EMUDHRA LIMITED EXPANSION PROJECT PLAN - CONFIDENTIAL
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EMUDHRA LIMITED
EXPANSION PROJECT
PLAN
CONFIDENTIAL 1ABOUT THE COMPANY
eMudhra Limited was incorporated under the Indian Companies Act in July 2008.With
only 5 years in operation, the company has swiftly captured a substantial market share
in DSC business in India.eMudhra is a Licensed Certifying Authority under
Government of India (GOI) to issue Digital Signatures Certificates (DSC) in India under
eMudhra brand. The company provides retail issuance of Digital Signature Certificates
online and through its partner network across India. eMudhra has issued more than 1.5
million DSCs in Indian Market including eGovernance projects and Banking sectors.
eMudhra’s expertise in Public Key Infrastructure technology has enabled the team to
create many innovative solutions and file patents across the globe. eMudhra also holds
various PKI Authentication security solutions such as eMas, eMsigner etc. Our Current
market share in DSC is around 40%.
eMudhra renders information technology enabled services to retail consumers apart
from catering the requirements of Government, Large corporate and Banking Sectors.
The Company is among the No.1 brands in India for issuing DSC and is an established
player catering the needs of Indian consumers.
eMudhrahas always worked closely with the GOI to digitize consumer’s work flow and
to bring in adequate online security for the consumers, which would also help the
commercial objectives of the Company. There are dedicated senior level executives to
liaison with Government and Large Corporate on a daily basis.
eMudhra’s growth through the last 5 years lies in its strong credentials as a Certifying
Authority in India and Mauritius, our ISO 27001 certified processes, a strong corporate
culture focusing on good corporate governance practices, and an innovative team of
employees and leaders with an aptitude for strong vision and a hunger for perfection.
The determination and perseverance of our team has pioneered untiring innovation as
evident in solutions such as SWYSKey and Digicard digital signature tokens, eMAS
digital signature server, eMsigner Paperless revolution, Taxsmile online tax filing portal,
and many other valuable and relevant solutions easing our customers’ daily lives.
CONFIDENTIAL 2The major milestone in eMudhra journey are as under:
2008
• Authorized e-Return Intermediary under Department of Income Tax
• Licensed Certifying Authority under Ministry of IT - Govt. of India
2009
• Started Commercial Operations of Digital Signature Certificates
2010
• First Banking customer acquisition
• Achieved 100,000 DSC issuance
2011
• An ISO 27001:2005 certified company
• Patent for Secure Messaging Application.
2012
• 500,000 DSCs issued
• Recognized Foreign Certification Authority in Mauritius
2013
• Succeeded in achieving 1 Million customer base
• Strategic alliances with major SIs
2014
• Got several large banks as customers
• Opened 14 branch-offices across India
• 8,00,000 DSC’s issued in one year
2015--16
• Become the first e-Sign service provider in India
• Digital Locker project of Government of India uses eMudhra Limited’s e-Sign
services
• Identity and Transaction Management Solution – eMas, eMsigner and e-Sign
gained momentum in the market
• Transformed into a unique product company in the area of Digital Security and
Authentication solutions
2015--16
• Established channel partner network Internationally
• International Sales Commissioned
• No. of offices expanded to 20
• Market leader Position further consolidated
CONFIDENTIAL 3PROMOTERS BACKGROUND
Mr. V. Srinivasan – Chairman
Mr.Srinivasan is the Chairman of the group since the inception in 2008. Prior to this, he
was the Managing Director and Global Chief Executive Officer of 3i Infotech since April
1999. Within a span of just ten years, he turned 3i Infotech into a global technology
company with over 10,000 employees servicing a large number of customers in over 50
countries across 5 continents. Having traveled widely around the world, he has a deep
understanding of global business issues.
Mr. Srinivasan combines a comprehensive mix of academic qualifications and
professional experience. He is a graduate in Mathematics from Madras university and
secured the First Rank in the university. Apart from being a rank holder in the Chartered
Accountancy examination, he is also a qualified Cost and Works accountant and a
Company Secretary. He had also attended the Executive Development Programme at the
Kelloggs School of Management in Chicago, USA.
Mr. Srinivasan had also authored a book titled “New Age Management Philosophy from
Ancient Indian Wisdom” based on his learnings from the Thirukural, a 2000 year old
Indian text.
Mr. Srinivsan is the Chairman of India PKI forum, a body sponsored by Controller of
Certifying Authorities, Ministry of IT, Govt of India, for development of Digital
Signature Industry. He has presented papers relating to Digital signature Industry in
Asia PKI Consortium. He has also been chosen to be Vice Chairman of Asia PKI
Consortium head Quartered in Hong Kong.
BOARD OF DIRECTORS
Mr. V. Srinivasan- Chairman
Mr. Venu Madhava – Whole Time Director
Mrs Heera Prabhakar – Whole Time Director
Mr. M.B Battilwala - Independent Director
Mr. Manoj Kunkalienkar – Independent Director
The day to day management is looked after by Mr. V Srinivasan , Chairman assisted by
Mrs. Heera Prabhakar, CFO and Mr. Venu Madhava , Head- HR & Legal.
CONFIDENTIAL 4Venu Madhava Head – Legal and HR
Venu comes with more than 10 years of corporate experience in varied industries and
was associated with companies like Hewitt Associates and Adecco India. Venu has
completed his Bachelor’s degree in Commerce and Law. Venu, in his current capacity as
Head of legal, has been associated with eMudhra for more than 3 years. He has the
experience in handling a wide array of contracts.
Heera Prabhakar Head – Finance
Heera brings in 11 years of professional experience in managing, accounts, finance
operations involving audits, taxation and treasury management. She has experience in
effectively handling mergers, acquisitions and financial strategy for the business group.
She has excellent professional skills in Financial Analysis of IT, Service & Manufacturing
Sectors.
Heera acquired her Bachelor’s degree in 2002 from Mahatma Gandhi University and
then went on to complete her Chartered Accountant (FCA) in 2005.
Her initial years ofexperience was in IBM as Financial Analyst till 2007. She had been
associated with Sogefi MNR, a manufacturing Company, as Finance Controller till May
2010 before joining eMudhra. She has been associated with eMudhra from 2010 and
currently heads the finance function.
