged in activities which is similar to its business. This may be a potential source of conflict of interest for it and which may have an adverse effect on the company`s business, financial condition and results of operations.

• 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 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.

• Any future issuance of Equity Shares, or convertible securities or other equity linked securities by the Company may dilute your shareholding and any sale of Equity Shares by its Promoters or members of the company Promoter Group may adversely affect the trading price of the Equity Shares.

• Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

• QIB and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.

• The requirements of being a publicly listed company may strain its resources.

• The sale of Equity Shares by its Promoters in future may adversely affect the market price of the Equity Shares.

• There is no guarantee that its Equity Shares will be listed on the and the NSE in a timely manner or at all.