De Neers Tools

Risks

• The company brand De Neers is at its initial stage.

• The company debtors constitute payments that are due from over 3 years.

• The products marketed and sold by the Company in relation to the "De Neers" brand are vulnerable to counterfeiting or imitation by third parties that may affect the reputation of the Company.

• The company has experienced negative cash flows in the past.

• The Company has taken unsecured borrowings payable on demand from Promoters.

• The company relies substantially on third parties.

• The company major revenues are derived from sales made in the states of Delhi NCR, Gujarat, Telangana, Bihar & Uttar Pradesh (UP) in India.

• The company Statutory Auditor is in the process to renew its Peer Review Certificate.

• The company is dependent on a number of key personnel and services of the members of senior management and the loss of such persons, or its inability to attract and retain key personnel and senior management in the future, could adversely affect its business, growth prospects, results of operations and cash flows.

• The company sell its products in highly competitive markets and its inability to compete effectively may lead to lower market share or reduced operating margins, and adversely affect the company results of operations.

• If the company is unable to attract new customers or retain its existing customers the growth of the company business and cash flows will be adversely affected.

• The company Registered Office is not registered in its name and is taken on lease. There can be no assurance that the said lease agreement will be renewed upon termination or that its will be able to obtain other premises on lease / rent on same or similar commercial terms.

• There has been instances of delay in RoC compliances.

• The company has working capital requirements. If its experience insufficient cash flows to enable the company to make required payments on its debt or fund working capital requirements, there may be an adverse effect on its results of operations.

• The company cannot predict or forecast the success of its business.

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

• Loans availed by the Company from its Promoter and Other Group Entities are unsecured and payable on demand.

• The company require 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 or comply with such rules and regulations, and the failure to obtain or retain them in a timely manner or at all may adversely affect its operations.

• Certain sections of this Draft Red Herring Prospectus disclose information from an industry report commissioned by it and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

• The company Promoter and Promoter Group will continue to hold majority shareholding after the completion of the Issue.

• The deployment of funds raised through this Issue shall not be subject to any monitoring agency and shall be purely dependent on the discretion of the management of the Company.

• The company could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• The company cannot assure you that the deployment of the Net Proceeds in the manner intended by it will result in increase in the value of your investment.

• Significant differences exist between Indian GAAP and Ind AS and other accounting principles, such as IFRS and U.S. GAAP, which may be material to investors` assessments of its financial condition, result of operations and cash flows.

• The company is dependent on third party transportation providers for the delivery of products. Accordingly, any increase in transportation costs or unavailability of transportation services for its products may have an adverse effect on its business, financial condition, results of operations and prospects.

• The company may not be able to sustain effective implementation of its business and growth strategy.

• 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.

• Additional issuances of equity may dilute your holdings and sales by its Promoter could adversely affect the market price of the company Equity Shares.