M.B Battilwala - Independent Director
A career spanning over 40 years, with considerable senior level international exposure,
in areas such as business development, marketing and public relations, Information
Technology (IT), Banking and Insurance. His areas of Expertise are Marketing & Public
Relations;Business Development and opening doors, including overseas and
mentoring.Some of the positions handled and work done over the last 15 years are as
follows:
Current:
Non-Executive Director on the Board of Konark Advisers Pvt. Ltd., an advisory firm
for Private Equity investments
Partner in Vita Consultants, a Business Associate of Tata AIA Life Insurance Co. Ltd.
Past:
Member of the Operating Board at 3i Infotech, an India-based global IT company
CONFIDENTIAL 5 Global head of Marketing & Public Relations at 3i Infotech for 10 years
Started the operations of 3i Infotech in Dubai, and was the Regional Head of
Tricolour Infotech, the Middle East JV between the Emirates Bank Group and 3i
Infotech
Was instrumental in securing several awards for 3i Infotech, including a “Special
Achievement Award” from the U.S. Commercial Service, United States of America,
Department of Commerce, “For its special efforts and success in doing business with
The United States of America”
His prior experience was with ICICI (1992-99) and State Bank of India (1972-92) in
various IT, Banking and Investor Service related where he was also in charge of groups
of over 100 personnel.
Education:
Masters in Financial Management (MFM) *
M. Sc. (Physics), Kanpur University
Certified Associate of the Indian Institute of Bankers (CAIIB)
Diploma in Systems Management (DSM) *
Diploma in Computer Management (DCM) *
* from the Jamnalal Bajaj Institute of Management Studies, University of Bombay
Mr. Manoj Kunkalienkar – Independent Director
Mr. Manoj is an experienced technocrat with a strong technical background. He has
successfully created, nurtured and built strong IT organizations one of which was listed
on the stock exchange in India. He is working with Prof. Deepak Phatak and Prof. N. L.
Sarda to provide Consulting in area of system performance, IT strategy and
benchmarking for companies like United Insurance, MTNL, RCF, UTI. He is a B.Tech
1981 in Electrical Engineering from Indian Institute of Technology Bombay, and M.Tech
1983 in Computer Science & Engineering from Indian Institute of Technology Bombay.
Positions Held
Member of Board Technology Committee of National Commodity and Derivative
Exchange
Member of Board Technology Committee of National Securities Depository Ltd.
Member of Board Standing Committee of United Stock Exchange Ltd.
CONFIDENTIAL 6Experience
2010 — Soft.Com India Pvt. Ltd :- As a founder has built up a team to deliver high-end
Consulting in Application Performance
2006 – 2010 Saraswat Infotech Ltd ( a Subsidiary of Saraswath Bank):-Managing Director
& CEO
1999 -2006 3i Infotech (formerly ICICI Infotech) Ltd:- .
Executive Director and Member of Board
Responsible for Global Technology Services Line of Business
Controlled the P&L for entire business operation of South Asia
Spearheaded Companywide Quality and Internal Process Initiatives
1992 -1999 Rohan Software Pvt. Ltd.
Started own consulting and software development company
Merged the company with ICICI Infotech in 1999
Core strength in System Performance Consulting
Key Management Team
Arvind Srinivasan - Director - Middle East & Africa
Arvind is a graduate from Rutgers Business School with a Masters from University of
Michigan both, with a specialization in Finance. Post his education, he started his career
with Barclays Capital as a Commodities Analyst in Manhattan, NY, where he worked
with the Oil and Precious Metals Desks. He has founded a venture focusing on
readymade e-commerce platforms for the restaurant sector known as Zeletor.
Arvind currently is in-charge of managing the team in Dubai and enabling a channel and
direct sales structure so as to effectively pursue business opportunities in Middle East
and Africa. His primarily focus is to grow business in the region through a combination
of managing brand building efforts, Sales structures, and ensuring strong delivery.
He is based out of Dubai and manages the eMudhra Dubai Office. He is also an active
member of TIE Dubai.
CONFIDENTIAL 7Ashwin Jansale Head - Channel Sales
Ashwin Jansale -Head - Channel Sales
Ashwin Jansale comes with 20 years of Sales and Marketing experience, specializing in
various aspects of Sales and Marketing across a varied spectrum of industries, products
and services namely - IT, FMCG & Advertising. Prior to eMudhra he was with Dell Inc.
handling various Domestic and International roles in Enterprise B2B and B2C sales,
online sales and marketing. His previous roles were with Bacardi-Martini India Ltd,
Fosters India Ltd, Code Theatre Infotech P Ltd.
An Alumni of the Indian Institute of Management- Bangalore, he currently is the head of
Channel Sales for eMudhra and spearheads this organization to drive overall revenue
and profitability across different product lines.
Biju Varghese - Head – Enterprise Security Solutions
Biju Varghese has extensive technical expertise spanning more than 15 years in Public
Key Infrastructure/Certification Authority, Digital and Application Security, Applied
Cryptography, Enterprise Architecture, Security Policies, Mobile payments and Mobile
based Secure Applications, Smart Cards and Identity Management devices. Prior to
joining eMudhra, Biju was a Business Analyst at Aditya Birla Minacs IT Services and
Senior Project Executive at IDRBT, a Reserve Bank of India initiative.
Biju in his current capacity as Business Head of Enterprise Security Solutions is involved
in business strategy and managing products, presales, delivery and corporate sales
functions for the domestic and international markets. He was instrumental in setting up
the technical infrastructure of three Govt. licensed Certification Authorities,
implementing strong authentication solutions in major banks, government agencies,
insurance companies and establishing strategic alliances in India and abroad.
Biju is an M. Tech in Technology Management and B. Tech in Mechanical Engineering
from the University of Kerala.
Devraj Hazarika Head – Marketing
Devraj is a performance oriented and accomplished professional with 7 years of
experience in FMCG, Telecom, Financial and IT sectors, delivering performance in
Online/Digital and offline Marketing, corporate communications and product
marketing. Prior to eMudhra he was associated with Aditya Birla Group and Tata
Docomo. An MBA Graduate from Bangalore University, Devraj in his current capacity is
taking care of marketing in eMudhra for all its products.
