Vardhman Precision Components Limited

64.5% of our revenue from operations in the last financial year was derived from the State of Maharashtra. Any adverse political, economic, regulatory or competitive development in this market could disproportionately affect our business, financial condition and results of operations.

Our top 5 customers accounted for 61.3% of revenue in the last financial year: Mahindra & Mahindra Limited (22.4%), Tata Motors Limited (15.1%), Bajaj Auto Limited (10.3%), Force Motors Limited (7.2%), Greaves Cotton Limited (6.3%). The loss of, or a material reduction in orders from, any of these customers would adversely affect our business.

Our Promoters and Promoter Group will collectively hold approximately 54.54% of our post-Issue equity share capital. By virtue of this shareholding, they will continue to be able to control the outcome of matters requiring shareholder approval, and their interests may not always align with those of our other shareholders.

Our trade receivables stood at Rs 920.00 Lakhs as of FY2026, representing 19.09% of our revenue from operations for that year. Any delay or default by our customers in settling these amounts could increase our working capital requirements and adversely affect our cash flows and liquidity.

A portion of our revenue from operations (8.4% in the last financial year) is derived from exports to international markets. Any adverse political, economic or regulatory development in those markets, or adverse movement in foreign exchange rates, could adversely affect our business, financial condition and results of operations.

Our contingent liabilities not provided for totalled Rs 90.00 Lakhs as of FY2026, above our materiality threshold of Rs 12.08 Lakhs (the lower of 2% of turnover, 2% of net worth and 5% of average absolute profit after tax). If any of these liabilities crystallise, it would adversely affect our financial condition.

We have entered into, and expect to continue entering into, related party transactions with our Promoters, Directors and members of our Promoter Group (3 related parties on file, 4.36% of revenue in the last financial year). We cannot assure you that such transactions will always be on terms as favourable as those available from unrelated third parties.

1 legal proceeding against our Company, totalling Rs 34.00 Lakhs, meets or exceeds our litigation materiality threshold of Rs 12.08 Lakhs. An adverse outcome could require us to pay damages or comply with orders that affect our operations.

2 of our borrowing facilities are secured in part by personal guarantees from our Promoters, with an aggregate outstanding of Rs 6.85 Crores under those facilities. Invocation of any such guarantee could adversely affect our Promoters personally, which may in turn affect their ability to hold or exercise control over our Company.

We have availed unsecured loans with an aggregate outstanding of Rs 1.50 Crores, which are repayable on demand. If our lenders were to recall these amounts before they otherwise fall due, it could place significant strain on our cash flows and adversely affect our financial condition.

We currently operate from a single facility (Chakan facility) at Plot No. 42, Chakan Industrial Area, Phase II, Pune, Maharashtra. Any disruption to this facility — whether from fire, natural calamity, labour unrest or the loss of a licence specific to it — would adversely affect our ability to manufacture and supply our products.

Our success depends on the continued services of our Promoters, Key Managerial Personnel and Senior Management, and we do not maintain key man insurance in respect of any of them. The loss of any of these individuals, without insurance to offset the resulting cost or disruption, could adversely affect our business.

1 of our trademark application is still pending registration under the Trade Marks Act, 1999: Trade mark registration for the "VARDHMAN PRECISION" device mark in Class 12. Until registration is granted, we may be unable to prevent third parties from using an identical or deceptively similar mark, which could adversely affect our brand and competitive position.

We do not have long-term supply agreements or fixed-price arrangements with our key suppliers, and source our raw materials and other inputs on a purchase-order basis at prevailing market prices. We are accordingly exposed to fluctuations in the price and availability of these inputs, which we may not always be able to pass on to our customers, and which could adversely affect our margins, business and results of operations.

The objects of the Issue and the deployment of the Net Proceeds are based on internal management estimates and current business plans, and have not been appraised by any bank, financial institution or other independent agency. Our actual funding requirements and deployment may vary from these estimates, and our Board retains discretion over how the Net Proceeds are applied.

4 of our 5 directors have no prior experience of serving on the board of a company listed on a recognised stock exchange. They may accordingly be able to provide only limited guidance on the compliance obligations of a listed entity.