OUR BUSINESS

Some of the information in the following section, especially information with respect to our plans and strategies, contains
forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those expressed
in, or implied by, these forward-looking statements. You should also read the section “Forward-looking Statements” on page
28, the section “Risk Factors” on page 29, “Financial Information” on page 209 and “Management's Discussion and Analysis
of Financial Condition and Results of Operations” on page 283.

 

We have included various operational and financial performance indicators in this Prospectus, many of which may not be
derived from our Restated Consolidated Financial Information or otherwise be subject to an examination, audit or review by
our auditors or any other expert. The manner in which such operational and financial performance indicators are calculated
and presented, and the assumptions and estimates used in such calculations, may vary from that used by other companies in
India and other jurisdictions. Investors are accordingly cautioned against placing undue reliance on such information in
making an investment decision, and should consult their own advisors and evaluate such information in the context of our
Restated Consolidated Financial Information and other information relating to our business and operations included in this
Prospectus.

Unless otherwise indicated or the context otherwise requires, in this section, references to the “Company” or “our Company”

are to MedPlus Health Services Limited on a standalone basis, and references to the “Group”, “we”,
MedPlus Health Services Limited and its subsidiaries on a consolidated basis.

, “our”, are to

 

The industry-related information contained in this section is derived from the Technopak Report, dated November 19, 2021.
We commissioned and paid for the Technopak Report for the purposes of confirming our understanding of the industry in
connection with the Offer.

Overview

We are the second largest pharmacy retailer in India, in terms of (i) revenue from operations for the financial year 2021, and
(ii) number of stores as of March 31, 2021, according to the Technopak Report. For details, see “Industry Overview —
Competitive Benchmarking — Pharmacy Retail Market — Revenue” and “Industry Overview — Competitive Benchmarking —
Pharmacy Retail Market — Store Count” on pages 141 and 139, respectively. We offer a wide range of products, including (i)
pharmaceutical and wellness products, including medicines, vitamins, medical devices and test kits, and (ii) fast-moving
consumer goods, such as home and personal care products, including toiletries, baby care products, soaps and detergents, and
sanitizers. Our Company was founded in 2006 by Gangadi Madhukar Reddy, our Managing Director and Chief Executive
Officer, with the vision to set up a trusted pharmacy retail brand that offers genuine medicines and delivers better value to the
customer by reducing inefficiencies in the supply chain using technology. Our operations are primarily distributed between the
Issuer and Subsidiaries, as further described under "Our Business - Description of our Business" on page 154.

We have maintained a strong focus on scaling up our store network, having grown from operating our initial 48 stores in
Hyderabad at the conception of our business to operating India’s second largest pharmacy retail network of over 2,000 stores
distributed across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra, as of March 31,
2021, according to the Technopak Report. Stemming from our focus on growing and achieving leadership in the key cities
where we operate, for the financial year 2021, our share of the organized pharmacy retail market, based on revenue from
operations, in Chennai, Bangalore, Hyderabad and Kolkata stood at approximately 30%, 29%, 30% and 22%, respectively,
according to the Technopak report. Our number of stores has grown since the conception of our business and, as of September
30, 2021, we operated 546 stores in Karnataka, 475 stores in Tamil Nadu, 474 stores in Telangana, 297 stores in Andhra Pradesh,
224 stores in West Bengal, 221 stores in Maharashtra and 89 stores in Odisha. We have continued to expand our store footprint
in key cities where we operate and, between March 31, 2010 and September 30, 2021, our number of stores in Chennai grew
almost five-fold from 62 to 304 stores, our number of stores in Bangalore grew three-fold from 110 to 340 stores, our number
of stores in Hyderabad grew over two-fold from 141 to 331 stores, and our number of stores in Kolkata grew over ten-fold from
22 to 224 stores. In terms of number of stores as of March 31, 2021, we ranked 1% in Chennai and Bangalore, and 2" in
Hyderabad and Kolkata, according to the Technopak Report.

We employ a data analytics driven cluster-based approach to our store network expansion, whereby we first achieve high store
density in a densely-populated residential area within a target city before expanding our store network in the surrounding areas
within that city, followed by expansion into other adjacent cities. Our cluster-based approach to store network expansion is also
driven by our understanding of the catchment demographics, market dynamics, and our ability to support store expansion with
back-end infrastructure, such as warehouses and distribution centres. We believe that this approach and understanding allow us
to (i) create brand visibility within the cities where we operate, through focused implementation of marketing and advertising
initiatives, (ii) increase our market share in the cities where we operate, (iii) replicate our growth model in adjacent under-
served cities and towns, as we develop our presence in those clusters, and (iv) generate cost efficiencies due to operating
leverage achieved in our supply chain and inventory management. We have a streamlined and methodical store opening process,

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