eMudhra Ltd Management Discussions

I. Overview

We are engaged in the business of providing Secured Digital Transformation with huge focus on embeddingcyber security as an important element. Zero trust is the new security paradigm of "never trust, always verify" and cryptographic identities form an important bedrock of future proofing security and moving towards ZERO TRUST.

We are a "one stop shop" player in secure digital transformation and provide a wide spectrum of services and solutions from offering identity, authentication and signing solutions to issuance of certificates to human, websites and devices. We are the only Indian company accredited by WebTrust and is trusted by all the renowned browsers in the world. We are also a member of Asia PKI consortium, European Cloud Signature Consortium and Certifying Authority/Browser Forum.

During the year our company has renewed/got several quality certifications and has been recognized by various global technology advisory firms.

II. Our Portfolio of Products/Services

Product	Variants	Offering
emSigner	On-premise/Cloud work flow	This product enables secure digital transformation in any industry and replaces paper which helps to save the environment.
	Signer Gateway
	Server Side – API based and Folder based
	eStamping – Online and Offline
CertiNext/ emCA	On-premise	This enables issuance of certificates to individuals, organizations, devicesand their lifecycle management.
	Managed Services
emAS (Improvised and renamed as SECURE PASS)	Multifactor authentication [MFA] like DSC,OTP, biometric, etc.	Authentication solution enabling multi factor authentication, singlesign on and full suite of identity and access management including privileged access management.
	Identity and access management [IAM]
	emSafe – Securing Data at rest.
eMsign Hub (For TRUST Services)	Individual/organisation certificates [digitalsignatures]	This covers the basic needs of individuals/organizations for various compliances and caters to signing requirements. Apart from issuance of certificate
	eSign V2/V3	eMsign Hub enables creation of private certifying authorities on cloud.
	Device certificates in Internet of things [IoT]
	Remote signing
	Website certificates [SSL/TLS]

III. Business Outlook

Business Outlook

General Review of business environment

As per IMF data Global growth is projected at 3.3 percent both in 2025 and 2026, against the historical (2000–19) average of 3.7 percent. The forecast for 2025 is broadly unchanged from that in the October 2024 World Economic Outlook (WEO), primarily on account of an upward revision in the United States offsetting downward revisions in other major economies. Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies. With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth are broadly balanced. On the upside, faster disinflation could lead to further easing financial conditions. Looser fiscal policy than necessary and then assumed in the projections could imply temporarily higher growth, but at the risk of a more costly adjustment later on. Stronger structural reform momentum could bolster productivity with positive cross-border spillovers.

The World Economic Forums Global Cybersecurity Outlook 2025 report highlights the increasing complexity in the cyber landscape, which has significant implications for organizations and nations. This complexity arises from the rapid growth of emerging technologies, prevailing geopolitical uncertainty, the evolution of threats, regulatory challenges, vulnerabilities in supply chain interdependencies and the growing cyber skills gap. Cyberspace is more complex and challenging than ever due to rapid technological advancements, growing cybercriminal sophistication and deeply interconnected supply chains. Global Cybersecurity landscape forces leaders to equip with essential insights to navigate these challenges and strengthen cyber resilience.

Software and computing technology are transforming businesses in every industry around the world, in which PKI technology plays a vital role by offering secure digital transformation. Even in spite of any Macroeconomic headwinds spending on digital transformation and cyber security is expected to remain strong in view of the need for protection and for cost efficiency. Prioritization will be critical as CIOs look to optimize spend while using digital technology to transform their organizations value proposition, revenue and client interactions. Cybersecurity and digital transformation products will continue to have growth as enterprises prioritize spending to capture competitive advantages through increased productivity, automation and other software-driven transformation initiatives. While due to digital transformation exercise undertaken by many customers around the world, the Companys trust service and paperless work flow solution are expected to have huge demand, the cyber security threats are likely to increase the demand for the company identity and authentication management and public key infrastructure solutions.

IV. Our Strategy

The Company is adopting a ve-pronged strategy as under for global growth:

1. Maintain leadership in Indian Trust Services market and capitalize on industry opportunities.

2. Enhance solution offerings to tap growing needs of digital transformation and cybersecurity.

3. Grow presence in overseas markets with partnerships and acquisitions.

4. Expand share of revenues among existing customers and broaden our partner network and customer base.

5. Thrust on Converge Identity and Data Security as an important area and put R&D focus on GenAI enabled signing workflows for Document intelligence and risk assessment and Voice and Mobile authentication for signing on the go.