CONFIDENTIAL 8Janarthanan S Head – Customer Service
Jana has close to 10 years of experience in financial services and operations. Jana has
varied experience in Product management, Operations and Customer Service. He as has
worked with companies such as Citigroup, GE, Religare Finvest and Amazon. In
Amazon, he was involved in setting up the chat process for customer service team for
Amazon-Kindle in India.
Jana joined eMudhra in 2012 and was instrumental in setting up a full-fledged customer
service team for the digital Signatures business and subsequently has integrated
customer services for other eMudhra products like PAN cards .He is currently heading
the Customer Service team which takes care of Inbound Service, Outbound tele-sales
and Market Intelligence alongside fulfilling the role of Executive Assistant to the
Chairman of eMudhra. Jana is an Electrical Engineering graduate and has an MBA
degree from Anna University.
Kaushik Srinivasan -Head - Strategy and Analytics (Prism)
Kaushik is the head of data analytics division of eMudhra. Kaushik has also founded
another venture partyManao.com, a party products and services company with a focus
on bringing innovative party concepts to the Indian market.
Prior to his current assignments Kaushik was a Quantitative Analyst with Trafelet Delta
Funds in 2008, a $6 billion long short equity Hedge Fund in New York. In his earlier role,
he was with UBS Wealth Management in New Jersey where he was part of a select team
focused on developing state-of-the-art technology for managing client portfolios.
Kaushik holds a Bachelors Degree in Computer Engineering and Masters Degree in
Information Systems from Stevens Institute of Technology, New Jersey. He is a CFA
charter holder and a member of New York Society of Security Analysts and Indian
Association of Investment Professionals where he actively contributes. Kaushik is a
travel enthusiast having visited over 65 countries.
A M Kiran Head- Operations& Admin
A Commerce graduate with Masters degree in Finance, Mr. Kiran comes with close to 15
years of experience. He has varied experience in companies such as Deutsche Bank
(2008-2013) and Axa Business Services (2000-2008). Kiran Joined eMudhra in 2013 and is
currently heading operations Team in 14 Locations across Indiawhich processes
applications received from customers for various products of eMudhra such as DSC,
CONFIDENTIAL 9PAN. Apart from Operations Kiran also Heads Admin in eMudhra.
Vijay Kumar Head – Technology
An Electronics & Communication graduate, Vijay has 11 Years of experience at Relyon
(A leading Taxation & Payroll software provider) and CCH ProSystem (Wolters
Kluwer’s Indian software business) in the fields of product development, customer
support and web technologies. Across his professional career, he has also involved in
consultation, trainings and feedback to Directorate of Income Tax, ICAI, etc.
Technically, Vijay is an active participant in many tech events of Google, Yahoo, etc and
is hands on with variety of languages including open source and Microsoft flavours.
With his knowledge & experience with various aspects of technology & business, Vijay
fulfils the techno-functional quotient for various projects. He currently heads the
Technology at eMudhra.
CONFIDENTIAL 10Client List:
Banking Insurance/ NBFC Government Others
Barclays IRDA (Regulator) Dept of Income Tax Infosys
Deutsche Bank Kotak Life Insurance Civil Aviation TCS
Royal Bank of Birla Sun Life
Scotland Insurance DGS&D Wipro
United India ONGC (Oil and
State Bank of India Insurance Gas) IBM
ICICI Bank Bajaj Allianz BHEL EMC2
Axis Bank Axis Securities STPI Cisco
Punjab National State Sales Tax
Bank NSDL Depts Amazon
Kotak Mahindra State Treasury
Bank CDSL Depts Caterpillar
State Revenue Ashok
IndusInd Bank UTI ITSL Depts Leyland
Digital Locker, Govt
IDBI Bank VISA of India Idea Cellular
Renault
Corporation Bank Edelweiss ICTA Mauritius Nissan
Public Procurement
Central Bank of India Indiabulls Office , Mauritius TeamLease
Canara Bank Motilal Oswal Via.com
IDFC Bank Angel Broking ITZ Cash
CONFIDENTIAL 11Financial Performance
Key Business Indicators:
Active Digital Signatures in India44,00,000; eMudhra Current Market Share about
40% of above
PAN application processed till date 13,24,830
Registered consumer base: More than four million
Number of employees: 300+
Place of business operations: Bangalore (Corporate office), Salem (Disaster
Recovery Center),Chennai, Mumbai, Delhi, Kolkata, Mauritius are the major
locations apart from having our operations centre in other 18 location PAN India
Revenue posted last year 2014-15 – Rs. 37.42Cr : C.Y 2015-16- Rs.43.76 Cr
DSC 2016-17 issuance till Sep’16 – 6,09,990
E-Sign based issuance 13,35,000
With its Visionary Board of Directors, Strong corporate support and Enthusiastic and
experienced Management team, eMudhra has moved from the start-up phase very
quickly. Some key financial indicators are highlighted below:
eMudhra Revenue Position ( Rs. in Cr)
Particulars 2016 2015 2014 2013 2012
DSC/ Token 29.56 27.95 13.64 10.55 4.43
Enterprise Security Solutions 7.76 2.84 1.59 0.71 0.15
PAN 2.93 1.61 0.87 0.38 -
Online Taxfilling 1.26 1.70
Revenue from Core Business 41.51 34.10 16.10 11.64 4.58
Professional Services 1.96 1.20 - 5.80 5.82
Other Income 0.29 2.12 1.56 2.16 2.05
Revenue from Professional Services 2.25 3.32 1.56 7.96 7.87
Grand Total 43.76 37.42 17.66 19.6 12.45
The above revenue statement shows increase in turnover ofcore business from Rs.4.58 cr
CONFIDENTIAL 12in 2012 to Rs. 41.51Cr in 2016. Revenue from core business has shown a CAGR of 100%
year after year from 2012. This ismainly due to the below factors:
Increase in the DSC sale from Rs. 4.43 cr in 2012 to Rs.29.56 cr in 2016 shows an
increase of 567%. eMudhra has been focusing on growth in the partners reach
both in RA & SUB RA category in 2015 &16 as compared to 2012 , 13& 14 and has
removed the distributor model of business during these year which has
strengthened the overall partner network. During the year ended 2015& 2016
eMudhra has opened nearly 19 branches across India for issuance of DSC, which
has increased the DSC issuance during the year to 8,00,000 from the previous two
years against the issuance of 250000 during DSC season in initial years. During
the year 2016 the Company has become one of the leading Certifying Authorities
in India, commanding almost 40% market share in Digital Signature Certificate
business.
