KHFM Hospitality & Facility Mgt. Services Ltd Management Discussions

ANNEXURE- VI

Forward-looking statement

This Management Discussion and Analysis of Financial Condition and Results of Operations contains forwardlooking statements that reflect the Companys current expectations, assumptions, projections, and beliefs concerning future events, business performance, and strategies. These statements may include expressions such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “forecast,” or similar terminology and are made in compliance with applicable Indian securities laws and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

These forward-looking statements are based on certain assumptions and expectations regarding future developments, many of which are inherently uncertain and beyond the control of the Company. While the management believes the assumptions are reasonable, there can be no assurance that such expectations will prove to be accurate or that the anticipated events and developments will materialize as planned. Actual results, performance, or achievements may differ materially from those projected in such statements due to various factors including, but not limited to, changes in the macroeconomic environment, regulatory and policy shifts, fluctuations in input costs, currency volatility, market dynamics, technological disruptions, supply chain constraints, or unforeseen geopolitical or climatic events.

The Company expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless legally mandated under applicable law. Stakeholders are advised to interpret such statements with caution and in conjunction with the Companys audited financial statements and accompanying notes.

In accordance with Regulation 34 of the SEBI Listing Regulations, every listed entity is required to furnish a Management Discussion and Analysis Report (“MDAR”) as part of the Boards Report to the shareholders. Further, as prescribed under Schedule V of the said Regulations, the MDAR must cover the following specific areas:

• Industry structure and developments

• Opportunities and threats

• Segment-wise or product-wise performance

• Outlook

• Risk and concerns

• Internal control systems and their adequacy

• Discussion on financial performance with respect to operational performance

• Material developments in human resources / industrial relations, including number of people employed

The MDAR presented herein is aligned with the aforementioned requirements and is aimed at providing the Companys shareholders and other stakeholders with a comprehensive, transparent, and insightful view of the business environment, strategic direction, risk landscape, financial and operational performance, and the longterm growth roadmap of the Company.

1. ECONOMIC ENVIRONMENT - AN OVERVIEW

GLOBAL ECONOMY

The global economy continues to undergo a phase of moderated expansion amid a complex interplay of structural and cyclical forces. As per the latest World Economic Outlook released by the International Monetary Fund (IMF), global output growth is projected at 3.2% in calendar years 2024 and 2025, supported by resilient services activity, gradual easing of inflation, and stable demand in emerging markets. The World Bank, in its June 2024 Global Economic Prospects, projects a slightly lower trajectory of 2.6% in 2024 and 2.7% in 2025, indicating a slower pace of recovery due to tight financial conditions and global trade moderation.

Inflation, which had surged in the post-pandemic period due to supply bottlenecks, commodity price volatility, and demand-side imbalances, is now exhibiting signs of easing across most major economies. Global headline inflation is forecasted to decline to 4.3% in 2025, owing to the cumulative impact of monetary policy tightening by central banks, improved global logistics, and easing energy prices. However, core inflation particularly in services and housing remains elevated in several jurisdictions, posing challenges for monetary authorities navigating the delicate balance between price stability and growth revival.

Advanced economies, which include the United States, Eurozone countries, Japan, and others, are projected to grow at a subdued pace of 1.4% in 2025, reflecting tight credit conditions, high sovereign debt levels, and weakening consumer demand. In contrast, emerging market and developing economies are expected to expand by around 4.1%, led by strong domestic consumption, infrastructure-led investments, and a demographic dividend that continues to support medium-term growth. The global economic environment continues to be shaped by evolving risks including trade fragmentation, regional conflicts, and climate-related shocks, which require concerted multilateral responses to preserve financial and economic stability.

INDIAN ECONOMY

India continues to reinforce its position as a global growth engine and the worlds fastest-growing major economy, underpinned by resilient domestic demand, strong fiscal management, and a vibrant entrepreneurial ecosystem. As per estimates from the Ministry of Statistics and Programme Implementation (MoSPI), Indias real GDP grew by 8.2% in FY 2023-24, driven by strong manufacturing output, buoyant services activity, and robust investment flows. Growth is expected to moderate to between 6.3% and 6.7% in FY 2024-25, reflecting a more stable and sustainable expansion path, while the World Bank has forecast GDP growth of 6.3% for FY 2025-26. This steady performance is attributed to a conducive policy environment, rising public capex, and steady private consumption, supported by macroeconomic and monetary stability.

