Baazar Style Retail Ltd Management Discussions

Management discussion and analysis

Economic overview Global economy

The global economy in 2024 maintained a stable growth trajectory, expanding by 3.3% — a sign of resilience in the face of ongoing structural adjustments and shifting policy dynamics. The US led advanced economies with strong growth of 2.8%, supported by consumer demand and a resilient labour market. The euro area saw moderate progress with 0.8% growth, as efforts to stabilise energy markets and boost domestic activity continued. Emerging markets grew at a healthy 4.2%, driven by strong performances in India, Indonesia, and Vietnam, even as China adjusted to longer-term structural reforms with 4.6% growth.

Inflation trends remained encouraging, with global headline inflation easing to 4.2%, creating space for a gradual shift in monetary policy across several regions. While evolving trade dynamics, particularly new tariff measures imposed in early 2025, have introduced new complexities, they also underscore the growing importance of adaptive policymaking and economic diversification. The near-term outlook remains constructive, supported by improving fundamentals in many economies.

Global GDP growth

	FY 2022-23	FY 2023-24	FY 2024-25	FY 2025-26	FY 2026-27
World	3.2	2.7	2.7	2.7	2.7
Advanced economies	2.8	1.7	1.7	1.7	1.8
Emerging markets and developing economies	3.7	4.2	4.1	4.1	4.0

Global economic outlook FY 2025-26

The global economy is projected to expand by 2.9% in 2025, reflecting a broad-based moderation in growth as economies adapt to evolving trade and policy dynamics. While the US is expected to grow at 1.5%, ongoing trade adjustments and policy recalibrations are shaping a more measured pace of expansion. The Eurozone is projected to grow at 1%, with supportive monetary easing expected to continue. China is likely to grow at 4.5%, as targeted policy support helps maintain momentum amid structural transitions.

India remains a bright spot, with growth forecast at 5.9%, underpinned by strong domestic demand and a positive macroeconomic environment. Inflation is expected to ease in most regions, averaging 2.1% globally, allowing central banks in Europe and Asia room for rate adjustments. Fiscal policy in major economies such as the US, Germany, and China is likely to be growth-oriented. Overall, the global outlook remains stable, with economies focusing on resilience and long-term reform.

Morgan Stanley: 2025 Midyear Economic Outlook: A Widespread Deceleration

Global inflation and macroeconomic trends

Global inflation is gradually easing, though certain pressures persist. The OECDs March 2025 Interim Economic Outlook projects headline inflation in G20 economies at 3.8% in 2025 and 3.2% in 2026, slightly above earlier forecasts. Services inflation remains relatively firm amid tight labour markets, while goods price inflation is rising modestly in some regions.

These trends reflect the interplay of resilient demand and shifting cost structures, partly influenced by evolving trade policies. While the broader macroeconomic landscape is stabilising, elevated public debt levels and ongoing policy uncertainty call for careful navigation. Central banks are advised to proceed with calibrated policy responses, maintaining inflation expectations while supporting recovery where demand remains subdued. The outlook also underscores the importance of medium-term fiscal prudence and structural reforms to bolster productivity. With a proactive approach to policy, open markets, and targeted investment in innovation and skills, economies can sustain momentum and mitigate volatility in an evolving global environment.

OECD: Global economic outlook

Indian economy

Indias economy expanded by 6.5% in FY 2024-25, supported by a strong finish in the fourth quarter, which recorded 7.4% growth - the fastest quarterly pace during the year. This reflects continued resilience amid a challenging global backdrop. Notably, the agriculture sector maintained strong momentum, growing 4.6% for the year, buoyed by a strong 5.4% performance in Q4 FY25.

The manufacturing sector grew 4.5% annually, building on stable momentum despite a high base, while construction saw double-digit growth of 10.8% in Q4 FY25, bringing the annual growth to 9.4%. The services sector remained steady, expanding 7.2% over the year. Consumption demand picked up, with private consumption growing by 7.2%, an improvement from the previous year. Investment activity, as reflected in Gross Fixed Capital Formation, remained supportive of growth, rising 7.1% for the year and 9.4% in Q4 FY25.

