eMudhra Ltd
Directors Reports
To,
The Members, eMudhra Limited
Your directors take pleasure in presenting the 15th Annual
Report on the business and operations of your company ("the company" or
"eMudhra") along with the audited financial statements for the year ended March
31, 2023. Unless it is expressly specified, all references in this report pertains to
consolidated performance of the Company.
1. Results of our Operations:
Financial Performance
(Extracts from statement of profit and loss)
(All amounts are in INR million, unless otherwise specified)
Particulars |
Standalone |
|
Consolidated |
|
|
FY 2023 |
FY 2022 |
FY 2023 |
FY 2022 |
Total Income |
1,696.72 |
1,537.38 |
2,540.54 |
1,837.35 |
Profit before interest and depreciation/amortization |
733.79 |
504.59 |
926.01 |
680.89 |
Profit before tax |
269.77 |
390.47 |
733.79 |
504.58 |
Profit after tax |
199.74 |
300.37 |
611.98 |
411.36 |
Total of other comprehensive income/(loss), net of tax |
(4.00) |
7.38 |
(48.61) |
7.98 |
Total comprehensive income for the year attributable to
owners of the company |
195.74 |
307.75 |
563.38 |
419.35 |
Profit attributable to owners of the company |
199.74 |
300.37 |
616.77 |
414.04 |
Non- controlling interests Earnings per share (EPS) [face
value: INR 5.00 per share]: |
|
|
(4.79) |
(2.68) |
Basic |
2.60 |
4.28 |
8.35 |
5.86 |
Diluted |
2.60 |
4.28 |
8.01 |
5.86 |
Financial Position
(Extracts from statement of assets and liabilities)
(All amounts are in INR million, unless otherwise specified)
Particulars |
Standalone |
|
Consolidated |
|
|
FY 2023 |
FY 2022 |
FY 2023 |
FY 2022 |
Non-current assets |
2,232.71 |
1,568.01 |
2,116.28 |
1,682.74 |
Current assets |
1,439.52 |
656.15 |
2,483.17 |
908.66 |
Total Assets |
3,672.23 |
2,224.16 |
4,599.45 |
2,591.40 |
Non-current liabilities |
103.28 |
342.50 |
115.28 |
349.35 |
Current liabilities |
371.52 |
610.83 |
560.03 |
701.03 |
Retained earnings: |
|
|
|
|
Opening balance |
657.32 |
359.68 |
860.02 |
447.29 |
Add: |
|
|
|
|
Profit for the year |
199.74 |
300.36 |
616.77 |
414.05 |
Other consolidation adjustments |
|
|
|
1.40 |
Less: |
|
|
|
|
Dividends [of which INR2.58 (2022: INR2.72) is preference
dividend] Transfer to capital redemption |
102.00 |
2.72 |
94.83 |
2.72 |
reserve |
86.00 |
- |
86.00 |
- |
Closing balance |
669.06 |
657.31 |
1,295.96 |
860.02 |
Equity share capital |
390.36 |
350.90 |
374.87 |
350.90 |
Other reserves and surplus |
2,134.63 |
255.24 |
2,241.75 |
308.50 |
Other comprehensive income |
3.38 |
7.38 |
3.38 |
8.64 |
Non-controlling interest |
- |
- |
8.18 |
12.96 |
Total Equity |
3,197.43 |
1,270.83 |
3,924.14 |
1,541.03 |
Total equity and liabilities |
3,672.23 |
2,224.16 |
4,599.45 |
2,591.40 |
2. Dividend
During the year, your directors declared an interim dividend of 3% on
Redeemable preference shares of INR 86 million for the period April 01, 2022, to December
15, 2022 amounting to Rs. 18.30 lakhs (date of redemption December 15, 2022). They propose
to recommend the same as final preference dividend. They also propose to recommend final
equity dividend at 25% on the paid-up equity share capital.
The Dividend Distribution Policy, in terms of Regulation 43A of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations") is available on the Company's
website at https://emudhra.com/Docs/DIVIDEND-DISTRIBUTION-POLICY.pdf.
Though the standalone net profit has declined, as consolidated net
profit has considerably increased, your directors have decided to maintain the equity
dividend at 25% on the paid-up equity share capital though it may be somewhat in excess of
the percentage given in the dividend distribution policy.
3. Retained Earnings
The closing balance of the retained earnings of the Company for FY
2023, after all appropriations and adjustments was INR 1,295.96 million and INR 669.06
million on consolidated and standalone basis
respectively. The company has not transferred any amount to any
specific reserves during the fiscal other than capital redemption reserves.
4. Company's Structure
The company has 8 subsidiaries as on March 31, 2023, out of which 2 are
Indian subsidiaries and the rest are foreign subsidiaries (list of subsidiaries are
provided in point no. 53 with description of activities performed by each). While all of
the subsidiaries except PT eMudhra Technologies Indonesia are 100% subsidiaries, in PT
eMudhra Technologies Indonesia, the Company owns 60% and the remaining 40% is held by
outsiders who are local residents in Indonesia and/or who know the local business in
Indonesia. We have also consolidated the employees stock option trust as per SEBI listing
guidelines.
