osia hyper retail ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on 31st March, 2023.

ECONOMIC OVERVIEW

The Indian economy is expected to grow by an estimated 7% in FY 2022-23 (Source: Ministry of Statistics & Program Implementation) led by supportive government policies and strong private consumption. This was facilitated by near-universal vaccination coverage post COVID-19 outbreak, the normalization of growth in contact-intensive sectors to pre-pandemic levels, and the continued consumer spending on the back of pent-up demand. However, inflation remained high almost throughout the year, prompting the regulator to raise the repo rate cumulatively by 250 basis points from May 2022 to February 2023. The effectiveness of the monetary policy response became evident in March 2023 when headline retail inflation slowed down to a 15- month low of 5.66%. Despite high interest rates and a slowdown in global growth, the Indian economy showed resilience and strong growth across sectors.

Globally, there are concerns of slowdown in growth due to uncertainty in the financial markets. Geo-political risks also continued to remain heightened in some regions. In India, inflation continues to be the key economic indicator for regulators. However, the domestic economy remains resilient led by several inherent factors such as growing urbanization, stable geo-political environment and favorable demographics.

INDUSTRY STRUCTURE & DEVELOPMENTS

FY 2022-23 is estimated to have seen full resumption of activities post the COVID-19 pandemic which impacted the previous two years. The overall retail industry is estimated to have grown at 15% to 84 trillion in FY 2022-23. Organized retail is estimated to have grown at 20% to 9 trillion (~11% of the overall retail industry) while E-retail is estimated to have grown at 24% to 3 trillion (~3.7% of the overall retail industry). Of the total organized retail industry, the food and grocery segment accounts for about 25% (in value terms) as of FY 2022-23.

Retail industry is estimated to grow at a compounded annual growth rate of 10-11% between 2023 and 2028 as economic activity picks up and inflation remains in a low to moderate range. Consumption revival, coupled with economic growth, is expected to boost consumer sentiment and drive discretionary spends.

(Source: CRISIL Research)

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 43 stores 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 favorable 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, 2019 and raised Rs. 39 crores (1578400 Equity 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 and company has migrated to Main board of NSE w.e.f. 01.12.2022.

During the FY 2022-23, Company has issued an equity shares and warrants as mentioned below:

Sr. No. Type of Issue	No. Shares of Allotted
1. Preferential issue	4,91,844 Equity Shares
2. Bonus Issue	38,67,146 Equity Shares
3. Convertible Warrant Issue**	3,00,00,000 Convertible Warrants

** As on June 28, 2023, 72,00,000 Convertible warrants were converted into 72,00,000 Equity Shares.

** As on July 21, 2023, 78,00,000 Convertible warrants were converted into 78,00,000 Equity Shares.

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 2021-22 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 2023 vis-a-vis Financial Year 2022 are as below:

Particulars	Financial Year 2022-23	Financial Year 2021-22
Debtors Turnover	17.14	17.19
Inventory Turnover	2.75	2.48
Current Ratio	1.98	1.76
Interest Coverage Ratio	1.99	3.77
Debt Equity Ratio	1.03	0.97
Operating Profit Margin	5.98%	3.55%
Net Profit Margin	1.28%	1.53%
Return on Net Worth	8.42%	9.90%

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
Date: 08.09.2023
Place: Ahmedabad
	SD/-	SD/-
	Mr. Dhirendra Chopra	Mrs. Kavita Chopra
	Managing Director	Director
	DIN:06473774	DIN:06473785