Senco Gold Ltd Management Discussions

COMPANY OVERVIEW

Senco Gold Limited (Senco) is a leading pan-India jewellery retailer with a legacy of more than eight decades and is the largest in eastern India based on the number of showrooms. Senco has been rated as 2^nd Most Trusted Jewellery Brand for 6^th year in a row by Trust Research Associate (TRA) and amongst Most Desired Jewellery Brand by TRA in 2024. Senco has also been certified 3^rd time as Great Place to Work (GPTW) consistently. Senco is listed on BSE and NSE and was also included in MSCI India Domestic Small Cap Index. Senco has been awarded the "Leading Hedger – Bullion Segment" award by MCX India for 2^nd year in a row in June 2025. Sencos credit ratings have been reaffirmed by ICRA at [ICRA] A2+ with "Stable" Outlook for Short-term working capital facilities; and [ICRA] A with "Stable" Outlook for Long-term working capital facilities. Senco has 175 showrooms (including 72 Franchisee showrooms) spread across India with a mix of COCO, FOFO and FOCO; and includes 4 Sennes showrooms and 1 international showroom at Dubai. Out of 175 showrooms, 103 showrooms are company operated, and the remaining are Franchisee operated (FOFO and FOCO). Out of 103 own showrooms, 93 showrooms are taken on lease whose average tenure ranges between 9 years to 15 years. Sennes Fashion Limited (SFL), the wholly owned subsidiary has 2 showrooms and further considering the 4 Sennes showrooms under Senco Gold, combined Sennes showrooms stands at 6. Most of the company owned properties are mortgaged with the consortium banker toward the working capital facilities.

Senco has in its portfolio 3 wholly owned subsidiaries namely Senco Global Jewellery Trading LLC Dubai, UAE (SGJTL), Senco Gold Artisanship Pvt. Ltd. (SGAPL) and Sennes Fashion Ltd. (SFL). The UAE entity achieved total sales of Rs 2,002.5 million including Rs 51 million retail sales. Senco has operated SGAPL for enhancing captive manufacturing capacity and achieved total revenue of Rs 532.6 million as mix of trading revenue and job work income. SFL was incorporated during FY 2024-25 to spearhead and promote Sennes Business (lab grown diamond jewellery, Leather accessories and Fragrances) and achieved a topline of Rs 1.03 million during the first year from its 2 retails stores as well as Shop-in-Shop (SIS) model.

Senco has been regularly expanding showroom presence across North, West, South and Central India as part of our Bharat Strategy leading to an increase of total non-east revenue to Rs 11,518.5 million as against Rs 9,450.1 million in FY24. The Average Ticket Value (ATV) and Average Sell Price (ASP) also increased from Rs 63,700 and Rs 41,600 to Rs 73,000 and Rs 48,100 respectively indicating premiumisation and improved stud ratio. The range of the various product at our various store formats range from Rs 2500 to Rs 30,00,000.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian jewellery sector continued to evolve in FY 2024–25, supported by strong consumer demand, regulatory changes, and growing formalisation. While the market remains largely fragmented, there was a clear shift in consumer preferences and retail structure, offering significant growth opportunities for organized players.

Despite its traditional nature, the industry witnessed increased activity from branded retailers, particularly in Tier-II and Tier-III cities. Organized players steadily gained market share by leveraging asset-light models and franchise-based expansion. As of FY 2025, nearly 50% of the overall jewellery retail market remains unorganized, highlighting the vast potential for further penetration by formal, branded entities. Industry estimates project that organized retail could account for more than half of the market by FY 2029.

A key development during the year was the reduction in custom duties on precious metals. The Union Budget 2024 reduced import duty on gold and silver from 15% to 6%, and on platinum to 6.4%. This move improved affordability for consumers, curtailed unofficial imports, and promoted transparency in the value chain. However, this also led to a one-time margin impact for jewellery retailers due to inventory revaluation, estimated at 50–70 basis points. Gold jewellery remained the dominant category, with value growth estimated between 14%–18% during the year, driven by festive demand, rising gold prices, and growing preference for lightweight and lower-carat jewellery. There was also increasing interest in lab-grown diamonds, particularly among younger consumers looking for value and sustainability. In contrast, the studded jewellery segment, especially solitaires, faced pricing pressure due to weak international demand and declining export volumes.

Digitalisation and changing consumer behaviour also shaped the industry. Retailers adopted omnichannel strategies to reach tech-savvy consumers, offering online browsing, virtual try-ons, and home shopping experiences.