In line with our above strategy, the Company has implemented various technology tools for partners and end customers to consume our trust services and with aggressive retail focus has maintained leadership in the Indian trust service market. With the acquisition of Ikon Tech and Two95 International the companys revenue in US has improved considerably. The Companys operation in Europe is yet to take off. The company had earlier invested in a Data Center in Netherlands (Europe). With the growth of customer base in the USA the need for Data Center in USA is much more than the current need in Netherlands. In View of this the company has shifted the Data Center Equipments in Netherlands to USA and is in the process of creating Data Center in US without much of additional investment. The need for Data center in Europe will be looked into based on the growth in Europe. In line with the objective of enhancing solution offerings, the Company has planned to develop features based on Gen AI for product like emSigner, Remote Signing and EMCA. The year 2024-25 was a very successful year for the Companys international foray and Companys revenue from international market increased by 57.5% during the year. The Company is expected to further strengthen the international markets in the coming years. The share of the existing customers in the total business of the Company is 78% in FY 2024-25.

V. R&D and Product Development

The Company has been continuously doing R&D and over the last several years has come up with various solutions towards digital transformation and cyber security. During the year, the company has developed three Product viz PQC (Post Quantum Cryptography), FHE (Fully Homomorphic encryption) and Mobile PKI. The Companys R&D team of over 200+ people are continuously working towards these technologies so that the Company can offer a comprehensive solution to its customers. By its R&D, the company has created a one stop shop by combining its trust service layer and the enterprise solution layer so that both the layers complement each other. In upcoming Financial year company plan to develop GenerativeAI capabilities in our existing products by enabling ability of Natural Language instruction, model context protocol, LLM Application. Further by way of R&D the company proposes to enhance Remote Signing, emSigner, Certinext and develop Data Privacy Stack.

VI. Results of our Operations Financial Results

Please refer to our Standalone and Consolidated financial statements in this Annual Report for detailed schedules and notes.

The Consolidated and Standalone Statement of Profit and Loss is as follows:

Consolidated Statement of Profit and Loss

Particulars	For the year ended March 31,2025	For the year ended March 31,2024
Income
I Revenue from operations	5,193.85	3,731.19
II Other income	84.51	69.21
III Total Income (I+II)	5,278.36	3,800.40
IV Expe nse s
Operating expenses	2,112.33	888.62
Purchase of stock-in -trade	305.07	354.42
Changes in inventories of stock in trade	15.37	(19.01)
	2,432.77	1,224.03
Gross Margin	2,845.59	2,576.37
Gross Margin %	53.91%	67.79%
Employee benefits expense	929.64	812.88
Finance costs	11.58	30.05
Depreciation and amortisation expense	238.26	208.09
Other expenses	592.13	598.73
EBITDA	1,323.83	1,164.76
EBITDA %	25.08%	30.65%
Total expenses (IV)	4,204.38	2,873.78
V Profit/(Loss) before exceptional items and tax (III-IV)	1,073.98	926.62
VI Exceptional items	-	-
VII Profit/(Loss) before tax (V-VI)	1,073.98	926.62
PBT %	20.35%	24.38%
VIII Tax expense
Current tax	154.10	121.27
Deferred tax	47.54	41.83
Total tax expenses	201.64	163.10
Tax %	18.77%	17.60%
IX Profit/(Loss) for the year (VII-VIII)	872.34	763.52
PAT %	16.53%	20.09%
X Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurement (loss)/gain on defined benefit plan (net of tax)	(1.15)	(1.33)
Equity instrustments through other comprehensive income	(0.66)
Income tax relating to items that will not be reclassified to profit and loss	1.26	0.26
Items that will be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (net of tax)	(60.17)	2.22
Other comprehensive income/(loss) for the year (net of tax)	(61.98)	0.89
XI Total comprehensive income/(loss) for the year (IX+X)	810.36	764.41
(comprising profit/(loss) and other comprehensive income for the year)
Profit is attributable to
Owners of eMudhra Limited	846.38	750.64
Non-controlling interests	25.96	12.88
Other comprehensive income attributable to
Owners of eMudhra Limited	(61.98)	0.89
Non-controlling interests	-	-
Total comprehensive income attributable to:
Owners of eMudhra Limited	784.40	751.53
Non-controlling interests	25.96	12.88
XII Earnings per share (Nominal value of share INR 5/- each)
Basic	10.41	9.74
Diluted	10.22	9.50