Indias economic performance in FY 2024-25 highlights its underlying strength and adaptability in a dynamic global economic environment.

Indian economic outlook FY 2025-26

Indias economy is forecast to grow by 6.3% in 2025, slightly lower than earlier estimates, yet it remains one of the fastest-growing large economies globally. According to the UNs mid-year economic report, this momentum is driven by resilient private consumption and strong public investment.

Domestic demand is expected to remain robust, supported by easing inflation - projected to decline from 4.9% in 2024 to 4.3% in 2025 - and a recovery in rural and urban consumption. Key sectors such as construction, trade, and financial services continue to fuel growth. While merchandise exports face headwinds from global trade tensions and policy uncertainty, services exports and exempt sectors like pharmaceuticals and electronics are expected to remain steady. On the policy front, the RBI initiated a monetary easing cycle in early 2025. Despite the downward revision, Indias structural strengths and stable macroeconomic fundamentals position it favourably in a global environment marked by slower growth and rising protectionism.

United Nations: Department of Economic and Social Affairs Economic Analysis

FICCI: Economic Outlook Survey, January 2025

Industry overview Global retail industry

The global retail industry is projected to reach a market size of $35.2 trillion in 2025, expanding at a compound annual growth rate (CAGR) of 7.65% through 2030. Global retail sales are forecast at $24.9 trillion for the year, with nearly one-fifth expected to come from online channels. The strongest volume growth is anticipated in Asia and the Gulf, driven by young, tech-savvy consumers, rising incomes, and rapid urbanisation.

This growth comes amid easing inflation and stabilising interest rates, creating more favourable financial conditions. Retailers are capitalising on this environment by investing in Al, AR, and composable commerce to deliver personalised customer experiences across touchpoints.

Mergers and acquisitions are accelerating, as companies seek scale, resilience, and competitive advantage. High-margin verticals like cloud services and retail media are also gaining traction. While regulatory uncertainty and workforce retention remain key challenges, the sector is entering 2025 with cautious optimism and a clear focus on digital transformation, customer centricity and long-term value creation.

Retail industry trends and growth drivers

Experiential retail gains momentum

Retailers are turning to immersive, multisensory experiences to engage customers and enhance brand loyalty. Pop-up stores, themed events, and interactive displays are creating memorable moments that encourage social sharing and footfall.

Rising return fees and fraud prevention

With return-related losses reaching $103 billion in the US alone, many retailers are introducing return fees and shortening return windows. Companies like Amazon and Best Buy are adopting strategic return policies to curb fraud and manage costs, supported by real-time technology to flag risky transactions.

Minimalism and sustainable fashion

A growing preference for minimalist lifestyles, driven by financial pressures and environmental awareness, is fuelling demand for capsule wardrobes and resale programs. The capsule wardrobe market, valued at $1.3 billion in 2023, is expected to double by 2030, reflecting consumers shift toward conscious consumption.

Expanding anti-ageing market with younger consumers

The anti-aging segment is set to grow to $63.2 billion in 2025, fuelled by interest from younger demographics like Gen Z and Gen Alpha. Influenced by social media trends and skincare routines, these consumers are driving demand for preventative beauty and hybrid wellness products.

Power of brand collaborations

Strategic partnerships between complementary brands are helping expand reach and drive customer engagement. Collaborations enable cross-audience exposure and unique, limited-edition offerings that boost visibility.

Surge in social commerce

Social commerce is reshaping retail dynamics, projected to reach $821 billion in 2025. Platforms like TikTok, Instagram, and Pinterest are enabling direct, in app shopping experiences. Shoppable posts and influencer-driven content are becoming critical tools in converting engagement into sales.

