Icodex Publishing Solutions Ltd Management Discussions

You should read the following discussion of our financial position and results of operations together with our Restated Financial Statements which have been included in this Red Herring Prospectus. The following discussion and analysis of our financial position and results of operations is based on our Restated Financial Statements for the Financial Years ended March 31, 2025, March 31, 2024 and March 31, 2023 including the related notes and reports, included in this Red Herring Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Company has not attempted to explain those differences or quantify their impact on the financial data included in this Red Herring Prospectus and it is urged that you consult your own advisors regarding such differences and their impact on our Companys financial information. Our Financial Statements, as restated have been derived from our audited financial statements for the respective period and years. Accordingly, the degree to which our Restated Financial Statements will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India. 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.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under “Risk Factors" and “Forward Looking Statements" beginning on pages 27 and 18, respectively, and elsewhere in this Red Herring Prospectus.

In this section, unless the context otherwise requires, any reference to “we", “us" or “our" refers to Icodex Publishing Solutions Limited and, our Company. Unless otherwise indicated, financial information included herein are based on our “ Restated Financial Statements" for the Financial Years ended March 31, 2025, March 31, 2024 and March 31, 2023 beginning on page no. 170 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company was incorporated in 2018 with a focus to provide software products to the scholarly and academic publishing industry. Since inception, our Company is engaged in the business of Software Product Development for Scholarly Publishing. Our Software products help in publication of research papers, studies and academic articles; that help researchers, academicians, and scholars in their field of work. We specialize in a developing and providing publishing products and software, which support the publishing process, i.e., from manuscript preparation till print and digital content distribution.

Our Company also provides Business Process Management services that support the publishing process with activities like Quality assurance checks, editorial services and back-end support to our Global Publishing Client.

Our Company also provides IT support services which includes installation of all kinds of hardware and peripherals and backend support.

For further details, please refer chapter titled “Our Business" beginning on page 125 of this Red Herring Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED PERIOD i.e., MARCH 31, 2025

In the opinion of the Board of Directors of our Company, no material development has taken place since the last audited period i.e., March 31, 2025

Further, there have not arisen any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months, if any.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled “Risk Factors" beginning on page 27, of this Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

• Company derives significant portion of its revenue from one customer

• Our revenue is highly dependent on customer located outside India

• Company is exposed to foreign exchange risks

• Success of business is dependent on key employees

• Increase in attrition rates could adversely affect our business

• Increase in the competition in our industry;

• General economic and business conditions in the markets in which we operate and in the local, regional and national & international economies;

• Any change in Government policies resulting in increase in taxes payable by us;

• Our ability to retain our Key Managerial Personnel and to attract and retain qualified personnel;

• Our ability to successfully implement our growth strategy and expansion plans, technological initiatives,

and to launch and implement various projects and business plans for which funds are being raised through this Offer;

• Our ability to respond to technological changes;

• Changes in laws and regulations that apply to the industry in which we operate

• Potential mergers, acquisitions restructurings and increased competition;

• Inability to successfully obtain registrations in a timely manner or at all;

• Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

• Our ability to meet our capital expenditure and working capital requirements;

• General social and political conditions in India which have an impact on our business activities or investments;

• Occurrence of Environmental Problems & Uninsured Losses;

• Our ability to repay interest and principal payments on our existing debt obligations and satisfy the other covenants contained in our existing debt agreements;

• Any failure to raise additional financing for our Company could have an adverse effect on our business, results of operations, financial condition and cash flows.

• The performance of the financial markets in India and globally;

• Global distress due to pandemic, war or by any other reason.

• Inability to collect receivables and default in payment from our dealers or customers could result in reduced profits and affect our cash flows.

SIGNIFICANT ACCOUNTING POLICIES

• The Restated Financial Information or Restated Financial Statements have been made after incorporating adjustments for the changes in accounting policies retrospectively in respective financial year to reflect the same accounting treatment as per the changed accounting policy for all reporting periods, if any;

• The Restated Financial Information or Restated Financial Statements have been made after incorporating adjustments for prior period and other material amounts in the respective financial year to which they relate and there are no qualifications which require adjustments;

For more details kindly refer to chapter titled “Restated Financial Statements" beginning on page 170 of this Red Herring Prospectus.

