Yudiz Solutions Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the period ended March 31, 2023 and financial year ended March 31, 2022, and for the financial year ended March 31, 2021.One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled "Financial Statements" and the chapter titled "Financial Information" on page 206 of the Red Herring Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors " on page 26 of this Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page 19 of this Red Herring Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-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 Yudiz Solutions Limited, our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for Financial Years 2023, 2022 & 2021 included in this Red Herring Prospectus beginning on page 206 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company was incorporated in the year 2011. We are an ISO 9001:2015, ISO 13485:2016 certified company engaged in providing IT solutions and consultancy focused on providing scalable and secure solutions to shape a business idea by implementing the latest and cutting-edge technologies. Since our incorporation and commencement of business operations, we have successfully executed several projects for our clients situated in India & Abroad.

Our range of solutions and services include web development, wearable device / IoT development, game development and mobile application development. The technologies used by us include blockchain technology, metaverse, AR (Augmented Reality) / VR (Virtual Reality) / MR (Mixed Realty) and AI (Artificial Intelligence) / M (Machine Learning), IIoT (Industrial Internet of Things), 2D/3D animation, UI/UX design, SEO (Search Engine Optimization) to in order to efficiently provide the abovementioned solutions and services. Our other services include designing, digital marketing, quality assurance, hire on contract, white-label product development, consulting, Development & IT Operations (DevOps), and Support & Maintenance. We have also developed white-label products who have their application in mobiles, consoles as well as websites. We help our clients with planning, architecting, setup & implementation, migration, and management of complete IT infrastructure through developing proprietary software applications, enterprise-based solutions, and support.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR AND STUB PERIOD

As per mutual discussion between the Board of the Company and BRLM, 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 the Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

• The Board of Directors of our Company has approved and passed resolution on December 26, 2022 to authorize the Board of Directors to raise the funds by way of Initial Public Offering.

• The Shareholders of our company appointed Mr. Pratik Bhaskarbhai Patel as Managing Director, Mr. Suraj Chokhani as Whole-Time Director, Mr. Bharat Shamjibhai Patel as man and Whole Time Director and Mr. Chirag Rajendrakumar Leuva as Chief Executive Office and Executive Director in the Extra-Ordinary General Meeting held on October 7, 2022, and board meeting held on September 1, 2022 respectively.

• The shareholders of our Company appointed Mr. Amit Joshi and Ms. Jija Roy as Independent Directors in the Annual General Meeting held on September 30, 2022.

• The board of directors in its meeting held on August 1, 2022 appointed Mr. Deepak Kantilal Jain as Company Secretary & Compliance officer of the Company & on January 16, 2023 appointed Ms. Zarna Hiteshkumar Shah as Chief Financial Officer of the Company.

SIGNIFICANT 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 26 of this 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 results of operations and financial performance;

• Performance of Companys competitors;

• Significant developments in India‘s economic and fiscal policies;

• Failure to adapt to the changing needs of industry and in particular IT Sector may adversely affect our business and financial condition;

• Volatility in the Indian and global capital market;

DISCUSSION ON STANDALONE RESULT OF OPERATION

(Amount in Lakhs)