In terms of section 136 of the Companies Act, 2013 the company has not
attached the financial statements of the subsidiary companies. The financial information
about the foreign and Indian subsidiary companies have been duly audited by the respective
qualified auditors wherever required. For consolidation under Ind AS these are audited by
Company's statutory auditors. The consolidated financial statements presented by the
company, which form part of this annual report are also based on the financial statements
of its subsidiary companies. Out of which the financial statements of material
subsidiaries are available in our website in the link www.emudhra.com
5. Management Discussion and Analysis
Management Discussion and Analysis as required under Schedule V of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("Listing Regulations") is provided separately in the Annual
Report.
6. Transfer of Unpaid Dividend to Investor Education and Protection
Fund
The company has paid all the dividends declared by the company to the
beneficiaries within 30 days and there are few unpaid dividends as on the balance sheet
date and the list of unpaid dividends is uploaded on the website of the company. Since,
the prescribed period is not over in respect of these unpaid dividend, no amount has been
transferred to Investor Education and Protection Fund.
7. Review of Business operations including its subsidiaries
The consolidated financial statement of the company represents audited
financials of eMudhra Limited with its 100% subsidiaries, eMudhra Consumer Services
Limited, India, eMudhra Technologies Limited, India, eMudhra (MU) Ltd, Mauritius, eMudhra
DMCC, UAE, eMudhra PTE LTD, Singapore, eMudhra INC, USA, eMudhra B.V, The Netherlands and
60% subsidiary - PT eMudhra Technologies Indonesia, Indonesia. During the year under
review there has been a considerable improvement in our operations and positioning.
Our Solutions:
Our enterprise solution business saw a considerable growth of about
25.9% in India and 141.4% globally during the year 2022-23. During the year we further
strengthened our "one stop shop" positioning on cyber security and paperless
transformation. Zero Trust or in other words never trust always verify has become the name
of the game in view of the global increase in cyber frauds and crimes. The company has
become one stop shop towards this Zero Trust by offering Trust Services (emSign) as one of
the layers and solution for secure online access (emAS), public key infrastructure (emCA),
paperless workflow (emSigner) and certificate life cycle management (emDiscovery). Our
products and solutions have international reach and very few competitors globally. Even
those competition are on one specific segment and none of the competitors have one stop
shop positioning as eMudhra. This puts us in a unique positioning in the global markets.
Coming to emAS, the product has become a complete identity and access
management suite with multifactor authentication, single sign on, mobile enabled, covering
data at rest and data in transit and is being used by several major banks.
Our PKI product emCA has been considerably strengthened to take care of
Root PKI, enterprise PKI and managed PKI with ability to issue user certificates, device
certificates and trusted SSL/TLS and other certificates. emCA is a one stop shop PKI
solution encompassing certificate issuances, certificate management and other crypto
operations such as signing encryption and decryption. It is platform agnostic with multi
environment and database support. It supports various protocols such as ACME, SCEP, CMP
and EST. And it has the capability to issue EMV and TLV type of certificates apart from
x509 V3 to address certificate requirements in IoT and card payment industries. This
product is being used by certifying authorities, defense, banking and telecom
establishments globally.
Our paperless workflow product emSigner caters to digital signature
workflow management, global digital signature, stamping support, server-side signing,
remote signing and client-side signing. This product has also been verticalized for
banking industry, pharma industry and few other industries so that the specific nuances of
the industry are taken care of in the product. emSigner offers comprehensive product
capability, features and depth in eliminating paper using eSignatures across range of
scenarios cuffing across various sectors and customer segments. It is not just a signing
platform but can act as a source system to allow origination of any signed document into
an enterprise. It has comprehensive audit trails, predefined connectors and integration
with host of third-party trust service providers. For Indian market it is specifically
integrated with eSign and eStamping framework. It is being offered in on-prem, private
cloud and public cloud model. It is being listed in other market places. emSigner is used
as a paperless transformation tool in major banks, financial and other enterprises in
India, UAE and other countries including the USA.
Our certificate lifecycle management product emDiscovery caters to
discovery and lifecycle management, key/certificate management, auto provisioning of
certificates and DevSecOps/container-based security. This product is being solutioned to
offer a comprehensive discovery plus certificates plus PKI capability so that the entire
certificate life cycle with automatic provisioning can be taken care of. This is a new
product and has been selected by one of the large banks.
International Positioning:
During the year we have established a foothold in most major markets in
Middle East and Africa. Fortunately, we have been able to solidify our brand and
involvement in the mid-large to large-cap sector in the region. We have now a good
reference in North America where we have been able to replace a major North American
product. We are being treated as a vendor of choice by a major system integrator across
Europe and imminently North America for PKI and emSigner. We have rolled out most variants
of Managed PKI use cases across geographies to serve as a reference and knowledge base for
further re-selling along similar models. In South America, one of the country's central
banks has become our customer which is leading to many other conversations in the region.
On Trust Services we have aligned with a Trust Service Provider in Chile and one in Peru
to set up issuing CA based on our emSign root CA and issue certificates locally. In
Indonesia we have won our first large deal from a large public sector corporate for our
emSigner with eStamping and mobile application. This has paved the way for many other
conversations in the region. With all these, our international revenue increased by 141.4%
during 2022-23.
Certifications, Accreditations and Membership in International Bodies:
We have obtained a variety of accreditations, security and compliance
certifications which we maintain on an ongoing basis. For example, WebTrust Accreditation
to provide services as a public certifying authority globally and have listed our digital
signature certificate roots with renowned browsers. We have received certifications of
compliance with the standards prescribed under CMMI Level 5 - Software Development
Lifecycle Maturity, ISO 27001:2013, ISO 27018:2014, ISO9000-2015,
ISO20000-1:2018, SOC2 Type 2 - Cloud Information Security, ISO 22031:2019 and
certification for EAL 4+ Common Criteria by the Cyber Security Agency of Singapore.