Standalone statement of profit and loss

Particulars	For the year ended March 31,2025	For the year ended March 31,2024
I Revenue from operations	2,029.60	1,832.59
II Other income	91.45	79.51
III Total Income (I+II)	2,121.05	1,912.10
IV Expe nse s
Operating expenses	492.66	195.81
Purchase of stock-in -trade	305.07	354.42
Changes in inventories of stock in trade	15.37	(19.01)
Employee benefits expense	578.38	574.40
Finance costs	0.27	22.00
Depreciation and amortisation expenses	152.35	154.15
Other expenses	306.50	343.85
Total expenses (IV)	1,850.60	1,625.62
V Profit/(Loss) before exceptional items and tax (III-IV)	270.45	286.48
	-	-
VII Profit/(Loss) before tax (V-VI)	270.45	286.48
VIII Tax expense
Current tax	35.72	38.32
Deferred tax	48.08	41.94
Total tax expenses	83.80	80.26
IX Profit/(Loss) for the year (VTT-VTTT)	186.65	206.22
X Other comprehensive income
Remeasurement (loss)/gain on defined benefit plan	(4.94)	(0.66)
Income tax relating to items that will not be reclassified to profit and loss	1.24	0.17
Other comprehensive income/(loss) for the year (net of tax)	(3.70)	(0.49)
XI Total comprehensive income/(loss) for the year (IX+X)	182.95	205.73
(comprising profit/(loss) and other comprehensive income for the year)
XTT Earnings per share (Nominal value of share INR 5/- each)
Basic	2.25	2.61
Diluted	2.25	2.61

1. Revenue

The growth in our revenue in fiscal 2025 from 2024 is as below:

	Consolidated			Standalone
INR in million	FY 2025	FY 2024	Change	FY 2025	FY 2024	Change
Revenue from operation	5,193.85	3,731.19	39.2%	2,029.60	1,832.59	10.8%

The increase in revenues was primarily due to an increase in our solutions and services revenue in global geographies.

The consolidated and standalone revenues from trust services and enterprises solutions for fiscal 2025and 2024 are as follows:

	Consolidated			Standalone
INR in million	FY 2025	FY 2024	Change	FY 2025	FY 2024	Change
Trust services (India and Global)	1,058.53	1,043.79	1.4%	999.64	1,002.76	-0.3%
Solutions India	972.11	681.91	42.6%	1,029.96*	829.83*	24.1%
Solutions Global	3.163.22	2,005.49	57.5%	NA	NA	NA
Total:	5,193.85	3,731.19		2,029.60	1,832.59

*Include Transfer pricing revenue.

During the year under review, we have added 204 new enterprise customers.

During the year, based on guidelines from CCA we have changed our billing model in the Trust Service business. As per the guidelines the billing should be directly made to the end customer, and the partner should be considered only as a referral partner. Due to this change the Gross revenue was accounted and related commission was accounted as operating cost instead of the earlier practice of net price to partner as revenues. Further during the year, the Income Tax Department has announced that taxpayer other than corporate undergoing tax audits no longer need a Digital Signature Certificate ( DSC ) to submit their returns. Instead, they can now use an Aadhaar One-Time Password ( OTP ) for this purpose. Due to this there was a substantial reduction in DSC requirements. During the year this reduction is offset by the revenue increase due to grossing up and price increase. Hence Trust services has marginally increased by 1.4%. In our enterprise solution business in India the revenue grew to 42.6%. Further our Global enterprise solution business grew very well at 57.5%. During 2024-25 the acquisition of TWO95 International and Sendrcrypt Inc has also helped in growing the business.

2. Expenditure

Cost of goods sold

The cost of goods sold, comprises of commission expenses, direct personnel cost, cost of software, transfer price of proprietary solutions of the group, cost of stock in trade and repurchase of stock due to the change in business model impose by the CCA guidelines. In the

earlier model while we were selling stocks to large number of partners and they used to hold the stock and resell to the customers, in the new model imposed by CCA guidelines the old stock cannot be used and new invoicing has to be done for each and every end customer sale. In view of this on the effective date of the new model (15^th July, 2024) the stocks available with the partners became useless. Hence we have to agree with the partners for repurchase of stock to the extent the concerned partner bring new sale to end customer.

Cost of goods sold on a consolidated basis increased from 32.2% in FY 2024 to 46.1% as a percentage in FY 2025 to the total income of the respective year due to increase in technology services business and introduction of commission model in Trust Services (Rs 205.6 Mn) and repurchase of DSC stock to the extent of Rs 87.5 Million. The standalone cost increased from 27.8% to 38.3% as a percentage to the total income due to introduction of commission model in Trust Services and repurchase of DSC stock to the extent of Rs 87.5 Million. Third party items bought for service delivery is also included in cost of goods sold.

The cost of stock in trade has decreased as a percentage of total revenue from 8.8% to 6.1% in the fiscal 2025 on consolidated basis and decreased from 17.5% to 15.1% on standalone basis, in line with the companys effort to reduce the sale of third party components.