Infosys: Retail Industry Outlook 2025

Indian retail industry

Indias retail market has grown in lockstep with rising consumption, expanding from Rs.35 Lakhs Crores in 2014 to ?82 Lakhs Crores in 2024, noting an impressive 8.9% CAGR. This surge reflects increased discretionary spending, rapid urbanisation and a digitally empowered consumer base. Retail categories like grocery, electronics, fashion and jewellery have all contributed to this growth, while lifestyle and indulgence categories have grown at over 10% annually.

Organised retail, particularly offline, has consistently outpaced underlying category growth, with leading players reporting up to 46% YoY growth in certain years. On the supply side, investments in infrastructure, regulatory incentives, and a 30%+ rise in online retail have expanded access and affordability. Looking ahead, Indias retail market is projected to surpass 5190 Lakhs Crores by 2034, sustaining nearly 9% annual growth.

Indian retail industry outlook

Indias retail sector is poised for strong growth in 2025, driven by evolving consumer preferences and strategic investments. According to CBREs 2025 India Retail Outlook, shopping malls are enhancing their tenant mix to offer dynamic shopping, entertainment, and dining experiences, attracting both international and domestic brands across various categories.

The first quarter of 2025 witnessed a significant upswing in retail supply, with approximately 2.2 million sq. ft. becoming operational. Fashion and apparel dominated leasing activity, accounting for about 27% of the overall space take-up, followed by homeware and department stores. This momentum underscores the sectors resilience and adaptability, positioning it for sustained expansion in the coming years.

Indias fashion industry

Indias fashion industry is undergoing rapid transformation, driven by rising incomes, urbanisation, digital adoption, and evolving consumer preferences. E-commerce and social media have democratised access to domestic and global fashion, especially in Tier II and III cities. Sustainability, athleisure, and ethical fashion are gaining prominence among environmentally conscious consumers. While challenges remain in infrastructure and unorganised retail, government initiatives, tech integration, and growing youth influence position Indias fashion industry to become a globally competitive force in the coming decade.

Apparel

Indias apparel industry, valued at $115.7 billion in 2024, is expected to reach $171.6 billion by 2034, growing at a CAGR of 4%. The surge is driven by rising disposable incomes, evolving consumer lifestyles, and an expanding middle class. E-commerce has revolutionised apparel consumption, offering convenience, variety, and access to both domestic and global brands, especially in Tier II and III cities. A growing preference for sustainable fashion is also reshaping the market, with consumers increasingly prioritising eco-friendly materials, ethical production, and conscious consumption. Digital innovation and sustainability will define the next chapter of Indias apparel growth story.

Footwear

Indias footwear market, valued at $18.8 billion in 2024, is projected to grow at a CAGR of 10.1%, reaching $46 billion by 2033. The industrys momentum is driven by rising disposable incomes, urbanisation, and the growing influence of fast fashion. Consumers increasingly seek stylish, comfortable, and high-quality footwear that aligns with evolving fashion trends. E-commerce has amplified accessibility with flexible payment and return options. Innovations such as smart shoes and the growing use of social media marketing are further shaping Indias dynamic footwear landscape.

https://www.imarcgroup.com/india-footwear-market-report

Accessories

Indias fashion accessories market is poised for strong expansion, growing from $14.7 billion in 2024 to $24.3 billion by 2030 at a CAGR of 9%. This growth is driven by rising fashion consciousness, increased disposable income, and wider access to branded and trendy accessories. Jewelry remains the highest revenue-generating segment, reflecting deep cultural significance and evolving design preferences. Meanwhile, handbags and purses are the fastest- growing category, particularly popular among urban and aspirational consumers.

https://www.grandviewresearch.com/horizon/outlook/ fashion-accessories-market/india

Key drivers of Indias retail market growth

• Digital and tech transformation

The adoption of Al, automation, and data analytics is enhancing efficiency, enabling hyper- personalised shopping, and improving supply chain agility. These technologies are helping retailers tailor offerings, manage inventories better, and elevate customer experiences.

• Rise of quick-commerce and ONDC

The expansion of quick-commerce and the Open Network for Digital Commerce (ONDC) is opening new, cost-effective retail channels, especially for Tier 2/3 markets, fuelling convenience- driven consumption and democratising digital retail access.

