DIRECTORS’ REPORT

Dear Shareholders,

Your Directors have pleasure in presenting the 6TH ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2018-19 ended 31st March, 2019.

COMPANY’S PERFORMANCE, STATE OF COMPANY’S AFFAIRS AND FUTURE OUTLOOK:

Your Company is the business of an emerging supermarket chain with a focus on value- retailing. Your company stores have over thousands of products under a single roof that will cater to every need of a family and making Osia Hypermart public‘s favorite shopping destination with a modern ambience and with the feel of a large retail mall.

Your Company’s financial performance for the year under review has been encouraging. During the year under review, the Company has achieved a gross turnover of Rs. 23169.77 lakhs in comparison to previous year’s turnover which was Rs. 14223.28 lakhs. It represented an increase of 62.90% over the previous year. Your Company has earned a net profit of Rs. 810.47 lakhsagainst last year’s Rs. 561.13 lakhs. It represented an increase of 44.44% over the previous year. Key aspects of Financial Performance of your Company for the current financial year 2018-19 along with the previous financial year 2017-18 are tabulated below in the Financial Results.

The future outlook of the Company and its professional management makes an enterprise of high quality and high efficiency as core competition. Our focus on quality has enabled us to sustain and grow our business model to benefit our customers. Our Company is managed by a team of experienced personnel having experience in different aspects of retail industry. We believe that our qualified and experienced management has substantially contributed to the growth of our business operations. We believe our track record of timely delivery of quality products and demonstrated technical expertise has helped in forging strong relationships with our customers.

FINANCIAL RESULTS:
(Rs. in lakhs)

DIVIDEND:

Since the Company needs to plough back the profits for the future development and expansion, hence the Board of Directors has not recommended any dividend for the financial year 2018-19.

STATE OF COMPANY’S AFFAIRS:

The management of the Company continued with its core business activities. There is no change in the nature of business of the Company.


LISTING:

The Equity Shares of the Company are listed on SME Emerge Platform of NSE Limited w.e.f. 5th April, 2019.

ALLOTMENT OF 15,78,400 EQUITY SHARES TO PUBLIC THROUGH INITIAL PUBLIC OFFER (IPO) AFTER CLOSING OF FINANCIAL YEAR:

The Company after obtaining necessary approvals and finalizing the Basis of allotment in consultation with NSE SME have allotted 15,78,400Equity Shares of Rs. 10/- each at an issue price of Rs. 252/- per share including premium of Rs. 242/- per share to the public through Initial Public Offer (IPO) after complying provisions and guidelines under the Companies Act, 2013, SEBI (ICDR) & SEBI (LODR). The Post IPO Paid up Share capital of the Company is 59,53,400 Equity Shares of Rs. 10/- each.

DEMATERIALISATION OF EQUITY SHARES:

All the Equity Shares of the Company are in dematerialised form with either of the depositories viz. NSDL and CDSL. The ISIN No. allotted is INE06IR01013.

TRANSFER TO RESERVES:

During the financial year under review, the amount of Rs. 810.47 lakhs has been transferred to any ‘Reserve & Surplus Account’ of the Company.

PUBLIC DEPOSITS:

During the financial year under review, the Company has neither accepted nor renewed any ‘Public Deposit’ within the meaning of section 73 of the Act read with the Companies (Acceptance of Deposit) Rules, 2014.

SUBSIDIARY(IES) COMPANY:

The Company has no Subsidiary Company during the financial year under review.

ASSOCIATE COMPANY:

The Company does not have any ‘Associate Company’ within the meaning of section 2(6) of the Act during the financial year under review.

ANNUAL RETURN

The extract of Annual Return pursuant to the provision of section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the financial year 2018-19 in Form MGT - 9 is annexed hereto and form part of this report as Annexure –1.

DIRECTORS & KMP:

One of your Directors viz. Mr. Pranay Jain(DIN – 07891715), retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers himself for reappointment.

Mrs. Keerti Lachhwani Appointed as Company secretary and Compliance officer of the Company w.e.f. 19th January 2019.

Mr. Sandeep Tailor Appointed as Chief Financial officer of the Company w.e.f. 19th January 2019.

The Board of Directors duly met 12 times during the financial year under review.

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act.

Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at 31st March, 2019 being end of the financial year 2018-19 and of the profit of the Company for the year;
that the Directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
that the Directors had prepared the annual accounts on a going concern basis.
the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Disclosure relating to remuneration:

The provisions of section 197(12) of the Act read with rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 do not apply for the FY 2018-19 as the company was listed on 5th April 2019. Accordingly, details with respect to remuneration of employees are not applicable.

COMMITTEES

In terms of Companies Act, 2013, our Company has constituted the following Committees of the Board: 

1) Audit Committee;

2) Nomination and Remuneration Committee;

3) Shareholders/ Investors Grievance Committee;

4) Corporate Social Responsibility Committee; and

5) Internal Complaints Committee.

