Chairman's Speak

Dear Shareholders,

Success is work in progress. It’s a journey, not a destination. During our journey at Vakrangee Limited,
we have been a part of empowering rural India through our ambitious grass-root initiatives. We have been maximising shareholder returns by delivering on our promises and leveraging our core competencies in technology, ground-breaking products and processes. With our path set towards India’s socio-economic development and social transformation, our work today is as much a cause, as a business mission.
 
A Transformed Company  
Over the years, we have moved up the value chain – from being a sub-contracted IT enabler in e-governance projects into a prime bidder focussed on “mission mode projects”, as per the e-Governance plan of India. We have evolved into an organised “Rurban Retail House” offering banking, insurance, B2C and G2C services under “Vakrangee Kendra”.

We have worked on mission mode deployment of cutting-edge IT systems and solutions for the central and various state governments. We gained competencies in providing back-end solutions to assimilate and process data related to citizens and G2C interactions – electoral roll accumulation and printing, MCA-21 automation, PDS and UIDAI. In fact, we have consistently outpaced other enrolment agencies
to emerge as the No 1 player in terms of Aadhaar generation, data uploaded and number of individuals enrolled.

During FY2013-14, we signed contracts with Public Sector Banks to set up and manage “BC Outlets” for 5+2 years as “Common Business Correspondents” for the states of Maharashtra, Rajasthan and Delhi. Subsequently, these banks have been permitting us to set up more BC outlets in other states. We now intend to complete ~50,000 Vakrangee Kendra in 15 states by March 2017, out of which 15,000 will be in urban and semi-urban areas and the remaining 35,000 in rural areas. These BC Outlets offer paperless, real-time, inter-operable Banking to customers and present a strong platform for savings formation in India.
 

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Our Front-end Delivery Point
Besides Banking, Vakrangee Kendra act as front-end delivery points for value-added services in insurance, G2C and B2C portfolio at the Gram Panchayat level. Our bouquet of services gives us first-mover advantage in the urban and rural space. It also ensures we are a “one-stop multi-retail outlet” for consumers with the highest level of efficiency and effectiveness. Our deep understanding on consumer behaviour, due to last 20 years of working at grass-root level in the e-Governance space, enables us to maximise customer experience. It also helps us be the “last mile link” connecting the under-served citizens with India’s modern ecosystem. Our key objective is to develop a platform that can enable Government, private and social sector organisations to align their social and commercial goals for the benefit of India’s population. This will be enabled in the remotest corners of India through a combination of IT and non-IT based services, giving us a definite competitive edge.

WLA s – our Growth Driver
The Reserve Bank of India (RBI) has granted us a license to set up and run a minimum of 15,000 White Label ATMs (WLAs) over three years across India. These ATMs will have all the functionalities of a bank-run ATM dispenser, providing services to customers of all banks. Another key feature is that all our ATMs are adjoining to Vakrangee Kendra in Urban and Semi-Urban areas, offering more value-added services in terms of Banking, Insurance, G2C and B2C services to optimise cost and enhance profitability. Also, by adding the authentication mode of “Biometric Transaction” at these ATMs, we can magnify the ATM market size from the number of “ATM Card Holders” to “Aadhaar Card Holders”. Hence, the WLA business is a perfect strategic fit for our current business model of Vakrangee Kendra.

Government’s Push towards Financial Inclusion
Our key driver for growth has been the Indian Government’s massive push towards financial inclusion, through the “Pradhan Mantri Jan Dhan Yojana”. The objective of this is to bring every Indian into the banking net, including very poor households, by ensuring at least 2 bank accounts per household (at least one should be of the lady of the house). The scheme aims to provide bank accounts to 15 crore individuals in Rural and Urban India, along with accidental insurance cover of Rs. 1 lakh. These accounts shall be linked with the Aadhaar number of these account-holders and will become the single point of contact for receipt of all direct benefit transfers (DBT) from Central/State Government/Local Bodies.