The revenue from sales of e-Token during the years increased more than 100% in
2016 & 2015 as compared to earlier financial years. The Company has Achieved
200% growth in the number of Token issued in 2016 when compared to 2014.
The revenue from sales of Enterprise Security Solutions (ESS) such as eMas
(eMudhra Authentication Server) , eMsigner and e- Sign sales to large corporate
during the year 2016 has increased more than 173% to Rs. 7.76 Cr as compared to
previous financial year 2015&more than 388% as compared to F.Y 2014&13. The
company has also become the first e-Sign service provider in India during the
year 2016.The Company was able to penetrate major industry verticals like
Banking, Insurance, Telecom and Government Bodies though our Identity and
Transaction Management Solution – eMas, eMsigner and e-Sign. This contributed
to the increase in the ESS Revenue during the year 2016. Other major
achievements in this product area have been the tie up with major partners like
Infosys, Wipro etc.
The Company is also a PAN intermediary for soliciting PAN applications online.
During the financial year 2016, the revenue from Pan Services increased from Rs.
1.61Cr in 2014 to Rs 2.93 Cr showing an increase of more than 81% from Previous
Financial Year.
eMudhra has been doing Professional consultancy services till 2013 on an
opportunity basis, which brought in a revenue of Rs. 5.80 Cr in 2013 &Rs.5.82 Cr
during 2012. During the year ending 2015& 2016the company shifted its focus
only on DSC and Authentication business and the total revenue of Rs.43.76 in
2016& Rs 37.42 Cr in 2015 is without any major consultancy revenue. The
revenue from professional services during 2015 & 2016 represent mainly from
implementation cost from ESS products. This clearly shows the potential of the
CONFIDENTIAL 13business to grow during the coming years as well.
Other Income Includes Charge out Income from other Group Companies &
Interest Income
Rs in Cr
eMudhra Profitability Statement
Year Year Year Year Year
ending ending ending ending ending
Particulars 2016 2015 2014 2013 2012
Revenue from Operations 41.51 34.10 16.10 11.64 4.58
Cost of Goods sold 15.43 13.46 5.90 5.94 3.40
Gross Profit 26.08 20.64 10.20 5.70 1.18
Consultancy/other Income 2.25 3.32 1.56 7.96 7.87
Other Operating Exps 17.99 15.69 9.04 10.31 11.97
EBIDTA 10.34 8.27 2.72 3.35 (2.92)
Int. & Dep 3.16 2.72 1.48 1.68 1.92
EBT & Exceptional Item 7.18 5.55 1.24 1.67 (4.84)
Deferred / current Tax 1.54 0.85 0.47 0.57 (0.02)
PAT 5.64 4.70 0.77 1.10 (4.82)
Extraordinary Item * 13.78 8.13 - 8.25
Profit After Extraordinary item 5.64 (9.08) (7.36) 1.10 3.43
Gross Profit:eMudhra’s Gross Profit Margin has reduced marginally from 63.35 % in
2014 to 62.82% in 2016.
EBITA:The Company has grown from a negative EBITA margin at Rs (2.92) Cr in 2012 to
a 24.9% margin in 2016 with Rs. 10.34 Cr. This has been possible due to its continuous
focus in reducing its operating cost. During the initial years of business the company has
spend huge amount for brand building activities which though ended up in a negative
EBITA margin initially has helped the company to develop the brand “eMudhra”
CONFIDENTIAL 14gradually.
EBT and Exceptional Item: Company’s EBT has increased from Rs. (4.84)cr in 2012 to
Rs.7.18cr in 2016 with an EBT margin of 17.29%through itscontinues focus on increasing
the revenue and reducing the operating cost.
PAT:The Company has shown a steady increase in PAT year on year and has ended up
with a 13.58% PAT margin before exceptional item at Rs. 5.64 Cr during 2016 as
compared to a loss during initial year ended 2009.
*Exceptional Item:The Company has incurred Short Term Capital Loss of Rs. 8.0 Cr on
account of Transfer of its subsidiary (Taxsmile.com India Private Limited) Shares held by
the Company during the year 2014 &Short Term Capital Loss of Rs. 13.78 Crduring 2015
on account of transfer of Subsidiary (Y-Cash Software Solutions Private Limited) Shares.
This is an exceptional item and not related to the company’s core business of DSC & PKI
Authentication.
CONFIDENTIAL 15eMudhra Balance Sheet Statement
Balance sheet Position Rs. In Cr
Year Year Year
ending ending Year ending Year ending ending
Particulars 2016 2015 2014 2013 2012
Share Capital&
Reserves and Surplus 56.26 50.61 50.1 57.4 56.2
Current Liabilities 7.13 6.70 8.46 7.2 6.1
Total 63.39 57.31 58.56 64.6 62.3
Fixed Assets 36.89 29.52 14.3 11.2 12.1
Investment 16.08 14.78 25.9 31.3 25.6
Current Asset 10.42 13.01 18.36 22.1 24.6
Total 63.39 57.31 58.56 64.6 62.3
Share Capital: The company Authorised share capital comprises of 123,000,000 Equity
shares of Rs. 5 each and 25,000,000 Preference share capital of Rs. 10 each. Issued,
Subscribed and Paid up capital comprises of 61,328,006 equity sharesof Rs. 5 each and
25,000,000 shares of Rs. 10 each. Share Capital amount shown above is inclusive of
reserve & surplus amount.
Current Liabilities:There is an decrease in liabilities during year ended 2015 as
compared to previous year due to the repayment of deposit received from the
Distributors to the extent of Rs. 2.5 Cr . The company has availed during earlier years
Cash credit facility from KVB to the extent of Rs. 1 Cr and Vehicle loan facility to the
extent of Rs. 22Lakhs with KVB. The Cash credit facility with KVB has been closed
during 2016.
