plant and equipment, amortization on right-of-use assets, provision for gratuity and leave benefits, interest on lease liability
and net loss on fair value changes, and working capital adjustments. Our changes in working capital primarily consisted of
an increase in inventories of 22,494.89 million.

For the financial years 2019 and 2020 and the six months ended September 30, 2020 and 2021, our net cash flows from
investing activities were negative primarily due to the purchase of fixed assets for the new stores we opened and our
investment in bank deposits. For the financial year 2021, our net cash flow from investing activities was negative primarily
due to the purchase of land and other fixed assets.

For the financial years 2019 and 2021, our net cash flows from financing activities were negative primarily due to (i) the
repayment of lease liabilities relating to our stores, and (ii) the payment of interest on our borrowings. For the financial
year 2019 in particular, our net cash flow from financing activities was negative also due to the repayment of our long term
borrowings. For the six months ended September 30, 2020 and 2021, our net cash flows from financing activities were
negative primarily due to the payment of lease liabilities relating to our stores.

For further information, see “Financial Statements” and “Management's Discussion and Analysis of Financial Condition
and Results of Operations” on pages 209 and 283, respectively. We cannot assure you that our net cash flows will be
positive in the future. Negative cash flows over extended periods, or significant negative cash flows in the short term, could
materially impact our ability to operate our business and implement our growth plans. As a result, our cash flows, business,
prospects, results of operations and financial condition may be materially and adversely affected.

Our lenders have imposed certain restrictive conditions on us under our financing arrangements.

Optival has entered into agreements for availing certain cash credit facilities from various lenders, and our Company has
issued a corporate guarantee to lenders on account of a loan of % 1,850 million availed by Optival, for funding Optival’s
working capital requirements. Certain covenants in these agreements require us to obtain approval/permission from our
lenders in certain conditions including changes in shareholding, management, control and constitutional documents of
Optival. In the event of default or the breach of certain covenants, our lender has the option to make the entire outstanding
amount payable immediately. Further certain agreements also impose financial and other restrictive covenants such as
maintenance of financial ratios, submission of results, etc. For instance, upon the occurrence of an event of default under
the debenture agreements between Agilemed, GIPL, Gangadi Madhukar Reddy and Vistra ITCL (India) Limited, and Lone
Furrow, GIPL, Gangadi Madhukar Reddy and Vistra ITCL (India) Limited, each dated January 20, 2021, the lenders, i.e.
Zash Traders (through the Zash Debenture Trustee) and Morning Brook Investment Ltd (through the Morning Brook
Debenture Trustee), each have the right to nominate one nominee Director on the Board of the Company. There can be no
assurance that we will be able to comply with these financial or other covenants or that we will be able to obtain consents
necessary to take the actions that we believe are required to operate and grow our business. Our level of existing debt and
any new debt that we incur in the future has important consequences. Any failure to comply with these requirements or
other conditions or covenants under our financing agreements that is not waived by our lenders or is not otherwise cured
by us, may require us to repay the borrowing in whole or part and may include other related costs. We may be forced to
sell some or all of its assets or limit our operations. This may adversely affect our ability to conduct our business and impair
our future growth plans. For further details, please see “Financial Indebtedness” on page 302.

Changes in prescription drug pricing and commercial terms could adversely affect our operations and financial
performance.

For each of the financial years 2019, 2020 and 2021 and the six months ended September 30, 2021, more than 75% of our
revenue from retail sales was attributed to sales of branded pharmaceutical products, the manufacturing and sale of which
is tightly regulated by various laws and regulations. Any changes to such legislation could have a material adverse impact
on our business, sales and profitability.

Sales of prescription drugs, medical devices and drug prices may be affected by changes to the health care industry,
including legislative or other changes that impact patient eligibility, drug product eligibility, the allowable cost of a
prescription drug product, the mark-up or channel margin permitted on a given prescription drug product, the amount of
professional or dispensing fees paid by third-party payers or the provision or receipt of manufacturer allowances by
pharmacy and pharmacy suppliers. Moreover, the price at which we sell certain of our pharmaceutical products are
determined by the Drugs (Prices Control) Order, 2013 (“DPCO”), promulgated by the Government of India and
administered by the National Pharmaceutical Pricing Authority (“NPPA”). If a given pharmaceutical product falls within
the DPCO, the product’s price could be significantly lower than what its market price would be without such price
restriction. Any changes to these prices stipulated by the DPCO, NPPA or other similar authorities, or the inclusion of
other of our pharmaceutical products not currently within the DPCO, could adversely impact our sales and adversely impact
our business, sales, margins and operations. We may incur significant costs in the course of complying with any other
changes in the regulatory regime affecting prescription drugs, which may adversely affect our business, financial condition
and results of operation.

There are outstanding legal proceedings involving our Company, Subsidiaries, Promoters and our Directors. Any
adverse outcome in any of these proceedings may adversely impact our business, reputation, financial condition and

31