KEY PERFORMANCE INDICATORS

(Rs. In Lakhs except percentages and ratios)

Particulars	For the year ended March 2025	For the year ended March 2024	For the year ended March 2023
Revenue from Operations	2187.74	1,040.07	953.67
Growth in Revenue from operations	110.34%	9.06%	16.62%
EBITDA	1,342.99	426.07	194.81
EBITDA Margin	61.39%	40.97%	20.43%
PAT	895.62	439.70	181.18
PAT Margin	40.56%	40.02%	18.64%
Net Worth	1,904.65	859.03	419.33
Return on Net Worth	47.02%	51.19%	43.21%
Earnings per share (Basic & diluted)	7.32	3.66	1.51
Net asset value per share -	15.56	7.16	3.49

*As certified by JMMK & Co., Chartered Accountants pursuant to their certificate dated July 19, 2025.

Notes:

• Revenue from Operations means the Revenue from Operations of the Company as appearing in the Restated Financial Statements.

• Growth in Revenue from Operations (%) is calculated as Revenue from Operations of the relevant year minus Revenue from Operations of the preceding period, divided by Revenue from Operations of the preceding year.

• EBITDA is calculated as Profit before tax + Depreciation + Finance Cost - Other Income

• ‘EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

• ‘PAT Margin is calculated as PAT for the year divided by total income.

• Net worth means the aggregate value of the equity share capital and reserves and surplus (including, Securities Premium, General Reserve and surplus in statement of profit and loss)

• Return on Net Worth is calculated as Net profit after tax (as restated) divided by Net worth at the end of the year.

• Basic earnings per share (Rs): Net profit after tax as restated for calculating basic EPS/ Weighted average number of equity shares outstanding at the end of the year

• Diluted earnings per share (Rs): Net profit after tax as restated for calculating diluted EPS/ Weighted average number of equity shares outstanding at the end of the year for diluted EPS

• Net assets value per share: Net Worth at the end of the period or year/ Weighted average number of equity shares outstanding at the end of the year

• Weighted average number of equity shares is the number of equity shares outstanding at the beginning of the year adjusted by the number of equity shares issued during the year multiplied by the time weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding as a proportion of total number of days during the year.

DISCUSSION ON RESULTS OF OPERATION

The following table sets forth financial data from our restated financial statements of profit & loss for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 the components of which are also expressed as a percentage of total revenue for such periods:

Particulars	31st March 2025	%	31s March 2024	%	31st March 2023	%
A. Revenue
Revenue from Operations	2,187.74	99.09%	1,040.07	94.67%	953.67	98.14%
Other Income	20.14	0.91%	58.55	5.33%	18.09	1.86%
Total Revenue	2,207.88	100.00%	1,098.62	100.00%	971.76	100.00%
B. Expenditure
Employee Benefit Expenses	596.39	27.01%	517.04	47.06%	607.36	62.50%
Finance Cost	22.17	1.00%	4.00	0.36%	1.02	0.10%
Depreciation & Amortization Expense	59.21	2.68%	36.06	3.28%	27.67	2.85%
Other Expenses	248.35	10.27%	96.94	8.82%	151.50	15.59%
Total Expenditure	926.12	40.97%	654.04	59.53%	787.55	81.04%
Profit/Loss Before Exceptional and Extraordinary Items and Tax	1,281.75	58.05%	444.56	40.47%	184.21	18.96%
Exceptional Items
Profit Before Extraordinary Items and Tax	1,303.24	58.05%	444.56	40.47%	184.21	18.96%
Extraordinary Items
Profit Before Tax	1,303.24	58.05%	444.56	40.47%	184.21	18.96%
Tax Expense:
(1) Tax expense for Current year	361.98	16.40%	76.65	6.98%	31.58	3.25%
(2) Short/(excess) of prior years	0.44	0.02%
(3) Deferred tax	23.71	1.07%	(2.51)	-0.23%	(0.31)	-0.03%
(4) MAT Credit Entitlement			(69.28)	-6.31%	(28.24)	-2.91%
Profit (Loss) from the period for continuing operations	895.62	40.56%	439.70	40.02%	181.18	18.64%

*(%) column represents percentage of total revenue

KEY COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS BASED ON OUR RESTATED FINANCIAL STATEMENTS

Total Income

Our total income comprises of revenue from operations and other income.