The marginal increase in current liability during 2016 is due to the increase in the Trade
payable corresponding to the increase in the closing stock maintained by the company.
Fixed and Intangible Asset:
Intangible Asset: The company’s asset mainly consists of Internally developed
intangible products and work in progress products related to Identity & Transaction
Management Application. It had become imperative for organizations to have
Technology for Single Signing, Multiple Signing, encryptetc. eMudhra has been able to
CONFIDENTIAL 16address all the functionalities above withits Identity & Transaction Management
Applicationsuch as eM- Signer, e-sign etc.The company has also been able to come up
with own Certificate manager which can be used for its own products such as e-sign and
also have future selling opportunities as a separate product. Further the intangible assets
includes revenue generating software products for sale such as DSC, eMas, PAN, e-sign
etc
The increase in Intangible asset in 2015 compared to previous years is due to the
intangible asset of amalgamating companies being transferred to eMudhra on account of
amalgamation. As eMudhra has the required Technology, it has been able to successfully
integrate these intangible assets with its already existing product line.
Fixed Asset: The fixed asset of the company mainly consists of its office equipment &
furniture and fixtures.During the year 2016, the company has Fixed asset work in
progress amounting to Rs. 7.5 Cr, which related to the amount paid to KIAD for the 3
Acres of land allotted for the expansion project.
Non Current Investment:Investment amount in balance sheet during 2016 mainly
consist of eMudhra’s investment in its subsidiary company eMudhra Mu Limited.
eMudhra Mu Ltd is a 100% subsidiary of eMudhra Limited incorporated in 2013 to act
as a foreign certifying authority for issuance of Digital signature certificate and related
activities in Mauritius.For doing this eMudhra is licensed as a foreign Certifying
Authority by ICTA, Mauritius. Considering the global opportunity eMudhra Limited
had invested in eMudhra Mu Ltd.
Current Asset:Current assetincludes Cash and cash equivalent to the extent of Rs. 2.85Cr
in 2016, Rs3.26 cr in 2015,Rs.6.19 cr in 2014, Rs .84 cr in 2013 & Rs.1.36 cr in 2012.
Trade receivable during the year ending 2016 has increased 150% as compared to
previous years as the company’s revenue from selling ESS ( Enterprise Secuity Solutions)
products to the corporate and banking sector had increased during the year and these
sales are basically on credit terms.
FINANCIALS
Detailed Financial statements of last 3 year are enclosed (Attachment 1).
CONFIDENTIAL 17PROJECT BACKGROUND
As indicated earlier eMudhra Ltd is a licensed certifying authority in India to issue
digital signatures and associated products. Using technology as the key enabler for
services, eMudhra Consumer Services aims to bring in a fundamental shift in the way
business and transactions are conducted and provide associated process and cost
efficiencies to the end customer.
Until now eMudhra had three offerings, viz eMudhra DSC, eMas – Authetication Server
and PAN card issuance.
eMudhra DSC: As more and more people transact over the Internet, DSCs have become
one of the most important tools to secure online transactions. On the internet, customers
transact remotely; and establishing the identity of the two parties is of critical
importance. eMudhra CA offers DSCs that will allow individuals and organizations to
digitally sign e-mails and documents, encrypt e-mails and messages, and electronically
authenticate their identity and ensure that transactions are transmitted in a secure way.
DSCs are used widely in online banking, eCommerce, eTender, eProcurement,
eGovernance, Credit card or loan applications, Electronic clearing services mandate,
Online trading, Online trading origination, Insurance origination / claims and so on.
DSCs are powered by Public Key Infrastructure technology, widely recognized as a best
practice for ensuring digital accountability in electronic transactions. eMudhra CA also
offers Secure Sockets Layer (SSL) certificates that digitally authenticate server identity to
customers and OCSP (Online Certificate Status Protocol) validation services that enable
users to verify the validity of digital certificates in real time.
The company commercially sells DSC through Channel partners and also directly to
retail customers. Initially, the Digital Signatures were compelled only in Company law
related applications. Over time, Digital Signatures has been made mandatory in certain
category of Tax payments, for Banking transactions, e- Governance etc. This has resulted
in continuous growth of digital signatures in the country. Volume of DSC’s issued by
the Company during the last four years are as under:
Year 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2013-14 2012-13
No 820657 812,160 253,150 266,950 171,970 114,110 253,150 266,950
As may be seen from the above the volume has almost increased 3 times compared to
CONFIDENTIAL 18previous years.
eMas –When digital signatures are used they have to be authenticated by the
concernered organization, be ita aBAnk or an Insurance Company, or Government. eMas
is an Indigenously developed, scalable, multi-platform supported authentication
solution. It is compatible with popular web application servers, RDBMS, Operating
Systems and most of the core banking solutions including Infosys Finacle, Oracle
Flexcube, TCS Bancs and Polaris application. eMAS solution is successfully implemented
in major public and private sector banks like SBI, ICICI, Axis , Kotak etc, egovernment
agencies, insurance agencies in India and abroad.
PAN: We are in PAN distributorship model with UTI and also solicit PAN application
online through website. Mudhra PAN Card services facilitates individuals in acquiring
their PAN cards online, be it a new /lost /damaged PAN card at nominal prices in a few
simple steps.
eMSigner - emSigner is a secure on premises cloud (SaaS) based automated signing
solution which can be accessed from anywhere and anytime and it allows you to sign
legally binding documents online, without pen, paper or fax. In a way that is faster and
more secure than executing paper documents.With the result apart from just signing
digitally, it has become imperative for organizations to have Technology for Single
Signing, Multiple Signing, encryption, De-Cryption, Time Stamping, Validation of time
Stamping, Signature Authentication and Work Flow.
It’s a digital signature solution for online document signing, document management and
workflow. Solution is devised to suit the needs of Individual’s, SME’s and Enterprises
for their day to day various kinds of document signing needs. This a paperless office
concept and solution which aims at replacing the herculean manual efforts, time and cost
involved in paper based signing and approval process to an automated, efficient, time
and cost saving workflow based online document signing solution.