One of the key contributors to this growth has been the Governments significant investments in physical infrastructure, including highways, urban metro systems, smart cities, and logistics corridors. These initiatives, coupled with supportive reforms in taxation, digital governance, and the production-linked incentive (PLI) schemes across various sectors, have revitalized private investment sentiment. The services sector, particularly information technology, financial services, and hospitality, has exhibited strong traction, while the construction and manufacturing sectors continue to benefit from increased infrastructure deployment. However, the agriculture sector faced headwinds due to uneven monsoon conditions and regional climatic uncertainties, underscoring the need for climate-resilient practices in rural India.

Indias inflation outlook remains favorable, with headline Consumer Price Index (CPI) inflation averaging 4.3% in FY 2024-25, comfortably within the Reserve Bank of Indias target range of 2%-6%. For FY 2025-26, inflation is expected to remain range-bound between 3.7% and 4.2%, aided by food price stability, targeted fiscal spending, and monetary prudence. The Indian economy continues to exhibit robust macroeconomic fundamentals, including a manageable current account deficit, strong forex reserves of over Rs. 64 lakh crore, and a stable currency supported by net capital inflows and remittance strength

The long-term economic vision for India is shaped by the objective of becoming a high middle-income country by 2047, coinciding with the centenary of independence. In line with this aspiration, policy emphasis is being placed on inclusive development, green energy transition, skill development, and structural reforms that enhance productivity and formalisation. India remains committed to achieving its Sustainable Development Goals (SDGs), including its nationally determined contributions (NDCs), with a target of reaching net-zero carbon emissions by 2070 through clean energy investments, electric mobility, and carbon-neutral infrastructure.

FACILITY MANAGEMENT

The Indian Facility Management (FM) industry continues to witness robust growth and structural transformation, emerging as a critical enabler of operational excellence across sectors. According to recent industry research by Technavio, the Indian FM market is projected to grow at a compound annual growth rate (CAGR) of approximately 20.5% during 2024-2029, significantly higher than global averages. The industry is estimated to be valued at over Rs.13.5 lakh crore in 2025 and is expected to surpass Rs.19 lakh crore by 2030, fuelled by the rapid expansion of commercial and residential infrastructure, increasing preference for outsourced services, evolving regulatory frameworks, and rising expectations of safety, hygiene, and sustainability in built environments.

A prominent trend reshaping the industry is the transition towards Integrated Facility Management (IFM), which combines multiple services such as HVAC operations, fire safety systems, electrical and electromechanical maintenance, water management, pest control, housekeeping, and security under a unified service delivery model. IFM is gaining preference due to its inherent ability to streamline vendor interactions, reduce operational costs, and deliver data-driven performance metrics that improve efficiency and asset longevity. This bundling of services also supports scalability, standardisation, and compliance especially critical for large organisations operating across multiple locations.

Technology is increasingly emerging as the cornerstone of facility operations. Innovations such as IoT enabled building management systems, AI-based predictive maintenance tools, cloud-integrated work order management platforms, and real-time resource tracking are revolutionising service delivery. These digital enablers enhance transparency, ensure service continuity, and enable proactive issue resolution leading to improved client satisfaction and cost savings. As organisations adopt smart building technologies and digitised infrastructure, FM providers must invest in upskilling their workforce, enhancing digital literacy, and integrating emerging technologies into their delivery frameworks.

Simultaneously, environmental, social, and governance (ESG) imperatives are influencing client procurement preferences. Businesses are increasingly evaluating facility partners on their ability to provide green services, ensure workforce diversity, follow ethical procurement, and support energy-efficient building operations. ESG- focused facility management includes waste segregation, energy audits, water conservation initiatives, use of ecofriendly cleaning materials, and compliance with green building certifications such as IGBC and LEED.