Export performance was mixed. While plain gold jewellery exports registered strong double-digit growth, exports of cut and polished diamonds declined significantly due to weak demand from key international markets. Exporters began diversifying toward new markets, particularly the Middle East, in response to growing trade tensions and tariff barriers in Western economies.

Looking ahead, the sector remains well-positioned for continued growth, supported by favourable demographics, rising disposable incomes, regulatory reforms, and growing brand consciousness among consumers. Organized players, with their focus on quality, design innovation and customer experience, are expected to lead the transformation of the Indian jewellery industry in the years to come.

OPPORTUNITIES AND THREATS

The company sees opportunities in innovation through advanced design and manufacturing technologies like 3D printing and CAD, which allow for the creation of unique, high-quality products that attract discerning customers. The ongoing digital transformation presents significant potential for enhancing customer engagement, expanding reach and boosting sales efficiency through e-commerce and digital marketing initiatives. The growing market demand, driven by rising disposable incomes and increased fashion awareness, offers substantial growth prospects. Additionally, the increasing demand for ethically sourced and sustainable products provides an opportunity for Senco Gold Ltd. to appeal to socially conscious consumers by focusing on responsible sourcing of natural diamonds and precious metals. Expanding into new geographic markets and customer segments, leveraging strong brand recognition, integrating advanced technologies, and diversifying product lines to include complementary items such as luxury lifestyle accessories are also seen as key growth strategies.

On the flip side, the Company acknowledges several threats that could impact its operations. The highly competitive jewellery industry could lead to price wars, reduced margins and increased marketing expenses. Frequent regulatory changes, such as hallmarking mandates, import duties and tax reforms, may pose compliance challenges and affect operational efficiency. Economic uncertainty, including inflation and currency volatility, could impact consumer spending and raw material costs, affecting profitability and sales. Supply chain disruptions caused by geopolitical tensions, war in other countries, natural disasters, or logistical issues could affect the availability and cost of raw materials, leading to production delays and increased costs. Global market dynamics, including changes in international trade policies and tariffs, pose further risk to export potential and profitability. Technological risk, environmental and social scrutiny, rising operational costs, the prevalence of counterfeit products, and sociopolitical factors in key markets also present significant challenges. Additionally, rapid expansion or diversification without maintaining quality could lead to brand dilution and a loss of customer loyalty, while talent retention in a competitive market could be challenging.

SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE

Senco Gold Limited successfully navigated a dynamic market environment in FY25, delivering strong growth across product categories. The company continued to expand its retail footprint, increasing the total number of showrooms to 175, including 72 franchise-operated locations.

Category-wise Retail Performance

• Gold: Gold sales grew by 21% overall, with a 15% growth in LTL (Like-to-Like) sales. The increase in gold prices and strong wedding season sales were major contributors.

• Diamond: Diamond sales recorded an impressive 15% overall growth and 8% LTL growth, driven by increased demand for studded jewellery.

• Platinum: Platinum sales saw a decline of 4% overall, with an 8% LTL drop, primarily due to its high price point.

• Silver: Silver sales increased by 41% overall, with a 39% rise in LTL sales, supported by the growing popularity of the Gossip brand.

• Gossip: The Gossip brand, known for its contemporary fashion jewellery, achieved 21% overall growth and 20% LTL growth, appealing to younger demographics.

OUTLOOK

Despite challenges such as elevated gold prices and recent changes in customs duty structures, the outlook for the Indian jewellery market remains resilient. Jewellery continues to hold strong cultural, emotional and investment value among Indian consumers, especially during weddings and festivals. While higher prices may lead to some shift in demand patterns such as a preference for lighter designs or lower-carat jewellery the overall demand is expected to remain stable. Senco is uniquely positioned to leverage the above growth journey backed by its visionary leadership, strong management team, robust system and process, healthy financial metrices and availability of capital. While we maintain our market leadership based on number of stores in eastern region, we will also expand in north, west and south as a strong pan Indian brand. We also aspire to retain our position as second most trusted brand and second most desired jewellery brand and will continue to delight our customers with large range of designs, customer centricity with focus on sustainable profitable growth towards shareholders value creation. Looking ahead the Company anticipates a year of growth and opportunity, underpinned by favourable market conditions and a strategic emphasis on innovation and sustainability. The jewellery markets, both globally and in India, are expected to continue their growth, driven by rising disposable incomes, increasing fashion awareness and the enduring cultural significance of jewellery in Indian society. This positive environment provides a strong foundation for the Company to expand its market share and explore new growth avenues.