Employee benefit expenses

Our employee benefit expenses consist of salary, wages, bonus, insurance, contribution to provident fund, share based payments and other funds and staff welfare expenses. Our employee cost has reduced as a percentage of total revenue from 21.4% to 17.6% in the fiscal 2025 on consolidated basis and decreased from 30.0% to 27.3% on standalone basis due to improvement in employee efficiency.

During the year under review, we have incurred Staff welfare costs including employee transportation which is 0.9% and 1.9% on consolidated and standalone basis respectively as a percentage to total income. Further the share-based payment expenses increased to 1.4% from 1.1% on a consolidated basis and increased to 1.8% from 1.1% on a standalone basis.

Our number of employees increased to 851 employees as of March 31,2025 from 817 employees as of March31,2024.

Financial costs

Our financial cost consists of interest expenses on term loans, overdraft accounts and interest on lease liabilities. Our financial costs decreased as a percentage of total income from 0.8% to

0.2% in the fiscal 2025on a consolidated basis and reduced from 1.2% to 0.01 % on standalone basis.

The drop in the cost is due to closure of the lease for equipment relating to eMudhra Digital Campus.

Other expenses

Other expenses comprise of selling expenses, office maintenance expenses, rental expenses,

travel expenses, boarding expenses, communication, technology expense and all other indirect expenses. During the year under review other expenses as a percentage of total income have decreased from 15.8% to 11.2% on a consolidated basis and decreased from 18.0% to 14.5% on a standalone basis due to operational efficiencies.

During the year under review, we have held various product or brand awareness events in India as well as overseas locations and have been part of global information technology research coverage. However, the marketing expenses as a percentage of total income marginally increased from 2.4% in fiscal 2024 to 2.5% in fiscal 2025 on consolidated basis and it decreased from 4.1% to 2.9% on standalone basis. Further, the travel, boarding and lodging expenses as a percentage of total income decreased to 1.2% from 1.6% on consolidated basis and have decreased to 1.7% from 2.0% on standalone basis.

Other income

Other income primarily includes foreign exchange gains on consolidation, interest income of fixed deposits, profit on sale/ Mark to Market of assets/investments, write back of provisions no longer required and miscellaneous income.

The other income as a percentage of total income decreased to 1.6% from 1.8% on a consolidated basis and has marginally increased to 4.3% from 4.2% in the fiscal 2025 on standalone basis.

Depreciation and amortization expenses

Our depreciation/amortization expense as a percentage of total income has decreased from 5.5% to 4.5% on consolidated basis and has decreased from 8.1 % to 7.2% in the fiscal 2025 on standalone basis.

Provision for tax

During the year under review the company has provided effective tax rates as below.

	Consolidated		Standalone
INR in million	FY 2025	FY 2024	FY 2025	FY 2024
Income tax expenses	201.64	163.10	83.80	80.26
Effective tax rate	18.8%	17.6%	31.0%	28.0%

The company has provided Indian income tax at the rate of 22% along with applicable surcharge and educational cess. All other regions are coming under income taxes, which vary between 9% to 30%.

I. Financial condition Equity share capital

The paid-up equity share capital is at Rs. 41,40,58,535 consisting of 8,28,11,707 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.

Other equity comprises mainly of reserves and surplus and other comprehensive income

The movement in retained earnings was on account of profit earned during the year, payment of dividend, share based payment reserve and due to foreign exchange translation reserve.

Capital work-in-progress/Intangible assets under development

During the year under review, we have capital work-in-progress of INR 171.43 million and Nil on consolidated and standalone basis respectively. This predominately pertains to one data center in USA which is being created by shifting of the data center equipment from Netherlands.

The intangible assets under development is INR 2.43 million on consolidated and standalone basis respectively. This is towards continuous development of our core products.

Inventory

The inventory of the company stood at INR 13.99 million for FY 2025 as against INR 29.36 million forFY 2024 on consolidated and standalone basis which are convertible in the normal course of business.

Financial assets

a. Trade receivables

The days sales outstanding was at 96 days for FY 2025 as against the 94 days in the previous year on a consolidated basis. However, management does not foresee any threat to the collection despite an increase in high value billing.

b. Cash and cash equivalents

Our cash and cash equivalents comprise of balance with current account, deposit accounts and overnight funds with mutual fund houses. The closing cash and cash equivalents are INR 1,885.54 million and INR 1051.82 million on a consolidated and standalone basis respectively.

c. Loans

The Companys loans and advances on a consolidated basis increased from INR 25.42 million to INR 46.40 million. On standalone basis, the loans and advances decreased from INR 3.25 million to INR 0.35 million. The loan balance of the Employee Stock Option Trust was INR 2.81

million on 31^st March 2024 and is paid fully by trust during the current financial year.

