Sunrest Lifescie

Risks

• Its registered office and warehouse from where the company operate, are not owned by it.

• There are outstanding legal proceedings involving the Company, the Directors and the Promoter.

• The company relies on third parties for manufacturing of products for the Company.

• The Company requires significant amount of working capital for a continued growth. Its inability to meet the working capital requirements may have an adverse effect on the company results of operations.

• The company requires a number of approvals, licences, registrations and permits in the ordinary course of the business and any failure or delay in obtaining the same in a timely manner may adversely affect its operations.

• The company`s business activities are exposed to fluctuations in the prices of raw materials.

• If the company cannot respond adequately to the increased competition its expect to face, the company will lose market share and the profits will decline, which will adversely affect its business, results of operations and financial condition.

• There have been instances of delays or non-filling of certain forms which were required to be filed as per the reporting requirements under the Companies Act, 2013 to the Registrar of Companies.

• Non generation of separate Unique Document Identification Number (UDIN) for the Tax Audit Report and the Statutory audit Report for the financial year 2019-2020

• Non-compliance of Section 203(3) of the Companies Act, 2013.

• The company has in the last 12 months issued Equity Shares at a price that may be at lower than the Issue Price.

• The Company has availed Rs.3.37 Crore as an unsecured loan as on 31st December 2022 which is repayable on demand. Any demand from the lenders for repayment of such an unsecured loan may affect its cash flow and financial condition.

• Certain agreements may be inadequately stamped or may not have been registered as a result of which its operations may be adversely affected.

• The company has not executed any agreement with any of its Super Stockists and Stockists.

• Its inability to identify, obtain and retain intellectual property rights, or to protect or use them, could harm its business. Further, the company may infringe upon the intellectual property rights of others, any misappropriation of which could adversely affect its business and reputation.

• Delay in Deposits of Tax Deducted at Source (TDS) with the Income Tax Authority.

• The customers may delay or default in making payments for services rendered by it. If the company is unable to collect its receivables from the customers, its profits, cash flows and liquidity could be adversely affected.

• Availment of Car Loan on behalf of the Directors.

• Shares transferred as gift not being shown/ reflected in the ITR and related gift deeds are not registered.

• Being a pharmaceutical company, its operate in a highly regulated and controlled industry environment. The company business is dependent on approvals from relevant regulatory and health authorities. Any delay or failure to obtain or renew such required regulatory approvals, registrations, or any change in the regulatory environment in relation to marketing the products in regulated markets may significantly impact its business and strategy affecting the company overall profitability.

• The products that its commercialize may not perform as expected which could adversely affect the company business, financial condition, and results of operations.

• The availability of counterfeit drugs, such as drugs passed off by others as the company products, could adversely affect its goodwill and results of operations.

• The Company had negative cash flow from operating activity in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition, and results of operations.

• If the company inadvertently infringe on the patents of others, its business may be adversely affected.

• The company generally do business with the customers on purchase order basis and do not enter into long term contracts with most of them.

• The Company`s failure to maintain the quality standards of the products or keep pace with the technological developments could adversely impact its business, results of operations and financial condition.

• The company is subject to risks associated with expansion into New Markets.

• The Company is dependent on third party transportation for the delivery of products and any disruption in their operations or a decrease in the quality of their services could affect the Company`s reputation and results of operations.

• In addition to normal remuneration, other benefits, and reimbursement of expenses to the Promoters and Directors; they are interested to the extent of their shareholding and dividend entitlement thereon in the Company and for the transactions entered into between the Company and themselves as well as between the Company and the Group Companies/Entities.

• The average cost of acquisition of Equity shares by the Promoters is lower than the Issue price.

• The company`s success depends heavily upon the Promoters, Directors and Key Managerial Personnel for their continuing services, strategic guidance and financial support.

• Any conflict of interest which may occur between the business and any other similar business activities pursued by the Promoters and Promoter Group entity could have a material adverse effect on its business and the results of operations.

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

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

• The company insurance coverage may not be adequate to protect us against all potential losses to which its may be subject to, and this may have a material adverse effect on the business.

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

• Industry information included in this draft prospectus has been derived from industry reports. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

• The company has not identified any alternate source of raising the funds required for the object of the Issue and the deployment of funds is entirely at its discretion and as per the details mentioned in the section titled "Objects of the Issue".

• Within the parameters as mentioned in the chapter titled "Objects of this Issue" of this draft prospectus, the Company`s management will have flexibility in applying the proceeds of this Issue. The fund requirement and deployment mentioned in the Objects of this Issue have not been appraised by any bank or financial institution.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the NSE Emerge in a timely manner, or at all.

• Any variation in the utilization of the Net Proceeds as disclosed in this Draft Prospectus shall be subject to certain compliance requirements, including prior Shareholders` approval.

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by the company major shareholders may adversely affect the trading price of the Equity Shares.

• Its ability to pay dividends in the future will depend upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in the financing arrangements.

• Its inability to effectively implement its business and growth strategy may have an adverse effect on the operation and growth.

• 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 requirements of being a public listed company may strain its resources and impose additional requirements.

• The company has relied on the affidavits provided by its promoter for their experience.

• The company contingent liabilities could adversely affect its financial condition.