AUDIT COMMITTEE

The Audit Committee was constituted vide Board resolution dated December 19, 2018. The Audit Committee consists of the following Directors:

NOMINATION AND REMUNERATION COMMITTEE

The constitution of the Nomination and Remuneration Committee was constituted at a meeting of the Board of Directors held on December 19, 2018. The Nomination and Remuneration Committee consists of the following Directors;

SHAREHOLDERS/ INVESTORS GRIEVANCE COMMITTEE

The Shareholders/ Investors Grievance Committee have been formed by the Board of Directors at the meeting held on December 19, 2018. The Shareholders/ Investors Grievance Committee consist of the following Directors;

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee has been formed by the Board of Directors at the meeting held on December 19, 2018. The Corporate Social Responsibility Committee consist of the following Directors;

INTERNAL COMPLAINTS COMMITTEE:

The Internal Complaints Committee has been formed by the Board of Directors at the meeting held on December 19, 2018 in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

GENERAL:

During the year;

The Company has issued 625000 Equity Shares @ Rs. 144 each on Private Placement basis on 25-Sep-18 during the financial year under review.
The Company does not have any ESOP scheme for its employees / Directors;
The Company has not bought back any of its securities;
The Company has not issued any Sweat Equity Shares;

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

AUDITORS:

Statutory Auditor:

Members of the Company at the Annual General Meeting that was held on 30th September, 2015 had appointed M/s Chopra Shah & Associates, Chartered Accountants as Statutory Auditor for a period of 5 years. In terms of section 139 of the Act such continuing appointment is subject to the yearly ratification by the members at an Annual General Meeting.The Statutory Auditors’ Report does not contain any qualification, reservation or adverse remark.

As M/s. Osia Hyper Retail Limited listed on stock exchange on 5th April 2019 and now audit of the company shall be carried out by the auditors who have Peer Review Certificate by the Peer Review Board and M/s Chopra Shah& Associates does not hold Peer Review Certificate. Hence M/s Chopra Shah & Associates is not in a position to carry out the Statutory Audit of your Company. Accordingly, they had submitted their resignation as Statutory Auditors of the company with effect from 30th August 2019.

The Board of Directors at the Board Meeting held on 30th August 2019 appointed M/s. Deora Maheshwari & Co, Chartered Accountants, with registration number 123009W to fill the casual vacancy caused due to resignation of M/s Chopra Shah & Associates subject to approval of members in the general meeting.

As per the provisions of Companies Act, 2013 read with rules made thereunder a causal vacancy caused due to resignation of Statutory Auditor needs to be approved by the members in a general meeting within three months. Accordingly, the Board of Directors have recommended the appointment of M/s. Deora Maheshwari & Co Chartered Accountants to the members of the company for their approval at the Annual General Meeting by way of passing an ordinary resolution to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the 11th Annual General Meeting .

M/s. Deora Maheshwari & Co Chartered Accountants, have conveyed their consent to be appointed as the Statutory Auditors of the Company along with the confirmation that, their appointment, if approved by the shareholders, would be within the limits prescribed under the Act.

Cost Auditor:

The provisions of section 148 of the Companies Act read with rule 3 of the Companies (Cost Records and Audit) Rules, 2014 do not apply to the Company. Accordingly, the Company has not appointed the Cost Auditor.



Secretarial Auditor:

The provisions of section 204 of the Act read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 do not apply for the FY 2018-19 as the company was listed on 5th April 2019. Hence the Secretarial Audit Report is not applicable to the Company.

RELATED PARTY TRANSACTION:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Auditors’ Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

PARTICULARS OF LOANS, GUARANTEES, INVESTMENT & SECURITIES PROVIDED:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act,
2013 respectively are given in the notes to the Financial Statements attached to the Auditors’ Report.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORY:

During the year; there was no significant / material order passed by any regulator, court or tribunal on the Company impacting the going concern status and Company’s operations in future.

RISK MANAGEMENT:

The Company was already having risk management system to identify, evaluate and minimize the Business risks. The Company during the year had formalized the same by formulating and adopting Risk Management Policy. This policy intends to identify, evaluate, monitor and minimize the identifiable risks in the Organisation.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has no information to furnish with respect to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo, as are needed to be furnished under section 134(3) (m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY:

The Company has formed Corporate Social Responsibility Committee as per section 135 of the Companies Act, 2013 and Rules of Companies (Corporate Social Responsibility policy), 2014. Committee Consist three director Mr. Hemen Hirenkumar Joshi as Chairperson of CSR Committee, Mr. Dhirendra Gautamkumar Chopra and Mrs. Kavita Chopra Dhirendrakumar as a member of the Committee.