CONFIDENTIAL 19MARKET ANALYSIS
Digital India Vision
Massive efforts are underway across all concerned Government Ministries and
Departments to implement Digital India, a programme that envisions transformation of
the country into a digitally empowered society and knowledge economy. One of the
game changing steps in this direction being taken by the Department of Electronics &
Information Technology (DeitY) is implementation of the Digital Locker System and
eSign facility.
All application or forms submitted by a citizen require physical signature of the Citizen
and copies of various documents, issued by other agencies, to be attached. The
Government has now conceptualized an e-signature (eSign) facility that leverages
Aadhaar validated identities of citizen and allows them to sign their forms online using
digital signatures. This eSign is legally tenable under the Information Technology Act,
2000. The Government has also conceptualized a Digital Locker system where citizens
can upload their document copies online, e- sign them and use this system to
electronically submit these documents for various Government services online.
The benefits in hand are immense from adopting the proposed system. While Digital
Locker eliminates the need for Physical documentation and removes chances of
falsification by facilitating online validation, eSign is a very easy and instantaneous
mechanism of identity validation. When adopted together, they save significant time of
both citizens as well as the Government agencies, avoid transit delays/ losses of
documents, and reduce physical visits of citizens to Government offices and facilitate
direct C2G interactions.
Digital Locker
Digital Locker, one of the key initiatives under the Digital India vision, is aimed at
eliminating the usage of physical documents and enable sharing of e-documents across
government agencies via a mechanism to verify “authenticity” of the documents
online. Residents can also upload their own electronic documents and digitally sign
them using the e-sign facility. These digitally signed documents can be shared with
Government organizations or other entities.
CONFIDENTIAL 20The Digital Locker system has the following Objectives:
To enable digital empowerment of residents by providing them a Digital Locker
on the cloud
To enable all resident related documents to be e-signed and made available
electronically and online
To enable government departments to access the documents issued by
government agencies online, thereby reducing administrative overhead and
critical service processing time
To ensure all the documents issued to the residents are available to him/her
anywhere anytime, in a standard format which can be shared with authorized
agencies
To provide the facility for keeping and sharing legacy
records
To provide a portal and mobile application for residents to view their documents
in a consolidated way
To ensure privacy and authorized accessibility to
residents’ data
eSign
Information Technology Act, 2000 grant legal recognition to electronic records and
digital signatures. The IT Act provides for the Controller of Certifying Authorities
(CCA) to license and regulate the working of Certifying Authorities (CAs) and also
to ensure that none of the provisions of the Act are violated.
Digital Signature is a paid certificate, issued by a Certifying Authority after the
verification of the proof of identity and address of an individual. However, it has the
same legal validity as that of a physical signature on a document and hence, widely
used for authentication in the electronic environment. Some of the salient features of
digital signature are:
Non-repudiation: Digital signatures ensure that the sender who has
signed the information cannot at a later time deny having signed it
CONFIDENTIAL 21 Integrity: In many scenarios, the sender and receiver of a message need
assurance that the message has not been altered during transmission. Digital
Signatures provide this feature by using cryptographic message digest functions
Authenticity: Digital signatures are used to authenticate the source of
messages. The ownership of a digital signature key is bound to a specific user
and thus a valid signature shows that the message was sent by that user
e-Sign allows to digitally sign the documents with just a click of the mouse usingng a
digital signature certificate issued online.
eSign service
eSign service provides a mechanism by which any Aadhaar holder can generate
a digital signature and digitally sign any document using an online service. The
entire process is simplified to provide convenience to the end user without
compromising security. eSign service has the same legal validity as that of a traditional
digital signature. It will allow many third party applications to use the service via an
open API and integrate it into their system.
eSign service will authenticate the person, do the Aadhaar e-KYC and digitally
sign the document for which it has been initiated. UIDAI offers an authentication
service that makes it possible for residents to authenticate their identity biometrically
through presentation of their fingerprints or non-biometrically using a One Time
Password (OTP) sent to the registered mobile phone and/or the registered e-mail
address.
Hence, a person can simply sign a document or application and submit it within
minutes through a connected electronic device.Given that over 75 Crore Indian citizens
have now been issued Aadhaar numbers, leveraging these digital identities known
through Aadhaar would reduce the steps and time taken for a number of government-
citizen interactions.
eMudhra is authorized by CCA as e-sign service provider and have been approved
UIDAI as a e- KYC agency.
CONFIDENTIAL 22PROPOSAL
To Cater to the huge growth opportunity created due to digital India Vision eMudhra
proposes to do the following:
eMsigner
e-Sign
eMlocker
e- KYC
All this will also encourage the growth of conventional DSC and eMas Solutions. As
indicated earlier the Company’s core revenue has a CAGR of almost 100% in past 4
years. With the Digital India Vision the Compnay’s Volume of business is likely to
increase at least six times in the next 5 years.
To Catch up with the expansion of growing business, eMudhra is proposing an
aggressive business plan. The expansion envisaged requires an entire Data Centre with
all the necessary Hardware, Servers and Network applications to be set up as per the
guidelines issued by the CCA of India who is the controller for DSC issuance in India. It
is also necessary to have the resources for the development of these products.It should
also be backed up with a strong Customers Support team for helping the growing
customer base in terms of the Technology related matters. To cater to the above
requirement in terms of Space, Resources & Data Center, 3 Acre land has been acquired
for construction of office premises. The premises proposed will be actively used for
Issuance of Digital Signature Certificate and for Development and implementation of
Authentication Solutions as mentioned above.
The employee expansion proposed for the project is summarized as below. The resource
plan including managerial, Supervisory, Skilled and unskilled is expected to increase
from the current no of 300 to 1000 within a span of 5 years.