S.N. Particulars	For the period March 31, 2023	%age of Total Income	For the year ended 31 March, 2022	%age of Total Income	For the year ended 31 March, 2021	%age of Total Income
1 Revenue from Operations	2,731.45	99.52%	1,875.98	99.70%	1,282.67	98.26%
II Other Income	13.30	0.48%	5.57	0.30%	22.75	1.74%
III Total Income (I + II)	2,744.75	100%	1,881.55	100%	1,305.41	100%
IV Expenses
(d) Employee benefits expenses	1,674.68	61.01%	1276.56	67.85%	886.81	67.93%
(e) Finance costs	21.25	0.77%	13.85	0.74%	8.50	0.65%
(f) Depreciation and amortization expenses	232.97	8.49%	96.53	5.13%	68.42	5.24%
(g) Other expenses	454.20	16.55%	377.95	20.09%	260.95	19.99%
Total Expenses	2,383.09	86.82%	1764.88	93.80%	1224.68	93.82%
V Profit before exceptional and extraordinary items and tax (III - IV)	361.66	13.18%	116.67	6.20%	80.74	6.18%
VI Exceptional items & Extraordinary items	-	-	-	-	-	-
VII Profit before tax (V + VI)	361.66	13.18%	116.67	6.20%	80.74	6.18%
VIII Tax expense:
(a) Current tax	139.29	5.07%	37.96	2.02%	28.31	2.17%
(b) Deferred tax	(53.21)	-1.94%	4.63	0.25%	(28.34)	(2.17%)
(c) MAT credit entitlement	-	-	-	-	-	-
(d) Income Tax relating to earlier years	0.41	0.01%	-	-	-	-
Total tax expense	86.49	3.15%	42.60	2.26%	(0.03)	0.00%
IX Profit for the year (VII - VIII)	275.17	10.03%	74.07	3.94%	80.76	6.19%

DISCUSSION ON CONSOLIDATED RESULT OF OPERATION

(Amount in Lakhs)

Particulars S.N.	For the year ended 31 March, 2022	%age of Total Income	For the year ended 31 March, 2021	%age of Total Income
1 Revenue from Operations	1,876.18	99.70%	1,282.67	98.26%
II Other Income	5.57	0.30%	22.75	1.74%
III Total Income (I + II)	1,881.75	100%	1,305.41	100%
IV Expenses
(d) Employee benefits expenses	1276.56	67.84%	886.82	67.93%
(e) Finance costs	13.85	0.74%	8.49	0.65%
(f) Depreciation and amortization expenses	96.53	5.13%	68.42	5.24%
(g) Other expenses	378.15	20.10%	261.15	20.01%
Total Expenses	1764.88	93.80%	1224.88	93.83%
V Profit before exceptional and extraordinary items and tax (III - IV)	116.67	6.20%	80.56	6.17%
VI Exceptional items & Extraordinary items	-	-	-	-
VII Profit before tax (V + VI)	116.67	6.20%	80.53	6.17%
VIII Tax expense:
(a) Current tax	37.96	2.02%	28.31	2.17%
(b) Deferred tax	4.63	0.25%	(28.34)	(2.17%)
(c) MAT credit entitlement	-	-	-	-
(d) Income Tax relating to earlier years	-	-	-	-
Total tax expense	42.60	2.26%	(0.03)	0.00%
IX Profit for the year (VII - VIII)	74.07	3.93%	80.56	6.17%

*With effect from December 31, 2021, Fetuz Hatcher Private Limited ceased to be our subsidiary company. Items for Standalone and Consolidated Restated Financial Statements Our Significant Accounting Policies

For Significant accounting policies please refer " Significant Accounting Policies", under Chapter titled Restated Standalone Financial Statements and Restated Consolidated Financial Statements beginning on page 255 and 214 respectively of the Red Herring Prospectus.

Overview of Revenue & Expenditure

The following discussion on results of operations should be read in conjunction with the Restated Standalone Financial Statements for the period ending on March 31, 2023, Financial Year 2022, and 2021 and the Restated Consolidated Financial Statements for the period ending on March 31^st, 2022. Our revenue and expenses are reported in the following manner:

Revenues

- Revenue of operations

Our Companys revenue is primarily generated from providing software development and related Information Technology consultancy Services to our clients.

- Other Income

Other Income includes interest income from bank deposits, gain on foreign exchange fluctuation and other miscellaneous income.

Expenditure

Our total expenditure primarily consists of Employee benefit expenses, Finance Costs, Depreciation, and Other Expenses.

- Employment Benefit Expenses

Our employee benefits expense primarily comprises of Salaries, wages & bonus expenses, Remuneration to directors, Contribution to Provident and Other Fund, Staff welfare expenses etc.

- Finance Cost

Our company is a debt-free company. Hence, we are not burdened with cost, interest and other charges related to borrowings. However, it includes interest on statutory dues, lease obligations, MSME, other defined benefit obligations and certain bank charges.