Revenue Growth Enterprise Solution- India
The enterprise business division of India region has shown a strong
growth across Government, Enterprise and BFSI segment by achieving 25.9% growth on a
consolidated basis. During the year 2022-23, we have won large orders in Government sector
with some of them over and above INR 100.00 million. Banking and Enterprise segment also
saw significant penetration with new and existing customer renewals for all our products.
Enterprise Solution- Rest of the world
During 2022-23, the enterprise business division of rest of the world
region has grown by 141.4% as compared to year 2021-22. The growth was driven by deeper
penetration for our solutions in the Middle East and Africa region and the USA. The
company also scored good wins in the Europe and Asia Pacific region. With several marquee
reference customers in global markets, the company is in a good position to capture the
growth opportunity available for its solutions.
Trust Services
On a consolidated basis, the revenue from Trust Services was more or
less flat as compared to the last year 2021-22. While the sales through channel partner
network in India declined during the year due to pricing pressure, the decline was
compensated by increase in retail sales, eSign sales and SSL sales.
8. General:
The revenue from operations of the company on standalone basis for the
year ended 31st March 2023 was INR 1,640.22 million showing an overall increase of 7.2%,
as compared to previous year revenue of INR 1,530.21 million.
The EBITDA on standalone basis has declined by 22.1% from INR 548.09
million to INR 426.90 million during the reporting period. EBITDA for the financial year
is 25.2% of total income as compared to 35.7% in the last financial year.
The profit before tax and appropriations, PBT, for the year under
review is INR 269.78 million as compared to INR 390.46 million during the previous year
showing a decrease of 30.9%. The PBT margin for the year under review is 15.9% as compared
to 25.4% in the previous financial year.
The Profit after tax and before appropriations, PAT, in the financial
Statement for the year is INR 199.74 million compared to a profit of INR 300.36 million
during the previous financial year showing a decrease of 33.5%. The PAT margin for the
year under review is 11.8% as compared to 19.5% in the previous financial year.
The basic and diluted earnings per share on a standalone basis
decreased from Rs.4.28 per equity share with a face value of Rs.5 per share to Rs.2.60 per
equity share, showing a decrease of 39.4%.
Intellectual property of emSigner and emSign are owned by two of the
Indian subsidiaries and certain other intellectual properties are also owned by some of
the foreign subsidiaries. In view of this, the revenue from
operation on standalone basis are not showing the full solution
revenue. Further, overall brand building and certain related expenditures are incurred in
India affecting the profitability on standalone basis.
The consolidated revenue from operations of the company for the
reporting period was INR 2,487.57 million as against INR 1,826.37 million in FY 2022
showing growth of 36.2%.
The consolidated EBITDA for the year under review is INR 926.01 million
as compared to INR 680.89 million during the previous year showing a growth of 36.0%. The
EBITDA margin for the year stood at 36.4% as against 37.1% in the previous financial year
The Profit before tax and before appropriations in the consolidated
financial Statement for the year is INR733.79 million as compared to a profit of INR
504.59 million during the previous financial year showing a growth of 45.4%. The PBT
margin for the year under review is 28.9% as against 27.5% in the previous year.
The Profit after tax and before appropriations, PAT in the consolidated
financial Statement for the year is INR 611.98 million as against INR 411.37 million
during the previous financial year showing a growth of 48.8%. The PAT margin for the year
under review stood at 24.1% as against 22.4% in the previous year.
The basic and diluted earnings per share on a consolidated basis
increased to INR 8.35 and INR 8.01 respectively per equity share with a face value of Rs.5
per share from Rs. 5.86 per equity share in the last financial year.
