JHS Svendgaard Retail Ventures Ltd Management Discussions

BUSINESS OVERVIEW FOR THE FINANCIAL YEAR ENDED MARCH 31, 2025

JHS Svendgaard Retail Ventures Limited operates in the Indian retail sector and Human Resource Services, with a dedicated focus on acquiring premium and high-footfall retail spaces in Indias High Street Retail Markets, particularly at key airport locations across the country. The Companys strategic approach emphasizes securing retail spaces that ensure maximum visibility and engagement with a diverse and growing consumer base.

INDUSTRY OVERVIEW Retail Sector

The Indian retail sector is one of the most dynamic and fastest-growing markets globally, driven by robust macroeconomic fundamentals, favorable demographics, and evolving consumer preferences. The sector contributes significantly to the countrys GDP and employment and has transformed into a key pillar of Indias consumption-driven economy.

Several factors continue to fuel the expansion of the retail industry in India:

• Rising disposable incomes and expanding middle class: Higher income levels, coupled with greater aspirations, are leading to a sharp increase in discretionary spending across product categories.

• Urbanization and organized retail penetration: The

steady migration toward urban centers, along with the development of organized retail formats such as malls, supermarkets, and exclusive brand outlets, has reshaped the shopping landscape.

• Evolving consumer behavior: Modern consumers increasingly prefer branded, premium, and convenience-led offerings. The demand for quality, variety, and personalized experiences is encouraging retailers to innovate and diversify.

• Technology adoption and digital integration: The

convergence of offline and online channels, driven by e- commerce, omni-channel retailing, and digital payment ecosystems, has further accelerated industry growth.

• Expansion into new geographies: Retail infrastructure is expanding beyond metropolitan hubs into Tier II and Tier III cities, unlocking significant untapped potential.

• Emergence of niche segments: Categories such as luxury retail, experiential retail, health & wellness, and value fashion are gaining traction, catering to distinct consumer needs.

Post-pandemic, the sector has shown strong resilience, supported by renewed consumer confidence, increasing footfalls across physical retail spaces, and the normalization of supply chains. Retailers are also leveraging technology,

data-driven insights, and consumer engagement platforms to deliver differentiated experiences and enhance operational efficiency.

Importantly, the Indian retail industry is not limited to any single format or location. This diversified retail ecosystem provides companies the flexibility to cater to a wide spectrum of consumer segments, ranging from value-conscious buyers to aspirational and luxury-seeking customers.

COMPANYS BUSINESS MODEL AND STRATEGY The Companys business model is centered around creating a differentiated retail experience by strategically securing spaces at niche and high-potential locations across India. Our approach ensures visibility, accessibility, and engagement with a wide consumer base, while optimizing costs and maximizing returns.

KEY ELEMENTS OF THE BUSINESS MODEL

1. Strategic Location Acquisition:

• Focus on identifying and acquiring premium retail spaces in high-footfall areas including malls, airports, metro stations, and key high streets.

• Target Tier I, Tier II, and emerging Tier III markets to achieve a balanced geographical presence.

• Prioritize locations that offer long-term growth potential and align with evolving consumer demographics.

2. Consumer-Centric Retail Format:

• Establish retail outlets designed to provide convenience, comfort, and a superior shopping experience.

• Adapt store formats based on market requirements - flagship stores in metros, compact formats in Tier II/III cities, and pop-up stores at transit hubs.

3. Brand Partnerships & Product Mix:

• Curate a mix of renowned national and international brands tailored to customer needs.

• Leverage exclusive tie-ups, franchise models, and partnerships to strengthen brand offerings.

4. Operational Efficiency & Scalability:

• Standardize store operations, supply chain processes, and vendor management to maintain efficiency and cost-effectiveness.

• Establish scalable systems to rapidly expand across new locations while maintaining uniform service quality.

5. Revenue Model:

• Revenue is primarily generated from retail sales through company-operated and franchise stores.

• Long-term focus on maximizing same-store sales growth while expanding the overall retail footprint.

6. Customer Engagement & Value Proposition:

• Deliver value through location convenience, curated brand offerings, and a differentiated shopping environment.

