19.

20.

21.

costs related to liability claims. Product liability or personal injury claims may be asserted with respect to any of the drugs
or other products or services we sell or provide. For instance, in the past, consumers have filed complaints against Optival,
in relation to, inter alia, claims of alleged extra charges, deficiency of services and sale of expired products. While the
complaints filed against Optival by the consumers during the last three financial years were amicably resolved between the
Company and the consumers without any fines or penalties, and the damages claimed in these matters have typically not
been of a material nature, the occurrence of such events or incidents, as well as the failure to maintain quality standards at
store level, could result in harm to customers negative publicity or could adversely affect brands, reputation, operations or
financial performance and could lead to other unforeseen liabilities from legal claims or otherwise. See “Outstanding
Litigation and Material Developments” on page 304.

We may not be able to avoid significant liability exposure even if we take appropriate precautions, including maintaining
liability coverage (subject to deductibles and maximum pay-outs). Any liability that we may have as a result could have a
material adverse effect on our business, financial condition and results of operations, to the extent insurance coverage for
such liability is not available. Any liability claims in the future, regardless of their ultimate outcome, could have a material
adverse effect on our reputation, our ability to attract and retain customers and may detrimentally divert management’s
attention away from the business.

We could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could
adversely affect our financial condition, results of operations and reputation.

Certain employee misconduct or material human errors, such as mistakenly dispensing expired or incorrect drugs or
accidentally dispensing drugs without verifying prescriptions, could occur, which may expose us to business risks or losses,
including regulatory sanctions and serious harm to our reputation. There can be no assurance that we will be able to detect
or deter such misconduct. Moreover, the precautions we take to prevent and detect such activity may not be effective in all
cases. Our employees and agents may also commit errors that could subject us to claims and proceedings for alleged
negligence, as well as regulatory actions on account of which our business, financial condition, results of operations and
goodwill could be adversely affected. While there have been no instances where our business has been materially harmed
by employee misconduct or errors during the past three financial years and the six months ended September 30, 2021, we
cannot assure you that such instances may not occur in the future.

Information relating to our installed capacities and the historical capacity utilisation of our production plants
included in this Prospectus is based on various assumptions and estimates by the chartered engineer verifying such
information and future production and capacity utilisation may vary.

Information relating to our installed capacities and the historical capacity utilisation of our production plants included in
this Prospectus is based on various assumptions and estimates, including proposed operations, assumptions relating to
availability and quality of raw materials and assumptions relating to potential utilization levels and operational efficiencies.

The table below sets forth certain assumptions and estimates that were used in calculating the installed capacities or
historical capacity utilisation of our production plants:

 

 

 

 

 

 

 

 

 

Location Item Assumption or Estimate
' Units of manufacturing No. of working hours were taken as 24 hours in a da‘
Jeedimetla 5 =
per second No. of working days were taken as 300 days in a year
No. of working hours were taken as 8 hours in a day
Units manufactured per Max employees per shift with the given machinery was taken as 30
Moosapet
man hour employees
No. of working days were taken as 312 days in a year
Units manufactured per No. of working hours were taken as 8 hours in a day
Pashamylaram 7 ;
man hour No. of working days were taken as 300 days in a year

 

 

 

 

While we have obtained a certificate dated November 26, 2021, Servel Krishna Engineers Private Limited, chartered
engineers in relation to such capacities and actual production levels, future capacity utilisation rates may vary significantly
from the estimated production capacities of our production facilities and historical capacity utilisation rates. In addition,
capacity utilisation is calculated differently in different countries, industries and for the kinds of products we manufacture.
Actual utilisation rates may differ significantly from the estimated installed capacities or historical estimated capacity
utilization information of our facilities. Undue reliance should therefore not be placed on our installed capacity or historical
estimated capacity utilisation information for our existing facilities included in this Prospectus. For further information,
see “Our Business” on page 158.

 

We rely on third-party manufacturers for the supply of our products, and a failure by manufacturers to meet high
product quality standards may adversely affect our business.

Almost all our inventories sourced by us are manufactured by third-party manufacturers, including our private label
products which are manufactured for us by third-party manufacturers on a contract-manufacturing basis. As a result, we
are dependent on third-party manufacturers for the timely supply of all our inventories, including general pharmaceutical

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