capital or pay out debts, could adversely affect our financial condition and result of our operations. See “Objects of the
Offer — Details of the Objects of the Offer ” on page 103.

Our ability to borrow and the terms of our borrowings will depend on our financial condition, the stability of our cash
flows, general market conditions, economic and political conditions in the markets where we operate and our capacity to
service debt. Our total outstanding indebtedness was 2 1,044.02 million, % 1,050.51 million, % 1,352.35 million and
% 567.48 million, respectively, in financial years 2019, 2020 and 2021 and the six months ended September 30, 2021
(excluding lease liability). See “Financial Indebtedness” on page 302.

Our indebtedness results in substantial amount of debt service obligations, which could lead to:

e increasing our vulnerability to general adverse economic, industry and competitive conditions;
¢ limiting our flexibility in planning for, or reacting to, changes in our business and the industry;
e affecting our credit rating;

¢ limiting our ability to borrow more money both now and in the future; and

¢ increasing our interest expenditure and adversely affecting our profitability.

Our activities expose us to a variety of financial risks, including credit risk, liquidity risk and in particular, market risk. If
any of the credit facilities availed by us are recalled on a short notice, we may be required to arrange for funds to fulfil the
necessary requirements. The occurrence of these events may have an adverse effect on our cash flow and financial
conditions.

11. Failure to properly manage inventories and anticipate demand may impact our financial performance.

Although we have a proprietary inventory management system in place to manage our inventory and distribution on a
dynamic basis, as with other pharmacy retail businesses, we are subject to risks associated with consumer demand and
changes in medical prescriptions. A failure to properly manage our inventory and effectively anticipate demand may result
in us holding unsold inventory. We are also exposed to inventory risk in connection with our products, such as our FMCG
and private label products, as a result of changes in product life cycles, changing consumer preferences, uncertainty of
product developments and launches, manufacturer back orders and other vendor-related problems, as well as the volatile
economic environment in India. While we aim to keep our inventory at a maximum fill rate and our net write-downs at a
low, steady level, we cannot assure you that we can accurately predict these trends and events and avoid over-stocking or
under-stocking of products. Furthermore, demand for products could change significantly between the time when the
products are ordered and the time when they are ready for delivery. When we begin to sell a new product, it is particularly
difficult to forecast product demand accurately. As our pharmaceutical distribution and pharmacy retail businesses carry
an extensive range of products and maintain significant inventory levels for a substantial portion of our merchandise, we
may be unable to sell such inventory in sufficient quantities or during the relevant sales seasons. As a result, we may need
to return our unsold inventory to the manufacturers and if so, may also suffer losses due to damage of inventory in transit.
Net write-downs of our inventories to their net realizable value totalled = 108.15 million, = 82.15 million, = 117.02 million
and % 50.64 million, respectively, in Financial Years 2019, 2020 and 2021 and the six months ended September 30, 2021.
As for all branded FMCG and private label products sold by us, we may be unable to return unsold inventory to the
manufacturers, and may suffer significant inventory write-downs, product expirations, increases in inventory holding costs,
and potential negative effects on our liquidity. While there have not been any specific instances of such risk adversely
affecting our business or operations materially in 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.

Conversely, if we underestimate customer demand or if our suppliers fail to provide products to us in a timely manner, we
may experience inventory shortages, which may, in turn, result in a delay in servicing consumer orders, which could have
a negative impact on our customer relationships. In addition, the specific product mix required varies by region, and we
cannot assure you that we will be able to maintain adequate inventory levels across our stores. Any such failure may
adversely affect our business, financial condition and results of operations.

12. Failure to meet customer expectations, needs and requirements may harm our brand and reputation, our ability
to retain and grow our customer base and our operating results.

The success of our pharmacy retail business depends on, among other things, its ability to fulfil the requirements of our
customers, deliver a superior and more convenient shopping experience, provide engaging customer service and offer a
quality assortment of merchandise which our customers need and which differentiates us from other retailers.

We seek to provide convenience to our customers through our omni-channel platform, with both online and offline
channels. We maintain a wide product mix, which includes products that depend on recent inventions and developments
in the pharmaceutical manufacturing industry. We market and sell these products based on recent prescription trends in the

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