Key Financial Ratios
In accordance with the SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations, 2018, the Company is required to give details of
significant changes (change of 25% or more as compared to the immediate previous financial
year) in key sector-specific financial ratios. The key financial ratios (as identified by
the Company) on standalone basis for the year ended March 3 1, 2023 is given below:
Ratio |
Numerator |
Denominator |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Variance % |
Reason for major variance |
Current Ratio |
Current Assets |
Current Liabilities |
3.87 |
1.22 |
218 |
During the year, the company made public issue/private
placement of INR 2,000 million. The resultant increase in cash and cash equivalents and
reduction in current liabilities has |
|
|
|
|
|
|
resulted in higher ratio. |
Debt equity Ratio* |
Total Debt |
Shareholders' Equity |
0.00 % |
22.76 % |
(100) |
In view of above said public issue/private placement, during
the year, company have repaid the entire external debt, hence the decrease. |
Debt Service Coverage (times) |
Earning for debt service = Net profit after taxes + non-cash
operating expenses like depreciation and other amortizations + Interest + other
adjustments like loss on sale of PP&E |
Debt Service = Interest and principal repayments including
lease payments. |
1.07 |
6.81 |
(84) |
Though the debt has been paid out of public issue/private
placement, assuming the entire debt is repaid out of cash accruals, it is working out to
1.07. |
Return on Equity Ratio |
Net Income |
Average Shareholder Equity |
8.94 % |
26.99 % |
(67) |
During the year, the company has made public issue and
private placement amounting to INR 2,000 million and thereby the equity base has increased
compared to the previous year, which resulted in decrease in the ratio. |
Inventory |
COGS |
Average |
21.19 |
28.44 |
(25) |
Our |
Turnover (times) |
|
Inventory |
|
|
|
concentration is to sell our products rather than trading the
materials/servi |
|
|
|
|
|
|
ces and hence the decrease. |
Trade Receivables turnover ratio |
Avg Accounts Receivable |
Revenue from operations |
19.89 % |
14.50 % |
37 |
This is due to business growth in the ordinary course. |
Trade Payables turnover ratio |
Hardware creditors payable |
Purchases of hardware |
28.68 % |
38.10 % |
(25) |
The ratio has improved due to quicker payment to hardware
creditors. |
Net capital turnover (times) |
Revenue from operations |
Working Capital |
4.05 |
1.37 |
195 |
This is due to efficient management of working capital. |
Net profit ratio |
Net Profit |
Revenue from operations |
12.18 % |
19.63 % |
(38) |
These is due to increased brand building, marketing and
employee cost. |
Return on Capital employed |
EBIT (Earnings before interest and tax) |
Capital Employed (Total Assets - Current Liabilities) |
9.20 % |
31.80 % |
(71) |
During the year, the company has made public issue and
private placement amounting to INR 2,000 million and thereby the equity base has increased
compared to previous year, which resulted in decrease in the ratio. |
Return on investment |
Interest (Finance Income) and gain from mutual funds. |
Investments (includes mutual funds and fixed deposits. |
6% |
6% |
- |
NA |
9. Events occurring after Balance Sheet date
There are no significant events after the balance sheet date which is
likely to affect financial posifi'on/results of the Company in a significant way.
10. Material changes and commitment if any affecting the financial
position of the company occurred between the end of the financial year to which these
financial statements relate and the date of the report
There are no material changes and commitments affecting the financial
position of the company other than the matters disclosed under "events occurring
after the balance sheet date"
11. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The provisions of Section 134(m) of the Companies Act, 2013 relating to
conservation of energy and technology absorption do not apply to our company.
The disclosure of foreign exchange earnings and outgo for eMudhra
Limited, in terms of provisions of Section 134 (3)(m) read with Rule 8 of the Companies
(Accounts) Rules, 2014 are given hereunder:
Foreign Exchange |
2023 |
21-2022 |
Earnings |
47.76 |
64.01 |
Outgo |
9.58 |
4.93 |
12.Corporate Social Responsibility (CSR) initiatives
CSR initiatives and activities are aligned to the requirements of
Section 135 of the Act. The brief outline of the CSR policy of the Company and the
initiatives undertaken by the Company on CSR activities during the year are set out in
Annexure A of this report in the format prescribed in the Companies (Corporate Social
Responsibility Policy) Rules, 2014.
The vision of our CSR initiatives is for eMudhra to be a socially and
environmentally responsive organization committed to improve quality of life within and
outside. We at eMudhra focus on imparting education for employment by enhancing the
vocation skills, especially women skilling and empowerment, skilling and empowerment of
health workers, skilling of rural artisans and socio-economic development through training
and student empowerment programs. The Annual Report on our CSR activities is appended as
Annexure A to the Board's report.
This Policy is available on the Company's website at www.emudhra.com
13.Internal Financial Control Systems and their Adequacy
eMudhra has an effective Internal Financial Control System where
policies and internal controls adopted, assist in achieving management's objective of
efficient conduct of business - which includes:
Adherence to policies,
Safeguarding of assets,
Prevention and detection of fraud and error,
Accuracy and completeness of the accounting records, and
Timely preparation of reliable financial information
The internal financial control system also comprises of the below
procedures:
Authorization matrix for approval of expense and revenue Pricing
Internal Check and Control - Finance approval for issuance of
P.O, Vendor Invoice approval, Online payment approval, etc.
Upgraded Account ng Package
Cost centre wise data recording
Weekly reconciliat on of bank accounts
Monthly closure of books of accounts
Yearly physical verificat on of assets
Ensuring statutory payments and returns are filed within respect
ve due dates
Policies and procedures for DSC issuance as per approved CPS by
CCA
ISO 9001 (QMS), ISO 27001 (ISMS) and ISO 20000-1 (IT Services),
ISO27018 (Protecton of personal informat on in cloud), GDPR and CMMI L5
Several daily, weekly and monthly reports for analysis
Reporting:
Daily sales and operatng MIS
Weekly reporting of fund positon
Monthly MIS report
Cost centre reportng - branch/vert cal wise
Other reports on need basis
Daily collecton report
Fortnightly receivables report
Several reports on DSC, Retail business and lead management for
enterprise division
Monitoring:
Online Access of all operatng bank accounts for contnuous
monitoring
Monthly financial review
Quarterly internal audit
Quarterly review of accounts by the statutory auditors
Yearly audit by statutory auditors
Monitoring of all statutory compliances
CCA internal audit and yearly CCA external audit
emSign internal audit and yearly external audit by M/s BDO
Malaysia
ISO and other quality certficaton surveillance audits
These financial control systems are considered adequate for the size of
the company and nature of its business
14.Particulars of loans, guarantees or investments
Loans, guarantees and investments covered under Secton 186 of the
Companies Act, 2013 form part of the Notes to the audited standalone financial statements
and the same is disclosed in note no. 6 and note no. 14 of the consolidated audited
financial statements.