India, along with other Asia-Pacific economies, is rapidly emerging as a regional leader in the facility management sector. The formalisation of this industry, previously fragmented and unorganized is gaining momentum with the entry of large players, increased consolidation, and a growing shift from manpower-driven models to tech-enabled service platforms. Urbanisation trends, growing infrastructure investments, and government-led initiatives such as the Smart Cities Mission are accelerating the demand for organised FM services in metro and Tier-II cities alike.

KHFM is strategically positioned to capitalise on these sectoral shifts. With its robust pan-India presence, deep experience in both soft and technical services, strong digital capabilities, and a client-centric operating model, the Company is well-aligned to meet the evolving needs of large institutional and corporate clients. Its continued focus on ESG compliant practices, integrated service delivery, and innovation-led efficiency ensures that KHFM remains a preferred partner in the facility management industrys dynamic and competitive landscape.

2. OPPORTUNITY & THREATS

The Indian facility management industry is currently experiencing a paradigm shift, driven by the growing emphasis on outsourcing non-core operations and a preference for specialised, tech-enabled services. This transformation is being fueled by diverse sectors including infrastructure, healthcare, retail, IT/ITES, manufacturing, logistics, and real estate, all of which are increasingly relying on professional facility service providers to manage their day-to-day operational requirements. This change has been accelerated by the rising complexity of infrastructure, the need for hygiene and compliance post-pandemic, and the pressure to optimise costs while improving service efficiency. As companies seek to streamline their operations, improve productivity, and enhance the user experience of physical assets and workspaces, demand for integrated and scalable facility solutions continues to grow.

The digitalisation of facility management is another major catalyst shaping the future of the sector. Technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), cloud-based facility platforms, and intelligent video surveillance are revolutionising how services are delivered and monitored. These technologies allow for predictive and condition-based maintenance, energy optimisation, real-time issue tracking, automation of repetitive tasks, and more agile reporting systems, thereby driving measurable value to clients. Furthermore, the deployment of Building Management Systems (BMS) and smart sensors is empowering service providers to achieve energy efficiency, ensure occupant safety, and meet sustainability benchmarks.

Indias rapid urbanisation and real estate expansion are also contributing significantly to the sectors growth. The influx of urban populations, coupled with increasing demand for residential, commercial, and institutional spaces, has created a surge in demand for structured and compliant facility management. Major government-led initiatives such as the Smart Cities Mission, AMRUT, and the continued development of metro, airport, and highway infrastructure have opened avenues for long-term facility management contracts. Regulatory reforms such as the Real Estate (Regulation and Development) Act (RERA) have further institutionalised the sector and enhanced the scope of professional FM services in both greenfield and brownfield developments.

The evolving nature of workplaces, especially after the pandemic, has resulted in hybrid work models, remote operations, and decentralised office structures, which demand customised, responsive, and health-conscious facility management strategies. Clients are increasingly looking for partners who can manage sanitisation, health and wellness, air quality control, touchless access systems, and integrated workplace management solutions. These trends have created an unprecedented opportunity for organised FM companies like KHFM to build differentiated offerings and deepen their value proposition to enterprise clients.

Despite this favourable environment, the facility management industry faces certain operational, regulatory, and economic challenges. One of the foremost concerns is the shortage of trained and skilled manpower, particularly for technical functions such as HVAC systems, fire safety, MEP (mechanical, electrical, and plumbing) services, and occupational health and safety compliance. High attrition levels, especially among frontline workers, coupled with the lack of standardised training infrastructure, often lead to service inconsistency, increased onboarding costs, and client dissatisfaction.

The rapid pace of technological change, while offering opportunities, also poses integration and cost-related challenges. Implementing digital solutions across geographically dispersed client sites requires substantial capital investment, robust IT infrastructure, and domain expertise. Smaller companies find it difficult to scale such platforms profitably, whereas larger players face challenges in ensuring consistency in service levels, cybersecurity risks, and change management at the client interface. Additionally, the increasing push from clients for value-based pricing models and outcome-driven contracts exerts pressure on operating margins.