The companys strategic focus will include enhancing its e-commerce and digital marketing efforts to better engage with customers and drive sales. By investing in cutting-edge technologies such as 3D printing, CAD, and augmented reality (AR), Senco Gold Limited aims to offer innovative and unique jewellery designs that resonate with contemporary consumer preferences. The companys commitment to ethical sourcing, particularly with natural diamonds, and sustainable practices aligns with the growing consumer demand for responsible and eco-friendly products, further enhancing its brand appeal.

Diversifying its product range and expanding into new geographic regions will be key growth strategies for the Company. Offering personalized and bespoke jewellery services will help differentiate the brand from competitors and build lasting customer relationships. Financially, the company expects steady revenue growth, driven by operational efficiencies and strategic investments. A proactive approach to risk management will be essential to navigate potential challenges such as economic fluctuations and regulatory changes, ensuring long-term financial stability.

Overall, the Company is well-positioned to achieve continued success in 2025-2026, leveraging emerging market opportunities while effectively managing potential risks. The companys strong market presence, focus on innovation, commitment to sustainability, and enhanced customer experience will drive its growth and strengthen its competitive advantage in the dynamic jewellery industry.

RISK MANAGEMENT

The Company has established a comprehensive risk management framework for the identification and mitigation of key business risks. The major risks and mitigation strategy of the Company are mentioned below:

Macroeconomic Risk

Impact - Geopolitical tensions, supply chain disruptions, higher inflation, monetary tightening and global economic slowdown may reduce consumer spending and impact the growth of the gems and jewellery industry.

Mitigation Strategy - The Company is focussed on increasing its geographical footprint, e-commerce expansion, and producing innovative products to strengthen its position in the market. Further, it primarily concentrates on the domestic market and remains protected from the impact of international economic challenges. Moreover, its plan for geographical diversification will reduce the dependence on a particular economy in case of adverse events and circumstances in any country.

Competition Risk

Impact - The gems and jewellery industry faces intense competition from the growing presence of both organised and unorganised players. The inability to produce high-quality and aesthetic products at competitive prices may impact the market share and growth of the Company.

Mitigation Strategy - The Companys superior brand recall, unique design and product portfolio and impeccable track record enable it to establish itself as a leading and preferred jewellery brand in India. Moreover, consistent efforts towards developing new designs, product innovation and branding & marketing activities will further strengthen its brand positioning and customer connect.

Margin Risk

Impact - Profitability/margin of the Company is dependent on gold jewellery business and any adverse conditions in gold procurement or prices can significantly financially challenge the company.

Mitigation Strategy - The Company has taken various initiatives for increasing the share of Diamond Jewellery i.e staff incentivisation, special offers, new product designs etc. The Company is focussing on increasing diamond, polki, and platinum sales. Further, new product line with higher margins like Leather accessories, Lab Grown Diamonds have been introduced.