- Depreciation and Amortization Expenses

Depreciation and Amortization Expenses majorly includes depreciation on Plant & Equipment, which majorly includes computer systems and laptops, which forms an integral part of our business.

- Other Expenses

Other Expenses includes majorly expenses on advertisement, legal and professional charges, design and development charges and rent.

PERIOD ENDED MARCH 31, 2023, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

- Total Income

Total Income for the period ended March 31, 2023, stood at Rs. 2,744.75 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 1,881.55 Lakhs representing an increase of 45.88%.

Reason: There is an increase in ‘Total Income because of an increase in ‘Sale of software development and related IT consultancy services. Also, due to new hirings our employees base has been increased during the previous years which has contributed to the increase in the total income.

- Revenue of operations

Net revenue from operations for the period ended March 31, 2023, stood at Rs. 2,731.45 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 1875.98 Lakhs representing an increase of 45.60%

Reason: There is an increase in ‘Total Income because of an increase in ‘Sale of software development and related IT consultancy services. Also, due to new hirings our employees base has been increased during the previous years which has contributed to the increase in the total income.

- Other Income

Other Income for the Period ended March 31, 2023, stood at Rs. 13.30 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 5.57 Lakhs representing an increase of 138.72%

Reason: There is a increase in ‘other income because of an increase in interest on ‘bank deposits & and miscellaneous income.

Expenditure

- Total Expenses

Total Expenses for the Period ended March 31, 2023, stood at Rs. 86.48 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 1,764.89 Lakhs representing an increase of 86.82%.

Reason: Our expenses comprises of ‘Employment Benefit Expenses, ‘Finance Cost, ‘Depreciation and amortization expenses, and certain other ‘Other expenses There has been increase in all the expenses as compared to last year. The details of all expenses is given under their heads.

- Employment Benefit Expenses

Employee benefit expenses for the Period ended March 31, 2023, stood at Rs. 1,674.68 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 1276.56 Lakhs representing an increase of 31.19%.

Reason: There is an increase in ‘Employment Benefit Expenses because of an increase in employee related expenses such as ‘salaries, ‘wages, ‘bonus, ‘gratuity expenses and ‘staff welfare expenses on account of increase in the number of employees, due to new hirings as compared to previous financial year.

- Finance Cost

Finance Cost for the Period ended March 31, 2023, stood at Rs. 21.25 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 13.85 Lakhs representing an increase of 53.38%.

Reason: Our finance costs do not consist of any interest on loans or borrowings. It includes interest on lease liabilities, which were taken during the year and in interest on statutory dues and bank charges.

- Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Period ended March 31, 2023, stood at Rs. 232.97 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 96.53 Lakhs representing an increase of 141.35%.

Reason: There is an increase in ‘depreciation and amortization expenses due to increase in employee base which has led to more requirement of office equipments, Computer, Furniture etc.

- Other Expenses

The Other Expenses for the Period ended March 31, 2023, stood at Rs. 454.20 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 377.95 Lakhs representing an increase of 20.17%.

Reason: Other expenses comprises of various expenses that are directly or indirectly related to business. Majorly, it consists of, ‘Design and Development charges, ‘Web hosting, ‘Rent and ‘Advertising expenses. Design and Development charges and Web hosting are directly related to the services we offer. Thus, increase in revenue is directly proportionate to these expenses. Due to the hiring of workforce, new workplace have been procured which increased rent.

- Restated Profit/(Loss) before Tax

The restated profit/(loss) before tax for the Period ended March 31, 2023, stood at Rs. 2,383.09 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 116.67 Lakhs representing an increase of 35.03%.

Reason: There has been an increase in total income of company from FY 2023-22 to FY 2021-22 of approx. 86.82%. At same time, Total Expenses has also increased to 20.17%. This increase in total income and stability of total expenditure has increased PBT & PAT of company.

- Restated Profit/(Loss) after Tax

The restated profit/(loss) after tax for the Period ended March 31, 2023, stood at Rs. 275.17 Lakhs whereas in Financial Year 2021-22 it stood at Rs. 74.07 Lakhs representing an increase of 271.51%.

