Fino Paytech Limited Unlisted Shares

Annual Report Summary

Fino PayTech Limited Annual Report Summary (F.Y. 2022-2023)

This document is the annual report for Fino PayTech Limited for the financial year 2022-2023, including consolidated and standalone financial statements.

Financial Highlights and Performance:

• Net Sales and Other Income: The company's net sales and other income experienced a significant decrease in the standalone financials, falling from Rs. 84,163.56 lakhs in 2021-22 to Rs. 5,973.11 lakhs in 2022-23. Consolidated figures also declined, from Rs. 1,05,063.02 lakhs to Rs. 129,130.12 lakhs.
• Profit/Loss Before Tax: The company moved from a standalone profit before tax of Rs. 60,554.95 lakhs in 2021-22 to a loss of Rs. 4,530.04 lakhs in 2022-23. Consolidated profit before tax also declined significantly.
• Net Profit/Loss After Tax: The standalone financials show a net loss of Rs. 5,711.85 lakhs in 2022-23 compared to a net profit of Rs. 52,363.86 lakhs in the previous year.
• Dividend: An interim dividend of Rs. 37.71 per share was declared and paid on equity and preference shares. The total dividend payout amounted to Rs. 5,02,44,18,970.
• Buyback of Shares: The company bought back 47,86,754 equity shares and 10,42,654 preference shares at Rs. 214.43 per share, for a total amount of Rs. 1,24,99,99,959. This represented 21.92% of the total paid-up share capital and free reserves. A Capital Redemption Reserve of Rs. 5,82,94,080 was created.

Share Capital:

• The Authorised Share Capital remained unchanged at Rs. 1,70,00,00,000, divided into equity shares (Rs. 120,00,00,000) and fully compulsorily convertible preference shares (Rs. 50,00,00,000).
• The Paid-up Share Capital was reduced to Rs. 1,27,40,89,630 due to the buyback.

Subsidiary and Associate Companies' Performance:

• Fino Payments Bank Limited: Revenue of Rs. 1,22,991.33 lakhs and Net Profit of Rs. 6,508.7 lakhs.
• Fino Finance Private Limited: Revenue of Rs. 470.04 lakhs and Net Loss of Rs. 573.68 lakhs.
• Fino Financial Services Private Limited: Revenue of Rs. NIL and Net Loss of Rs. 0.23 lakhs.
• Fino Trusteeship Services Limited (Associate): Revenue of Rs. 133.94 lakhs and Net Profit of Rs. 95.44 lakhs.

Director and Key Managerial Personnel Changes:

• Appointments: Prateek Roongta, Manoj Heda, Apurva Joshi, Rajeev Deoras, and Amit Kumar Jain were appointed as Directors.
• Cessations: Ramakrishna Gupta Vetsa and Sudeep Gupta ceased to be Directors.
• Key Managerial Personnel: Rakesh Tripathi was appointed CFO and later resigned, Ravindra Gupta was appointed Company Secretary and also resigned.

Board Evaluation:

• The Board acknowledged the recent appointment of the majority of Directors and determined that it would be more prudent to evaluate their performance in the subsequent year.

Conservation of Energy, Research and Development:

• The company undertook several energy conservation initiatives such as installing LED lights and optimizing air conditioning usage. They also implemented a comprehensive security stack managed by ctrl S for their banking application.

Related Party Transactions:

• All material related party transactions are in the ordinary course of business and on an arm's length basis.

Meetings of the Board and Committees:

• Eight Board Meetings were held. Details of attendance are provided.
• Three Audit Committee meetings, three Nomination and Remuneration Committee meetings, and one Corporate Social Responsibility Committee meeting were held. No Stakeholders Relationship Committee meeting was held.

Corporate Social Responsibility (CSR):

• CSR policy adopted through the CSR Committee, focusing on healthcare and education.
• For FY 2022-23, the company was not required to spend any amount towards CSR activities.

Risk Management & Internal Controls:

• The company has an Internal Control System commensurate with the size, scale and complexity of its operations.

Investor Education and Protection Fund (IEPF):

• Dividends unclaimed/unpaid for seven years are transferred to the IEPF.

Auditors:

• A P Sanzgiri & Co. were appointed as Statutory Auditors.
• DM & Associates, Company Secretaries LLP, were appointed as Secretarial Auditor.

Key Qualifications/Observations from Auditors' Reports and Board Responses:

• Audit Committee and Nomination & Remuneration Committee Composition: The committees' composition did not fully adhere to the Companies Act requirements for some time.
• Filling Vacancies: Delays in filling the CFO, Independent Director, and Woman Director positions.
• Board Response: The Company was actively searching for qualified candidates for the open positions and has since complied with the relevant regulations.

Employees Stock Option Plan (ESOP):

• Details of options granted, exercised, and lapsed are provided. A partial ESOP liquidity plan was implemented.

Additional Disclosures:

• The company has complied with Secretarial Standards.
• No instances of fraud were reported by auditors.

The report is signed by Ashok Kini, Independent Director and Amit Kumar Jain, Whole-time Director.