RCL Retail Ltd Management Discussions.

We herewith submit Management Discussion and Analysis Report on the business of the Company for the year ended 31st March, 2019.

ECONOMY

India’s GDP growth has accelerated to 6.8% in FY 2019, from 6.7% in the previous year as per the second advance estimates released by Central Statistics Office. It has been the result of various initiatives and reforms, some of which include the introduction of GST, Make in India, Skill India, Digital India, steps towards the resolution of bank nonperforming assets, recapitalization of banks and FDI liberalization. On the back of a continuing reform outlook, India is expected to become one of the top three economic powers in the world over the next decade

INDUSTRY OVERVIEW

While India is one of the fastest growing economies, its per capita food consumption is estimated to be close to one-fourth that of the developed economies. This presents a tremendous opportunity for the Indian food industry. Fast-moving consumer goods (FMCG) sector is the 4thlargest sector in the Indian economy. The urban segment (accounts for a revenue share of around 55 per cent) is the largest contributor to the overall revenue generated by the FMCG sector in India However, in the last few years, the FMCG market has grown at a faster pace in rural India compared with urban India.

OUTLOOK

The Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 840 billion in 2017, with modern trade expected to grow at 20 per cent - 25 per cent per annum, which is likely to boost revenues of FMCG companies. Revenues of FMCG sector reached Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and are estimated to reach US$ 103.7 billion in 2020. The sector witnessed growth of 16.5 per cent in value terms between July-September 2018; supported by moderate inflation, increase in private consumption and rural income.

KEY CHALLANGES

The industry is characterized by relatively lower entry barriers although distribution and brand building are the extensive and expensive task. Factors like interest rates, inflation, growth in economic activity, rationalization of tax structure, job creation and consumer sentiment continues to be the biggest source of threat as well as opportunity for the Company. Other external factors, including a steep rise in interest rates or drastic changes in the policy or regulatory environment can pose financial challenge for the Company.

SEGMENT-WISE ANALYSIS

The Company’s Operating segment is identified based on nature of activity, risks and returns. The Company is primarily engaged in Trading of all kinds of tradable and marketable goods.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place, adequate internal control systems and procedures commensurate with the size and nature of our business.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Company’s objectives, projections, estimates and expectations might be construed as ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied.

ANNEXURE D

DIRECTOR’S DECLARATION ON CODE OF CONDUCT:

To

The Members of RCL RETAIL LIMITED

I, Ratanchand Lodha, Director of the Company declare that all the Board members and Senior Management of the Company have affirmed compliance with the code of conduct.

For RCL RETAIL LIMITED
Sd/-
Place : Chennai Ratanchand Lodha
Date : 03.09.2019 Director
DIN: 01534269