Another threat to the sector is the intensifying cost sensitivity among clients, especially in the context of macroeconomic uncertainties and volatile input costs such as wages, fuel, and raw materials. Balancing expectations for high service quality with tight financial controls is a constant concern for FM providers, particularly in price-competitive tenders and large-volume contracts. Further, the regulatory environment, including labour laws, environmental compliance, and health and safety norms, requires companies to stay agile and continuously invest in governance mechanisms.

KHFM acknowledges these risks and is actively addressing them through focused investments in workforce development, technology innovation, and digital transformation. The Company continues to prioritise client- centricity, quality assurance, and scalable service models to mitigate external threats and unlock sustainable value. By fostering collaborative partnerships, building operational resilience, and maintaining a strong compliance posture, KHFM is well-positioned to navigate industry risks and leverage structural opportunities for long-term growth.

3. SEGMENT - WISE OR PRODUCT- WISE PERFORMANCE

KHFM Hospitality and Facility Management Services Limited operates within the Integrated Hospitality and Facility Management (IHFM) space, delivering end-to-end services across both hard and soft facility domains. The Companys value proposition lies in its ability to provide unified solutions through a combination of mechanised housekeeping, pest control, security and surveillance services, horticulture and landscaping, sanitation, building operations and maintenance (O&M), and specialised technical support functions such as electrical, HVAC, fire safety, and plumbing systems.

During the year under review, KHFM strengthened its operational footprint across multiple service verticals, catering to a broad and diversified client base. This includes central and state government departments, public sector undertakings (PSUs), municipal corporations, Indian Railways, major infrastructure projects, and private sector enterprises across manufacturing, healthcare, education, and commercial real estate. The Company continued to execute complex facility management assignments involving large-area operations, stringent service level agreements (SLAs), and high workforce mobilisation, all of which were delivered with a strong focus on compliance, responsiveness, and customer satisfaction.

A significant share of revenue was derived from long-tenured contracts with government and quasi-government clients, which provide revenue stability and visibility. In parallel, KHFM deepened its presence in high-potential sectors such as industrial manufacturing parks, healthcare institutions, urban civic infrastructure, and railways, which offer large scale, recurring service opportunities. Notably, the Companys tailored service delivery models, built on rigorous site-level supervision and digital monitoring tools, allowed it to maintain performance standards while managing cost efficiency.

KHFMs segmental strategy is anchored in delivering integrated and bundled services to clients seeking a singlepoint FM partner. This approach reduces operational fragmentation, enhances accountability, and ensures end-to- end oversight of critical building functions. Through the deployment of trained manpower, mobile command centres, IoT-based service dashboards, and compliance reporting tools, KHFM has created a differentiated execution model in the IHFM industry.

To sustain future growth, the Company is strategically expanding its offerings in the domains of energy management, ESG-aligned services, and green housekeeping. Investments are being made in mechanisation, training academies, and standard operating procedures (SOPs) to ensure consistent service quality across regions. KHFMs product-wise performance continues to reflect a strong alignment between its integrated service capabilities and the evolving expectations of clients operating in regulated, high-footfall, and mission-critical environments.

Our service offerings include the following broad services which are offered by our Company as indicated below:

4. OUTLOOK

The outlook for the Indian facility management sector remains fundamentally strong, supported by an evolving demand landscape, regulatory momentum, infrastructure expansion, and the growing maturity of the outsourcing ecosystem. As organisations increasingly seek partners who can deliver integrated, technology-led, and ESG- compliant solutions, the industry is expected to continue on a high-growth trajectory over the next five years. According to industry estimates, the Indian FM market is projected to grow at a compounded annual growth rate (CAGR) of over 15% between FY 2025 and FY 2030, reaching a value of more than Rs.19 lakh crore by the end of the decade.