Deferred tax assets / liabilities

Net deferred tax liabilities comprising deferred tax liabilities less deferred tax assets. It has increased during the fiscal 2024 primarily on account of temporary difference on depreciation/amortization expenses of the company while comparing with income tax depreciation/amortization. The net increase is INR 47.54 million and INR 48.08 million on consolidated and standalone basis in fiscal 2025.

Contingent liabilities

The Contingent liabilities on a consolidated and standalone basis as on March 31, 2025 stood at INR 210.58 million as against INR 32.29 million as on March 31, 2024. The increase of INR 177.50 million pertains to contingent liability towards repurchase of DSC stock available with the partners based on sale of DSC to be made to their customers based on their introduction of the customers. The balance increase of INR 0.79 million pertains to Income Tax notice relating to tax deduction at source which the company has appealed.

II. Liquidity

Our principal source of liquidity are cash and cash equivalents and cash flow that we generate from operations. Our consolidated total cash and cash equivalents including overnight funds stood at INR 1,885.54 million as at March 31,2025. The cash and cash equivalents decreased from Rs 2511.71 million to Rs 1,885.54 Million (decrease of Rs 626.11 Million). This decrease was only INR 626.11 million inspite of acquisitions and capital expenditure aggregating to Rs 1575.24 Million as the balance was met out of operating cash flow.

Our current ratio in the fiscal stood at 5.80 times (average basis) consolidated, which measures our ability to pay short- term obligation or those dues within one year. This way, we can satisfy current debts as well as other payables.

III. Related party transactions

These have been given in detail in note no. 44 to the consolidated financial statements of the company.

IV. Events occurring after Balance Sheet date

There are no significant events after the balance sheet date which is likely to affect financial position/results of the Company.

V. 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 immediately previous financial year) in key sector-specific financial ratios for standalone and consolidated has been provided in the Directors Report.

VI. Profit for the year

Net profit for the year has increased from INR 763.52 million to INR 872.34 million on a consolidated basis and decreased from INR 206.22 million to INR 186.65 million on a standalone basis. The decline in net profit on a standalone basis was due to the repurchase of stock to the extent of Rs 87.5 Million.

VII. Liquidity and Capital Resources

Our primary sources of liquidity have historically been cash generated from operations. We expect that cash generated from operations will be our primary sources of liquidity. We believe that after taking into account cash generated from our business operations, we will have sufficient working capital for both our present and anticipated future requirements for capital expenditures and for our normal operations for the 12 months following the end of Fiscal 2025.

The following table sets out a condensed summary of our cash flows for the periods indicated:

	Consolidated		Standalone
INR in million	FY 2025	FY 2024	FY 2025	FY 2024
Net cash flows from operating activities	1,016.16	725.21	379.69	248.65
Net cash flows used in investing activities	(2,113.40)	(894.48)	(1,639.21)	(622.19)
Net cash flows from/(used) in financing activities	(213.48)	1,762.53	(105.15)	1,798.38
Foreign exchange differences on translation of foreign Operations	70.59	(10.41)	-	-
Cash and cash equivalents at the beginning of the year	2,252.65	669.80	1,564.91	140.07
Cash and cash equivalents at the end of the year	1,012.52	2,252.65	200.24	1,564.91
Liquid investment & fixed deposit with maturity period of over 3 months and more	873.02	259.0	6 868.01	258.12
Total Cash and cash equivalents	1,885.54	2,511.71	1,068.25	1,823.03

Operating activities

Our net cash flow from operating activities before taxes stood at 105.4% of the profit before tax on a consolidated basis for FY 2025 as against 90.1% for FY 2024. Net cash flow from operating activities before taxes on a standalone basis stood at 162.7% of profit before tax for FY 2025 as against 99.8% for FY 2024.

Investing activities

Net cash flow used in investing activities is INR 2,113.40 million on a consolidated basis and INR 1,639.21 million on a standalone basis for FY 2025. Investment in the current year includes investment into further development of existing products (INR 238.33 million), new product development (INR 233.51 million). Other outflow is on account of investment in the TWO95 International Inc., and Sendrcrypt INR 963.65 million net of asset acquired.

Financing activities

During the year under review, net cash outflow from financing activities was INR 213.48 million on a consolidated basis and INR 105.15 million on a standalone basis for the FY 2025. This is mainly due to Payment of Dividend and Repayment of loan.