Reason: There has been an increase in total income of company from FY 2023-22 to FY 2021-22 of approx. 86.82%. At same time, Total Expenses has also increased to 20.17%. This increase in total income and stability of total expenditure has increased PBT & PAT of company.

FISCAL YEAR ENDED MARCH 31, 2022 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

- Total Income

Total Income for the Financial Year 2021-22, it stood at Rs. 1881.55 Lakhs whereas in Financial Year 2020-21 it stood at Rs. 1305.41 Lakhs representing an increase of 44.13%.

Reason: There is an increase in ‘Total Income because of an increase in ‘Sale of software development and related IT consultancy services. Also, due to new hirings our employees base has been increased during the previous years which has contributed to the increase in the total income.

- Revenue of operations

Net revenue from operations For the Financial Year 2021-2022 stood at Rs. 1875.98 Lakhs. Whereas For the Financial Year 2021-22, it stood at Rs. 1282.67 Lakhs representing an increase of 46.26%.

Reason: There is an increase in ‘Revenue from operations because of an increase in ‘Sale of software development and related IT consultancy services. Also, due to new hirings our employees base has been increased during the previous years which has contributed to the increase in the total income.

- Other Income

Other Income for the Financial Year 2021-2022 stood at Rs. 5.57 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 22.75 Lakhs representing a decrease of 75.51%.

Reason: There is a decrease in ‘other income because of a decrease in interest on ‘bank deposits & and miscellaneous income.

Expenditure

- Total Expenses

Total Expenses for the Financial Year 2021-2022 stood at Rs. 1764.89 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 1224.68 Lakhs representing an increase of 44.11%.

Reason: Our expenses comprises of ‘Employment Benefit Expenses, ‘Finance Cost, ‘Depreciation and amortization expenses, and certain other ‘Other expenses There has been increase in all the expenses as compared to last year. The details of all expenses is given under their heads.

- Employment Benefit Expenses

Employee benefit expenses For the Financial Year 2021-2022 stood at Rs. 1276.56 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 886.81 Lakhs representing an increase of 43.95%.

Reason: There is an increase in ‘Employment Benefit Expenses because of an increase in employee related expenses such as ‘salaries, ‘wages, ‘bonus, ‘gratuity expenses and ‘staff welfare expenses on account of increase in the number of employees, due to new hirings as compared to previous financial year.

- Finance Cost

Finance Cost for the Financial Year 2021-2022 stood at Rs. 13.85 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 8.50 Lakhs representing an increase of 63.13%.

Reason: Our finance costs do not consist of any interest on loans or borrowings. Our company is a debt-free company. There is an increase in ‘Finance cost because of increase in interest on statutory dues and bank charges.

- Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 2021-2022 stood at Rs. 96.53 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 68.42 Lakhs representing an increase of 41.08%.

Reason: There is an increase in ‘depreciation and amortization expenses due to increase in employee base which has led to more requirement of office equipments, Computer, Furniture etc.

- Other Expenses

The Other Expenses for the Financial Year 2021-2022 stood at Rs. 377.95 Lakhs. Whereas For the Financial Year 2020-21, it stood at 260.95 Lakhs representing an increase of 44.83%.

Reason: Other expenses comprises of various expenses that are directly or indirectly related to business. Majorly, it consists of, ‘Design and Development charges, ‘Web hosting, ‘Rent . Design and Development charges and Web hosting are directly related to the services we offer. Thus, increase in revenue is directly proportionate to these expenses. Due to the hiring of workforce, new workplace have been procured which increased rent.

- Restated Profit before Tax

The restated profit before tax For the Financial Year 2021-2022 stood at Rs. 116.67 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 80.74 Lakhs representing an increase of 44.50%.

Reason: There has been an increase in total income of company from FY 2020-21 to FY 2021-22 of approx.

44%. At same time, Total Expenses amount to 93.82% of Revenue is FY 2020-21 & the same has stayed almost same 93.80% of Total Revenue in FY 2021-22. This increase in total income and stability of total expenditure has increased PBT & PAT of company.

