(xx) Provisions, contingent liabilities and contingent assets

Provisions are recognized when the Company has a present (legal or

constructive) obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions required to settle are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. Provisions are discounted to their present values, where the time value of money is material.

Contingent liability is disclosed unless the likelihood of an outflow of resources is remote and there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

Contingent assets are disclosed only when inflow of economic benefits therefrom is probable and recognize only when realization of income is virtually certain.

(xxi) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted

for the effects of all dilutive potential equity shares.

(xxii) Business combinations

Business combinations are accounted for using the acquisition method as per Ind AS 103, Business combinations. The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities assumed at the date of acquisition, which is the date on which control is transferred to the Company. Identified assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Transaction costs that the Company incurs in connection with a business combination such as stamp duty, legal fees, due diligence fees and other professional and consulting fees are expensed as incurred.

The excess of the consideration transferred over the fair value of the net identifiable assets acquired is recorded as goodwill.

(xxiii) Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance. Based on such assessment, the Company currently has only one operating segment and two geographical segments viz. Domestic Market and International Market.

(xxiv) Share based payments

Share-based compensation benefits are provided to employees via the "ROUTE MOBILE LIMITED”, Employee Stock Option Plan 2017 and 2021 (the ‘ESOP scheme’). The fair value of options granted under the ESOP scheme is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:

• including any market performance conditions (e.g., the entity’s share price)

• excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the entity over a specified time period), and

• including the impact of any non-vesting conditions (e.g. the requirement for employees to serve or hold shares for a specific period of time).

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

The Company has created a Route Mobile Employee Welfare Trust (ESOP Trust) for implementation of the said ESOP scheme. The Company allots shares to the ESOP Trust. The Company treats the ESOP trust as its extension and shares held by ESOP Trust are treated as treasury shares.

(xxv) Treasury shares (Shares held by the ESOP Trust)

The Company uses the ESOP Trust as a vehicle for distributing shares to employees under the employee remuneration schemes.

The Company treats ESOP trust as its extension and shares held by ESOP Trust are treated as treasury shares. Share options exercised during the reporting period are satisfied with treasury shares. The consideration paid for treasury shares including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from retained earnings.

(c) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of ' 10 each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts and the distribution will be in proportion to the number of equity shares held in the Company.

(e) Shares reserved for issue under options:

For details of shares reserved for issue under the employee stock option plan (ESOP), refer note 43

(f) Ordinary shares allotted as fully paid pursuant to contract(s) without payment being received in cash during the period of immediately preceding five years: Nil

(g) For the period of five years immediately preceding the date as at which the Balance Sheet is prepared aggregate number and class of shares allotted as fully paid-up by way of bonus share: Nil

(h) Aggregate number and class of shares bought back during the year of immediately preceding five years:

861,021 equity shares were bought back by the Company during the year ended 31 March 2023. Refer note 50.

(ii) Securities premium

Securities premium is credited when shares are issued at premium. These reserves are utilised in accordance with the provisions of the Companies Act, 2013.

(iii) Share options outstanding

This represents fair value of the stock options granted to eligible employees of the Company. The reserve will be utilised on exercise of the options.

(iv) Capital redemption reserve

In accordance with Section 69 of the Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from securities premium.

I. Fair value hierarchy

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level is given below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the- counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

II. Valuation techniques and significant unobservable inputs

The fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables, loans, trade payables and other financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments.

34 Financial risk management

The Company’s principal financial liabilities comprises of trade payables, lease liabilities and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, current investments, trade and other receivables, and cash and cash equivalents and other bank balances that derive directly from its operations.

The Company’s activities expose it to credit risk, liquidity risk and market risk. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and business activities.

A Credit risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms and obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks. The financial instruments that are subject to concentration of credit risk principally consists of trade receivables, current investments, loans, cash and bank balances and bank deposits.

The trade receivables of the Company are typically non-interest bearing un-secured customers. The customer base is widely distributed both economically and geographically. The Company has very limited history of customer default and considers the credit quality of trade receivables that are not past due or impaired to be good.