Revenue from Operations

Our revenue from operations represents revenue generated from provision of software development services, application support & IT Management services for the publishing industry and otherwise. The company is engaged in the business of support service provider in the publishing industry. For detail, please refer to section “ Our Business” on page 125 of this Red Herring Prospectus.

Total Expenditure

Our total expenditure primarily consists of Employees Benefit Expenses, Finance cost, Depreciation and Amortization and Other expenses.

Employee Benefit Expenses

Employee benefit expenses comprise of Salary Expenses to employees and directors, consultancy fees and Contribution to Statutory Funds and staff welfare expenses.

Depreciation & Amortisation Cost

Depreciation and amortization expense consists of depreciation on office equipment, computers, furniture & fixtures and intangible assets.

Other Expenses

Other expenses consist of audit remuneration, administrative expenses, dues and subscription, insurance, other expenses, power and fuel, professional fees, rent, repairs and maintenance, server, hosting and domain and expense, travelling and conveyance expenses.

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2025 TO FINANCIAL YEAR ENDED MARCH 31, 2024 (Based on Restated Financial Statements)

Income:

Total Income

Our total income amounted to Rs. 2,207.88 Lakhs for the financial year ended March 31, 2025 which is on account of revenue from operations as described below and other income:

Revenue from Operations

Our revenue from operations for the financial year ended March 31, 2025 was Rs. 2,187.74 Lakhs.

During the financial year ended March 31, 2025, the Company exported services to an overseas client amounting to Rs. 914.92 Lakhs. Further, during the same period, the Company started providing services to five new domestic clients. The nature of services provided to the new customers include Software Product Development, Business process management and Application Support and IT. The revenue of the company increased during the fiscal 2025 because the company was able to book revenue from five new domestic clients and services amounting to Rs. 1,272.82 Lakhs were provided to them.

Expenditure:

Employee Benefits Expenses

The employee benefits expenses for the financial year ended March 31, 2025 is Rs. 596.39 Lakhs which is about 27.01% of the total income. The Employee Benefit expenses have increased in absolute terms as compared to last year as companys business operations increased during the financial year ended March 31, 2025 and the company had to hire new employees to service the new clients.

Finance Cost

Finance cost for the financial year ended March 31, 2025 is Rs. 22.17 Lakhs as compared to Rs. 4.00 Lakhs in Financial year ended March 31, 2024. This increase is because the short term borrowings of the Company has increased.

Depreciation and Amortization Expenses

Depreciation for the financial year ended March 31, 2025 is Rs. 59.21 Lakhs which is about 2.68% of the total revenue. During the period, there has been addition of Rs. 532.24 Lakhs worth of fixed assets at the Gross Block level and there has been no disposal of any fixed assets.

Other Expenses

Other Expenses for the financial year ended March 31, 2025 is Rs. 248.35 Lakhs which is about 10.27% of the revenue. This expense includes administrative expenses, dues and subscription, professional fees, Travelling and Conveyance expenses, Server hosting & domain expenses, Insurance and rent as the primary components of other expenses.

The increase in operations of the Company has resulted in increase in administrative expenses, professional fees, rent, etc.

Tax expense

Our total tax expenses for the financial year ended March 31, 2025 was Rs. 389.91 Lakhs. Our tax expenses comprised (i) current tax amounting to Rs. 365.76 Lakhs, (ii) Short/(excess) of prior years amounting to Rs 0.44 Lakhs and (iii) deferred tax amounting to Rs. 23.71 Lakhs. This increase in tax expenses is due to increase in revenue and corresponding increase in profit before tax during the financial year FY 2024-25.

Profit after Tax

Profit after tax for the financial year ended March 31, 2025 is Rs. 895.62 Lakhs which is about 41.37% of the total income.

The increase in PAT for the financial year ended March 31, 2025 is on account of increase in revenue from operations during the said period.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2024 TO FINANCIAL YEAR ENDED MARCH 31, 2023 (Based on Restated Financial Statements)

Income:

Revenue from Operations

During the financial year 2023-24, the revenue from operations has increased to INR 1,040.07 Lakhs as against INR 953.67 Lakhs in 2022-23 showing an increase of 9.06%. During the year 2023-24, the company provided services to an existing international customer i.e., Global Publishing Company and there was no significant change in the revenue from operations apart from normal growth in business operation. This increase of 9% is normal business growth for providing related services to the sole international client.

