Gulf Lloyds India Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended on March 31, 2026, March 31, 2025 and March 31, 2024. You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in this Prospectus. You should also read the section entitled Risk Factors beginning on page 16 of this Prospectus, which discusses a number of factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and, is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year (Fiscal Year) are to the twelve-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to we, us or our refers to Gulf Lloyds (India) Limited, our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for the Financial Year ended on 2025-26, 2024-25 and 2023-24 included in this Prospectus beginning on page 162 of this Prospectus.

BUSINESS OVERVIEW

Our Company was originally incorporated as Gulf Lloyds Industrial Services (India) Private Limited as a private limited company under the provisions of the Companies Act, 2013 pursuant to a Certificate of Incorporation dated September 26, 2014, issued by the Assistant Registrar of Companies, Gujarat. Further the name of our company has been changed to Gulf Lloyds (India) Private Limited. A fresh Certificate of Incorporation consequent upon such conversion was issued by the Registrar of Companies, Central Processing Centre, on January 20, 2025, consequently the name of our Company was changed to Gulf Lloyds (India) Limited The Corporate Identification Number of our Company is U74900GJ2014PLC080922.

Our company operates in the Services Sector, offering inspection, verification, auditing, testing, training, and certification services across various industries and regions. Our Company provides Third-Party Inspection, Auditing, Testing, Training and Certification services to public sector undertakings as well as private organizations. It also deploys trained and technically qualified personnel to perform inspection, verification and audit services as per client requirements and applicable standards.

For more details, please refer chapter titled Business Overview on page 109 of this Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR:

After the date of last financial statements disclosed in this Prospectus, there is no any significant development occurred in the Company, except as disclosed below:

1. The Company has been sanctioned unsecured Business loan of the amount of Rs. 75.00 Lakhs on May 21, 2026 from TATA Capital.

2. The Company has been sanctioned unsecured Business loan of the amount of Rs. 75.00 Lakhs on May 26, 2026 from Mas Financial Services.

3. The Company has been sanctioned unsecured Business loan of the amount of Rs. 75.46 Lakhs on May 20, 2026 from Poonawala Fincrop Limited.

4. The Company has been sanctioned unsecured Business loan of the amount of Rs. 50.00 Lakhs on May 20, 2026 from IndusInd Bank.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION:

Our Companys future results of operations could be affected potentially by the following factors:

1. Changes in Laws and Regulations that apply to our Industry.

2. Changes in Fiscal, Economic or Political conditions in India

3. Failure to adapt the changing technology in our industry of operation may adversely affect our business

4. Failure to comply with regulations prescribed by authorities of the jurisdiction in which we operate

5. Competition with existing and new entrants.

6. Our ability to retain our key managements persons and other employees;

7. Companys ability to successfully implement its growth strategy and expansion plans;

8. Failure to comply with the quality standards and requirements of our customers

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, Annexure IV beginning under Chapter titled Restated Financial Information beginning on page 170 of this Prospectus.

RESULTS OF KEY OPERATIONS (t in lakhs)

	For the year ended on
Particulars	31 March 2026	31 March 2025	31 March 2024
Inspection & Other Services
- Domestic	3,543.36	3,492.57	2,240.83
- Export	22.46	65.12	83.61
Other Operating Income	2.13	3.13	1.55
Total Revenue from Operations	3,567.94	3,560.82	2,325.99
% of growth	0.20	53.09	77.70
% total Income	99.19	99.25	98.94
Other Income	29.03	26.82	24.82
% total Income	0.81	0.75	1.06
% of growth	8.25	8.06	329.70
Total Income from Operations	3,596.97	3,587.64	2,350.81
Expenses
Employee benefits expense	2,202.36	2,347.06	1,667.28
% Increase/(Decrease)	(6.17)	40.77	157.43
Finance Costs	159.77	98.29	45.09
% Increase/(Decrease)	62.54	117.99	412.39
Other expenses	604.23	474.13	387.02
% Increase/(Decrease)	27.44	22.51	(18.04)
Depreciation and amortisation expenses	66.36	41.06	19.48
% Increase/(Decrease)	61.62	110.73	(26.09)
Total Expenses	3,032.71	2,960.54	2,118.87
% to total Income	84.31	82.52	90.13
EBDITA	790.39	766.45	296.51
% to total Income	21.97	21.36	12.61
Restated profit before tax from continuing operations	564.26	627.10	231.93
Total tax expense	133.97	160.30	64.19
Restated profit after tax from continuing operations	430.29	466.80	167.75
% to Total Income	11.96	13.01	7.14
% Increase/(Decrease)	(7.82)	178.28	45.11

COMPARISON OF F.Y. 2025-26 WITH F.Y. 2024-25:

Income from Operations:

Revenue from Operations

The Company recorded total revenue from operations of Rs3,567.94 lakhs in FY 2025-26, broadly stable as compared to Rs3,560.82 lakhs in FY 2024-25, representing a marginal increase of 0.20%. This increase was primarily on account of a general rise in overall business activity during the year. Revenue from domestic operations increased to Rs3,543.36 lakhs in FY 2025-26 from Rs3,492.57 lakhs in FY 2024-25, while export revenue declined to Rs22.46 lakhs from Rs65.12 lakhs over the same period.