Details Current Proposed
Managerial 12 25
Supervisory 36 100
Skilled 237 800
Unskilled 15 75
Total 300 1000
CONFIDENTIAL 23Cost of Project:
The proposed project is expected to commence by Oct 2016 and expected to complete in
2 years period ending Sep 2018. Cost of the project is expected to be Rs. 41 Cr, which
consists of Investment in Land, Building, Plant & Machinery, Contingency cost,
Working Capital as mentioned below:
Details Rs. In Cores
Land 8.0
Building 20
Plant & Machinery- Equipments 8
Working Capital Margin 5
Total 41
LAND:
The proposed 3 acres (12,000 sq.mts) of land is has been obtained for construction from
Karnataka Industrial Area Development Board located at Singahalli, Bangalore IT Park,
Devanahalli ,Bangalore on a 99 year lease basis. The cost of the land is Rs. 8.0 Cr
BUILDING
The Company currently operates from leased premises in multiple locations. To
consolidate the same and to take care of the increased employee needs and Data center
,the company proposes to construct a built up area of about 1,00,000 sq ft in the first
phase.
PLANT & MACHINERY- EQUIPMENTS
The cost of creating a Data center to cater to the companies needs, including computer
and networking hardware & software would be about Rs. 8 Cr.
WORKING CAPITAL MARGIN
CONFIDENTIAL 24An amount of Rs. 5 cr is considered as working capital margin to meet the day-to-day
operationsing.
Proposed Means of Finance
Details Rs. In Cores
Company Cash Accrual 21.00
Term Loan 20.00
Total 41.00
Means of finance for the project will be through Term loan and companies cash
accruals. It is proposed to get term loan from Bank to the extent of Rs. 20 cr. The balance
of Rs. 21 Cr expected for the project will be funded by internal cash accruals of the
company.
Cash Accrual:
The company has ended up in a closing cash balance to the extent of Rs. 8.8cr as on
September 30th 2016. The projected Cash accrual for the during the two year ending Sep
30, 2018 would be be adequate to meet the project needs.
Term Loan:
The Company is looking for a term loan of Rs. 20 Cr from the Bank for the Project.
CONFIDENTIAL 25MARKET OPPURTUNITIES
Government Sector
Government has emphasized on Digital India Vision, the use of Technology to
enable connectivity to every Indian Consumers.Government has almost fulfilled
ADDHAR to every Indian Citizen .With a big Push from Government Sector
adoption of DSC has increased significantly in the Recent past in the below
Sectors:
Ministry of Corporate Affairs was the first to adopt digital signatures in a major
way for entire Company Law Administration.
Income Tax Department has also mandated use of digital signatures for certain
types of assesses and is considering mandating of DSC for other individual
segment also.
RBI has mandated digital signatures as one of the authentication mechanisms for
online banking.
E-Tendering has been completely digitized.
Several State Governments are implementing digital signatures in local tax
administration.(Eg: VAT)
Private Sector:
In view of the adoption by the Government for various applications private sector uses
digital signatures for their interaction with Government. They have started using digital
signatures for issuance of TDS certificates, Form-16s, employment offer letters, certain
statements etc. Hence most of the authorized signatories in organizations have digital
signatures at present.
CONFIDENTIAL 26While private sector has started using Digital Signatures for mostly government related
transactions, the adoption is still low and full potential of Digital Signatures is not yet
realized.
Digital Revolution –Going Green and Paperless
UsageofDigitalSignaturehasthepotentialtocompletely
eliminatepaperandgodigitalpaperless.
InformationTechnologyActgivesthelegalsanctityforuseofDigitalSignatureinalldocument
s(exceptfivetypes)thuspavingwayforusageofdigitallysigneddocumentsinalltransactions.
Whilemostoftheorganization’shavedigitizedtheirdataanddataflow,stilltheassociatedpap
erflowhappensphysically.
For example
InaBank,whilecustomerdataiskeptelectronically,allcustomerapplicationsaresigne
dphysicallyandstoredinphysicalfiles.
InanInsurancecompany,whileallthepolicydetailsarekeptelectronically,allpolicyap
plicationformsandassociateddocumentsaresignedphysicallyandstoredinphysicalf
iles.
Inahospital,whilethepatientinformationisstoredelectronically,thedischargesumm
ary,claimformsaresignedandstoredphysically.
A lot of paper gets generated at the time of signature even though most of the core
business functions are automated. As the paper traverses through the organization and
outside, cost increases manifold per above lifecycle. Further it poses lot of difficulty in
tracing. This also results in compliance failures and fraud as paper based signatures
cannot be mapped to authorization matrix.
In all these cases, documents are created physically, signed physically, scanned and
then stored electronically and physically. There is a huge opportunity here to
completely digitize all interaction between organizations (private and government) and
its customers, suppliers, employees and other stakeholders using Digital Signature.
Document Signing Solution System
Whilethesystems Like ERP- CRM, Tally, FRM, HRM, SCM etc
handletheentiredataflowwithinandoutsidetheorganization,correspondingdocumentscur
rentlygets Signedandmovephysically. Document signing system like eMudhra’s eM
CONFIDENTIAL 27signer platform along with DSC can replace the complete document movement
associated with the data which are currently handled physically.
The above solution can offer a last mile solution towards truly eliminating paper by
100%.The above system can have time stamping, encryption, validation, etc to ensure
complete authenticity and security of the digital transactions. Such a system can lead to
huge cost benefits while at the same time ensuring compliance and governance.
Other Benefits are as below:
Going Green
Reduce Cost and Time
Ability to do transactions from anywhere
Ensure Authenticity
Ensure Data Integrity
Ensure Traceability
Following are some of the use cases and envisaged benefits from the proposed
system
# Annual Digital
Service Transaction Locker Description Benefits
1 Income Tax 4 Crore eSign For individuals, ITR-V Instant
Returns forms need to be signed receipt of
Filing and mailed to the Central
Processing Centre. Those ITR-V
with digital certificates Saving 5-7
sign and submit online. days between
Using e-Sign, individuals online filing and
would be able to leverage receipt of ITR-V
their identity already form
known through Aadhaar,
and submit their ITR-V Save on
forms online using their paper handling
biometric/OTP & storage, thus
authentication instantly reducing cost
CONFIDENTIAL 282 PAN Card 1 Crore Digital PAN card forms are Elimination
physically signedand of agents /
issuance Locker submitted.Using e-Sign touts
and and digital locker, citizens
eSign would be able to apply for Saving on
PAN online using their fees
Aadhaar identities and Reduced costs
submit the required
documents through digital Faster
locker.Also, the IT processing
Department can push the
newly issued PAN Card Less paper
directly into the Digital usage
Locker of the Aadhaar Avoid
holder to avoid any falsification of
falsification PAN Card
3 A/C 10 Crore Digital Indian government has Eliminate
taken a number of need to visit
opening in Locker measures to help all Indian
and residents manage their Submit forms
Banks eSign and documents
financials through Bank
accounts. Using the online, saving
combination of digital paper
locker and e-Sign all such Saves time
individuals may open and faster
bank accounts using their response time
Aadhaar authenticated
identities, fill form online,
eSign it and attach
supporting documents
(photo ID, address, etc.)