Key macro-level growth drivers include sustained urbanisation, increasing investments in Tier 2 and Tier 3 city infrastructure, proliferation of co-working and hybrid workplaces, heightened focus on hygiene and safety, and the digitisation of asset management. Government-led initiatives such as the PM GatiShakti National Master Plan, National Infrastructure Pipeline (NIP), and the Smart Cities programme are expected to further boost the demand for structured, compliant, and accountable FM services. Simultaneously, the global shift toward net-zero buildings and sustainable built environments is pushing clients to adopt green facility management practices.

On the global front, the Asia-Pacific region is emerging as a dominant market for facility services, led by countries like India, China, and Indonesia. The demand for integrated workplace solutions, energy-efficient buildings, and digital building ecosystems is growing, particularly across commercial real estate, transport hubs, educational institutions, and healthcare infrastructure. Indias cost competitiveness, growing pool of skilled facility professionals, and maturing service providers make it a preferred FM destination for multinationals and global facility outsourcing programmes.

KHFM is strategically aligned to capitalise on this opportunity-rich environment. With a well-diversified portfolio, operational presence across urban and semi-urban locations, and deep domain expertise in integrated service delivery, the Company is ideally placed to cater to the rising demand for professional FM services. KHFMs continued investments in digital technologies, mobile workforce solutions, and AI-driven operational analytics are expected to further strengthen service responsiveness and scalability.

Looking ahead, the Company intends to deepen its penetration into growth verticals such as industrial logistics, healthcare facilities, civic urban infrastructure, smart townships, and railway stations, where integrated and compliant facility services are critical. KHFM also aims to enhance its ESG offerings by promoting energy conservation, water reuse, waste segregation, and inclusive workforce policies. With a robust order pipeline, strategic government contracts, and long-term partnerships with marquee clients, KHFM is poised to consolidate its leadership position and deliver sustained value to stakeholders in the years ahead.

5. RISK AND CONCERN

Risks	Risk Mitigation
Economic Risk	The Company recognises the impact of macroeconomic cycles, policy changes, and inflationary trends on business continuity. To mitigate this, KHFM follows a strategy of sectoral and geographical diversification, reducing reliance on any single industry or region. By operating across stable and counter-cyclical sectors, the Company maintains revenue visibility and minimises exposure to broad-based economic downturns.
People Risk	Given the labor-intensive nature of the facility management sector, challenges related to skill availability and retention persist. KHFM addresses this through structured training, regular upskilling, employee engagement, and robust onboarding systems. These initiatives help reduce attrition, improve workforce quality, and ensure continuity across diverse client sites.
Financial Risk	Liquidity management and timely collection of receivables are critical to operational stability. KHFM maintains financial discipline through prudent working capital management, active receivable monitoring, and strong credit control mechanisms. A structured collection process and internal review systems support cash flow visibility and timely payments.
Competition Risk	The facility management industry is highly competitive, with pricing pressures and service differentiation challenges. KHFM maintains its edge through integrated service offerings, digital capabilities, strict SLA adherence, and continuous performance benchmarking. These efforts enhance service quality and client retention.
Post-Pandemic Operational Risk	The post-COVID environment demands greater resilience and safety compliance. KHFM has institutionalised hybrid service models, remote monitoring tools, and robust health and safety protocols. These adaptive measures ensure operational continuity and preparedness for future disruptions.
Efficiency and Innovation Risk	As client expectations evolve, there is increased demand for tech-enabled, outcome- oriented solutions. KHFM mitigates this risk by fostering a culture of innovation and continuous improvement. The Company actively invests in process optimisation, automation, and digital transformation to ensure scalability, service efficiency, and alignment with client-specific goals.

6. INTERNAL CONTROL SYSTEM

KHFM Hospitality and Facility Management Services Limited has instituted a robust and well-documented internal control framework, meticulously designed to ensure sound governance, operational efficiency, and strict regulatory compliance across all levels of the organisation. This framework forms the backbone of the Companys risk management strategy and facilitates transparency, accountability, and integrity in day-to-day operations. The internal controls are embedded into every functional area including finance, procurement, service delivery, human resources, statutory compliance, and project execution and are tailored to accommodate the specific operational intricacies of the integrated facility management industry.