VII. Enterprise risk Management

Listed below are some of the key risks, anticipated impact on the company and mitigation strategies:

Key Risks	Impact on the company	Mitigation
Business risk	eMudhra operates in two business segments:Trust Services comprising of:	• As our revenue from global markets including trust service and SSL business grows, concentration risk associated with revenues from a single geography or regulator, or type of certificate will reduce.
	• Issuing digital signature certificates for individuals, organizations under license from Government of India.The operations are audited yearly and license is renewed every 5 years
	• Individual, Organization under emSign Root (accreditedunder WebTrust) and empaneled/licensed by various Governments (UAE, Kenya, Mauritius etc.)
		• Newer areas of certificate issuance for IoT devices while classified under Trust Services are not subject to regulation.
	• SSL/TLS certificates under emSign Root (governed by CABrowser Forum) WebTrust Audits are conducted every year
	Enterprise Solutions comprising of:
	• emSigner - eSignature Workflow Platform
	• Secure Pass - Authentication and Access Management	• Over time, we anticipate enterprise solutions to grow faster and this will change the revenue mix in favor of Enterprise Solutions.
	• emCA/Certinext - PKI solution
	The revenue split between Trust Services and Enterprise Solutions is 20% : 80% for the year ended March 31,2025.
	The revenue split between India and International is 38% :62% for the year ended March 31,2025.
	• The trust services business is a licensed business andis predominantly generated from India. This exposes20% of our yearly revenue of fiscal 2025 to risks inherent with operating a licensed activity in a single geography.
	• Enterprise Solutions are not operated under or subject to licensing requirements and to this extent are directly correlated to the demand for cybersecurity and digital transformation solutions.

Competition risk

We are faced with competition from global payers as listed below:

Types of Service	Global Player
Digital Trust Services
SSL/TLS Certificates	DigiCert (USA), Entrust (USA), Sectigo (USA) GlobalSign (Belgium)
Digital Signature Certi cates	DigiCert (USA), Entrust (USA), GlobalSign (Belgium)
IoT Device Certi cates	DigiCert (USA), Entrust (USA), GlobalSign (Belgium)
Digital Security Solutions
Identity and Access Management	Microsoft (USA), IBM (USA), Ping Identity (USA), Okta (USA), Sailpoint (USA), Ilantus technologies (USA), Saviynt (USA), Thales (France), Broadcom (USA)

• In terms of global competition, we are the Only Indian playerto have the range of capabilities in our space.

• In Trust Services in India, we continue tomaintain market leadership.

• Our product suite andtrust services positionus as a One Stop Shopgiving us a unique positioning.

• Our products have several marquee reference customers and feature in many global market researchreports.

• Our technology is fully in-house and proprietary allowing usto be flexible and nimble both from a

Public Key Infrastructure	Hardware: Thales (France), HID Global (USA), Keyfactor (USA) Software: Entrust (USA), Nexus Group (Sweden) Keyfactor, Digicert
Certificate Discovery	DigiCert (USA), Sectigo (USA), AppViewX (USA), Venafi (USA)
Cloud Infrastructure	Google (USA), AWS(USA)
Paperless Transformation Solutions
Paperless Transformation/ Solutions	Adobe (USA), OneSpan (USA), DocuSign (USA), Alpha Trust (USA), WISeKey (Switzerland)

In the digital signature certificate/CA market, we are faced withthe following competition in Indian markets:

Mitigation

delivery and pricing standpoint.

• Our delivery centers are in Bangalore at lower cost as compared to global players who have a substantially higher cost of delivery.

Licensed CAs	Class 1-3 DSCs	eSign	SSL and Code Signing Certificates	Time Stamping
eMudhra	Yes	Yes	Yes**	Yes
Safecrypt	Yes	Yes	No	Yes
IDRBT	YesA	No	YesA	YesA
(n)Code Solutions	Yes	Yes	Yes*	Yes
CDAC	No	Yes	No	No
Capricorn	Yes	Yes	No	Yes
Protean	No	Yes	No	No
V Sign (Verasys)	Yes	Yes	No	No
Indian Air Force	YesA	YesA	No	YesA
CSC	No	Yes	No	No
RISL (RajComp)	Yes	Yes	Yes	Yes
Indian Army	YesA	YesA	YesA	YesA
ID Sign	Yes	Yes	No	Yes
CDSL Ventures	No	Yes	No	No
Pantasign	Yes	No	No	No
Xtra Trust	Yes	No	No	No
ProDigiSign	Yes	No	No	No
Sign X	Yes	No	No	No
Care 4 sign	Yes	No	No	No
IGCAR	Yes	No	No	No

*The Root CA Certificate of India is listed only in Microsoftproducts (including IE)

** Accredited to all leading browsers like Microsoft, Mozillaand Apple a only for private use

Technology risk

• eMudhra is heavily dependent on technology for the delivery of services to its customers.

• eMudhra develops proprietary IP for the delivery of trustservices and enterprise solutions and manages:

• Application Development Lifecycle

• Product Customization, Maintenance and Upgrades

• Product Security

• The technology delivery also can be broadly categorized into:

• Our technology teams are constantly upgrading the products with release roadmaps planned wellin advance.