Other Income

Other income increased to Rs29.03 lakhs in FY 2025-26 from Rs26.82 lakhs in FY 2024-25, an increase of 8.25%. The increase is on account of increase in interest on fixed deposits.

Employee Benefits Expense

Employee benefits expense decreased to Rs2,202.36 lakhs in FY 2025-26 from Rs2,347.06 lakhs in FY 2024-25, there is a decrease of 6.17%.

Finance Costs

Finance costs increased to Rs159.77 lakhs in FY 2025-26 from Rs98.29 lakhs in FY 2024-25, an increase of 62.54%. This increase is consistent with the higher level of borrowings during the year, with total long-term borrowings increasing to Rs539.95 lakhs as at March 31, 2026 from Rs429.62 lakhs as at March 31, 2025, and total short-term borrowings increasing to Rs1,027.59 lakhs as at March 31, 2026 from Rs464.25 lakhs as at March 31, 2025.

Other Expenses

Other expenses increased to Rs604.23 lakhs in FY 2025-26 from Rs474.13 lakhs in FY 2024-25. The increase of 27.44% was mainly on account of increase in labour and manpower supply charges which increased to Rs450.49 lakhs in FY 2025-26 from Rs283.08 lakhs in FY 2024-25. The increase in this expense was primarily attributable to higher labour requirements.

Depreciation and Amortisation Expenses

Depreciation and amortisation expense increased to Rs66.36 lakhs in FY 2025-26 from Rs41.06 lakhs in FY 2024-25. The increase depreciation by 61.62 % in F.Y. 2025-26 as compared to F.Y. 2024-25 was due to purchase of new Property, plant & equipment including computers, Furniture and fixtures, office equipment and vehicles.

EBITDA

EBITDA increased to Rs790.39 lakhs in FY 2025-26 from Rs766.45 lakhs in FY 2024-25. EBITDA margin improved to 21.97% of total income in FY 2025-26 compared to 21.36% in FY 2024-25. The slight increase was due to marginal increase in the revenue.

Profit after Tax (PAT)

PAT decreased to Rs430.29 lakhs in FY 2025-26 from Rs466.80 lakhs in FY 2024-25. The PAT margin stood at 11.96 % of total income in F.Y. 2025-26 compared to PAT of 13.01 % of total income in F.Y. 204-25. The decrease in PAT margin was primarily on account of the increase in finance costs and other expenses during the year. Despite prevailing global challenges, the Company secured a substantial volume of new service contracts during the year, leading to an increase in Inspection, Labour and Manpower Supply Charges from Rs283.08 lakhs to Rs450.49 lakhs, an increase of 59.14%, in line with the corresponding scale-up in operations. Execution of these contracts also required additional working capital, funded through increased market borrowings, resulting in Finance Costs rising from Rs98.29 lakhs to

Rs159.77 lakhs, an increase of 62.55%, which was the primary driver of the compression in PAT margin from 13.01% to 11.96%.

COMPARISON OF F.Y. 2024-25 WITH F.Y. 2023-24:

Income from Operations:

Revenue from Operations

In the financial year 2024-25, the Company recorded revenue from operations of Rs3,560.82 lakhs, marking a growth of 53.09% compared to Rs2,325.99 lakhs in the previous financial year 2023-24. The increase in revenue is mainly due to a rise in overall business activity during the year. In FY 2024-25, the revenue from operations mainly comprises Rs3,492.57 lakhs from domestic sale and Rs65.12 lakhs from export sale. The year-on increase in revenue was largely driven by higher domestic sales during the year.

Other Income

The other Income for the FY 2024-25 was Rs26.82 lakhs which was Rs24.82 lakhs in the FY 2023-24. The slight rise in the other income was driven by increase in interest on Fixed deposits.

Expenditure:

Employee Benefits Expenses:

In the financial year 2024-25, employee expenses stood at Rs2,347.06 lakhs, reflecting a 40.77% increase from Rs1,667.28 lakhs in FY 2023-24. With the growth of business by 53.09% there is increase in employee benefit expense. Additionally, there is increase in managerial remuneration from Rs40.00 lakhs in FY 2023-24 to Rs115.70 lakhs in FY 2024-25.

