Euphoria Infotech (India) Ltd Management Discussions

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled "Restated Financial Information" beginning on page 118. You should also read the section titled "Risk Factors" on page 21 and the section titled "Forward Looking Statements" on page 15 of this DRHP, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated Financial Statements.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditor which is included in this DRHP under "Restated Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

BUSINESS OVERVIEW

Our Company was originally incorporated on May 28, 2001 as a Private Limited Company as "Euphoria Infotech (India) Private Limited" vide Registration No. 093236 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Kolkata, West Bengal. Subsequently, pursuant to a special resolution passed by the Shareholders at their Extraordinary General Meeting held on January 18, 2023, our Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to ‘Euphoria Infotech (India) Limited and a Fresh Certificate of Incorporation consequent to Conversion was issued on May 22, 2023 by the Registrar of Companies, Kolkata, West Bengal. The Corporate Identification Number of our Company is U92200WB2001PLC093236.

Euphoria Infotech (India) Limited is a full-stack IT and ITes solution, based out at Kolkata, West Bengal. The Company was started off in 2001 by our founder and Managing Director Mr. Shamba Bhanja with a vision to encourage multiple aspects of networking, software design, quality assurance and internet technology.

Today, we provide high-end IT and ITes solution in the field of Citizen Centric Application, Enterprise Resource Planning (ERP), E-Commerce, Application programming interface (API), Internet of Things (IoT), cloud based tools and application, data management etc. using standard software practices or through customised software development model depending upon the requirement of the clients which is backed by advanced technology and efficient team of software developers who tend to keep themselves abreast by undergoing continuous R&D activity.

Our offerings can be classified into five broad categories namely, customized software, e-commerce, IoT, Artificial Intelligence and Machine Learning.

Our Company is engaged in the business of customized web application development for industry and general citizens. The applications range from Online Recruitment, Online Application, Urban Local Body services, University management system, Online Ticket Booking Systems, E-commerce and IoT-based dashboards for Sewerage Treatment Plant (STP) and similar industry specific requirements. We are developing different products for the education domain and citizen-centric services. We are providing consultation to different clients from multiple-spectrum to develop, implement and maintain different customized software to enhance the efficiency and growth of the company. We have become a technology partner to different government and financial organizations including more than 100 municipalities in West Bengal.

Our objective lies in the development and maintenance of software solutions for enterprises in various sectors such as E-commerce, Education, Fintech, Healthcare, IoT, and other industries to enable ease of doing business and customer-centric solutions.

The Information Technology industry is a continuously evolving technological industry and we endeavour to exploit these technological advances to reach audiences in India and globally to provide growth, efficiency and advancement in the business objectives.

Our success lies in the strength of our relationship with our clients, expertise in the industry. We are channel partner of Webel Technologies Limited. Webel Technologies Limited is the nodal agency for implementation of ITes in the departments and organisations of the Govt. of West Bengal and floats tenders on behalf of departments and organisations of the Govt. of West Bengal. We have been able to get repeated projects from our clients which includes municipal boards, government agencies and corporates. Our team, through their vast experience, efficiency and timely delivery, is able to source new businesses for our Company.

We started our journey in Bangladesh back in 2018 through our JV company namely Euphoria Infotech (Bangladesh) Private Limited with the motto of enabling a self-reliant software development house through technology transfer. We hold 49% stake in the JV Company and balance 51% is held by our JV partners who are resident of Bangladesh. We are proudly associated with many projects with the objective of Citizens betterment, safety & security, and ease of work. Some such examples are the Citizens Revenue Collection Module and

Online Administrative services. We have become a technology partner to different government and financial organizations like Narayangonj City Corporation - NCC (Bangladesh), Agent Banking for South-East Bank Limited (Bangladesh) and Grameen Phone (Bangladesh).

For detailed information on the business of our Company please refer to "Our Business" beginning on page numbers 78 of this Draft Red Herring Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR AND STUB PERIOD

As per mutual discussion between the Board of the Company and LM, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in this Draft Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

? The Shareholders of our Company approved appointed of Mr. Avijit Mallick and Mr. Sriyans Lunia appointed as Independent Directors in the Extraordinary General Meeting held on May 5, 2023.

? The Board of Directors of our Company have approved raising of funds by way of Initial Public Offering vide its resolution dated January 12, 2023.