The Companys internal control systems are reviewed on a periodic basis and are continuously calibrated to address evolving operational risks, changing regulatory requirements, and the increasing complexity of multilocation service delivery. The objective is to ensure that controls remain aligned with best-in-class industry practices, support real-time decision-making, and provide assurance on the reliability of financial reporting, safeguarding of assets, and adherence to internal policies and external obligations.

A structured internal audit mechanism is in place, facilitated by a dedicated Internal Audit team under the supervision of the Audit Committee of the Board. The audit process covers key operational, financial, and compliance parameters across all major locations, and evaluates adherence to standard operating procedures (SOPs), efficiency of resource deployment, and alignment with client expectations. Audit findings and recommendations are reviewed at the management level, and corrective actions are promptly implemented to mitigate identified gaps.

The Company has also made significant progress in adopting digital technologies to enhance the effectiveness of internal controls. Tools such as enterprise resource planning (ERP) systems, biometric attendance, compliance tracking dashboards, and real-time reporting mechanisms have been integrated into internal operations, allowing for tighter monitoring, better exception handling, and improved oversight across multiple touchpoints. The finance and compliance functions are supported by automated workflows to ensure accuracy, reduce manual intervention, and reinforce control consistency.

KHFMs commitment to internal control excellence is further reflected in its emphasis on training and upskilling of employees responsible for governance functions. Regular workshops, policy orientation programmes, and compliance certifications are conducted to ensure a uniform understanding and implementation of internal control standards across the organisation. In a dynamic regulatory environment, this proactive approach to governance enables KHFM to anticipate emerging risks, respond with agility, and maintain its reputation as a compliant and dependable service provider.

7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company for the financial year ended March 31, 2025, reflects continued growth momentum, improved operational execution, and enhanced financial resilience.

During FY 2024-25, the Company recorded Standalone Revenue from Operations of Rs. 9,518.25 lakh, compared with Rs. 10,744.51 lakh in FY 2023-24. Standalone EBITDA (including other income) stood at Rs. 1,092.26 lakh in FY 2024-25, compared with Rs. 1,042.27 lakh in FY 2023-24. The Standalone Profit after Tax (PAT) for the year was Rs. 324.65 lakh in FY 2024-25, compared with Rs. 346.46 lakh in FY 2023-24.

We secured new work orders valued at approximately Rs. 7,927.82 lakh during the year, reaffirming our strong market presence and execution capabilities.

The Companys financial performance is a testament to the strength of its integrated business model, the durability of its client relationships, and its strategic agility in responding to market dynamics. The consistent improvement in profitability, achieved without compromising on compliance or service quality, underscores KHFMs ability to deliver value to stakeholders even in a challenging environment marked by inflationary pressures and evolving client demands.

The Company remains focused on further strengthening its financial position through service innovation, disciplined cost management, and diversification across industry verticals and geographies.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

KHFM firmly believes that its human capital is the cornerstone of its long-term success and a key enabler of operational excellence. As of March 31, 2025, the Company employed a workforce of over 2,500 individuals, including permanent employees and contractual personnel deployed across a pan-India network of client sites. The workforce comprises a diverse mix of technical staff, facility supervisors, customer support personnel, security officers, sanitation workers, horticulture professionals, and skilled and semi-skilled technicians, reflecting the breadth and complexity of KHFMs integrated service offerings.

The Companys human resource strategy is centred around fostering a culture of learning, meritocracy, and employee well-being. KHFM has institutionalised robust training and development programmes designed to enhance domain-specific competencies, leadership acumen, and service excellence. These include on-the-job training, health and safety certifications, workshops on compliance and behavioural skills, and digital skill development modules aimed at creating a future-ready workforce. The Company operates multiple training centres and collaborates with external institutes to deliver certified training courses for upskilling its workforce, particularly in areas such as HVAC systems, fire safety, facility automation, and customer service.

The performance management framework at KHFM is designed to be transparent, feedback-oriented, and aligned with the Companys strategic goals. Individual and team performance is monitored through key result areas (KRAs), regular appraisals, and structured reviews that promote accountability, recognise excellence, and identify high-potential talent for future leadership roles. The Company also runs incentive programmes and employee engagement initiatives aimed at fostering a sense of belonging, improving retention, and driving productivity across all levels.