Data Security and Privacy

Impact - Data privacy infringement shall be a major impact in conducting the business and any breach can lead to a non- compliance of the data privacy law. Mitigation Strategy – The company is proactively working on various avenues for enhancing data management, protection and software capabilities. The Company is focussing on leveraging cloud-based data storage solutions and upgrading the software services. By embracing these possibilities, the Company aims to optimise efficiency, scalability, and overall performance to meet the evolving needs of the data security and privacy.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Trust and transparency along with purity and quality form the core foundation of our value system. We ensure that all the jewellery sold by us are of appropriate quality (Carat, 4C, ethically sourced). We have thus built robust internal controls along with integrated systems built on institutionalised process to ensure that our customers are at the fulcrum in all our business process. Senco places utmost importance in regularly enhancing internal control framework in view of complex business environment and ever-increasing risk of fraud and error in the digital era. Senco adopts a calibrated and smart framework spanning on pillars of administrative and financial controls. On the administrative control side, company has a proper reporting structure, several oversight committees, segregation of duties, maker and checker controls, ERP based controls at all levels to ensure appropriate checks and balances. On the financial controls side, management with the knowledge and understanding of the business, its organization, operations and processes has put in place appropriate controls including reporting mechanism to deter and detect misstatements in financial reporting. On the business and customers facing side we have built controls like gold purity testing, diamond carat testing, testing of old gold in front of customers, 100% hallmarking, SGL & other diamond certification, regular audit and review of Karigar performance, multistage Quality Control process backed by lifelong buy back, to reinforce our quality commitments. Further, Senco has an internal financial control (IFC) system, which commensurate with the nature of its business and the size and complexity of its operations. The Companys system of internal control has been designed to provide a reasonable assurance with regard to controls over critical business activities and operations, policies and procedures for ensuring the orderly and efficient conduct of business, critical procurements, prevention and detection of frauds and errors, compliance with regulations and for ensuring timeliness and reliability of financial reporting. Companys IFC have been reviewed and actions have been taken wherever needed, to strengthen control and overall risk management procedure. The Internal Audit is carried out by a firm of Chartered Accountants which reports its findings and observations directly to the Audit Committee. In the age of phygital business, our auditors also regularly conduct ITGC audit to mitigate risk of any cyber fraud and error. The Audit Committee evaluates and reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen them. Based on the report of Internal Auditor and the response thereto, necessary corrective actions are undertaken to strengthen the controls. Similarly, risk committee of the Board continuously evaluates various risk facing the business and provides guidance for strengthening the controls. Overall, the Board and the Audit Committee maintains a proactive approach in ensuring that the control and governance framework is regularly reviewed and timely corrective actions are taken to minimize risk of disruption. We continue to look at reviewing and strengthening internal controls across the entire organisation with focus on customer delight.

FINANCIAL PERFORMANCE

Overall Consolidated Financial Performance

FY 2024-25 was another landmark year in the successful journey of Senco as we achieved total revenue growth of 20.7% YoY (including Same Showroom Sales Growth -SSSG of 15%) leading to an increase in topline from Rs 52,414.4 million to Rs. 63,280.7 million. This growth was primarily led by value growth of over 32.0% while there was no volume growth in gold. The value and volume growth in Diamond Jewellery was 5% and 18% respectively, taking our stud ratio at 10.9% as against 11.4% last year. The lower demand for diamond jewellery was primarily driven by gold price rise and the emerging popularity of Lab Grown diamond.

During the year, due to the reduction in customs duty on Gold from 15% to 6.5%, there was a one-time hit on our existing inventory of Rs 574.2 million which impacted gross margin and EBITDA by 50 basis points. However, after excluding the impact of one-time impact of custom duty, the adjusted EBITDA increased from Rs 3,755 million to Rs 4,250 million and adjusted PAT increased from Rs 1,810 million to Rs 2,018 million.

Analysis of the Profit and Loss Statement

Revenue: Revenue reported is net-off discounts and offers as well as provision for return and loyalty points. We achieved overall sales growth of 20.7% YoY from Rs 52,414.4 million to Rs 63,280.7 million. Our revenue mix was ~64% from company-operated showrooms, ~32% from franchisees showrooms (FOFO & FOCO both); and rest 4% was contributed by e-commerce, exports, corporate and digital gold. Out of this growth, retail growth from own and franchisee showrooms was 21.7% (including SSSG of 15%). Revenue from sale of coin was 3% at Rs 1,548.0 million, while revenue from sale of Digi gold and Digi silver touched Rs 75.0 million mark. The gold purchased by customers are stored with third-party vault. Franchisee fees includes one-time onboarding fees and support fees of Rs 96.8 million (FY 2023-24 Rs 97.5 million). Revenue from exports improved from Rs 2,079.07 million to Rs 2,893.66 million which was primarily driven by captive export to the Dubai WOS (SGJTL). Other income: Other Income substantially increased by 29.2 % YoY from Rs 422.4 million to Rs 545.7 million mainly due to the increase in interest income of Rs. 282.9 million on FD & Margin. The average ROI on the FD was 6.5%. The total funds invested in FD & Margin (collateral for working capital facilities, Jewellery Purchase Scheme Compliance, gold hedging margin etc) increased from Rs 5,328.5 million to Rs 5,576.0 million due to enhanced borrowing. Cost of Goods Sold rose marginally from 84.7% to 86.5% of revenue primarily due to customs duty rate reduction impact and product mix changes leading to a reduction in gross margin from 15.3% to 14.8%. It is expected that competitive intensity will continue to remain elevated as many players are offering huge discounts and offer, while some new entrances are planning to enter in this business.