The company has an outstanding investment of INR 524.02 million
[2022:224.99 million] in equity shares of various subsidiary companies and also has a loan
outstanding of INR 10.81 million [2022:30.17 million] from eMudhra employees Stock Optons
Trust.
15.Board of Directors and Key Managerial Personnel
Composition of the Board of Directors ("Board") is in terms
of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. As on March 31, 2023, the Board of Directors of your Company comprised
of six Directors, viz., two Executive Directors and four Independent Directors including
one woman Director. In accordance with the provisions of Section 152 of the Companies Act,
2013, Mr. Venu Madhava will retire by rotation at the ensuing AGM and being eligible,
offer himself for re-election. The Board has recommended his re-election.
As on March 31, 2023, the Company had designated the following as Key
Managerial Personnel:
Sl. No. |
Name |
Designation |
1. |
Venkatraman Srinivasan |
Executive Chairman |
2. |
Venu Madhava |
Whole-Time Director |
3. |
Saji K Louiz |
Chief Financial Officer |
4. |
Johnson Xavier |
Company Secretary & Compliance Officer |
5. |
Kaushik Srinivasan* |
Senior vice president & head - Product and delivery |
6. |
Arvind Srinivasan* |
Senior vice president & Head - International Business |
7. |
Ashwin Jansale** |
Senior vice president & head - channel sales |
8. |
Biju Varghese |
Senior vice president & sales head - India and APAC |
9. |
Janarthanan S |
Senior vice president & head - customer success |
10. |
Vijay Kumar |
Senior vice president & chief technology officer |
11. |
Kiran A M |
Vice president & head - customer operations |
* As on March 31, 2023, employed in eMudhra DMCC, Dubai. They are
related to Mr. V Srinivasan, Executive Chairman and are employed in the normal course of
business on an arm's length basis.
** Retired from the company with effect from April 15, 2023
16. Committees of the Board
The details of the powers, functions, composition and meetings of the
Committees of the Board held during the year are given in the Report on Corporate
Governance section forming part of the Annual Report.
17. Board Meetings
The Board of Directors of the Company met ten times during the year
under review. The details of these Board Meetings are provided in the Report on Corporate
Governance section forming part of the Annual Report. The necessary quorum was present for
all the meetings. The maximum interval between any two meetings did not exceed 120 days.
18. Board Evaluation
The Board of Directors has carried out an annual evaluation of its own
performance, board committees, and individual directors pursuant to the provisions of the
Act and SEBI Listing Regulations. The performance of
the board was evaluated by the Board after seeking inputs from all the
directors on the basis of criteria such as the board composition and structure,
effectiveness of board processes, information and functioning, etc. The performance of the
committees was evaluated by the Board after seeking inputs from the committee members on
the basis of criteria such as the composition of committees, effectiveness of committee
meetings, etc. The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the Securities and Exchange Board of India (SEBI) on January 5, 2017.
In a separate meeting of independent directors, performance of non-independent directors,
the Board as a whole and Chairman of the Company were evaluated, taking into account the
views of executive directors and non-executive directors.
Performance of individual directors on the basis of criteria such as
the contribution of the individual director to the board and committee meetings like
preparedness on the issues to be discussed, meaningful and constructive contribution and
inputs in meetings, etc. was also carried out. At the board meeting that followed the
meeting of the independent directors and meeting of Nomination and Remuneration Committee,
the performance of the Board, its committees, and individual directors were also
discussed. Performance evaluation of independent directors was done by the entire Board,
excluding the independent director being evaluated.
19. Policy on Directors' Appointment and Remuneration and Other Details
The company appoints directors based on need. They are selected based
on merit and their appointment, remuneration and other eligibility parameters are vetted
by the Nomination and Remuneration Committee. The nomination and remuneration committee
currently consists of Dr N. L. Sarda, chairman, Mr Manoj Kunkalienkar and Ms. Chandra
Iyer.
The Company's policy on appointment of directors is available on the
Company's website at www.emudhra.com. The policy on remuneration and other matters
provided in Section 178(3) of the Act has been disclosed in the Corporate Governance
Report, which is a part of this report and is also available on the Company's website at
www.emudhra.com.
20. Corporate Governance
Your Company has taken adequate steps to adhere to all the stipulations
laid down in the Listing Regulations. A report on Corporate Governance is disclosed
separately in the Annual Report.
21. Internal complaints committee
The Company has constituted an Internal Complaints Committee (IC) to
consider and resolve all sexual harassment complaints reported by women. The constitution
of the IC is as per the Sexual Harassment of women at workplace (Prevention Prohibition
and Redressal) Act, 2013. There were no cases reported during the financial year 2022-23
22. Declaration by independent directors
Pursuant to the provisions of Section 149 of the Companies Act, 2013
and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the independent directors of the company have submitted their
declarations that each of them meets the criteria of independence as provided in Section
149(6) of the Companies Act, 2013 along with Rules framed thereunder and Regulation
16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances
affecting their status as independent directors of the Company. During the year under
review, the non-executive directors of the Company had no pecuniary relationship or
transactions with the Company, other than sitting fees,
, reimbursement of expenses, if any. commission and
23. Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies
Act, 2013, an extract of the annual return in prescribed format is available at the
Company's website www.emudhra.com.
