Valiant Laborato

Risks

• The company is subject to strict quality requirements, regular inspections and audits by its customers and any failure to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact the company business, financial condition, results of operations and prospects it may impact the reputation as well.

• The company does not have long-term agreements with its suppliers for raw materials and an inability to procure the desired quality, quantity of its raw materials in a timely manner and at reasonable costs, or at all, may have a negative impact on the business, results of operations, financial condition and cash flows.

• If there are delays in setting up the Proposed Facility or if the costs of setting up and the possible time or cost overruns related to the Proposed Facility or the purchase of plant and machinery for the Proposed Facility are higher than expected, it could have a material adverse effect on its financial condition, results of operations and growth prospects.

• The company`s single product manufacturing company and any changes to the paracetamol API industry or the company product demand will adversely affect its revenues, financials and profitability.

• The majority of its operative income is derived from the domestic market and any adverse developments in this market could adversely affect its business.

• The company Manufacturing Facility is located in one geographic area and therefore, any localized social unrest, natural disaster or breakdown of services or any other natural disaster in and around Palghar, Maharashtra or any disruption in production at, or shutdown of, its manufacturing unit could have material adverse effect on the company business and financial condition.

• The company is dependent on a few customers for a major part of the revenues. Further its do not enter into long-term arrangements with the customers and any failure to continue our existing arrangements could adversely affect its business and results of operations.

• The company is in the process of expanding its operations and establishing a network of customers in a line of business where the company do not have a significant presence or prior experience. Any failure to expand into these new products could adversely affect its sales, financial condition, result of operations and cash flows.

• The company is subject to government regulations and if its fail to obtain, maintain or renew the statutory and regulatory licenses, permits and approvals required to operate the company business, results of operations and cash flows may be adversely affected.

• The objects of the Issue include funding working capital requirements of Valiant Advanced Sciences Private Limited, a wholly owned Subsidiary of the Company, which are based on certain assumptions and estimates.

• The pharmaceutical industry is intensely competitive and the company inability to compete effectively may adversely affect its business, results of operations and financial condition and cash flows.

• The company is subject to certain risks consequent to the operations involving the manufacture, usage and storage of various hazardous substances.

• Pricing pressure from customers may affect the company gross margin, profitability and ability to increase its prices, which in turn may materially adversely affect the company business, results of operations and financial condition.

• Reforms in the healthcare industry and the uncertainty associated with pharmaceutical pricing and reimbursement could adversely affect the pricing and demand for its products.

• The company funding requirements and the proposed deployment of Net Proceeds are not appraised by any independent agency and are based on management estimates and may be subject to change based on various factors, some of which are beyond its control. Any changes in the estimated funding requirements could affect the company business and results of operations.

• The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its results of operations.

• The company manufacturing unit and office premises are located on leasehold / leave and license basis. If these leasehold /license agreements are terminated or not renewed on terms acceptable to it, it could have a material adverse effect on its business, financial condition, results of operations and cash flows.

• The company has not yet placed orders in relation to the capital expenditure to be incurred for the proposed facility which is proposed to be financed from the Issue proceeds. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the equipment in a timely manner, or at all, may result in time and cost over-runs and its business, prospects and results of operations may be adversely affected. Setting up of the Proposed Facility are subject to the risk of unanticipated delays in implementation due to factors including delays in construction, obtaining regulatory approvals in timely manner and cost overruns.

• R&D activities play an important role for the business and if its do not successfully improve the company existing products or continue the product portfolio expansion in a timely and cost- effective manner, its business, financial condition, cash flows and results of operations may be adversely affected.

• The company inability to accurately forecast demand or price for the products and manage the company inventory may adversely affect its business, results of operations, financial condition and cash flows.

• Under-utilization of the company production capacities could have an adverse effect on its business, future prospects and future financial performance.

• The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with its Shareholders.

• The company Subsidiary has acquired land in the last five years from its Promoter Group member and may undertake further acquisitions in the future.

• Changes in technology may affect its business by making the company unit or equipment less competitive.

• Improper storage, processing and handling of raw materials and finished products may cause damage to the company inventory leading to an adverse effect on its business, results of operations and cash flows.

• Exchange rate fluctuations may adversely affect the company results of operations as its sales from exports and a portion of th expenditures are denominated in foreign currencies.