• Evolving consumer demographics

The emergence of a young, digital-first middle class, particularly Gen Z, is reshaping retail expectations with an emphasis on value, speed, and personalisation. 100 million new middle- income households are expected to power mass consumption.

• Growth in non-metro markets

Tier II and III cities are outpacing urban centres in e-commerce growth, driven by digital penetration, rising aspirations, and improved logistics, offering a fertile ground for organised retail expansion.

• Rising disposable income and urbanisation

Rising incomes, rapid urbanisation, and a consumption-oriented middle class are increasing demand for essentials, fashion, and lifestyle products, shifting spending from luxury to value- driven and essential purchases.

• Investments and consolidation

The retail sector is seeing growing foreign direct investments, PE-led consolidations, and strategic acquisitions, fueling scale, innovation, and competitiveness.

• Supply chain optimisation

Retailers are upgrading logistics hubs and tracking systems to enable faster deliveries, especially in quick commerce. This also supports employment in logistics and related services.

• Consumer focus on sustainability

Consumers are increasingly expecting ethical and sustainable retail practices. Retailers are responding with more transparent supply chains and environmentally responsible initiatives.

• Festive and value retail revival

The revival of festive spending and value retail postpandemic has rejuvenated consumer sentiment, with cautious optimism for continued momentum in 2025.

https://economictimes.indiatimes.com/ industry/services/retail/2025-to-be-a-year-of- transformation-for-retail-industry-ai-automation- to-play-a-crucial-role/articleshow/ll6786168. cms?from=mdr

Company overview

Incorporated in 2013 and headquartered in Kolkata, Baazar Style Retail Limited is one of Eastern Indias leading value fashion retailers, operating under the well-recognised brands Style Baazar and Express Baazar. With a cluster-based expansion model, our Company has built a stronghold in West Bengal and Odisha, and is deepening its presence in key states such as Bihar, Assam, Jharkhand, and Uttar Pradesh. As of March 31, 2025, the Company operates 214 stores across Tier 2, 3, and 4 towns, supported by strong warehousing infrastructure and tech-driven operations.

Focused on serving the aspirational Indian family with a wide and affordable product mix across apparel, home needs, beauty, toys, and stationery, Baazar Style has created a unique value proposition through regionally resonant merchandise, private labels contributing over 45% of revenue, and a strong repeat customer rate of 71%. With a commitment to delivering quality at competitive prices, our Company continues to drive growth, profitability, and operational excellence through technology integration, supply chain optimisation, and customer insight-led merchandising.

Our portfolio Style Baazar

Style Baazar is the flagship brand of Baazar Style Retail Limited, positioned as a one-stop family fashion destination catering to aspirational customers in Tier 2, 3, and 4 cities. It offers a wide array of apparel including ethnic, fusion, western wear for women, formal and casual collections for men, and a trendy range for kids. Beyond fashion, it also features home essentials, beauty products, toys, and stationery, ensuring a comprehensive value shopping experience. The brand is known for its quality, affordability, and deep regional relevance, driven by private labels that contribute to revenue and reinforce strong customer loyalty.

Express Baazar

Express Baazar is the compact-format offering from Baazar Style, designed to extend the brands value proposition into emerging catchments and smaller geographies. With a curated selection of fast-moving and essential fashion categories, it ensures accessibility, speed, and affordability for price-conscious consumers. Express Baazar stores are typically located in high- footfall zones and operate with a leaner format while retaining our brands core strengths: regional relevance, family-centric assortment, and everyday value.

The format plays a key role in our Companys cluster-based expansion strategy and supports quicker penetration across untapped markets, further enhancing the brands visibility and profitability footprint.

Strategic foundations of growth

Baazar Style Retails growth is anchored in a focused cluster-based strategy, strong private labels, deep regional penetration, and tech-enabled operations, creating a scalable, efficient, and customer-centric value retail model.