Customs Duty Impact: During FY 2024-25, a one-time revision in the customs duty rate on gold from 15% to 6% resulted in an estimated loss of Rs 574.2 million on the existing inventory which was backed by GML hedging. The inventory backed by MCX hedging did not have any loss. This impact was fully absorbed and adjusted in Q2 and Q3 of FY 2024-25 at the COGS and Gross Margin. As the effect was one-time in nature, it is not expected to influence margins or profitability in FY 2025-26.

Total expenses: This includes manpower expenses, marketing expenses, sales and distribution, lease rental (IndAs Adjusted) and other administrative expenses which increased from Rs 4,258.8 million to Rs 4,838.9 million due to variable costs relating to new stores opened, full year impact and inflation impact. Manpower expenses increased from Rs 1,112.3 million to Rs 1,390.8 million due to new hiring for expansion, investment in talent building, staff welfare, training & development. Marketing and brand building expenses increased from Rs 1,033.7 million to Rs 1,065.6 million and remained below 2% of sales in line with Industry trend. Lease rentals are paid towards COCO showroom taken on lease, Guest House, Factories & Workshops and Offices; and it increased from Rs 586.8 million Rs 728.4 million, however due to IND AS 116 lease accounting impact, Rs 332.4 million was classified as interest cost on lease liabilities; Rs 440.9 million towards depreciation on ROU Assets; and balance Rs 86.3 million as lease expenses as against Rs 75.2 million last year.

EBITDA: EBITDA decreased from Rs 3,755.1 million to Rs 3,676.3 million with resultant EBITDA margin at 5.8% for FY 2024-25. EBITDA was marginally lower compared to FY 2023-24 mainly due to customs duty impact of Rs 574.2 million as stated above. The Adjusted EBITDA (adding back customs duty impact in FY 2024-25) increased from Rs 3,755.1 million to Rs 4,250.5 million in FY 2024-25 and the resultant Adjusted EBITDA Margin was 6.7% – 50 basis points lower than FY 2023-24.

Finance Cost: Finance Cost (including lease accounting impact) increased from Rs 1,081.0 million to Rs 1,362.1 million. In this context, it is pertinent to state that average borrowing (including GML and CC/ WCDL) increased from Rs 13,388.1 million to Rs 16,336.8 million and year end borrowing increased from Rs 14,983.4 million to Rs 17,690.1 million. The increase was mainly on account of inventory for new stores and enhancement of inventory at existing stores. The actual finance cost was Rs 1,025.1 million in FY

2024-25 as against Rs 785.4 million in FY 2023-24. The blended rate of interest increased marginally from 5.7% to 5.9% due to a sudden increase in GML rates in Q4 and is likely to cool in FY 2025-26. EBIT: The EBIT margin for FY 2024-25 also reduced from 6.8% to 5.6% in FY 2024-25 due to customs duty and other impacts as stated above. PAT: PAT decreased by 12% from Rs 1,810.0 million to Rs 1,593.1 million, whereas the Adjusted PAT (APAT) increased by 11.5% from Rs 1,810.0 million to Rs 2,018.0 million, which contributed to the cash flow and the same was deployed along with QIP fund for growth and expansion as well as inventory buildup.

Analysis of the Balance Sheet

Share Capital & Reserve (Net Worth) – During the year, we raised funds through QIP of Rs 4590 million (Rs 4483.4 million, net of QIP expenses of Rs 120.7 million) and resultantly along with the PAT for the year, the net worth of the company increased by Rs 6,047.5 million from Rs 13,655.4 million to Rs 19,702.9 million. The QIP funds have been utilised towards borrowings reduction and working capital improvement as per the objects of the issue. The unutilised amount of Rs 934.2 million have been parked in bank FDs for General Corpoate Purpose.

Bank borrowing: We have a consortium banking arrangement and Indian Bank is our lead banker along with 16 other bankers some of which provide GML facility. Our borrowings are primarily for short-term working capital purposes, and a major part (67% of total borrowing) is in the form of GML which has substantially lower average rate of 3.6% p.a. Our total borrowings increased YoY from Rs 14,983.4 million to Rs 17,690.1 million on account of inventory increase at existing stores and new stores roll out. We have also increased the level of our diamond inventory in line with our target to increase stud ratio. We have been continuously increasing Gold Metal Loans (GML), and it has reached to 67% as on March 25 as against 61% in March 24. The blended rate of interest remained range-bound between 5.7% to 5.9%. The total capital employed increased from Rs 28,638.8 million to Rs 37,393.0 million which has been optimally allocated to inventory and a substantial amount of Rs 5,576 million has been deployed in FD and margin with the respective banks as per terms of borrowing.