Finance Cost:

The Finance Cost has been increased to Rs98.29 Lakhs in FY 2024-25 as against Rs45.09 Lakhs in the F.Y. 2023-24 showing increase of 117.99 %. The finance cost was increased on account of increase of term loan from the bank and more working capital limit being utilized by the company. The total outstanding of the borrowings as on March 31, 2025 was Rs893.87 lakhs. The cash inflow from the borrowings in the FY 2024-25 was Rs200.05 lakhs resulting in to higher finance cost.

Other Expenses

Other Expenses increased to Rs474.13 Lakhs for F.Y. 2024-25 against Rs 387.02 Lakhs in F.Y. 2023-24 showing increase of 22.51%. The Increase in the Other expenses in the FY 2024-25 was on account of increase of the business by 53.09% in comparison to FY 2023-24.

The increase in other expenses was mainly due to higher rent and rates, advertisement & marketing, and travelling expenses during FY 2024-25. Rent and rates increased to Rs46.55 Lakhs in FY 2024-25 from Rs1.22 Lakhs in FY 202324, mainly because the Company took additional offices on rent during the year. Advertisement and marketing expenses increased to Rs50.45 Lakhs in FY 2024-25 from Rs24.60 Lakhs in FY 2023-24, while travelling expenses increased to Rs32.16 Lakhs in FY 2024-25 from Rs13.09 Lakhs in FY 2023-24. The increase in these expenses was mainly due to higher business activities along with the increase in revenue during the year.

Depreciation and Amortization Expenses:

The Depreciation for F.Y. 2024-25 was Rs41.06 Lakhs as compared to Rs19.48 Lakhs for F.Y. 2023-24. The increase depreciation by 110.73 % in F.Y. 2024-25 as compared to F.Y. 2023-24 was due to purchase of new Property, plant & equipment including computers, Furniture and fixtures, office equipment and vehicles.

TRinTA

The EBIDTA for F.Y. 2024-25 was f 766.45 Lakhs as compared to f 296.51 Lakhs for F.Y. 2023-24. The EBIDTA was 21.36 % of total Revenue in FY 2024-25 as compared to 12.61 % in F.Y. 2023-24. The increase in the business by 53.09% in FY 2024-25 has contributed to improvement in the EBIDTA of the Company and EBIDTA has also improved due to decrease in the overall expenses of 82.52% of the total Income as compared to 90.13% of the total Income in the FY 2023-24.

Profit after Tax (PAT)

PAT is f 466.80 lakhs for the F.Y. 2024-25 in compared to PAT of f 167.75 lakhs in F.Y. 2023-24. The PAT was 13.01 % of total income in F.Y. 2024-25 compared to PAT of 7.14 % of total income in F.Y. 2023 -24. The PAT has increased significantly in absolute figures by f 299.05 lakhs. The PAT margin was increased due to increase in business by 53.09 %.

BALANCE SHEET ITEMS

(f in Lakhs)

Particulars	For the year ended on
	31 March 2026	31 March 2025	31 March 2024
Long Term Borrowings
Secured Loans from bank	105.56	56.18	19.15
Unsecured loan from banks and NBFC	434.39	373.44	249.58
Total	539.95	429.62	268.73
Short term Borrowings
Secured working capital loans from bank	727.70	231.40	221.76
Unsecured loan from directors and related parties	28.39	1.02	72.01
Long term debts (Current Maturity)	271.50	231.83	131.31
Total	1,027.59	464.25	425.09
Trade Receivables
Less Than 6 Months	1,035.30	829.93	312.98
6 months to 1 year	320.91	146.78	176.41
1-2 years	166.76	93.35	35.50
2-3 Years	33.43	-	-
Total	1,556.40	1,070.06	524.89
Trade Payables
Micro, Small & Medium Enterprise	-	-	-
Others
Less than 1 year	88.34	19.64	122.76
1 to 2 years	0.05	-	2.82
Total	88.40	19.64	125.58
Loans and Advances Given
Loan to other related parties	124.62	74.64	-
Advance to staff	46.30	26.40	37.30
Total	170.92	101.04	37.30

Long Term Borrowings

The long-term borrowings include vehicle loans and term loans obtained from various banks and financial institutions. A majority of long-term borrowing is unsecured term loans availed from banks and financial institutions. The unsecured borrowings are increased to meet the working capital requirements.

Short term Borrowings

Short-term borrowings include the working capital limits availed by the Company, the current maturities of long-term borrowings and unsecured loan availed from directors and related parties In FY 2024-25, the company had availed the loan from Standard Chartered, ICICI, HDFC bank. The outstanding working capital limit is also increased from Rs221.76 Lakhs in FY 2023-24 to 727.70 Lakhs in FY 2025-26.

