22.

23.

and FMCG products. From time to time, and especially during periods of intense demand or supply chain disruptions, our
suppliers may find it necessary to allocate a supply of particular products amongst retailers such as us. Such allocations of
supply have not in the past proven to be a significant impediment in the conduct of our business. However, any decline in
the quality of products manufactured or a delay in delivery of products, or a rise in job work charges may adversely affect
our operations. Any withdrawal of services from such manufacturers may adversely affect our result of operations and
future prospects. Although we have put in place strict quality control measures for all private label products manufactured
for us on a contract basis, we cannot assure that our private label products will always be able to satisfy our customers’
quality standards. Any failure by the manufacturers to maintain high quality standards may affect adversely our business
and any resulting negative publicity regarding our business or our private label products, including those arising from any
deterioration in quality of our products supplied to us by vendors, or any other unforeseen events could adversely affect
our reputation, our operations and our results from operations. While there has been no instances where our business have
been materially affected due to such a risk during the last three financial years and the six months ended September 30,
2021, we cannot assure you that such instances may not occur in the future.

We may face disruptions in our product supply chain which could adversely impact our reputation and have a
significant adverse effect on our business, operating results, cash flows and/or financial condition.

Our products are sourced from a wide variety of domestic and international vendors, and any future disruption in supply
chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely
and efficient manner could adversely impact the needs of our customers. We do not have exclusivity arrangements or long-
term contracts with our current vendors. An ineffective selection of service providers (including transport carriers or
logistics service providers and operators of distribution facilities), contractual terms or relationship management could
impact our ability to source products, to have products available for customers, or to operate efficiently and effectively.
We utilise the services of multiple logistics providers. However, a disruption of service from any one logistics provider or
the loss or disruption of supply arrangements for any reason, including for issues such as the COVID-19 pandemic or other
health epidemics or pandemics, labour disputes, inability to procure inventory, quality control issues, ethical sourcing
issues, a supplier’s financial distress, natural disasters, civil unrest or acts of war or terrorism, trade sanctions or other
external factors, could interrupt product supply. A disruption in business operations could also occur as a result of a
contamination of products at our warehouses or during transportation, a failure to maintain necessary shipment and storage
conditions, errors in processing within our omni-channel platform, labour disruptions or other unanticipated disruptions,
among other factors. While there have been no instances of disruptions to our product supply chain during the past three
financial years and the six months ended September 30, 2021 which has materially affected our business, we cannot assure
you that such instances may not occur in the future. For more information, see “~ Internal Risk Factors — The extent to
which COVID-19 may affect our business and operations in the future is uncertain and cannot be predicted” on page 42.

We conduct our business in a highly-regulated industry and environment. Our business is dependent on approvals
from relevant regulatory and health authorities. Any delay or failure to obtain or renew such required regulatory
approvals, registrations or any change in the regulatory environment in relation to marketing our products in
regulated markets may significantly impact our business and strategy affecting our overall profitability, and may
impose significant compliance burdens on us.

 

We operate in a highly-regulated industry, and are required to obtain and maintain a number of statutory and regulatory
permits and approvals under central, state and local government rules in India, generally for carrying out our business, and
are subject to various governmental regulations and licensing requirements in India. For instance, these include licenses to
sell, stock, exhibit or offer for sale drugs under the Drugs and Cosmetics Act, 1940, trade and labour licences and shop and
establishment permits that we require to operate our stores, central licenses under the Food Safety and Standards Act, 2006,
licenses under the Bio-medical Waste Management Rules, 2016 and environmental licenses. In addition, we will need to
apply for renewal of certain approvals, licenses, registrations and permits, which expire or seek new approvals, licenses,
registrations and permits from time to time, as and when required in the ordinary course of our business. For details, see
“Government and Other Approvals” on 312. For instance, we have made applications for renewal of licenses and
registrations under the Drugs and Cosmetics Act, 1940, and the Food Safety and Standards Act, 2006, and for shops and
establishments registrations and trade licenses for certain stores. Further, certain of our approvals may have expired in the
ordinary course of business and in respect of which we have not made renewal applications, such as registrations to
undertake retail food business under the FSSA in respect of certain stores, and registration under state shops and
establishments act in respect of certain stores. We have not applied for certain licenses and registrations which are required
to be obtained, such as, registration to undertake retail food business under FSSA in respect of certain stores, and have not
applied for registrations under the state shops and establishments act or municipal corporation acts for shops and
establishments registration and trade licenses, respectively, in respect of certain stores. If we fail to obtain, renew or
maintain the required permits, licences or approvals, including those set out above, we could be subjected to penalties by
the relevant regulatory authorities, which may result in the interruption of our operations or delay or prevent our expansion
plans and may adversely affect our business, financial condition, results of operations and cash flows. For instance, in the
past, criminal and regulatory proceedings have been initiated by drug control departments of various states against Optival,
one of our Subsidiaries for alleged violation of certain provisions of the Drugs and Cosmetics Act, 1940 and the relevant
DCA and the Drug Rules. For details, see “Outstanding Litigation and Material Developments” on page 304.

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