• Use of open-source software is studied with respect to the usage rights and only those software which

• Delivery of services through eMudhras data centers - Thisincludes trust service applications, eSign service and portals for partner, customer management.

• Delivery of services through Cloud hosting providers - Thisincludes eSignature workflow offerings.

• Applications hosted on customer data centers - Thisincludes emSigner, emAS and emCA.

• This presents us with the following risks:

• Technology Obsolescence

• Talent Risk

• Risk of using open-source software

• Physical infrastructure management (in the context of applications hosted and offered by us through a Softwareas Subscription)

• Product, Infra security and Cyber Risks

are usable without redistribution of our source code is used. Allother software is distributed only through commercial redistributable licenses.

• Our infrastructure is setup for High Availability and Redundancy and continuously being upgraded in line with

recommendations from Board Technology Committee,

• All products and infrastructure undergoregular internal and external VAPT assessments.

• Key members of the technology team are retained through a combination of salary,incentives and ESOPs.For the other members, we have a strong lateral/fresher hiring system combined with adequate training for them to get upto speed quickly.

Legal/Regulatory

risk

eMudhras Trust Service and Enterprise Solutions business isreliant on:

• Licenses being obtained from regulators for the issuance of digital signature certificates for individuals/organizations, Ongoing Webtrust accreditation, compliance with CA/Browser Forum requirements and acceptance of our Root Certificate by the

• Digital Signature acceptance is driven by UNCITRAL Model Law on eSignatures 2000, which has been incorporated intomost countries Electronic

Impact on the company	Mitigation
Browsers for thecontinued issuance of SSL certificates.	Transactions Act or Information
• Verification, storage and processing of identity data of individuals/organizations and therefore compliance with relevant privacy regulations	Technology Act. Thus,the acceptance of technology has been there for > 20 years.
• Acceptance of digital signature certificates by relyingparties such as Governments, Banks etc. for authentication, signing and other use cases
• Signing of contracts with customers with potentially stringent clauses including liability and indemnity	• eMudhra maintains strong document archival/retrieval system coupled with audit trails to be able to respond to information requests in an expedited manner. eMudhra hashad clean audits from the beginning of its operations.
In the above context, eMudhra faces the following legal/regulatory risks:
• Inability to comply with changes in guidelines, audit requirements or maintain its license in India or other geographies.
• Being subject to request for evidence, litigation in case ofdigital signature misuse.	• eMudhra continuously maintains various ISO certifications for Information Security, privacy certifications for GDPR and HIPAA.
• Insufficient regulatory push, adverse changes to ElectronicTransactions Act or lack of relying party adoption.	• Being an early mover in the space, eMudhraregularly conducts/participates in global bodies that drive digital signature adoption. eMudhra works with global regulators to build awareness and use cases for technology adoption.
• Local data storage requirements for operation of trust services in geographies such as European Union, Indonesiaetc.
• Inability to comply on an ongoing basis with privacyguidelines such as GDPR.
eMudhra is bound by contractual obligations for timely delivery, support, fulfillment of SLA obligations, IP infringement protection, confidentiality and other clauses. Material breach of these clauses typically triggers service credits, liability and indemnity cover that we provide to our customers.	• Generally, in our agreements, we limit our liabilities to actualdamages only and an indemnity cap of previous 12 months fee received

 

