13.

14.

financial years, and interchange fees have increased as of August 1, 2021, we cannot assure you that
interchange fees will not decrease in the future. In addition, any potential future network or legislative
actions that affect the amount of interchange fees that can be levied on a transaction may adversely affect
our revenues. Any of the above may have an adverse effect on our business, results of operations, cash
flows and financial condition.

Our cash management and digital payment businesses expose us to fraud and other security risks and
our insurance coverage may not adequately protect us against these risks.

As of August 31, 2021, we had provided cash management services through our subsidiary SVIL to over
46,214 ATMs. Our subsidiary, SVIL has 475 vaults and spoke locations as of August 31, 2021. Our cash
management business exposes us to significant risks, including the potential for cash-in-transit losses,
employee theft, as well as claims for personal injury, wrongful death, worker’s compensation, punitive
damages, and general liability. For example, SVIL has filed a number of FIRs against its employees with
respect to instances of theft and employee misconduct. For the five months ended August 31, 2021, and
financial years 2021, 2020 and 2019, our total losses due to theft were = 25.38 million, = 120.87 million,
% 96.49 million and 2 64.54 million, respectively. For details, see “Outstanding Litigation and Material
Developments” on page 358. While we have instituted risk management policies to identify frauds and
other operational risks, adopted mitigating measures such as employee verification and training and
adoption of standard operating procedures at our branches and spoke locations, and sought to maintain
appropriate levels of insurance to adequately protect us from these risks, we may incur significant future
claims or adverse publicity related thereto. Further, our insurance coverage might not be adequate to
cover potential liabilities or the cost of insurance coverage might increase significantly. During the five
months ended August 31, 2021 and the financial years 2021, 2020 and 2019, the aggregate coverage of
the insurance policies obtained by us to cover theft was = 150.00 million per transit and = 2,000.0 million
per vault at any point in time, while our losses due to theft which we were not able to recover either from
the offending employees or from our insurance policies were % 20.25 million, 256.20 million,
% 24.78 million and % 34.35 million for the five months ended August 31, 2021 and the financial years
2021, 2020 and 2019, respectively. The availability of quality and reliable insurance coverage is an
important factor in our ability to successfully operate this aspect of our operations. A loss claim for
which insurance coverage is denied or which is in excess of our insurance coverage could have an
adverse effect on our business, results of operations, cash flows and financial condition. Pursuant to
certain of our ATM outsourcing contracts, we are liable to make good losses of cash to our clients within
a fixed period, regardless of whether such claims are settled by the insurance provider within such
period. Accordingly, we would be required to bear the loss of any delays by insurance providers in
settling claims, which could have an adverse effect on our business, results of operations, cash flows and
financial condition.

 

Further, our cash management operations, which centre around the management and handling of cash
and our digital payment solutions depend substantially on the integrity of our employees and those of our
third-party service providers. In the course of our screening and background check process when hiring
employees, we may be supplied with false or incomplete background information. Our third-party service
providers may also not conduct substantial background checks on their employees. These situations
expose us to risk of thefts, robberies, fraud and other forms of malpractice from our employees and those
of our third-party service providers. For example, cash is counted and loaded into our ATMs on site by
the employees of our third-party service providers in addition to our own employees. Shortfalls in cash or
the loading of counterfeit cash can only be detected by an audit of the ATM by the cash management
team at a later date. Our employees or the employees of our third-party service providers may introduce
counterfeit currency into ATMs owned, operated or managed by us or work together to siphon off cash
from such ATMs or currency shipments, which may not be detected immediately. In addition, we run the
risk of processing unauthorised digital transactions. For example, during the five months ended August
31, 2021 and the financial years 2021, 2020 and 2019, our losses due to chargebacks amounted to nil,
% 1.15 million, 2.0.39 million, and nil, respectively. Our internal controls and protocols may be
insufficient to adequately protect us from misconduct by our employees or third-party service providers.
The occurrence of any of the above events could therefore adversely affect our reputation, business,
results of operations, cash flows and financial condition.

We maintain a significant amount of cash within our Company-owned devices and at our vault
locations, which is subject to potential loss due to theft or other events, including natural disasters.

For the five months ended August 31, 2021 and the financial years ended 2021, 2020 and 2019, SVIL
replenished a daily average amount of approximately 2 20 billion, 2 20 billion, = 10 billion and %9
billion, respectively. Any loss of cash from our ATMs or SVIL’s vaults or during cash in transit by SVIL

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