MARKET OUTLOOK AND GROWTH DRIVERS

According to industry reports, the global retail market has experienced robust growth, rising from approximately USD 28,846.57 billion in 2023 to an estimated USD 31,310.6 billion in 2024, at a compound annual growth rate (CAGR) of 8.5%. The positive growth trajectory is driven by:

• Expanding economies, especially in emerging markets like India.

• Increasing urban population density driving demand for modern retail formats.

• Rising foreign direct investment (FDI) in the Indian retail sector.

• Growing consumer preference for organized retail spaces such as supermarkets, hypermarkets, and airport retail outlets.

• Technological advancements in retail operations, including digital payments and supply chain integration.

• Availability of retail finance options facilitating consumer spending. Expanding economies, especially in emerging markets like India.

In addition to these factors, the Indian governments continued push for infrastructure development, ease of doing business, and reforms encouraging foreign investments have further enhanced growth opportunities in the sector.

Sources: www.zionmarketresearch.com/

OPPORTUNITIES:

Retail

The Indian retail industry continues to present significant growth opportunities, driven by structural shifts in consumer behavior, evolving demographics, and supportive policy frameworks.

The following key opportunities are expected to benefit the Company in the medium to long term:

1. Expanding Consumer Base:

• Rising disposable incomes, particularly among the middle class, are leading to increased purchasing power.

• Growing aspirations of young consumers and their preference for branded, organized retail formats create strong demand potential.

2. Urbanization and Infrastructure Growth:

• Rapid urbanization and smart city developments are expanding organized retail markets in Tier II and Tier III cities.

• Enhanced connectivity through metros, airports, and highways is creating new high-footfall retail hubs.

JHS SVENDGAARD RETAIL VENTURES LIMITED

3. Shift Toward Organized Retail:

• The unorganized-to-organized shift in retail is accelerating, supported by better infrastructure, government reforms, and GST implementation.

• Consumers are increasingly preferring organized outlets for convenience, quality assurance, and brand variety.

4. Digital and Omni-Channel Integration:

• Growing internet penetration and smartphone adoption are driving omni-channel opportunities.

• Hybrid models that combine offline retail with e- commerce platforms are expected to attract wider consumer segments and increase wallet share.

5. Global Brand Entry and Collaborations:

• India continues to be an attractive destination for global retail and lifestyle brands.

• Partnerships, franchising, and licensing models with international players present avenues for expansion and differentiation.

6. Experiential and Niche Retail Growth:

• Consumers are seeking experiences beyond traditional shopping?cafes, entertainment, and lifestyle services within retail spaces are gaining popularity.

• Niche retail formats at airports, transit hubs, and luxury malls present high-margin opportunities.

THREATS

• High Operating Costs:

Operating in premium locations such as airports and high streets involves substantial rental and operational expenditures. Maintaining profitability amidst these high fixed costs while ensuring superior service delivery is an ongoing challenge.

• Intensifying Competition:

The organized retail segment, particularly in prime locations like airports, faces increasing competition from domestic retailers and international brands. Sustained growth will depend on continuous product innovation, competitive pricing strategies, and delivering exceptional customer experiences.

• Macroeconomic and Sectoral Risks:

The retail sector is sensitive to macroeconomic factors such as inflation, economic slowdowns, fluctuating consumer spending patterns, and disruptions in air travel (e.g., pandemics, geopolitical tensions), all of which could negatively impact sales.

• Regulatory Environment:

Changes in regulatory frameworks, including policies from airport authorities, customs regulations, or FDI guidelines, could affect operational flexibility. Proactive compliance and adaptability to evolving regulatory landscapes are essential for uninterrupted business operations.

KEY PRODUCT SEGMENTS

The Company operates within the organized retail sector

with a focus on creating value through carefully chosen

formats and locations. Our business is structured across the

following key segments:

1. Location-Based Retailing:

• High-Street Outlets: Stores located in premium high- footfall areas that ensure brand visibility and strong consumer engagement.

• Transit Hubs (Airports, Metro Stations): Niche locations catering to high-income and time-conscious consumers, generating strong brand recall and higher margins.

• Shopping Malls & Commercial Complexes: Anchored in leading malls across metros and Tier II cities, providing exposure to diverse consumer groups.