Expenditure:

Employee Benefits Expenses

During the year 2023-24, the manpower cost has decreased by 14.87%. This reduction is because the company has capitalised a part of its employee benefit expenses under Intangible assets due to development of a software which was undertaken during the year.

Employee cost to the tune of Rs 135.33 Lakhs was booked as Intangible assets for development of HTML - OPS Version (Software of the Company) which was undertaken during the year, the benefit of which will be realised in future years. During the FY 2024, core members of the product team including the Promoters were also working on OPS Version (Software of the Company) for a substantial portion of their time.

The details of expenses against the capitalization for software development is as hereunder for the FY 2024:

Particulars	Amount (in Lakhs)
HTML OPS V.3
FY 2023-24
I. Salary Expenses Allocation during the year (including director remuneration)	135.33
II. Allocation of indirect cost proportionate	147.48
III. Bonus to specified employees	2.28
TOTAL AMOUNT CAPITALISED	285.09

Depreciation and Amortization Expenses

During the year 2023-24, the depreciation has been Rs. 36.06 Lakhs as against Rs. 27.67 Lakhs in 2022-23 showing an increase of 30.32% due to increase in Fixed Assets of the Company by Rs. 20.16 Lakhs during the year.

Finance Cost Expenses

During the year 2023-24, the finance cost expense has been Rs. 4.00 Lakhs as against Rs. 1.02 Lakhs in 2022-23 showing an increase of 293.25% due to increased requirement of working capital by the Company.

Other Expenses

During the year 2023-24, the other expenses has been Rs. 96.94 Lakhs as against Rs. 151.50 Lakhs in 2022-23 showing a decrease of 36.01%. This reduction is other expenses is because the company has capitalised a part of its other expenses and employee benefit expenses under Intangible assets due to development of a software which was undertaken during the year.

Profit after Tax

1. The PAT for the year 2023-24 is Rs. 439.70 Lakhs as against Rs. 181.18 Lakhs in 2022-23 showing an increase of 142.68%. The increase in PAT for the financial year ended March 31, 2024 is on account of increase in revenue from operations from Rs. 953.67 lakhs to Rs. 1,040.07 lakhs and reduction in manpower expenses during the said period and also on account of economies of scale.

2. During the year 2023-24, the employee benefit expense has been Rs. 517.04 Lakhs as against Rs. 607.36 Lakhs in 202223 showing a decrease of 14.87%. This reduction in employee cost is because the company has capitalized employee cost to the tune of Rs 135.33 Lakhs and booked as Intangible assets for development of HTML - OPS Version (Software of the Company) which was undertaken during the year, the benefit of which will be realised in future years. During the FY 2024, core members of the product team including the Promoters were also working on OPS Version (Software of the Company) for a substantial portion of their time.

Further, other expenses directly attributable to the development of HTML - OPS Version (Software of the Company) were also capitalized.

A. ANALYSIS OF EMPLOYEE COST FOR THE FINANCIAL YEARS FY 2025, FY 2024 and FY 2023 (Based on Restated Financial Statements)

Particular	24-25	23-24	22-23
Employee Cost	547.89	492.73	520.83
Retainers	277.99	98.75	91.07
Directors Remuneration	57.00	48.00	38.00
Statutory Payments and Staff Welfare	15.38	12.90	9.96
Total Remuneration paid	898.26	630.77	659.86
Less Transfer to Intangible under Development	301.88	135.33	52.50
Net Manpower cost	596.39	517.04	607.36
Revenue from Operations	2,187.74	1,040.07	953.67
Manpower cost as % of revenue from operations	27.26%	49.71%	63.69%

*As certified by JMMK & Co., Chartered Accountants pursuant to their certificate dated July 19, 2025.

Reason for variance -

1. The revenue from operations for the financial year ended March 31, 2025 has increased substantially as compare to revenue from operations for the FY 2024. Hence the manpower cost as percentage of revenue has come down.

2. During the FY 2024, core members of the product team including the directors were working on OPS Version (Software of the Company) for more than 50% of their time, cost of which has been capitalized to the tune of Rs. 135.33 Lakhs by the Company as compared to Rs. 52.50 for FY2023.

3. Further, in the month of January 2024, 65 employees were given increment on an average of 10-12%. The impact of this increment was booked during the FY 2024 for 3 months (January 2024, February 2024, March 2024) whereas the impact of the above increment was for 12 months ended March 31, 2025.