• Cluster-based expansion

Baazar Style has adopted a focused cluster-based strategy to scale operations efficiently across Eastern India. By concentrating on contiguous markets: core states like West Bengal, Odisha, Assam, and Bihar, and expanding into focus states like Jharkhand, Uttar Pradesh, Andhra Pradesh, and Tripura, our Company enhances supply chain and inventory efficiency while lowering operational costs. This strategy supports stronger brand recall, localised marketing, and efficient use of human capital.

Market/States	FY 2022-23	FY 2023-24	FY 2024-25	CAGR from FY23 to FY25
Core Markets
West Bengal	58	62	77	15%
Odisha	26	28	34	14%
Assam	15	25	34	51%
Bihar	15	17	26	32%
Focus Markets
Jharkhand	8	9	14	32%
Andhra Pradesh	6	6	5	(9%)
Tripura	2	2	2	0%
Uttar Pradesh	4	12	21	129%
Arunachal Pradesh	0	0	1	NA
Chattisgarh	1	1	0	NA

• Deeper penetration into tier 2, 3 and 4 markets

Our Companys growth is largely driven by its strong presence in underpenetrated cities beyond metros. With 73% of its stores located in Tier 3 and 4 towns, Baazar Style meets the evolving fashion needs of valueconscious customers, creating high visibility and stronger customer relationships at the grassroots level.

• Strengthening private label portfolio

Private labels are a cornerstone of Baazar Styles value proposition, contributing 45% to overall revenue (56,018 million in FY 2024-25). With 10 exclusive brands, including "Square Up," which crossed 52,000 million in sales, and two more brands "Awaya" and "Miss 19" touching almost 51000 million each, the strategy offers greater control over sourcing, drives customer loyalty, and improves margins. The focus on value-based pricing is expected to transition to fair pricing as brand equity builds.

• Comprehensive product offering

Positioned as a one-stop family destination, our brands collection spans mens, womens, and kids fashion, along with footwear, home essentials, furnishings, travel gear, and lifestyle products. This inclusive offering aligns with the needs of middle- income households, making our brand a staple in their everyday and festive purchases.

• High customer retention and engagement

A strong repeat purchase rate of 71% and a cumulative customer base of over 15.8 million underline the loyalty Baazar Style has built. Our brand leverages both ATL and BTL marketing to drive store footfalls and enhance customer stickiness, supported by growing digital presence (with nearly 2.9 Lakhs social media followers as of FY 2024-25).

• Technology and operational efficiency

Our Company continues to invest in technology, ranging from SAP systems to advanced analytics, to integrate its supply chain, enhance customer insights, and improve operational agility. Seamless tech adoption supports scalability and resilience in a dynamic retail environment.

Operational performance

Style Baazar continued to demonstrate strong operational momentum in FY 2024-25, driven by network expansion, higher customer engagement, and improved productivity across key metrics.

Strong Same Store Sales Growth (SSSG)

Our Company reported an impressive 12.7% SSSG in FY 2024-25, rising from 9.5% in FY 2023-24. This reflects strong consumer traction and improved merchandise effectiveness across mature stores.

Expansion in store footprint

Style Baazar expanded its retail footprint by adding net 52 new stores during the year, taking the total count to 214. The total retail space grew to 19.21 lakh square feet - a 31% year-on-year increase.

Accelerated private label penetration

Private labels contributed 45% to total revenues in FY 2024-25, up from 38% in FY 2023-24. This growing share underscores the success of in-house brands in driving margins and customer loyalty.

Higher productivity and sales efficiency

Sales per square foot (PSF) grew 12% year-on-year to 5721 in FY25. This was supported by better inventory planning, assortment refinement, and improved customer conversion.

Elevated customer throughput

Our Company generated 14.4 million bills in FY 2024- 25, up 43% YoY, indicating sustained growth in footfalls and conversions.

Financial performance

In FY 2024-25, Baazar Style delivered robust financial performance, underscoring its strong growth trajectory and operational resilience. Revenue from operations grew by 38% year-on-year to 513,437 million, up from 59,729 million in FY 2023-24, supported by consistent store expansion and increased consumer traction. Gross profit improved to 54,524 million with a stable margin of 33.7%, reflecting efficient sourcing and cost management.