? The Board of Directors of our Company have been authorised to raise the funds by way of Initial Public Offering vide special resolution passed at the Extra-Ordinary General Meeting held on January 18, 2023.

? The Board of Directors of our Company have approved appointment of Mr. Md. Talha, Company Secretary held on May 5, 2023.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page 21 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

? Changes, if any, in the regulations / regulatory framework / economic policies in India and / or in foreign countries, which affect national & international finance.

? Companys ability to adopt the changing technology in IT industry;

? Government support and spending on IT industry;

? Companys results of operations and financial performance; ? Performance of Companys competitors; ? Significant developments in Indias economic and fiscal policies;

? Failure to adapt to the changing needs of industry and in particular IT industry may adversely affect our business and financial condition; ? Volatility in the Indian and global capital market;

DISCUSSION ON RESULT OF OPERATION

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled "Other Financial Statements" beginning on page 157 of the Draft Red Herring Prospectus.

Overview of Revenue & Expenditure

Our revenue and expenses are reported in the following manner:

Revenues

? Revenue of operations

Our Companys revenue is primarily generated from IT and ITes solution.

? Other Income

Our other income mainly consists of interest from banks.

Particulars	31-Mar-23	31-Mar-22	31-Mar-21
Revenue from Operations	736.73	465.16	554.81
% of total revenue	99.89%	94.19%	99.76%
% Increase/(Decrease)	58.38%	-16.16%	-30.34%
Other income	0.83	28.72	1.33
% of total revenue	0.11%	5.81%	0.24%
% Increase/(Decrease)	(97.12%)	2060.94%	(61.74%)
Total Revenue	737.56	493.87	556.14

Expenditure

Our total expenditure primarily consists of Cost of Service & Material Consumed, Employee Benefit Expenses, Depreciation and amortization Expenses, Finance Cost and other expenses.

? Cost of Service & Material Consumed

It includes cost of devices and hardwares and services availed.

? Employment Benefit Expenses

It includes Salaries and allowances, Contributions to provident and other funds, Gratuity, and other expenses.

? Depreciation

Depreciation includes depreciation and amortization.

? Other Expenses

It includes Telephone & Internet Expenses, Sale Promotion Expenses, Printing & Stationery, Contractor Charges, Printing & Stationery, Maintenance, Rent, Power, Professional & Consultancy Charges, Travelling & Conveyance and others.

? Finance Costs

Our finance costs mainly include finance charges and interest.

RESULTS OF OUR OPERATION

Particulars	31-Mar-23	31-Mar-22	31-Mar-21
Incomes:
Revenue from Operations	736.73	465.16	554.81
% of total revenue	99.89%	94.19%	99.76%
% Increase/(Decrease)	58.38%	-16.16%	-30.34%
Other income	0.83	28.72	1.33
% of total revenue	0.11%	5.81%	0.24%
% Increase/(Decrease)	(97.12%)	2060.94%	(61.74%)
Total Revenue	737.56	493.87	556.14
% Increase/(Decrease)	49.34%	(11.20%)	(30.48%)
Expenses:
Changes in inventories of finished goods	197.10	142.97	178.76
% of total revenue	26.72%	28.95%	32.14%
% Increase/(Decrease)	37.87%	(20.02%)	-45.77%
Employee Benefit expenses	209.49	161.37	178.92
% of total revenue	28.40%	32.67%	32.17%
% Increase/(Decrease)	29.82%	(9.81%)	(6.75%)
Other Expenses	115.47	135.51	139.25
% of total revenue	15.66%	27.44%	25.04%
% Increase/(Decrease)	(14.79%)	(2.69%)	(33.93%)
Total Expense	522.06	439.84	496.93
% of total revenue	70.78%	89.06%	89.35%
% Increase/(Decrease)	18.69%	(11.49%)	(32.14%)
Profit before Interest, Depreciation and Tax	215.50	54.03	59.21
% of total revenue	29.22%	10.94%	10.65%
Depreciation and amortization Expenses	8.03	5.86	9.31
% of total revenue	1.09%	1.19%	1.67%
% Increase/(Decrease)	36.93%	(37.01%)	(19.61%)
Profit before Interest and Tax	207.47	48.17	49.90
% of total revenue	28.13%	9.75%	8.97%
Financial Charges	31.55	17.89	17.81
% of total revenue	4.28%	3.62%	3.20%
% Increase/(Decrease)	76.34%	0.44%	38.23%
Profit before Tax and Extraordinary Expenses	175.92	30.28	32.09
% of total revenue	23.85%	6.13%	5.77%
Extraordinary Expenses	-	-	-
% of total revenue	-	-	-
% Increase/(Decrease)	-	-	-
Restated Profit/(Loss) before tax	175.92	30.28	32.09
% of total revenue	23.85%	6.13%	5.77%
% Increase/(Decrease)	481.02%	-5.65%	-25.79%
Tax expenses/(income)
Provisions for Tax	49.71	8.03	7.50
Particulars	31-Mar-23	31-Mar-22	31-Mar-21
Provisions for Deferred Tax	(3.51)	0.54	0.68
Total tax expenses	46.20	8.57	8.18
% of total revenue	6.26%	1.74%	1.47%
Restated profit/(loss) after Tax	129.71	21.71	23.91
Share of profit/loss of joint ventures and associates (net)	0.88	(2.03)	2.04
Exchange Differences in translating the financial statements of foreign joint venture	(0.91)	0.22	0.22
Net of Exchange Difference	(0.03)	(1.81)	2.26
% of total revenue	(0.12%)	0.04%	0.04%
Restated Profit/(Loss) After tax	129.69	19.90	26.17
% of total revenue	17.58%	4.03%	4.71%
% Increase/(Decrease)	551.73%	-23.96%	10.22%