The capital is allocated systematically to various strategies and initiatives for achieving the desired Return on Equity.

Investment in Subsidiaries – It increased from Rs 133.1 million to Rs 314.8 million on account of capital infusion made in wholly owned subsidiaries i.e., SGJTL (Dubai) and SFL for Rs 131.3 million and 50.5 million respectively during the year. The total Investment as at year end was Rs 65.0 million, Rs 199.3 million and 50.5 million for SGAPL, SGJTL and SFL respectively. These investments are strategic in nature and contribute to growth and expansion strategy of the company. Inventory: Inventory consists of jewelleries (gold, diamond, platinum, silver, polki, precious stones and gossip jewelleries), raw material & WIP thereto; as well as Sennes related inventory. Inventories are valued at cost or net realisable value whichever is lower and includes the substantial impact of realised and unrealised losses/gains (MTM impact under IND AS 109) on hedging positions. Inventory increased YoY from Rs 24,570.2 million to Rs 32,992.5 million mainly due to new showroom addition, enhancement of inventory at existing showrooms as well as impact of gold price rise YoY by 35%. During the year, there was an incident of misappropriation of jewelleries for which necessary provision has been made and the same has been reported by statutory auditors to Central Govt for Rs 18.5 million.

Key Financial Ratios

The Key Financial Metrics relating to working capital management, profitability, capital gearing indicates healthy and stable trend as outlined below:

Sl. No.	Key Ratios	FY 2024-25	FY 2023-24	FY 2022-23	FY 2021-22	FY 2020-21
1	Return on Equity (ROE)*	9.6%	15.7%	19.0%	19.4%	10.7%
2	Return on Capital Employed (ROCE)	9.5%	12.5%	14.2%	15.6%	13.2%
3	Debt Equity Ratio	0.9	1.1	1.1	1.2	0.9
4	Net Debt to Equity Ratio	0.6	0.7	0.8	0.7	0.9
5	Total Outside Liability / Tangible Net Worth (TNW)	1.2	1.4	1.7	1.3	1.6
6	Debt Service Coverage Ratio	2.8	3.2	3.6	3.8	4.4
7	Inventory Turnover Ratio	2.6	2.4	2.8	2.5	2.5
8	Debtors Turnover Ratio	94.51	106.65	96.14	105.58	95.28
9	Net Capital Turnover Ratio	3.6	4.5	5.4	6.2	5.9
10	Current Ratio	1.7	1.6	1.6	1.5	1.6
11	Interest Coverage Ratio	2.70	3.50	3.78	3.95	2.90
12	EBITDA Margin	5.8%	7.2%	7.8%	8.2%	6.6%
13	Adjusted EBITDA Margin	6.7%	7.8%	8.3%	8.2%	6.6%
14	EBIT Margin	5.6%	6.8%	7.4%	7.0%	5.7%
15	Net Profit (PAT) Margin	2.5%	3.5%	3.9%	3.7%	2.3%
16	Adjusted PAT Margin	3.2%	3.5%	3.9%	3.7%	2.3%

* The significant change in Return on equity ratio was mainly due to increase in net worth of the company pursuant to Qualified Institutions Placement.

HUMAN ASSETS

Sencos Human Assets Mantra, "One India, One Senco," embodies the companys core belief: "Our people, our strength." The true driving force behind Sencos success lies in its people. Anchored by a distinctive Employee Value Proposition (EVP) —

"Protect, Performance and Progress" — Senco positions itself as an employer of choice within the industry.

As of March 31, 2025, the company employed a total of 2,897 individuals, including 1,085 women. Of the total workforce, 529 were engaged in corporate and support functions, 2,262 in retail operations and 106 in factory roles—reflecting a well-distributed and diverse talent base across business functions.

Human Resource Achievements:

• Senco s recognition as a ‘Great Place to the third consecutive year is a testament to its strong foundation built on high-spirited teams, visionary leadership and a culture rooted in honesty, integrity and transparency. The journey towards earning this prestigious badge began with a focused initiative and Senco proudly secured the title in FY 2022-23, FY 2023-24 and FY 2024-25 reaffirming its commitment to excellence in workplace culture.

• Senco implemented real-time performance evaluation through its employee productivity app, offering instant visibility into Month-to-Date (MTD) and Year-to-Date (YTD) achievements. The system also enables real-time recognition of performance, ensuring a transparent and scientific approach to evaluate productivity, goal attainment and individual contribution.

