Osia Hyper Retail Ltd Management Discussions.

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on 31st March, 2020.

GLOBAL ECONOMY

The outbreak of pandemic Covid-19 all over the world has disturbed the political, social, economic, religious and financial structures globally. The pandemic has adversely impacted the global market. Operations across all industry segments have come to a halt due to lockdown measures undertaken by governments across the globe. The impact of Covid-19 is expected to be severe on the economic structures of the world because people will not be spending money enough which shall result in businesses not getting revenue forcing many businesses to eventually shut down. Economic recovery from this contagion is expected to take one to two years or more time since it has left severe impact on the global economy and each country faces multiple difficulties to bring it back to a stable condition. As human and economic costs of the Covid-19 pandemic unfolds, the global financial system has been both a source of strength with banks and financial institutions helping distribute support to small businesses and households in need and also an area of potential risk, with record levels of market volatility and growing concern around credit losses. There is uncertainty about how badly the virus will affect different countries, how long containment measures must persist in different markets, how effective government policies will be at mitigating lost activity and how households and firms will change their behaviour in the medium and long term. Governments, central banks, regulators and international organizations have moved rapidly to address the economic collapse and financial fallout, but questions remain around how and to what extent such polices and measures should continue to evolve to preserve financial stability.

INDUSTRY STRUCTURE & DEVELOPMENTS

Indias potential lies in the growth of smaller cities that have been witnessing transformation over the years. Almost a third of new development will happen in the tier-II and -III cities. Even stand-alone stores opt for greater emphasis on visual displays, staff training and modern ambiance with their entry into even smaller towns. Availability and cost of retail space is another major consideration in the development of organised retailing. Prime locations in tier-II and -III cities are 30 per cent cheaper than their counterparts in the metros. Average rental values for ground floor space are much lower when compared against bigger cities. In 2018, supermarkets grew 25%, while hypermarkets grew by 15%. Nielsen said that in the last two years, towns with a population of less than a lakh contributed about 58 per cent of FMCG sales through modern stores. The major factors leading to the growth of modern retail in small towns are the rural growth impetus given by increased minimum support price for various crops that has led to a jump in the average household income. Small and large organized stores in cities with a population of 100,000 to 500,000 grew three times compared with those in metros. "In smaller towns, it is more the case of small mom-pop stores trying to reinvent themselves."

Demonetisation has given a huge boost to the plastic money in the smaller towns that was largely cash driven economy. The reduction of GST rates on certain branded commodities has also boosted sales, with the narrowing in the price gap between branded and unbranded commodities.

ORGANISATION PROFILE:

Company was originally incorporated in Ahmedabad as Mapple Exim Private Limited on October 2013. Later it was converted in to a Public Limited Company and the name was changed to Mapple Exim Limited. Mapple Exim Limited was renamed as Osia Hyper Retail Limited from September 2017. Company is currently being promoted by Mr. Dhirendra Gautamkumar Chopra and Mrs. Kavita Dhirendra Chopra with their rich experience of more than 15 years and 10 Years respectively. Osia opened its first store in Ahmedabad, Gujarat in 2014, in the name of "Osia Hypermart". As on date, Osia operates 17 stores (2,69,000 sq ft retail space) with business spread across Ahmedabad, Vadodara, Gandhinagar, Gandhidham, Palanpur, Mehsana and Dehgam and one distribution center located at Rakhial, Ahmedabad.

Osia offers thousands of products under a single roof which caters to every need of a family and making Osia Hypermart publics favourite shopping destination with a modern ambience and feel of a large retail mall. These incorporate Menswear, Womens wear, Kids wear, Footwear, Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, Gifts, FMCG, crockery, Handicrafts, utensils, handlooms, etc.

INDIAN RETAIL INDUSTRY

Indian Retail industry is expected to touch $1.2 tn in FY 21 and $1.8 tn by FY 26@ CAGR of 15%. The retail sector is experiencing exponential growth, with retail development taking place not just in major cities and metros, but also in Tier-II and Tier-III cities. According to a recent report by India Brand Equity Foundation (IBEF), India is expected to become the Worlds third largest consumer economy. At Present, India leads in terms of per capita retail store availability making it a favourable market for retailers. India is Asias third largest retail market and the worlds fourth largest after the US, China, and Japan. It is one of the fastest growing major economies in the world, in turn leading to high growth in consumer and retail markets, thus presenting massive investment and business opportunities.

EXPANSION & FUTURE PROPOSAL:

Osia Hypermart came out with a SME IPO in March 19 and raised Rs. 39 crores (1578400 shares issued @ Rs.252 per share) for further expansion to newer geographies for next level of growth. This Issue is being undertaken to meet the objects, as set forth herein, and to realize the benefits of listing of our Equity Shares on Stock Exchanges, which in our opinion would enhance our Companys visibility, brand name and enable us to avail of future growth opportunities. The other Objects of the Issue also include creating a public trading market for the Equity Shares of our Company by listing them on NSE EMERGE Platform.

The Net Proceeds from the Issue are proposed utilized by our Company for the following objects:

1. Purchase of Fit outs for stores;

2. To meet Working Capital Requirements;

3. General Corporate Purpose; and

4. Issue Expenses

Further, we believe that the listing of our Equity Shares will enhance our visibility and brand name among existing and potential customers.

RISKS AND CONCERNS:

Key factor in determining a companys performance is the companys ability to manage the risks in it business/environment effectively. Many risks exist in a companys operating environment and they emerge on a regular basis,. Viz Currency Risk, Commodity price Risk, Human Resource Risk. Risk management is embedded in operating framework of your Company. Your Company believes that managing risks helps in maximizing returns. Risk management framework is reviewed periodically by the Board and the Audit Committee. Like any other industry, the retail industry is also exposed to risk of competition, government policies, fluctuation of commodity price, natural factor like change in climate etc.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The financial performance of the Company for the year 2019-20 is described in the Directors Report under the head Financial Result.

INTERNAL CONTROL SYSTEM:

Your Company maintains a system of internal controls designed to provide reasonable assurance regarding the following:

• Effectiveness and efficiency of operations

• Prevention and detection of frauds and errors

• Effective use of resources

• Adherence to applicable Accounting Standards and policies

• Timely preparation of reliable financial information

Internal controls and governance process are duly reviewed for their adequacy and effectiveness on periodical basis.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT:

Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Industrial relations were cordial throughout the year.

-Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including

The Key Financial Ratios during Financial Year 2020 vis-a-vis Financial Year 2019 are as below:

Particulars Financial Year 2019-20 Financial Year 2018-19
Debtors Turnover 1.12 1.59
Inventory Turnover 2.30 2.41
Current Ratio 0.56 0.60
Interest Coverage Ratio 7.37 4.98
Debt Equity Ratio 0.45 1.42
Operating Profit Margin 4.35% 6.79%
Net Profit Margin 2.48% 3.52%
Return on Net Worth 11.01% 28.29%

DISCLAIMER:

Statements in this Annual Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may materially differ from those expressed or implied.

By Order of the Board of Directors

For, OSIA HYPER RETAIL LIMITED

[Formerly known as Mapple Exim Limited]

Date: 04.09.2020 Dhirendra Chopra Kavita Chopra
Place: Ahmedabad Managing Director Director
DIN:06473774 DIN:06473785