EBITDA stood at 51896 million, maintaining a margin of 14.1%, while the Profit Before Tax and Exceptional Items stood at 5296 million. Our Companys financial momentum was further evident in Q4 FY25, with revenue increasing to 53,454 million (up from 52,235 million in Q4 FY24.

Particulars	Formula	FY25	FY24	Variance	Details of Significant Changes in the Key Financial Ratios - (>+/-25%)
Inventory Turnover Ratio	COGS / Average Inventory	1.87	1.73	8%	NA
Interest Coverage Ratio	Earning for Debt Service (Profit after taxes + Noncash operating expenses like depreciation and other amortisations + Interest) / Debt service (interest and Lease Payments + Principal Repayments)	1.26	1.58	(20%)	NA
Current Ratio	Current Assets / Current Liability	1.21	1.05	15%	NA
Debt Equity Ratio	Total Debt / Shareholders Equity	0.37	0.76	(52%)	The Companys debt-equity ratio has improved on account of issue of additional equity shares during the current financial year.
EBITDA Margin (%)	EBITDA / Revenue from Operations	14.12%	14.62%	(3%)	NA
PAT Margin (%)	Net Profit after Tax / Total Income	1.09%	2.24%	(51%)	The Companys PAT margin has decreased due to loss on account of fire accident.
Inventory Sales Ratio (%)	Average Inventory / Sales	35.53%	38.58%	(8%)	NA
Return on Capital Employed (%)	EBIT / Average Capital Employed Capital Employed (Net Worth + Total Debt - Intangible Assets - Capital Reserve - Deferred Tax Assets)	19.55%	20.64%	(5%)	NA
Return on Equity (%)	Net Profit after Tax / Average shareholders equity	4.76%	10.76%	(56%)	The Companys return on equity has decreased on account of decrease in profit after tax due to fire and increase in overall shareholders equity.
Debtor Turnover Ratio*	Net credit sales/ Average trade receivable	"	"	"	NA

*The Company is into retail business and there are no trade receivable in the Company, accordingly ratio is not applicable to the Company

SCOT analysis

Strengths	Challenges	Opportunities	Threats
Market leadership in core regions Baazar Style is the leading organised value retailer in West Bengal and Odisha, with the largest retail footprint in Eastern India among listed peers.	Limited geographic diversification While presence in Eastern India is deep, scale in North, Central, and Southern India is still nascent and may require time and investment to replicate the cluster model.	Untapped growth in Eastern and Northern India With organised value retail penetration still at -28% in the region, Baazar Style is well-positioned to capture significant share in a ?2,208 billion market expected by FY 2026-27.	Macroeconomic vulnerabilities nflation, declining rura demand, or reduction in discretionary spending can affect value retail performance, especially in price-sensitive regions.
Growth track record Between 2017 and 2024, we were the fastest-growing value retailer in terms of store count and revenue, registering CAGRs of 35.8% and 26.8% respectively.	Dependence on core markets More than 80% of revenue is concentrated in four states - any socio-economic disruption in these could significantly impact performance.	Store expansion headroom The market can accommodate -8,000 stores in East and North India by FY 2026-27. Baazar Style has the scope to scale from its current 214-store base.	Supply chain disruptions Reliance on third-party logistics and pan-India supplier network makes the business vulnerable to delays or disruptions.
High operational efficiency A cluster-based expansion model, lean cost structure, automated supply chain, and ERP-driven inventory management drive efficiency and scalability.	Rising competition The organised value retail space is witnessing heightened competition from national and regional players expanding into Tier 2-4 cities.	Increased private label play Growing focus on private labels, which offer better margins and brand stickiness, can improve profitability and customer loyalty.	Brand cannibalisation in expansion Rapid growth or misaligned store locations in new territories could result in store overlap or dilution of brand equity without appropriate market understanding.
Customer-centric product strategy Boozor Style offers a comprehensive and affordable product mix catering to the entire family, backed by deep local market insights and micro-market product customisations.		Tech-driven retailing Deeper use of data analytics for demand forecasting, trend mapping, and hyperlocal assortment planning can further improve operating metrics.
Strong private label portfolio Growing contribution from private labels (45% of revenue in FY 2024-25) allows better margins, product control and differentiation.
High footfall locations Majority of stores are in high- street areas, enabling strong visibility, accessibility and customer acquisition.

