15.

 

is generally our responsibility. If we engage third parties for cash management services, we typically
require that our service providers, who either transport the cash or otherwise have access to the ATM
safe, maintain adequate insurance coverage in the event cash losses occur as a result of theft, misconduct,
or negligence on the part of such providers. Further, to mitigate risks under our contracts, we regularly
review our contracts with service providers to assess contractual liabilities and provisions relating to
deductions and penalties. However, we cannot assure you that we will be successful in recovering any
losses from such service providers and we are liable to indemnify the concerned customer bank for any
losses. Cash losses at the ATM occur in a variety of ways, such as natural disasters, including cyclones
and hurricanes, fires, vandalism, physical removal of the entire ATM, defeating the interior safe,
compromising the ATM’s technology components or incorrect dispensing of cash by the ATM. Our
ATMs also face exposure to attempts of theft and vandalism. Thefts of cash or replacement with
counterfeit currency may be the result of an individual acting alone or as a part of a crime group. For the
five months ended August 31, 2021 and the financial years 2021, 2020 and 2019, the total losses of our
Company and SVIL due to armed robbery were nil, = 0.42 million, nil and % 5.90 million, respectively.
While we maintain insurance policies to cover a significant portion of any losses that may occur that are
not covered by the insurance policies maintained by our service providers, such insurance coverage is
subject to deductibles, exclusions and limitations that may leave us bearing some or all of those losses.

Any increase in the frequency or amounts of theft and other losses could negatively affect our operating
results by causing higher deductible payments and increased insurance premiums. Additionally, ATM-
related thefts and damage, if extensive and frequent enough in nature, could adversely affect our
reputation and negatively affect our relationships with customers and impair our ability to deploy
additional ATMs in those existing or new locations of those customers, which may adversely affect our
business, results of operations, cash flows and financial condition.

We have paid compounding fees for offences in relation to non-compliance with certain corporate
law-related and foreign exchanges requirements.

In the past, we paid compounding fees to the Ministry of Corporate Affairs for, inter-alia, failure to
comply with the requirements of the Companies Act, 1956 or 2013, as applicable, including requirements
in relation to appointment of a whole-time company secretary, certain related party transactions,
appointment of a director of our Company to an office of profit and certain inter-corporate deposits made
by our Company to a private company in which a Director of our Company was managing director. We
have also paid additional fees for the delayed filing of certain forms under the Company Laws Settlement
Scheme, 2010. We also paid compounding fees to the RBI in 2011 for failure to comply with certain
overseas direct investment and reporting requirements under the Foreign Exchange Management Act,
1999 and the rules and regulations thereunder, each as amended (“FEMA”), including the filing of
certain forms in relation to subscription of shares by our Company in our wholly-owned subsidiary,
Global Transact Service Pte. Ltd. Additionally, we have also made delayed filings of Annual
Performance Reports in relation to our overseas direct investment in Global Transact Service Pte. Ltd.
with the RBI in the past.

A summary of the non-compliances in each compounding application filed along with fines imposed post
compounding is reproduced below:

 

 

 

 

 

 

 

 

i Date of the Nature of non-compliance Penalty imposed and
No. | Compounding Order paid
and Regulatory
Authority
T. | Order dated July 27, Failure to comply with the requirements of | & 18,000 each on the
2011 by the Regional Section 297 of the Companies Act, 1956 with | Company, Mr. Ravi B.
Director, Western respect to certain transactions of the Company | Goyal (the Chairman and
Region, Mumbai, with entities in which directors and./or their | Managing Director) and
Ministry of Corporate relatives were interested, without the prior | Ms. Rashmi C. Sarvaiya
Affairs approval of the Central Government (the Company Secretary
of the Company at the
time)
2. | Order dated September 9, | Failure to appoint a whole-time Company | % 30,000 each on the
2011 by the Company Secretary Company and Mr. Ravi
Law Board, Mumbai B. Goyal (in his capacity
Bench as an "officer in default").
3. | Order dated October 14, | Failure to comply with certain overseas direct | % 5,000 on the Company.
2011 by the Foreign investment and reporting requirements under the
Exchange Department, Foreign Exchange Management (Transfer or
Reserve Bank of Issue of any Foreign Security) Regulations, 2004,

 

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