B. ANALYSIS OF OTHER EXPENSES FOR THE YEARS ENDED FY 2025, FY 2024 and FY 2023 (Based on Restated Financial Statements)

Particular	24-25	23-24	22-23
Other Expenses	248.35	96.94	151.50
Major items in the above other expenses
Administrative Expenses	21.83	6.07	8.86
Dues and subscription expenses	19.84	7.99	10.17
Professional fees	18.62	9.55	8.26
Rent	73.77	32.95	30.29
Server, hosting and domain expenses	31.35	24.43	51.88
Travelling & Conveyance	48.44	3.85	3.64

Reason for variance -

1. The increase in Administrative Expenses during the financial year ended March 31, 2025 as compared to FY 2024 is on account of business promotion expense and server co-location expenses.

2. The increase in dues and subscription during the financial year ended March 31, 2025 as compared to FY 2024 is on account of increase in multiple software subscriptions for business purposes like Chat GPT, AIML software, Microsoft service offerings, and anti-viruses.

3. The increase in professional fees during the financial year ended March 31, 2025 as compared to FY 2024 is on account of availing management consultancy services during the said period.

4. The increase in rental expenses during the financial year ended March 31, 2025 as compared to FY 2024 were on account of capitalization of rental expenses to the extent of Rs 26.02 Lakhs for the development of HTML-OPS Version 3 during FY24, however, no rental expenses have been capitalized for the financial year ended March 31, 2025.

5. The variance in server, hosting and domain expenses for the financial year ended March 31, 2025 as compared to FY 2024 is on account of increased business and the company has been able to save some cost by availing only cloud-based servers with third parties compared to owning and managing some servers in-house helping to reduce the expense.

6. The increase in travelling & conveyance expenses from Rs. 3.85 Lakhs during the financial ended march 31, 2024 to Rs 48.44 lakhs for the financial year ended March 31, 2025 is primarily attributable to the execution of an IT support services project requiring on-site implementation across multiple client locations, including Mumbai, Pune, Nashik, Nagpur, and Sambhajinagar. The project scope involved installation of hardware and peripherals, technical documentation, and provision of ongoing support services, necessitating the deployment of technical teams to client premises. In addition to the above, the company, during the year, initiated the process of raising funds through public offer for which multiple visits were undertaken by company officials to meet investors, auditors, merchant banker and other stakeholders. These engagements collectively contributed to the increase in travelling expenses incurred during the year.

INFORMATION REQUIRED AS PER ITEM 11 (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. There are no unusual or infrequent events or transactions in our Company. The transactions are as per usual business operations.

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 27 of this Red Herring Prospectus. To our knowledge, except as we have described in this Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

Known trends or uncertainties impacting sales, revenue, or income

Apart from the risks as disclosed under Section “Risk Factors” beginning on page 27 of the Red Herring 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.

Future changes in the 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 27, 125 and 220 respectively of this Red Herring Prospectus, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

Income and Sales on account of major product/main activities

Income and sales of our Company on account of main activities derives from provision of software development services, application support & IT Management services.

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

The increased revenue during the year ended March 31, 2025 is on account of addition of five new domestic customers amounting to Rs. 1,272.82 Lakhs.

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

Our business activity primarily falls within a single business segment i.e. provision of IT enabled services in the publishing sector, as disclosed in “Restated Financial Statements” on page 170 of this Red Herring Prospectus, we do not follow any other segment reporting.

Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter “Our Business”, on page 125 of this Red Herring Prospectus our Company has not announced any new product or service.

Seasonality of business

Our business is not subject to seasonality. For further information, see “Industry Overview” and “Our Business” on pages 107 and 125 respectively of this Red Herring Prospectus.

Any significant dependence on a single or few suppliers or customers

Company has derived 100% of its revenue from a single customer till the year ended March 31, 2024. During the financial year ended March 31, 2025 our Company has added five new domestic customers and reduced its dependencies on a single customer.

For further details, refer to the chapter titled “Risk factors” on page 27 of Red Herring Prospectus.

Competitive Condition

Our Industry is fragmented consisting of large established players and small niche players globally. Further, there are no entry barriers in this industry and any expansion would further intensify competition. Industry is very competitive and niche and we expect competition to continue and likely to increase in the future.