2. Format-Based Operations:

• Flagship Stores: Large-format outlets in metro cities designed to provide immersive shopping experiences.

• Compact & Convenience Stores: Smaller outlets in Tier II and III cities to tap into aspirational consumers while maintaining cost efficiency.

• Pop-up and Experience Stores: Short-term formats in strategic locations to test new markets, concepts, and products.

3. Product & Brand Segments:

• Lifestyle & Fashion: Apparel, accessories, and lifestyle products tailored to youth and urban consumers.

• Personal Care & Wellness: Increasingly relevant category, driven by growing consumer focus on health and self-care.

• Food & Beverages (F&B): Niche F&B retail spaces that

complement lifestyle shopping experiences and drive recurring footfall.

• Partnership/Franchise Brands: Exclusive tie-ups with domestic and international brands to deliver differentiated offerings.

MARKET OUTLOOK

The global retail market is projected to grow to approximately USD 42,759.13 billion by 2028, at a CAGR of 8.1%. Key drivers for this expected growth include technological advancements in retail operations, increasing application of data analytics for customer insights, and a growing consumer preference for shopping locally and sustainably.

With a focused product strategy, strong operational capabilities, and presence in high-footfall retail locations, JHS Svendgaard Retail Ventures Limited remains well-positioned to capitalize on future market opportunities and deliver sustained growth.

Sources: www.zionmarketresearch.com/

FINANCIAL REVIEW

The Company generated revenue from operations of ?1,614.14 Lacs for the financial year ended 31st March 2025, as compared to ?1,304.81 Lacs in the previous year ended 31st March 2024, registering a growth of approximately 23.74%.

The Profit After Tax for the year stood at ?11.75 Lacs as compared to ?25.48 Lacs in the previous year. The decrease in profit is primarily due to increase in the operational cost at the airports owing to the increase competition in securing retail outlet at high footfall locations.

KEY FINANCIAL RATIOS

Details of changes in key financial ratios as compared to immediate previous financial year.

Key Financial Ratios	Year ended March 31, 2025	Year ended March 31, 2024	Absolute Variance (%)	Reason for Variance if Variance if 25% or more
Current Ratio (in times)	2.02	5.63	64%	The decrease in the current ratio is primarily due to the recognition of lease liabilities arising from the extension of the airport store lease during the relevant year.
Debt-Equity Ratio (in times)	0.44	0.11	-300%	The increase in the debt equity ratio is due to increase in the lease liabilities arising from the extension of the airport store lease as against the increase in equity on preferential allotment being made by the company during the relevant year.
Debt Service Coverage Ratio (in times)	0.95	10.13	91%	The decrease in the debt service coverage ratio is primarily due to the increase in lease liabilities arising from the extension of the airport store lease during the relevant year.
Return on equity ratio (%)	0.99%	4	75%	The decrease in ROE is primarily due to the increase in equity towards the end of the financial year, which is pending deployment, apart from the change in profitability owing to the business.
Key Financial Ratios	Year ended March 31, 2025	Year ended March 31, 2024	Absolute Variance (%)	Reason for Variance if Variance if 25% or more
Trade Payables turnover ratio (in times)	17.31	25.80	33%	The decrease in the trade payables turnover ratio is since the company is optimally utilizing the credit limit.
Debtors Turnover (in times)	26.84	16.14	-66%	The increase in the Trade Receivables Turnover Ratio is due to the majority of the business being B2C in nature, resulting in faster realization.
Return on Capital employed (%)	5.09%	1.69	-201%	ROCE has improved in a current year, primarily on account of higher finance costs forming a major component of expenses during the year.
Net Capital turnover ratio (in times)	3.42	3.27	-5%	The decrease in the capital turnover ratio is primarily due to the equity capital infusion towards the end of the financial year, which is pending deployment, along with changes in profitability owing to the business.
Net Profit Margin (%)	0.73%	2.00	64%	Net Profit Margin has declined in the current year from the previous year, primarily due to increase in operational cost at the Airports and recognition of lease liabilities arising from the extension of airport store lease.
Inventory Turnover	8.11	9.97	19%	NA
Interest Coverage Ratio	1.01	1.9	47%	Mainly due to an increase in lease liabilities during the year, resulting in higher interest costs.
Operating Profit Margin (%)	6.33	4.69	-35%	Operating Profit Margin improved in the current year, primarily due to higher profits earned during the year.