• The company financing agreements contain covenants that limit of the flexibility in operating its business. The company inability to meet to the obligations, including financial and other covenants under the debt financing arrangements could adversely affect its business, results of operations and financial condition.

• The Group Companies are authorised to carry on similar lines of business and there can be no assurance that its would not face competition from such Group Companies in the future.

• Restrictions on import of raw materials may impact its business and results of operations.

• The company failure to manage growth effectively may adversely impact its business, prospects, financial condition and results of operations.

• The company has incurred capital expenditure during the last three Fiscal Years. Its may require substantial financing the company business operations and capital expenditure and the failure to obtain additional financing on terms commercially acceptable to it may adversely affect its future profitability.

• The company do not own any registered trade names or trademarks and its may therefore not be able to adequately protect the company intellectual property. Furthermore, its may be subject to claims alleging breach of third party intellectual property rights. Any litigation related to the company intellectual property could be time consuming and costly.

• There have been some instances of incorrect filings with the Registrar of Companies and other non-compliances under the Companies Act in the past which may attract penalties.

• The company is dependent on third-party transportation providers for the supply of raw materials and delivery of its finished products.

• The Company, its Promoters and the Directors are party to certain legal proceedings. Any adverse outcome in such proceedings may have an adverse impact on its reputation, business, financial condition, results of operations and cash flows.

• Its may be subject to significant risks and hazards when operating and maintaining the company Manufacturing Facility, for which its insurance coverage might not be adequate.

• Industry information included in this Draft Red Herring Prospectus has been derived from an industry report from CRISIL Market Intelligence & Analytics, a division of CRISIL Limited which has been commissioned and paid by it for such purpose exclusively in connection with the Issue. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

• Information relating to the installed production capacity and capacity utilization of the company production units included in this Draft Red Herring Prospectus are based on various assumptions and estimates and future production and capacity may vary.

• Inability to protect, strengthen and enhance the company existing reputation could adversely affect its business prospects and financial performance.

• Any unscheduled or prolonged disruption of the manufacturing operations could materially and adversely affect its business, financial condition, results of operations and cash flows.

• The company ability to grow its business depends on the relationships with the company customers and any adverse changes in these relationships, or its inability to enter into new relationships and thereby expand the customer network, could negatively affect the company business and results of operations.

• The company is dependent on third parties for the supply of utilities, such as water, gas and electricity, at the Manufacturing Facilities and any disruption in the supply of such utilities could adversely affect its manufacturing operations.

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

• The company appoint contract labour for carrying out some of its operations and the company may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on the results of operations, cash flows and financial condition.

• The company inability to effectively manage its growth or to successfully implement of the business plan and growth strategy could have an adverse effect on the business, results of operations, financial condition and cash flows.

• The company may be subject to unionization, work stoppages or increased labour costs, which could adversely affect its business and results of operations.

• The company is dependent on the Promoters, Directors and a number of key managerial personnel and the loss of, or its inability to attract or retain such persons could adversely affect the company business, results of operations, financial condition and cash flows.

• An inability to renew quality accreditations in a timely manner or at all may negatively affect its business prospects and financial performance.

• The impact of the COVID-19 pandemic is uncertain and still evolving, and could adversely affect its business, financial condition and results of operations.

• The company Promoters and Promoter Group shall continue to retain significant control in the Company after the Issue, which shall allow them to influence the outcome of matters submitted to shareholders for approval. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control.

• Employee misconduct including misuse of confidential data and failure to maintain confidentiality of information could harm it and is difficult to detect and deter.

• The company have in this Draft Red Herring Prospectus included certain Non-GAAP Measures and certain other industry measures related to the company operations and financial performance. These Non-GAAP Measures and industry measures may vary from any standard methodology that is applicable across the pharmaceutical industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

• If the company is subject to any frauds, theft, or embezzlement by its employees, suppliers or customers, it could adversely affect the company reputation, results of operations, financial condition and cash flows.

• Activities involving the company manufacturing process can be dangerous and can cause injury to people or property in certain circumstances. A significant disruption at any of the Manufacturing Facilities may adversely affect its production schedules, costs, sales and ability to meet customer demand.

• There is no guarantee that the company Equity Shares will be listed on the Stock Exchanges in a timely manner or at all.

• The company ability to pay dividends in the future will depend on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of the financing arrangements.