• Senco has implemented end-to-end HR automation, transforming the department into a zero-paper, fully digital workspace. This initiative enhances efficiency, ensures data accuracy and supports our commitment to sustainability and seamless employee experience.

• Senco introduced employee sentiment analysis to capture real-time insights into workforce happiness and engagement levels. This data-driven approach helps build a dynamic Happiness Index, enabling timely actions to strengthen employee satisfaction and workplace positivity.

• Senco introduced a 360-degree feedback mechanism in appraisals along with the BOAT concept—Balance, Opportunity, Access and Talk. It ensures an unbiased process where every team member gets equal opportunity, access to senior management and functional heads and a fair platform to share feedback and voice concerns. The BOAT experience plays a significant role in the overall evaluation process, strengthening transparency and fair judgement.

• Senco introduced a Learning Management System (LMS) integrated with an evaluation-based training program. Designed on a 25-grid model, the LMS ensures systematic skill upgradation and productivity enhancement of the sales force through targeted learning and measurable outcomes.

• Senco launched structured training programs to build critical skills and develop a strong leadership pipeline. Over 300 team members—including senior leaders, store managers and first-time managers—have successfully undergone leadershipfor development sessions, strengthening future-ready capabilities across the organization.

• Senco builds a strong sense of connection, motivation and belonging through continuous and meaningful engagement initiatives. Our diverse engagement calendar includes: Atma Shakti (Womens Day), Independence Day celebration with specially-abled employees, Secret Santa, Cricket, Football and Badminton tournaments, Mothers Day, Retail Day, Saradiya Celebration, Employee of the Quarter, Holi, Dhanteras Party, Pride Day, Raksha Bandhan, Nababorsho & Akshaya Tritiya Celebration. These initiatives celebrate diversity, inclusion and team spirit across the organization.

• Employee Health & Wellbeing: Senco ensures comprehensive healthcare support by providing Mediclaim coverage for employees and their families, including parents, spouse and children. This is further strengthened with accidental insurance, regular health check-ups including eye examinations for all employees and karigars, promoting overall well-being and safety.

• Senco implemented sales incentive automation to ensure accurate and transparent reward distribution based on performance.

• Designing, developing and executing business-driven programs to enhance organizational competencies, encourage a high-performance mindset, improve productivity and drive capability and quality enhancement through time and motion efficiency.

• Promoted a culture of flexibility, trust and meaningful connections, complemented by structured career paths and a time-bound growth plan to drive talent retention and sustained employee commitment.

• Senco upholds a robust Whistleblower Policy and vigilance mechanism, ensuring transparency, ethical conduct and a safe channel for reporting concerns without fear of retaliation.

• Created a diversity and inclusion-driven culture where talent, ambition and potential take precedence over gender, sexual orientation or background ensuring equal opportunity and respect for all.

Diversity and Inclusion: Senco is deeply committed to Diversity and Inclusion, actively integrating specially-abled and LGBTQ individuals into meaningful roles with respect and dignity. Our Mediclaim policy extends support for gender transition, reflecting our belief that gender should never be a barrier to ones aspirations. At Senco, we value our people beyond roles—building genuine, emotional connections that empower every individual to thrive.

We have 62% Male, 37% Female and 1% Specially-abled and LGBTQ Employees.

Senco Employee Wellbeing Practices:

• Annual Health Check-Up: Comprehensive health check-up conducted annually for all employees to support preventive care.

• Parental Mediclaim Coverage: Since 2021, Senco has extended Mediclaim coverage to employees parents without any co-payment, ensuring complete family health protection.

• Mindfulness Sessions: Designed to enhance emotional intelligence, manage stress and anxiety, strengthen interpersonal relationships and help employees stay focused with purpose.

• Values & Culture Day: A pan-India talent showcase that celebrates the diverse skills and creativity of our workforce.

• Innovation & Best Ideas Day: Employees are recognized and rewarded for their most impactful business ideas, which are implemented across the organization.

• Employee of the Quarter: A quarterly recognition program that celebrates outstanding performance, dedication and contributions by team members.

• Reward & Recognition: Over 400 employees have been acknowledged through structured programs that honour excellence, dedication and impact—strengthening a culture of appreciation.

• Counselling Support: Counselling support to help employees effectively manage stress and maintain mental well-being.