With the ongoing digital transformation of the facility management industry, KHFM has digitised its core HR processes, including recruitment, onboarding, attendance tracking, payroll, compliance documentation, and performance monitoring. The adoption of human capital management (HCM) systems has improved decisionmaking, reduced administrative inefficiencies, and enhanced employee experience through better accessibility and process transparency.

In recognition of the increasingly diverse and mobile nature of its workforce, KHFM has adopted inclusive and flexible HR practices. These include gender-sensitive policies, health and wellness initiatives, and grievance redressal mechanisms designed to ensure a safe and equitable working environment. The Company has also taken proactive steps to align with evolving employment models, including the structured use of gig workers and parttime support staff to meet fluctuating client demands while ensuring compliance with labour laws.

Industrial relations during the year remained stable and constructive. KHFM continued to maintain an open and collaborative dialogue with employees and union representatives, ensuring proactive resolution of issues and implementation of fair employment practices. The Company is deeply committed to promoting occupational health and safety and has implemented stringent protocols, including regular site audits, safety drills, and compliance training, to minimize workplace risks.

Looking ahead, KHFM will continue to invest in building a high-performing, agile, and inclusive workforce that can support the Companys strategic ambitions and meet the growing expectations of clients. By embedding learning, innovation, and employee-centricity into its HR framework, KHFM aims to position itself as an employer of choice in the Indian facility management industry.

9. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the financial year, the details of significant changes in key financial ratios as compared to the previous year, along with remarks, are summarized below:

Particulars	As at March 31, 2025	As at March 31, 2024	% of change in ratio	Remarks
Current Ratio	2.03	1.77	-14.63%	Improvement in current ratio due to increase in receivables, inventories and other current assets
Debt-Equity Ratio	0.89	1.23	27.45%	Improvement in debt equity ratio due to proceeds from issue of shares/warrants on preferential basis during the year.
Debt Service Coverage Ratio	1.13	1.21	7.14%	The Company managed to earn enough profit to cover its interest payments by cutting down on other expenses.
Return on Equity Ratio (%)	5.71%	7.29%	21.57%	Average networth has increased compared to previous year on account of proceeds from issue of shares/warrants on preferential basis. Accordingly Return on equity has reduced.
Inventory Turnover Ratio	2.90	10.75	73.00%	Stock of Inventory has been increased significantly as compared to previous year.
Trade Receivables Turnover Ratio	3.34	4.74	29.48%	Increase in average trade receivables resulted in decline of Trade receivables turnover ratio.
Trade Payable Turnover Ratio	15.93	12.10	-31.64%	Average trade payables outstanding have been reduced comparatively from previous year. Outstanding Trade payables have been reduced in current year due to improvement in cashflow consequently from the proceeds from issue of shares/warrants on preferential basis.
Net Capital Turnover Ratio	1.63	2.29	28.84%	Net worth has increased compared to previous year on account of proceeds from issue of shares/warrants on preferential basis. Accordingly, net capital turnover ratio has reduced.
Net Profit Ratio (%)	3.16%	3.08%	-2.80%	The Company manages to earn profit over a previous year due to reduction in cost attributable to project.
Return on Capital Employed (%)	19.11%	21.68%	11.84%	Average net worth has increased compared to previous year on account of proceeds from issue of shares/warrants on preferential basis. Accordingly Return on capital employed has reduced.

10.CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis may include “forward-looking statements” within the meaning of applicable laws and regulations. These are based on certain assumptions and expectations of future events. Actual results may differ materially due to economic conditions, regulatory changes, amendments in tax laws, and other internal or external factors beyond the Companys control. The Company undertakes no obligation to update such statements, except as required under applicable law.

Sd/-	Sd/-
Mr. Ravindra Hegde	Mrs. Sujata Hegde
Managing Director	Director & CFO
DIN: 01821002	DIN: 01829352