PARTICULARS OF EMPLOYEES:

Pursuant to the provisions of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with the Companies Act, 2013, it is hereby informed that none of the employees of the Company was in receipt of remuneration of Rs.5 lakhs per month or Rs. 60 lakhs per annum during the year under review.




MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.

SAFETY, HEALTH AND ENVIROMENT:

Safety: The Company encourages a high level of awareness of safety issues among its employees and strives for continuous improvement. All incidents are analysed in the safety committee meetings and corrective actions are taken immediately. Employees are trained in safe practices to be followed at work place.

Health: Your Company attaches utmost importance to the health of its employees. Periodic checkup of employees is done to monitor their health. Health related issues if any are discussed with visiting Medical Officer.

Environment: Company always strives hard to give importance to environmental issues in normal course of operations. Adherence to Environmental and pollution control Norms as per Gujarat Pollution Control guidelines is of high concern to the Company. 

DISCLOSURE OF SEXUAL HARASSMENT:

Pursuant to section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, entire staff in the Company is working in a most congenial manner and there are no occurrences of any incidents of sexual harassment during the year.

CAUTIONARY STATEMENT:

Certain Statements in the Management Discussion and Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of the future performance and outlook.

ACKNOWLEDGMENTS

The Board places on record its appreciation for the continued co-operation and support extended to the Company by its customers which enables the Company to make every effort in understanding their unique needs and deliver maximum customer Satisfaction.

We place on record our appreciation of the contribution made by the employees at all levels, whose hard work, cooperation and support helped us face all challenges and deliver results. We acknowledge the support of our vendors, the regulators, the esteemed league of bankers, financial institutions, rating agencies, government agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates and other stakeholders.

ANNEXURE-1

FORM MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2019
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Director’s have pleasure in presenting the Management Discussion and Analysis Report for the year ended on 31st March, 2019.

INDUSTRY STRUCTURE & DEVELOPMENTS

India’s 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 a 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 Gautam Chopra and Mrs. Kavita Dhirendra Chopra with their rich experience of more than 15 years and 10 Years respectively. Osia opened it’s first store in Ahmedabad, Gujarat in 2014, in the name of “Osia Hypermart”. As on date, Osia operates 11 stores (2,69,000 sq ft retail space) with business spread across Ahmedabad, Vadodara, Gandhinagar, Gandhidham 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 public’s favourite shopping destination with a modern ambience and feel of a large retail mall. These incorporate Menswear, Women’s wear, Kid’s 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 World’s 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 Asia’s third largest retail market and the world’s 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 Company’s 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 to be 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 company’s performance is the company’s ability to manage the risks in it business/environment effectively. Many risks exist in a company’s 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 2018-19 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.


DISCLAIMER:

Statements in this Annual Report, particularly those which relate to Management Discussion and Analysis, describing the Company’s 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.

1. COMPANY’S PERFORMANCE, STATE OF COMPANY’S AFFAIRS AND FUTURE OUTLOOK: Your Company is the business of an emerging supermarket chain with a focus on value- retailing. Your company stores have over thousands of products under a single roof that will cater to every need of a family and making Osia Hypermart public‘s favorite shopping destination with a modern ambience and with the feel of a large retail mall. Your Company’s financial performance for the year under review has been encouraging. During the year under review, the Company has achieved a gross turnover of Rs. 23169.77 lakhs in comparison to previous year’s turnover which was Rs. 14223.28 lakhs. It represented an increase of 62.90% over the previous year. Your Company has earned a net profit of Rs. 810.47 lakhs against last year’s Rs. 561.13 lakhs. It represented an increase of 44.44% over the previous year. Key aspects of Financial Performance of your Company for the current financial year 2018-19 along with the previous financial year 2017-18 are tabulated below in the Financial Results. The future outlook of the Company and its professional management makes an enterprise of high quality and high efficiency as core competition. Our focus on quality has enabled us to sustain and grow our business model to benefit our customers. Our Company is managed by a team of experienced personnel having experience in different aspects of retail industry. We believe that our qualified and experienced management has substantially contributed to the growth of our business operations. We believe our track record of timely delivery of quality products and demonstrated technical expertise has helped in forging strong relationships with our customers.

The Company has no information to furnish with respect to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo, as are needed to be furnished under section 134(3) (m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014

The Company has no information to furnish with respect to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo, as are needed to be furnished under section 134(3) (m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014

The Company has no information to furnish with respect to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo, as are needed to be furnished under section 134(3) (m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014

g. DIRECTORS’ RESPONSIBILITY STATEMENT: Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed: i. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at 31st March, 2019 being end of the financial year 2018-19 and of the profit of the Company for the year; iii. that the Directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. that the Directors had prepared the annual accounts on a going concern basis. v. the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.