OUTLOOK

The outlook for JHS Svendgaard Retail Ventures Limited remains positive, supported by favorable industry dynamics, rising consumer demand, and the Companys strategic initiatives. The Indian retail sector is poised for sustained growth, driven by increasing disposable incomes, rapid urbanization, changing lifestyle preferences, and the accelerated shift toward organized and omni-channel retail. Expanding opportunities in Tier II and Tier III cities, coupled with the growing influence of digital and experiential retail formats, provide a strong foundation for future growth. The Company, with its focus on securing niche locations such as high streets, shopping malls, and transit hubs, is well- positioned to capitalize on these opportunities. By leveraging its brand partnerships, consumer-centric formats, and operational efficiency, the Company aims to strengthen its presence across diverse retail segments and deliver sustainable value to its stakeholders.

The Company remains focused on strengthening its product portfolio by introducing new product categories aligned with evolving consumer preferences, particularly in the natural, wellness, and sustainable product segments. Plans are underway to explore additional opportunities for expanding the retail footprint across more airports in India, ensuring wider brand reach and increased consumer engagement.

In addition to physical expansion, the Company is also actively exploring digital integration to enhance the overall customer experience. Initiatives such as pre-ordering and click-and-collect services at airport outlets are expected to not only contribute to increased sales but also build greater customer loyalty through convenience-driven offerings.

With a robust foundation, a clear strategic direction, and a favorable industry environment, the Company remains optimistic about its growth prospects in the coming years. RISKS AND CONCERNS

While the overall outlook is promising, certain risks and challenges may impact the Companys operations and financial performance:

• Supply Chain Management:

Ensuring an uninterrupted supply of products to retail outlets is essential for operational success. Disruptions in the supply chain arising from supplier constraints, transportation delays, or other logistical challenges could lead to product shortages and lost sales opportunities.

• High Fixed Operating Costs:

Premium retail locations, particularly at airports, involve substantial fixed costs such as rent, utilities, and staffing expenses. During periods of reduced sales, these fixed

overheads may place pressure on margins and profitability.

• Regulatory and Compliance Risks:

Operating in airport environments requires strict adherence to regulatory norms and compliance with various guidelines issued by airport authorities and government agencies. Any non-compliance could result in fines, operational restrictions, or the risk of losing retail licenses at certain locations.

• Intensifying Competition:

The organized airport retail space is highly competitive, with several domestic and international brands vying for market share. Continuous product innovation, pricing strategies, and superior customer service will be essential to maintain competitive differentiation. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

JHS Svendgaard Retail Ventures Limited has in place a robust internal control framework designed to ensure effective risk management, accurate financial reporting, and compliance with applicable laws and regulations. The internal control systems are structured to:

• Safeguard the Companys assets.

• Ensure accuracy and reliability of accounting records.

• Facilitate the efficient conduct of operations.

The internal audit function operates independently and conducts regular reviews of the Companys operational and financial processes. Identified gaps or weaknesses in controls are promptly addressed through corrective measures. Management regularly monitors and evaluates

the effectiveness of these internal controls to ensure operational resilience.

Additionally, the Company places significant emphasis on ethical conduct, strong corporate governance, and regulatory compliance. Regular training sessions are conducted across all levels of the organization to reinforce awareness of internal policies, legal obligations, and the importance of maintaining the highest standards of integrity in business practices.

Through these systems, the Company remains committed to ensuring that its operations remain resilient, efficient, and compliant with all applicable regulatory requirements. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company has always had a focus on introducing new benefits & policies that would help a culture of diversity, equity and inclusion to thrive while ensuring the well-being of the employees.

The human capital has always been the driving force behind Company success. A strategic transformation was undertaken by the HR department, aligning its efforts with the companys long-term business objectives. This revamped approach prioritized attracting and retaining top talent through enhanced recruitment and retention strategies.

The HR strategy focused on maximizing employee potential and aligning individual contributions with the companys overarching purpose, vision, mission and values. The Company understands that engaged employees, who feel valued and connected, are more likely to support its success. The total number of employees as on March 31, 2025 were 202.