Trade Receivables:

The Trade Receivables are considered good and the majority is due for less than 6 months and six months to One year. The outstanding trade receivables for more than 1 year are 12.86%, 8.72 % and 6.76% for the FY 2025-26, FY 202425 and FY 2023-24 respectively. The company is efficient in recovering the trade receivables and there is no bad debts in the year under review.

Trade Payables

The majority of Trade Payables are for less than one year.

Loans and Advances Given

The majority of the loans and advances include advances to related parties and advance to staff.

CASH FLOW

( Rs in Lakhs)

Particulars	March 31, 2026	March 31, 2025	March 31, 2024
Net cash from Operating Activities	(137.48)	94.23	(502.16)
Net cash flow from Investing Activities	(134.08)	(174.11)	(38.36)
Net Cash Flow Financing Activities	513.93	101.76	586.40

Cash flow March 31, 2026

The Company has negative cash flow from operating activities on account of increase in trade receivables and increase in current assets, partly offset by an increase in trade payables. The Company had incurred capital expenditure towards purchase of property, plant and equipment and advances given for property purchase, which resulted in negative cash flow from investing activities. The increase in long-term and short-term borrowings during the year is more than the finance costs paid, resulting in positive cash flow from Financing activities.

Cash flow March 31, 2025

The Company has Positive Cash flow from operating activities on account of change in working capital is less than the profit earned by the Company. The Company had invested the funds in the Property, plant and equipment and advances given for property purchase which resulting into negative cash flow from investing activities. The Company has raised funds from borrowings resulted in positive cash flow from financing activities.

Cash flow March 31, 2024

The Company has Negative Cash flow from operating activities on account of Increase of Loans and advances and other assets more than the profit earned by the Company. The addition of property plant and machinery leads to negative cash flow from investing activities. The Company has raised funds from borrowings resulted into Positive cash flow from financing activities.

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations :

1. Unusual or infrequent events or transactions

To our knowledge there have been no unusual or infrequent events or transactions that have taken place during the last three years

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in Factors Affecting our Results of Operations and the uncertainties described in the section entitled Risk Factors beginning on page 16 of this Draft Prospectus. To our knowledge, except as we have described in this Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Expected future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known.

Other than as described in the sections Risk Factors, Business Overview and Managements Discussion and Analysis of Financial Conditions and Results of Operations on pages 16, 109 and 205 respectively of this Prospectus to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

4. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled Risk Factors beginning on page 16 in this Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business.

6. Total turnover of each major industry segment in which the issuer company operated.

Our company operates in the Services Sector, providing Inspection, Auditing, Certification, Testing, and Training, services across various industries and regions., the relevant industry data, as available, has been included in the chapter titled Industry Overview beginning on page no 100 of this Prospectus.

7. Status of any publicly announced new products or business segment.

Our Company has not announced any new products or business segment.

8. The extent to which business is seasonal.

Our business is not seasonal.

9. Any significant dependence on a single or few suppliers or customers .

Our top 10 buyers and suppliers constitute majority of our business which is reproduce in Chapter Business Overview on page 109 of Prospectus.

The percentage of contribution of our Companys Customers vis-a-vis the total sales respectively for the financial year ended March 31, 2026, March 31, 2025 and March 31, 2024 is as follows:

(f in Lakhs)

Particulars	Sales
	2025-26	%	2024-25	%	2023-24	%
Top 01 Customers	773.10	21.67	554.70	15.58	618.30	26.58
Top 05 Customers	1849.84	51.86	1,698.56	47.70	1,923.97	82.72
Top 10 Customers	2637.88	73.93	2,153.70	60.48	2,182.84	93.85

As certified by the peer reviewed statutory auditor Sukrut Shah & Associates Chartered Accountants dated June 27, 2026, UDIN: 26180786WLBKUV2926.

The percentage of contribution of our Companys suppliers vis-a-vis the total purchases respectively for the for the financial year ended on March 31, 2026, March 31, 2025 and March 31, 2024 is as follows:

in Lakhs)

Particulars	Purchases
	2025-26	%	2024-25	%	2023-24	%
Top 01 supplier	505.17	83.61	37.80	7.97	25.42	6.57
Top 05 supplier	563.88	93.33	133.93	28.25	86.24	22.29
Top 10 supplier	594.37	98.36	203.83	42.99	121.80	31.47

As certified by the peer reviewed statutory auditor Sukrut Shah & Associates Chartered Accountants dated June 27, 2026 with UDIN: 26180786VXLWEA7662.

10. Competitive conditions.

Competitive conditions are as described under the Chapters titled Industry Overview and Business Overview beginning on pages 100 and 109, respectively of this Prospectus.