CONFIDENTIAL 294 Governmen 50 Lac Digital Usually, 4-5 documents are Reduce the
required bythe government hassle of
t services Locker for government service handling and
examinatio and examination registrations. storing paper
ns eSign However, now the
prospective applicants can No loss /
upload their academic and delay in transit
identity certificates in their for forms and
digital lockers and use the admit cards
same for submitting the Savings for
examination forms. examination
5 SIM card 6 Crore Digital Telecom companies Eliminating
can undertake fake identities
registration Locker instantaneous validation of
and SIM card applicants by Get SIM card
eSign querying the Aadhaar at home
number. Theapplicants Easy retrieval
can also apply for new as data
SIM card by filling the available online
form online, eSign it and
attaching documents Reduce the
through digital locker. The penalties due to
same can be used for loss of/
Mobile Number Portability misplaced data
service too
6 LPG 3 Crore Digital Individuals would be able Application
to submit theirforms made
registration Locker online after signing using instantaneously
and eSign and submitting the
eSign mandatory documents Process
through digital locker becomes
transparent
Save on
paper handling
& storage
CONFIDENTIAL 307 Driving 1.2 Crore Digital Getting a fresh driving Reduce the
license requiresan hassle of
License Locker individual to undertake a handling and
renewals and physical test in
eSign government storing paper
premises.However, Prevents
renewal merely requires physical visit
physical submission of for a citizen
forms with individual
signature. Using e-Sign,
individuals would be able
to submit their forms
online. Doctors can sign
medical certificates for
such applicants in a
similar fashion to give the
requiredmedical
clearance.Also, the RTO
can push the newly
issued/re-issued DL
directly into the account of
the Aadhaar holder to
Based on the above the market potential for digital signatures and all associated
systems like emsigner, emlocker, emas etc are huge. At present the Digital signature
market has only touched the tip of the iceberg and based on the figures indicated above
growth potential is enormous.
eMudhra is one among the 3 commercial certifying authorities with about 40% market
share. eMudhra is also in leadership position in authentication solutions. Thus eMudhra
is well poised to capture the growth to Digital Revolution in a big way.
CONFIDENTIAL 31PROFITABILITY
Detailed Financial statements of last year and projections for next 7 years are enclosed
(Attachment 2).The Projections are based on the actual figures and trend shown for the
Half year ended 31st Sep 2016.
Key Ratios:
Amt Rs. Cr
Till
Sep
Details 2016 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Revenue 37.72 65.58 84.70 109.61 141.79 169.80 203.26 243.48
Gross Profit 24.97 43.94 56.75 73.98 95.71 114.62 137.20 165.56
GM% 66.19 67.00 67.00 67.50 67.50 67.50 67.50 68.00
EBIDTA 12.34 21.44 28.21 37.81 49.77 59.85 71.70 86.43
EBIDTA % 32.72 32.69 33.30 34.50 35.10 35.25 35.28 35.50
PBDT 12.40 20.54 27.51 36.13 46.67 57.18 69.74 84.79
PBDT % 32.87 31.32 32.47 32.96 32.91 33.68 34.31 34.83
PAT 8.14 11.91 16.58 21.55 28.43 36.82 45.79 55.73
PAT% 21.57 18.16 19.57 19.66 20.05 21.69 22.53 22.89
Assumptions for Profitability Projection
Considering that the company has made 100% year on year growth over the past
years in terms of revenue, it is assumed that the same will continue over the next
few years.
Of the total funding requirement of Rs.41 Cr, Rs.20 Cr will be through term loan
and balance will be through Company cash accruals
Interest on Term loan assumed at 13% with 24 months moratorium period and
repayment schedule of 7 years. No interest on moratorium assumed.
Inventory , Receivable and payable have been estimated based on current
experience
CONFIDENTIAL 32SUMMARRY
The business landscape of eMudhra is poised to grow at a rapid pace. The growing
young population’s demand to simple secured solutions in the market, the fast rising
internet users are the facts that will revolutionize the way individuals transact in the
coming years. With the government Digital India Vision eMudhra is in a competitive
advantage with all the right products to cater the requirement.
eMudhra with its matured organization and strong management team has already put
in place a robust customer support system, an automated sales force across the country
and sturdy team working on innovations & inventions surrounding the existing
product lines.Disruptive business model, Service Excellence and Price are the
competitive advantage and USP of eMudhra.
The proposed expansion project would result in the following benefits:
1. Help in high level of digitalization in the country
2. Help in going green in a big way by saving lot of paper and thereby forest
resources.
3. Provide employment opportunity to 1000 people in the next few years.
4. Provide ancillary opportunities for setting up manufacture of tokens.
5. Provide VAT & Service Tax contribution to the extent of Rs. 50 Cr over the next 5
years.
The Financial indicators for the project are highly satisfactory as under:
2017 2018 2019 2020 2021 2022 2023
Debt Equity Ratio 0.17 0.37 0.48 0.48 0.48 0.24 0.29
Fixed Asset coverage Ratio 7.67 3.37 2.95 3.00 3.71 4.60
EBIDTA % 33.99 34.40 35.47 35.91 35.99 35.93 36.09
PAT % 18.88 20.22 20.21 20.52 22.14 22.94 23.27
Interest Coverage Ratio 179.12 243.83 29.97 17.48 24.58 41.01
Debt Service Coverage Ratio 214.39 14.47 6.85 7.17 8.95 11.79 2.70
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