- Restated Profit after Tax

The restated profit after tax For the Financial Year 2021-2022 stood at Rs. 74.07 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 80.76 Lakhs representing a decrease of 8.28%.

Reason: There has been an increase in total income of company from FY 2020-21 to FY 2021-22 of approx. 44%. At same time, Total Expenses amount to 93.82% of Revenue is FY2020-21 & the same has stayed almost same 93.80% of Total Revenue in FY 2021-22. This increase in total income and stability of total expenditure has increased PBT & PAT of company.

FISCAL YEAR ENDED MARCH 31, 2022, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021 (BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS)

Revenues

- Total Income

Total Income for the Financial Year 2021-22 stood at Rs. 1881.75 Lakhs whereas in Financial Year 202021 it stood at Rs. 1305.41 Lakhs representing an increase of 44.15%.

- Revenue of operations

Net revenue from operations For the Financial Year 2021-2022 stood at Rs. 1876.18 Lakhs. Whereas For the Financial Year 2021-22, it stood at Rs. 1282.67 Lakhs representing an increase of 46.27%.

- Other Income

Other Income for the Financial Year 2021-2022 stood at Rs. 5.57 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 22.75 Lakhs representing a decrease of 75.49%.

Expenditure

- Total Expenses

Total Expenses for the Financial Year 2021-2022 stood at Rs. 1765.09 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 1224.88 Lakhs representing an increase of 44.10%.

- Employment Benefit Expenses

Employee benefit expenses For the Financial Year 2021-2022 stood at Rs. 1276.56 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 886.82 Lakhs representing an increase of 43.95%.

- Finance Cost

Finance Cost for the Financial Year 2021-2022 stood at Rs. 13.85 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 8.50 Lakhs representing an increase of 63.13%.

- Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 2021-2022 stood at Rs. 96.53 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 68.42 Lakhs representing an increase of 41.08%.

- Other Expenses

The Other Expenses for the Financial Year 2021-2022 stood at Rs. 378.15 Lakhs. Whereas For the Financial Year 2020-21, it stood at 261.15 Lakhs representing an increase of 44.80%.

- Restated Profit before Tax

The restated profit before tax For the Financial Year 2021-2022 stood at Rs. 116.67 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 80.53 Lakhs representing an increase of 44.87%.

- Restated Profit after Tax

The restated profit after tax For the Financial Year 2021-2022 stood at Rs. 74.07 Lakhs. Whereas For the Financial Year 2020-21, it stood at Rs. 80.56 Lakhs representing a decrease of 8.05%.

INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

1. Unusual or infrequent events or transactions

Except as described in this 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.

Other than as described in the section titled Risk Factors beginning on page 26 of this Red Herring Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company 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.

Other than as described in this Red Herring Prospectus, particularly in the sections Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 26 and 292, respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.

4. Income and Sales on account of major product/main activities

Income and sales of our Company on account of major activities derives from the business of providing Information Technology services.

5. 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.

Our Companys future costs and revenues can be indirectly impacted by an increase in labour costs as the company require labour and material for the execution of the projects as the company does not directly employ any labour or directly procure the raw materials required for the projects. Our working partners provide the manpower and the raw material required for the completion of the projects.

6. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by competition, demand/supply situation, Indian Government Policies, foreign exchange rates and interest rates quoted by banks & others.

7. 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 our revenues are by and large linked to increases in the volume of business.

8. Total turnover of each major industry segment in which the issuer company operates

The Company is operating in Information Technology Sector. Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 110 of this Red Herring Prospectus.

9. Status of any publicly announced new products or business segments

Our Company has not announced any new services and product and segment / scheme, other than disclosure in this Red Herring Prospectus.

10. The extent to which the business is seasonal

Our business does not depend to a certain extent on the seasonal, environmental and climate changes. Hence, our business is not seasonal in nature.

11. Competitive Conditions

We face competition from existing and potential competitors which is common for any business. Over a period of time, we have developed certain competitive strengths which have been discussed in section titled Our Business on page 131 of this Red Herring Prospectus.