• Passion Badges: Employees across India are awarded badges based on their personal creative interests, celebrating individuality and encouraging self-expression.

• Employee Experience Satisfaction Survey: Regular surveys are conducted to capture employee feedback, measure workplace satisfaction and drive continuous improvement in the employee experience.

• Goal Getter App: A digital tool designed to track people productivity in real time, enabling transparent performance evaluation and helping employees stay aligned with their targets and goals.

Employee Engagement

Senco builds a strong sense of connection, motivation and belonging through continuous and meaningful engagement initiatives. Our diverse engagement calendar includes Atma Shakti (Womens Day), Independence Day celebration with specially-abled employees, Secret Santa, Cricket, Football and Badminton tournaments, Mothers Day, Retail Employees Day, Saradiya Celebration, Employee of the Quarter, Holi, Dhanteras Party, Pride Day, Raksha Bandhan, Nababorsho & Akshaya Tritiya Celebration—all celebrating diversity, inclusion and team spirit.

Career Development and enhancing Employee Happiness Index

At Senco Gold & Diamonds, our culture is deeply rooted in Honesty, Integrity and Transparency, creating an environment that supports professional growth. Through initiatives like the Time-Bound Growth Plan (TBGP) and flexible, shift-based retail schedules, we ensure structured development and work-life alignment for our employees. Engagement is further enhanced by our real-time virtual connect app, featuring an interactive chatbot for instant support and communication.

Our Reward & Recognition program, along with regular leadership interactions, reinforces our Vision, Mission and Core Values. A strong open communication framework, coupled with robust training programs, empowers employees to voice their opinions confidently and transition into independent roles with ease. During the recent performance evaluation cycle, the Management dedicated over 150 hours to personally connect with more than 600 employees across 9 zones and 17 states, exchanging feedback and strengthening trust. Our open-door policy provides every team member a safe space to express themselves, while structures like the Delegation of Authority, Escalation Matrix, Idea Box and Help Desk encourage empowerment, innovation and timely resolution of concerns—further reinforcing a culture of inclusion and accountability.

Learning and Development:

Learning and Development is a key driver of Sencos Mission Statement. Our focus on enhancing customer experience across retail outlets is supported through role-specific training programs, performance-linked evaluations and continuous capability building.

Our comprehensive Learning Management System (LMS), built on a 25-grid model, provides structured training and online assessments across key areas such as product knowledge, retail excellence, standard operating procedures (SOPs), digital readiness and people development—ensuring consistent skill enhancement and productivity improvement.

Leadership development is a strategic priority. Senco has identified a focused group known as the

57-Facets Leadership Team and introduced the

ACE Program—centred on Agility, Collaboration and Excellence. In addition, specialized programs have been launched for first-time managers and future leaders, aiming to shift their approach from reactive to inspirational leadership.

These initiatives are designed to build key managerial competencies such as adaptability to change, collaborative performance and responsible decision-making—aligning with the principles of ethical leadership and sustainable business conduct. Over 300 team members, including senior leaders and managers, have successfully completed these programs, strengthening our leadership pipeline for the future.

Great Workplace for Women

Senco is strongly committed to gender diversity and inclusion, with women comprising 37% of our workforce. We ensure a safe, respectful and enabling work environment through a robust POSH & Whistle blower policy and thoughtfully structured shift rosters that promote work-life balance.

Our initiative Atma Shakti focuses on building confidence and safety among women employees through self-defense training sessions conducted by certified professionals. Alongside this, we offer extended maternity leave support, women-exclusive sports tournaments and participation in Creative Day—reflecting our dedication to create a workplace where women are empowered to grow, lead and flourish both personally and professionally.

Rewards & Recognition

Our comprehensive Reward and Recognition program celebrates excellence across Sales, Head Office and Factory through monthly and annual awards. Key recognitions include Employee of the Quarter, Shining Star, Glittering Star and over 100 other accolades such as Long Service Awards, Champ Awards,

Values Awards and the prestigious Hall of Fame—all designed to inspire, motivate and honour outstanding contributions across the organization.

INDUSTRIAL RELATIONS

Throughout the year, we maintained a positive and harmonious working environment across all our establishments and offices.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (IndAS) notified under the

Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 read with Section 133 of the Companies Act, 2013.

CAUTIONARY STATEMENT

The statements made in this section describe the Companys objectives, projections, expectations, and estimations which may be "forward looking statements" within the meaning of applicable securities laws and regulations.