FISCAL YEAR ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022

Income

Total revenue has increased by . 271.57 Lakhs and 58.38% from . 465.16 Lakhs in the fiscal year ended March 31, 2022 to .736.73 Lakhs in the fiscal year ended March 31, 2023. The increase in revenue was on account of increase in operation of the Company.

Expenditure

Total Expenditure increased by . 98.05 Lakhs and 21.15%, from . 463.60 Lakhs in the fiscal year ended March 31, 2022 to . 561.64 Lakhs in the fiscal year ended March 31, 2023. Overall expenditure was increased mainly due to increase volume of operations of the Company.

Cost of Service & Material Consumed

Cost of Service & Material Consumed in terms of value and percentage increased by . 54.14 Lacs and 37.87% from

. 142.97 Lacs in the fiscal year ended March 31, 2022 to . 197.10 Lakhs in the fiscal year ended March 31, 2023. Cost of Service & Material Consumed was increased due to increase in volume of operation.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage increased by .48.12 Lakhs and 29.82% from .161.37 Lakhs in the fiscal year ended March 31, 2022 to .209.49 Lakhs in the fiscal year ended March 31, 2023. Overall employee cost was increased due to increase in no. of employees and increase in general increment in salary & incentives to employees.

Other Expenses

Other Direct Expenses in terms of value and percentage decreased by .20.04 Lakhs and 14.79% from .135.51 Lakhs in the fiscal year ended March 31, 2022 to .115.47 Lakhs in the fiscal year ended March 31, 2023. Other Direct Expenses was decreased due to initiative taken by the management to reduce cost at various levels.

Profit before Interest, Depreciation and Tax

Profit / Loss before Interest, Depreciation and Tax in terms of value and percentage increased by .161.46 Lakhs and 298.83% from .54.03 Lakhs in the fiscal year ended March 31, 2022 to .215.50 Lakhs in the fiscal year ended March 31, 2023. Profit before Interest, Depreciation and Tax was increased due to increase in revenue from operations of the Company.

Depreciation & Amortization Expenses

Depreciation in terms of value and percentage increased by . 2.17 Lakhs and 36.93% from .5.86 Lakhs in the fiscal year ended March 31, 2022 to . 8.03 Lakhs in the fiscal year ended March 31, 2023. Increase in depreciation is general in nature.

Finance Costs

Finance Costs in terms of value and percentage increased by .13.66 Lakhs and 76.34% from . 17.89 Lakhs in the fiscal year ended March 31, 2022 to . 31.55 Lakhs in the fiscal year ended March 31, 2023. Finance Costs was increased mainly due to higher interest outgo on increased borrowings.

Net Profit after Tax, Extraordinary items and Share of Profit/Loss of Joint Ventures and Associates (net)

Net Profit after Tax, Extraordinary items and Share of Profit/Loss of Joint Ventures and Associates (net) in terms of value and percentage increased by . 109.79 Lakhs and 551.73% from . 19.90 Lakhs in the fiscal year ended March 31, 2022 to profit of . 129.69 Lakhs in the fiscal year ended March 31, 2023. Net profit was increased due to increase in revenue from operations of the Company.