24. Secretarial Standards
The Company complies with all applicable mandatory secretarial
standards issued by the Institute of Companies Secretaries of India.
25. Particulars of Employees
The information under Section 197 of the Act read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
I. The ratio of the remuneration of each Director to the median
remuneration of the employees of the company for the financial year 2022-23:
Name |
Ratio of Remuneration of each Director to
median remuneration of Employees |
% Increase in remuneration in the financial
year |
Non-executive Directors: |
|
|
Manoj Kunkalienkar |
3.90 |
4.8% |
N LSarda |
4.22 |
13.4% |
Chandra Iyer* |
3.74 |
370.90% |
Chandrasekar Padmanabhan* |
3.85 |
626.4% |
Executive Directors: |
|
|
V. Srinivasan, Executive Chairman and |
|
|
Director** |
11.13 |
- |
Venu Madhava, Whole Time Director |
12.17 |
22.6% |
Appointed as non-executive directors during FY 2022 (Chandra Iyer on
August 13,2021 and Chandrasekar Padmanabhan on November 03,2011)
** Has not paid any remuneration or commission from eMudhra Limited
during the FY2023. However, he is entitled to rent free accommodation at Bangalore by
eMudhra Limited. Further he has drawn a yearly remuneration of AED 240,000 (INR 5.25
million) from eMudhra DMCC.
II. The percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the
financial year 2022-23:
Name |
Remuneration for FY 2022-23 (INR in Million) |
% Increase in Remuneration in FY 2022-23 |
Executive Directors: |
|
|
V. Srinivasan Executive Chairman and Director |
5.25 |
|
Venu Madhava Whole Time Director |
5.74 |
22.6% |
Chief Financial Officer: Saji K Louiz |
5.91 |
45.2% |
Company Secretary: Johnson Xavier |
3.15 |
66.5% |
a. The percentage increase in the median remuneration of the employees
of the Company for the financial year 2022-23 was 21.5%
b. The number of permanent employees on the rolls of Company:
There were 707 (Seven Hundred and Seven) permanent employees on the
rolls of eMudhra Limited as on March 31,2023. The total number of employees on eMudhra and
group companies are 763 (Seven Hundred and Sixty Three)
c. It is Affirmed that the remuneration is as per the nomination and
remuneration policy of the Company, which is published in www.emudhra.com
26.Directors' responsibility statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors
to the best of their knowledge hereby state and confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures;
b) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities.
d) the directors had prepared the annual accounts on a going concern
basis;
e) they have laid down internal financial controls to be followed by
the Company and such internal financial controls are adequate and operating effectively;
f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, the work performed by the internal,
statutory and secretarial auditors and external consultants, including the audit of
internal financial controls over financial reporting by the statutory auditors and the
reviews performed by management and the relevant board committees, including the audit
committee, the Board is of the opinion that the Company's internal financial controls were
adequate and effective during FY 2022- 23.
27.Subsidiaries, joint ventures and associate companies
During this year, your company has made additional investment of INR
295.48 million by way of subscription to 3,620,000 equity shares of eMudhra INC, USA, a
subsidiary company, at a face value of USD 1 per share.
The financial statements together with related information and other
reports of the material subsidiaries are available on the website at www.emudhra.com
Your Company's policy on material subsidiary is also available on the
website at www.emudhra.com
In accordance with Section 129 (3) of the Act, a separate statement
containing salient features of the financial statement of the subsidiaries of the Company
in Form AOC-1 is given in Annexure C.
Sl.no |
SUBSIDIARY |
Company profile |
1 |
eMudhra Technologies Limited |
The company is a WebTrust accredited global certifying
authority and is also engaged in providing solutions and associated services around PKI
technologies. |
2 |
eMudhra Consumer Services Limited |
The company is engaged in providing various software
products, IT and IT enabled products, etc. The company's product, emSigner, paperless
office solution is attaining major traction across the globe. |
3 |
eMudhra MU Limited |
The company is a certifying authority in Mauritius and
is engaged in providing digital signature and other allied services in and around PKI
technologies. |
4 |
eMudhra DMCC |
The company is a marketing company for eMudhra
products and their own products and allied services in Middle East Africa [MEA] region.
During the year it has also built its own product. |
5 |
eMudhra INC |
The company is a marketing company for eMudhra
products and their own products and allied services in Americas region and is also
developing technology services business in Americas region. |
6 |
eMudhra PTE Ltd |
The company is a marketing company for eMudhra
products and allied services in Asia -Pacific [APAC] region. |
7 |
eMudhra B. V |
The company is a marketing company for eMudhra
products and allied services in Europe region |
8 |
PT eMudhra Technologies Indonesia |
The company is a marketing company for eMudhra
products and allied services in Indonesia. |
9 |
eMudhra Employees Stock Option Trust |
This trust is to manage the ESOP of employees |
28. Related Party Transactions
The Board of directors have approved related party transactions, all of
them are in the normal course of business and on an arm's length basis. The summary of
related party transactions is also provided in Note no.53 of the audited financial
statements.
Since all related party transactions entered into by the Company were
in the ordinary course of business and were on an arm's length basis, Form AOC-2 is not
applicable to the Company.
29. Deposits from Public
The Company has neither accepted nor renewed any deposits during the
year under review.