Making India Digitally Empowered
Digital India is a new comprehensive e-Governance programme to transform India into a digitally empowered society and knowledge economy. It is an ‘Umbrella Mission’ for various citizen centric ministries/departments to offer services on demand to rural citizens at the click of the mouse, setting up digital infrastructure at each nook and corner of Rural India. We are one of the leading e-Governance players functioning as a systems integrator and an end-to-end service provider and have been a part of various mission-mode projects for over two decades. With footprint in most parts of India, we have the “first mover advantage” to leverage this huge opportunity from the Rs. 1.1 trillion “Digital India” mission of the Central Government.

Aadhaar – Our Pride
We are empanelled in the highest category of T3F4, permitting pan-India enrollment activity. We have emerged as the largest enrolment agency with generation of more than 42 million Aadhaar directly under the Unique Identification Authority of India (UIDAI) project. These numbers are linked to the residents’ demographic and biometric information. Our Company has benefitted greatly with the Government’s fast-tracking of the project. Further, UIDAI’s increased budget of more than Rs. 2,000 crore for this project gives further fillip to our growth in this business.

Unleashing our Full Potential
Our business has high scalability with efficient Capex management through a combination of “owned” and “franchisee” model. Affiliation with our B2C partners and PSU banks and a sustainable local demand is likely to give considerable traction to our retail operations, moving ahead. We are unleashing the full potential of our scale. A key to sustained growth within the Company will be proper execution of our “mission critical” projects. Over the years, we laid the groundwork and developed strong execution capabilities and a nationwide footprint right till the grass-root level. We are extremely well-positioned to grow – by category and by trend.

Going Forward
We have embarked on our next phase of evolution – from being a project solutions provider to a platform provider, earning stable annuity income. In a conducive environment under the new Government, we hope to do our utmost to systematically and prudently continue our profitable growth trajectory. Our strong growth agenda devised for the next three years will enable us to consistently deliver healthy shareholder value. We continue to remain targeted to fulfil our vision of bringing affordable and quality products and services to India’s population and improving their living standards. Going by our brand promise, no matter how remote, excluded or poor a person might be, we hope to give every Indian an access to basic modern banking within his walking distance.

We are dedicated to deliver performance with a purpose. Over the next few years, we wish to vertically expand our business offerings and establish ourselves as the largest player and a for-profit social enterprise, with an efficient and scalable business model. Our aim is to capitalise on our added advantage of comprehensive market knowledge, unique business model and strategic tie-ups to help garner operational efficiencies.

Being part of the Rural Retail Revolution
With deep knowledge of both rural consumer behaviour and the challenges of working in rural India, we aim to be a part of India’s rural retail revolution – the likes of which have never been witnessed before. We wish to offer efficient ways of accessing products and services offered by the government and extending banking services to India’s unbanked areas. Through our initiatives, we aim to be a part of the organised rural retail segment and contribute to the well-being of India’s rural population. We aim to accomplish this by helping them – receive financial aid; consume financial aid responsibly; and save for the future. We aim to get many more rural Indians insured so they have adequate safety nets to their lives.

At Vakrangee, we passionately believe that by doing things right, we can become powerful contributors to economic progress of the society. We are committed to contribute to deliver India’s economic growth, shareholder value and solutions that make India work better. We are focussing on building an adaptive team and culture, one that can continually renew itself and thrive on change. We have demonstrated that we have the right strategy, right culture and right geographical footprint to deliver consistent and sustained value for our shareholders. On the flip side, for the stakeholders, we are moving into more predictable annuity business that is working capital negative and where profits are assured owing to exclusivity. It is precisely this opportunity that will transform our Company and make it a vibrant enterprise, by contributing to economic development of rural India and by developing entrepreneurship at the grass-root level.

Yours Sincerely,

Dinesh Nandwana
Chairman & Managing Director