FISCAL YEAR ENDED MARCH 31, 2022 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021

Income

Total revenue has decreased by .89.66 Lakhs and 16.16% from .554.81 Lakhs in the fiscal year ended March 31, 2021 to . 465.16 Lakhs in the fiscal year ended March 31, 2022. The decrease in revenue was on account of reduced volume of operations of the Company.

Expenditure

Total Expenditure decreased by .60.46 Lakhs and 11.54%, from .524.05 Lakhs in the fiscal year ended March 31, 2021 to . 463.60 Lakhs in the fiscal year ended March 31, 2022. Overall expenditure was decreased mainly due to reduction in volume of operations of the Company.

Cost of Service & Material Consumed

Cost of Service & Material Consumed in terms of value and percentage decreased by .35.79 Lacs and 20.02% from

.178.76 Lacs in the fiscal year ended March 31, 2021 to .142.97 Lakhs in the fiscal year ended March 31, 2022. Cost of Service & Material Consumed was decreased due to reduced operation.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage decreased by .17.55 Lakhs and 9.81% from .178.92 Lakhs in the fiscal year ended March 31, 2021 to .161.37 Lakhs in the fiscal year ended March 31, 2022. Overall employee cost was decreased due to less no. of employees and lower salary payout to employees.

Other Expenses

Other Direct Expenses in terms of value and percentage decreased by .3.75 Lakhs and 2.69% from .139.25 Lakhs in the fiscal year ended March 31, 2021 to .135.51 Lakhs in the fiscal year ended March 31, 2022. Other Direct Expenses was decreased due to reduced operation level.

Profit before Interest, Depreciation and Tax

Profit / Loss before Interest, Depreciation and Tax in terms of value and percentage decreased by . 5.18 Lakhs and 8.75% from .59.21 Lakhs in the fiscal year ended March 31, 2021 to . 54.03 Lakhs in the fiscal year ended March 31, 2022. Profit before Interest, Depreciation and Tax was decreased due to reduced operations of the Company.

Depreciation & Amortization Expenses

Depreciation in terms of value and percentage decreased by . 3.45 Lakhs and 37.01% from .9.31 Lakhs in the fiscal year ended March 31, 2021 to .5.86 Lakhs in the fiscal year ended March 31, 2022. Increase in depreciation is general in nature.

Finance Costs

Finance Costs in terms of value and percentage decreased by . 0.08 Lakhs and 0.44% from .17.81 Lakhs in the fiscal year ended March 31, 2021 to .17.89 Lakhs in the fiscal year ended March 31, 2022. Finance Costs was decreased mainly due to lower interest outgo on borrowings.

Net Profit after Tax, Extraordinary items and Share of Profit/Loss of Joint Ventures and Associates (net)

Net Profit after Tax, Extraordinary items and Share of Profit/Loss of Joint Ventures and Associates (net) in terms of value and percentage decreased by .6.27 Lakhs and 23.96% from .26.17 Lakhs in the fiscal year ended March 31, 2021 to profit of .19.90 Lakhs in the fiscal year ended March 31, 2022. Net profit was decreased due to decrease in revenue from operations of the Company.

INFORMATION REQUIRED AS PER ITEM (II) (C) (I) OF PART A OF SCHEDULE VI TO THESEBI REGULATIONS:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

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

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

3. 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 "Risk Factors" beginning on page 21 of the DRHP, 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.

4. Future changes in relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Our Business" and "Managements Discussion and

Analysis of Financial Condition and Results of Operations" on pages 21 and 158 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Total turnover of each major industry segment in which our Company operates

The Company is in the business of IT and ITes solution. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 69 of this DRHP.

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business" on page 78, our Company has not announced any new product or service.

7. Seasonality of business

Our Companys business is not seasonal in nature.

8. Dependence on single or few customers or suppliers

The revenue of our company is dependent on a few limited numbers of customers. For details please refer the Chapters "Our Business" beginning on pages 78 of this DRHP.

9. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on pages 69 and 78 respectively of this DRHP.

10. Details of material developments after the date of last balance sheet i.e., March 31, 2023.

After the date of last Balance sheet i.e., March 31, 2023, no material events have occurred which have a significant impact on the financial position of our Company except those as in ordinary course of business.