Divyadhan Recy.

Risks

• The company Registered Office from where itsoperate are not owned by it. If the company is required to vacate the same, due to any reason whatsoever, it may adversely affect its business operations.

• Its Promoters is involved in certain legal proceedings/litigations. Any adverse decision in such proceedings may render it/them liable to penalties and may adversely affect its business and result of operations.

• Majority of its state wise revenues from operations for the last 3 years is majorly derived from Himachal Pradesh. Any adverse developments affecting its operations in this state could have an adverse impact on the company revenue and results of operations.

• Its group companies are involved in certain legal proceedings/litigations. Any adverse decision in such proceedings may render it/them liable to penalties and may adversely affect its business and result of operations.

• The company has had negative cash flows in the past and may continue to have negative cash flows in the future.

• The restated financial statements of the company has been provided by the peer reviewed chartered accountant who is not the statutory auditor of the Company.

• Under-utilization of its currently operational manufacturing facilities and any inability to effectively utilize the company proposed manufacturing capacity could have an adverse effect on its business, future prospects, and future financial performance.

• Certain of its corporate filings and records are not traceable, while certain corporate records have errors. the company cannot assure that regulatory proceedings or actions will not be initiated against it in the future, and the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.

• The company is dependent on one of its customers named PV Fibers LLP, who contributes significant portion of revenue of the company during the last 3 financial years and stub period. Any loss of business from this customer may adversely affect its revenues and profitability.

• Its Top 10 Suppliers contribute a significant portion of teh company raw material consumption during the current and previous financial years. Any dispute with one or more of them may adversely affect its business operations.

• Inconsistent Product quality could lead to customer dissatisfaction, hampering reputation, sales and business which may materially and adversely affect its business and prospects.

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

• The company depends on a limited number of customers for a significant portion of its revenues. The loss of a major customer or significant reduction in demand from any of its major customers may adversely affect the company`s business, financial condition, results of operations and prospects.

• The company requires high working capital for its smooth day to day operations of business and any discontinuance or its inability to procure adequate working capital timely and on favorable terms may have an adverse effect on its operations, profitability and growth prospects.

• The Company derives signification portion of revenue from Recycled PET Fiber and any reduction in the sale of such products could have an adverse the business, result of operations and financial condition.

• Its contingent liabilities as stated in the company Restated Financial Statements could adversely affect its financial conditions.

• The Company may incur penalties or liabilities for non-compliances with certain provisions of the GST Act, ESI, PF, and other applicable laws in the past Years.

• The company`s Board of Directors does not have any experience of listed companies.

• The Company`s success depends largely upon the services of its Directors, Promoters and other Key Managerial Personnel and the company ability to attract and retain them. Demand for Key Managerial Personnel in the industry is intense and its inability to attract and retain Key Managerial Personnel may affect the operations of the Company.

• The company failures to accurately forecast and manage inventory could result in an unexpected shortfall and/or surplus of raw material, which could have a material adverse impact on its profitability.

• The Company`s operation and growth is dependent upon successful implementation of its business strategies.

• Any shortage or non-availability of electricity or water and associated price fluctuations may adversely affect its manufacturing operations and have an adverse effect on the company`s business, results of operations and financial condition.

• An inability to comply with environmental laws and other regulatory requirements in relation to Waste Management may adversely affect its business, financial condition and results of operations.

• The company does not have long-term contracts with its suppliers and therefore, there may be potential unavailability of raw materials in future, which may adversely affect its business operations.

• Fluctuation of Interest rate may adversely affect the Company`s business.

• Its business operations are subject to various operating risks at the company`s sites, accidental risk, the occurrence of which can affect its results of operations and consequently, financial condition of the Company.

• Its funding requirements and proposed deployment of the Net Proceeds have not been appraised by a credit rating agency registered with the Board and if there are any delays or cost overruns, its may have to incur additional cost to fund the objects of the Issue because of which its business, financial condition and results of operations may be adversely affected.

• The company intend to utilise a portion of the Net Proceeds for funding its capital expenditure requirements. The company is yet to place orders for such capital expenditure.

• Documentary evidence of one of its directors with respect to the work experience is not available.

• The Logo of the Company has not been registered under the Trade Marks Act, 1999.

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

• In addition to normal remuneration, other benefits and reimbursement expenses of some its Directors (including the company Promoters) and Key Management Personnel, who are interested in the Company to the extent of their shareholding and dividend entitlement in the Company.

• If the company fails to maintain an effective system of internal controls, its may not be able to successfully manage or accurately report its financial risk.

• Certain Agreements, deeds or licenses 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.

• The company is subject to stringent labour laws or other industry standards and any strike, work stoppage, Lock-out or increased wage demand by its employees or any other kind of disputes with thecompany employees could adversely affect its business, financial condition and results of operations.

• Significant differences exist between Indian GAAP and other accounting principles, such as Ind 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 has not paid any dividend in past 3 financials years and its ability to pay dividends in the future may be affected by any material adverse effect on its future earnings, financial condition or cash flows.

• Industry information included in this Red Herring Prospectus has been derived from an industry report from various websites. The reliability on the forecasts of the reports could be incorrect and would significantly impact its operations.

• The Company`s future funding requirements, in the form of further issue of capital or other securities and/or loans that might be availed by it, may turn out to be prejudicial to the interest of the shareholders depending upon the terms and conditions on which they are raised.

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

• Its insurance coverage in connection with the company`s business may not be adequate and may adversely affect its operations and profitability.

• There are certain restrictions on daily movements in the price of 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.

• 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.

• Market price of its share will be decide by market forces and issue price of equity share may not be indicative of the market price its share price after the issue.