Key Risks	Impact on the company	Mitigation
		from the client. The only exclusions include IP infringement, confidentiality, gross negligence and willfulmisconduct.
Operations risk	eMudhras operations are broadly split into the followingareas:	• Identity verification personnel form part of a Trusted PersonnelList who undergo onboarding training, skill assessment and periodic reassessmentto ensure they are fully aware of guidelines.
	• Identity Verification or Validation Operations
	• Customer Support
	• IT Operations
	In the above context, eMudhra faces the following risks:
	• In terms of identity verification, eMudhra is responsible forfollowing appropriate guidelines for identity verification for
	issuance of digital signature certificates. Incorrect interpretation of guidelines or inaccurate vetting could result in potential audit violations.	• In terms of customer support, eMudhra hasa strong training program to ensure customer support agents for both trust service/enterprise solutions are adequately trained and are able to support customers effectively. This is further enhanced to quality and audit initiatives to assess and recalibrate support effectiveness and resolution.
	• In terms of customer support, eMudhra deals with a largeset of retail customers and partners for trust services business and supporting them requires a dedicated team of experts. Continuous poor experience in delivering support could result in brand and reputation risk and risk of renewal.
	• eMudhra also deals with several large and mid-size Enterprise customers who demand timely delivery and support for products supplied. Poor support experiencecould result in reputation risk.
	• eMudhra runs internal IT Operations teams for managinguser infrastructure, source code systems, secure networkconnections etc. Improper management could result in service disruptions that affects our ability to deliver services effectively to our clients.
		• eMudhra maintains redundancy/backups for critical internal systems ensuring minimal service disruption for internal IT systems.
Financial and Compliance risk	The following financial risks could typically affect eMudhrasability to maintain profitability and cash flows:	• eMudhra follows a robust mechanism forcollection of receivables and extends credit only to trustworthy parties orparties with whom eMudhra has a historyof association.
	• Receivables Risk, eMudhra provides credit period to its partners and customers for sale of its products. These areunsecured credit and typically based on history of association of customer with eMudhra.
	• eMudhra also deals with certain sectors in certaincountries across emerging markets which may be considered risky from a payment recoverability standpoint.
		• eMudhra regularly transfer prices foreignexchange collections and brings the money to India to minimize the impact of currency
	• Any non-recoverability of amounts could result inprovisioning in P/L and consequent reduction in profitability and cash flows.
	Foreign Exchange risk, eMudhra derives 62% of	movements from time of receipt.
	its FY 25revenues from international operations where realizationhappens in USD, EUR, AED and other currencies. Adverse movements in currencies as compared to INR could resultlower realization in INR where substantial costs are incurred.	• eMudhra has a strongcompliance team withoversight through secretarial audit, internal audit, external audit and committees of the Board for supervisory duty.
	The following financial risks could typically affect eMudhrasability to maintain profitability and cash flows:
	• Compliance Risk, as a public company, eMudhra is subject to various laws and guidelines such as SEBI guidelines, Income Tax Act, Companies Act, FEMA guidelines etc. which involve several monthly, quarterly and annual compliance and reporting. Lack of timely compliance couldinvolve penalties, tax notices etc.
Human Resource risk	Being a technology focussed company, eMudhra is dependentheavily on its people for:	• eMudhras key employees at management level, 2ndand 3rd level from Chairman are incentivized through acombination of healthy salary, bonus
	• Building innovative products
	• Delivering these products as services or solutions to itscustomers
	• Supporting them
	• Like other IT companies, eMudhra faces the risk of continuously being able to attract and
	retain talent andcost pressures as a result of high compensation hikes.	and ESOP and a conducive working environment creating a high level of stickiness.
		• As a player operating in a niche but growingspace, eMudhra provides a strong career path for those associated with the company.
		• eMudhra maintains arobust fresher hiring and training programhelping us mitigate effects of employees leaving the company.
		• eMudhra also continues to invest in automation of variousprocesses through tools reducing the dependence on manpower for certainprocesses to a significant extent.

VIII. Internal Financial Control Systems and their Adequacy

eMudhra Limited has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Internal Control - Integrated Framework (the 2013 framework) is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses. The company has successfully laid down the framework and ensured its effectiveness. Our internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. eMudhra has a well-defined delegation of power with authority limits for approving contracts as well as expenditure. Processes for formulating and reviewing annual

and long-term business plans have been laid down. eMudhra uses centralized Microsoft Business Central to record data for accounting, consolidation and management information purposes.

eMudhras management assessed the effectiveness of the companys internal control over financial reporting (as defined in Regulation 17 of SEBI LODR Regulations 2015) as of March 31, 2025. M/s Suri and Co, the statutory auditors of eMudhra have audited the financial statements included in this annual report and have issued an attestation report on the companys internal control over financial reporting (as defined in section 143 of the Companies Act 2013).

We have appointed M/s CNGSN Associates and LLP to carry out internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditors and approved by the audit committee. In line with this, the conduct of internal audit is oriented towards the review of internal controls and risks in the companys operations such as software delivery, accounting and finance, procurement, employee engagement, travel and insurance.

eMudhra also undergoes periodic audit by specialized third party consultants and professionals for business specific compliances such as quality management, service management, information security, etc.

The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets the statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically.

Based on its evaluation (as defined in section 177 of the Companies Act 2013 and Regulation 18 of SEBI LODRRegulations 2015), the audit committee has concluded that, as of March 31, 2025, the companys internal financial controls were adequate and operating effectively.

IX. Conclusion

eMudhra continuously evaluates risks applicable to its business on an ongoing basis and takescorrective measures to mitigate the effect of such risks. At a high level, the key focus of the company from a derisking standpoint would be on: ^•

• Product Innovation

• Geographical Diversification

• Segment Diversification

• Strong Financial/Operational MIS with highlight on exceptions on a real time basis

• Compliance Management

• Talent acquisition and retention through Strong HR/Recruitment program