Human resource development

At Baazar Style Retail Limited, our employees are our most valuable asset. We are committed to building a supportive, inclusive, and high-performance work environment where every team member feels empowered to thrive. As of March 31,2025, our workforce comprised 3,371 permanent employees across key functions including store operations, logistics, marketing, IT, finance, and human resources.

To attract, retain, and nurture top talent aligned with our strategic goals, we place strong emphasis on human resource management. Our approach includes transparent performance evaluations, bi-annual feedback sessions, and a culture that encourages continuous learning and interaction between new hires and senior leadership.

Learning and development

We invest in extensive in-house training programs to enhance employee skills across areas such as customer service, product quality, pricing strategies, and operational procedures. Employees are equipped with the tools to deliver retail excellence through technical, sales, and soft skills training, ensuring consistent brand standards and customer satisfaction.

People-first culture

Employee well-being is a key priority. We offer health insurance, incentive schemes, and performance- linked bonuses, along with ongoing support initiatives aimed at fostering a healthy work-life balance. Diversity, inclusion, and digital transformation remain central to our HR strategy.

Risk management

At Baazar Style, we are committed to proactively identifying and mitigating potential risks that could affect our operations and long-term objectives. Our comprehensive Risk Management Framework is overseen by the Board-appointed Risk Management Committee, chaired by Dr. Dhanpat Ram Agarwal, and is guided by a Board-approved Risk Management Policy.

We follow a structured approach to risk identification, assessment, prioritisation, and mitigation. This includes annual monitoring and regular updates to our risk policies and controls to reflect evolving market conditions and business dynamics. Risk evaluation is a continuous process aimed at maintaining resilience and supporting sustainable performance.

Key risk areas and mitigation strategies

• Supply chain disruptions: Given our dependence on a centralised distribution network, we have strong contingency plans and insurance coverage in place to ensure continuity in the event of natural disasters or operational disruptions.

• Inventory management: To avoid overstocking or stock-outs, we leverage accurate demand forecasting and inventory planning processes aligned with customer trends and store-level needs.

• Product quality and liability: Comprehensive quality control mechanisms are in place to minimise product defects and reduce exposure to liability claims, safeguarding brand integrity.

• Human capital risks: High employee turnover could impact operations. We mitigate this through employee engagement initiatives, training programs, and by building a positive workplace environment.

• Financial risks: Exposure to credit, liquidity, interest rate, and market risks is managed through sound financial planning, reserve maintenance, and risk- specific mitigation strategies.

• External risks: We monitor macroeconomic indicators, regulatory developments, and political conditions to anticipate and respond to changes that may impact our business.

While some inherent risks persist due to the dynamic nature of the retail industry, our adaptive risk management practices position us to navigate uncertainties and maintain operational stability.

Internal controls

Baazar Style has established a strong internal control system designed to ensure the accuracy and reliability of its financial reporting through timely and precise recording of all financial, operational, and commercial transactions. These controls also serve to protect our Companys assets from unauthorised use or disposal and ensure compliance with all relevant laws and regulations. Additionally, the Audit Committee conducts regular reviews to evaluate the adequacy and effectiveness of these controls and presents key observations to the Board, enabling prompt corrective measures where required.

Cautionary statement

The statements in the Management Discussion and Analysis relating to our Companys objectives, projections, estimates, and expectations may constitute forward-looking statements as defined under applicable laws and regulations. Actual results may vary from those anticipated or implied. Key factors that could influence our Companys performance include economic conditions impacting market demand and pricing, changes in government policies, tax laws, regulatory developments, and other unforeseen or incidental circumstances.