30. Auditors
1. Statutory Auditor
M/s Suri and Co, (ICAI registration number 004283S) were appointed by
the shareholders at the Fourteenth AGM (AGM 2022), as Statutory Auditors of the Company
for the first term of five consecutive years to hold office until the conclusion of the
Nineteenth AGM (AGM 2027). The requirement for the annual ratification of auditors'
appointment has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May
07, 2018 and that they are free from any disqualification specified in Section 141 of the
Companies Act, 2013 and the rules made thereunder.
Statutory Auditor's report:
The statutory auditor's report to the members for the year ended March
31, 2023 does not contain any qualification, reservation, adverse remark or disclaimer.
Further auditors have not reported any matter under Section 143 (12) of the Act and
therefore no detail is required to be disclosed under Section 134(3) (ca) of the Companies
Act,2013.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed Mr. S P Nagarajan, Company Secretary in practice, to undertake the
Secretarial Audit of the Company. The report on the Secretarial Audit carried out for the
year 2022-23 is annexed herewith as 'Annexure -B'. The secretarial audit report does not
contain any qualification, reservation, adverse remark or disclaimer.
Internal Auditor
In the last year we had appointed M/s Manohar Chowdhry and Associates
("MCA") as internal auditors for FY 2022-23. The audit team in MCA who have been
involved in our audit has joined CNGSN & Associates LLP, Chartered Accountants and now
the said team forms the Bangalore office of CNGSN & Associates LLP. Since the team has
been associated with us and are familiar with the business process and environment in
which we operate, we have appointed CNGSN & Associates LLP Chartered Accountants as
internal auditor for the year ending March 31, 2024.
31. Details in respect of frauds reported by auditor under section
143(12) of the Companies Act, 2013
During the year under review, there were no frauds reported by the
auditors to the Audit Committee or the Board under section 143(12) of the Companies Act,
2013.
32. Disclosure relating to maintenance of cost records
The Central Government has not prescribed the maintenance of cost
records under Section 148 of the Companies Act, 2013 for any of the services rendered by
the Company.
33. Audit Committee
The details pertaining to the composition of the Audit Committee are
included in the Corporate Governance Report, which is a part of this report.
34. Disclosure Requirements
As per SEBI Listing Regulations, the Corporate Governance Report with
the Secretarial Auditors' Certificate thereon, and the integrated Management Discussion
and Analysis, the Business Responsibility and Sustainability Report ("BRSR")
form part of the Director's Report.
This would enable the Members to have an insight into environmental,
social and governance initiatives of the Company. The Company has devised proper systems
to ensure compliance with the provisions of all applicable Secretarial Standards issued by
the Institute of Company Secretaries of India and that such systems are adequate and
operating effectively.
35. Risk Management policy
Risk Management and mitigation is taken care of by the Board and
Executive Management by appropriate delegation, reporting and authority structure. Risk
Management is also ensured by puffing various checks and balances across various
functions. It is integrated into management, Board and annual reporting mechanism. The
company has also constituted a risk management committee of the Board.
As part of Risk Management, the Company has also put in place an
Internal Audit Mechanism commensurate with size of business and nature of its operations.
Their scope of internal audit includes review of processes for safeguarding the assets of
the Company, review of operational efficiency, effec tiveness of systems and processes,
and assessing the internal control strengths in all areas. Internal Auditors findings are
discussed with the process owners and suitable corrective actions are taken to improve
efficiency in operations. Internal audit reports are also discussed in the Audit Committee
and Board meetings. The purpose of this policy is:
1. To ensure protection of shareholder value through the establishment
of an integrated Risk Management framework for identifying, assessing, mitigating,
monitoring, evaluating and reporting of all risks.
2. To provide clear and strong basis for informed decision making at
all levels of the organization.
3. To continually strive towards strengthening the "Risk
Management & Compliance System" through Continuous learning and improvement.
Risk management policy framework has been covered in detail in
MD&A.
36. Credit ratings
The company has engaged the credit rating agency ICRA limited. During
the year, based on a review of the latest developments, the Rating Committee of ICRA,
after due consideration, has reaffirmed long-term rating at [ICRA] BBB+ (pronounced ICRA
Triple B plus) to the captioned Bank Facilities ("Rating") and short-term rating
at [ICRA]A2 (pronounced ICRA A two). The Outlook on the long-term Rating is revised to
Positive from Stable. These ratings are valid till September 28, 2023.
37. Disclosure as required under rule 5 (2) and 5 (3) of the companies
(appointment and remuneration of managerial personnel) rules, 2014.
a) During the financial year, the Company has not employed any person
with the aggregate remuneration for Rs. 1,02,00,000 / per annum if employed throughout the
year or Rs. 8,50,000 per month if employed for part of the year.
b) During the financial year, the company has not employed anyone, who
was in receipt of remuneration (Refer note 61 in the standalone audited financials) in
that year which, in the aggregate, or as the case may be, at a rate which, in the
aggregate, is in excess of that drawn by the managing director or whole-time director or
manager and holds by himself or along with his spouse and dependent children, not less
than two percent of the equity shares of the company.
38. Disclosure of composition of audit committee and providing vigil
mechanism
During the year, the Audit Committee of the Board of Directors of the
Company comprised of 3 (Three) Members namely Mr. Chandrasekar Padmanabhan, Chairman, Mr.
V Srinivasan and Dr. N L Sarda.
The above composition of the Audit Committee consists of 2 (two)
independent Directors, Dr. N L Sarda and Mr. Chandrasekar Padmanabhan, who form the
majority.
The Board accepted the recommendations of the Audit Committee whenever
made by the Committee during the year. The Audit Committee duly met Four times on June 11,
2022, July 23, 2022, October 19, 2022 and January 25, 2023, during the financial year
under review and all the members were present in the said meeting.
The Company has established a vigil mechanism to oversee, the genuine
concerns, if any expressed by the employees. The Company has also provided adequate
safeguards against victimization of employees who express their concerns. The Company has
also provided direct access to the chairman on reporting issues concerning the interests
of co-employees and the Company.
The Company has a Whistle Blower Policy and has established the
necessary vigil mechanism for directors and employees in conformation with Section 177(9)
of the Act and Regulation 22 of SEBI Listing Regulations, to report concerns about
unethical behaviour. This Policy is available on the Company's website at www.emudhra.com.
39. Transfer to reserves
During the year, the company has transferred INR 86.00 million to the
capital redemption reserve.
40. Share capital
a) Equity share capital
During the year, your company allotted fresh share of 6,289,062 equity
shares of INR 5.00 per share as fresh issue of shares as part of IPO of the Company. In
addition to this, your company has also made preferential allotment of 1,603,617 equity
shares. With the said allotment, the paid-up equity share capital has increased to INR
390.36 million as on March 31, 2023 consisting of 78,072,371 equity shares of INR 5.00 per
share
Your Company has not issued shares with differential voting rights,
bonus and sweat equity shares during the year under review.
b ) Redemption of preference shares capital
During the year, the company has redeemed 86,00,000 preference shares
at the rate of Rs.10 [face value] per share amounting to INR 86.00 million on December 15,
2022 which was the due date for redemption as per the terms of issue of these shares.
These shares were held by:
Name |
No. of shares |
Venkatraman Srinivasan |
6,653,438 |
Lakshmi Kaushik |
973,281 |
Aishwarya Arvind |
973,281 |
Total: |
8,600,000 |
c) Employee stock option plan
During the year under review, your company has issued grant of 138,500
under eMudhra employees stock options plan. Your company has facilitated the transfer of
2,959,250 equity shares of INR 5.00 per share by eMudhra employees stock options trust to
the employees who exercised their options under the said plan.
Pursuant to the requirements of the SEBI (Share Based Employee
Benefits) Regulations, 2014, a certificate has been issued by the Secretarial Auditors of
the Company confirming that the Plan has been implemented in accordance with the said
Regulations and in accordance with the resolution passed by the Company in the General
Meeting.
The unissued closing balance at the year-end is 513,426 stock options
of equity shares out of the 60,57,801 stock options on equity shares.
41. Business Responsibility and Sustainability Report
As a responsible corporate in India and abroad, our values at eMudhra
mandate seffing up sustainable processes to conduct environment friendly operations,
mitigate climate change by cuffing down on paper consumption and take all necessary
actions and initiatives for better employee engagement, diversity, inclusion and belonging
in the organization.
As organizations across the globe leverage products and services
offered by eMudhra to build a business environment that is digitally secure, automated and
data driven, we offer end-to- end digital trust to improve corporate resilience across
industries and regions.
As we all know that climate change and other environmental concerns
have become the central agenda of governments and global bodies, it is our vision at
eMudhra to offer PAPERLESS solutions globally through the use of our trust services and
eSignature workflow solution and reduce paper usage significantly. This will help
organizations reduce carbon footprint and emissions on a global scale with better ESG
compliance and social responsibility.
Our product suite revolves around securing the digital transformation
initiatives with a foundational PKI layer, coupled with state-of-the art authentication
engine and Digital signing solution to make business operations secure, agile, scalable
and future ready. With a proven track record of enabling secure digital transformation for
a number of organizations worldwide, eMudhra is well positioned to help governments and
organizations ditch paper for good and adopt digital methods to carry out day-to-day
operations at scale with a focus on ensuring compliance and transparency.
As ESG becomes a force that will affect all businesses and investments
globally, it is paramount to digitally transform business operations and limit its
infringement upon environment and climate to the bare minimum. eMudhra is a leading
provider of digital platforms and solutions that not just help organizations mitigate
dependence on paper and manual processes, but help create a unified ecosystem for digital
transformation to scale ESG goals with tailored digital solutions.
Business Responsibility and sustainability report in the prescribed
format is annexed to this report.
Acknowledgements
The board places on record its appreciation for the continued
co-operation and support extended to the company by its customers, vendors, investors and
business partners. The company continues to make all efforts in understanding their unique
needs and deliver maximum stakeholder Satisfaction.
We place on record our appreciation of the contribution made by the
employees at all levels, whose hard work, co-operation and support helped us face all
challenges and deliver results.
We acknowledge the support of our vendors, the regulators, the esteemed
league of bankers, financial institutions, rating agencies, government agencies, auditors,
legal and secretarial advisors, consultants, business associates, investment bankers,
lawyers, registrars, public relationship agency and other stakeholders for their continued
support.
For and on behalf of the board of directors Of eMudhra
Limited |
|
Sd:/- V Sriniva s a n |
Sd:/- Venu Madhava |
Exec utive Chai rm a n |
Whole Time Director |
DIN:00640646 |
D IN:06748204 |
Date: April 28, 2023 Place: Bangalore |
|