Credit risk is controlled by analysing credit limits and credit worthiness of the customer based on their financial position, past experience and other factors, on continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

The credit limit policy is established considering the current economic trends of the industry in which the Company is operating.

The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates, accordingly, provision is created.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.

Bank balances and deposits are held with only high rated banks and majority of other security deposits are placed majorly with government agencies.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations on time or at reasonable prices. The Company’s objective is to maintain optimum levels of liquidity and to ensure that funds are available for use as per requirement. The liquidity risk principally arises from obligations on account of following financial liabilities viz. trade payables and other financial liabilities.

The Company’s corporate finance department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments at each reporting date:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: Foreign currency risk and price risk. The company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

(i) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions in several currencies through its sales in overseas markets and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure on overseas sales is partly balanced by purchasing of services in the respective currencies.

35 a) Capital management

The Company’s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

In order to maintain the capital structure, the Company monitors the return on capital, as well as the levels of dividends to equity shareholders. The Company is not subject to externally imposed capital requirements.

The Company monitors capital on the basis of the gearing ratio, however there is no outstanding debt as on 31 March 2024 and 31 March 2023.

B) Provident Fund

The Honourable Supreme Court, has passed a judgement on 28 February 2019 in relation to inclusion of certain allowances within the scope of "Basic wages” for the purpose of determining contribution to provident fund under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. The management, based on legal advice, is of view that the applicability of the judgement to the Company, with respect to the period and the nature of allowances to be covered due to interpretation challenges, and resultant impact on the past provident fund liability, cannot be reasonably ascertained.

C) The Company has provided letter committing continuing financial support to its subsidiary, Route Mobile Pte. Ltd. to enable it to meet its day to day obligation/commitment; to the extent this entity may be unable to meet its obligations.

II. Defined benefit plans:

The Company provides for gratuity benefit under a defined benefit retirement scheme (the "Gratuity Scheme”) as laid out by the Payment of Gratuity Act, 1972 of India covering eligible employees. Liabilities with regard to the Gratuity Scheme are determined by actuarial valuation carried out using the Projected Unit Credit Method by an independent actuary in accordance with Indian Accounting Standard-19, ‘Employee Benefits’. The Gratuity Scheme is a non-funded scheme and the Company intends to discharge this liability through its internal resources.

(h) Risk exposure:

Valuation are based on certain assumptions, which are dynamic in nature and may vary over time.

As such valuations of the Company is exposed to follow risks -

(a) Salary increase: Higher than expected increases in salary will increase the defined benefit obligation.

(b) Discount rate: The defined benefit obligation calculated use a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(c) Mortality and disability: If the actual deaths and disability cases are lower or higher than assumed in the valuation, it can impact the defined benefit obligation.

(d) Withdrawals: If the actual withdrawals are higher or lower than the assumed withdrawals or there is a change in withdrawal rates at subsequent valuations, it can impact defined benefit obligation.

III. Compensated absences

The Company has provided ' 0.15 crores (31 March 2023: ' 0.08 crores) towards compensated absences during the year ended 31 March 2024.

IV. Share-based Payment transaction

Refer note 43

Notes:

1. The Company as a lessee has obtained certain assets such as immovable properties on various leasing arrangements for the purposes of setting up of offices. With the exception of short-term leases, each lease is reflected on the balance sheet as a right-to-use asset and a lease liability. The Company has presented its right-of-use assets separately from other assets. Each lease generally imposes a restriction that unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company.

2. Additional information on extension/ termination options

Extension and termination options are included in a number of property lease arrangements of the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company's operations. The majority of extension and termination options held are exercisable are based on consent of the Company.

3. There are no sale and leaseback transactions.

4. Payments associated with short-term leases of premises are recognised on straight line basis as an expense in profit or loss.

5. When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its incremental borrowing rate. The weighted average incremental borrowing rate applied is 10.50% (year ended 31 March 2023: 10.50%).

6. There are no leases which are yet to commence as at 31 March 2024.

41 Earnings per share

The amount considered in ascertaining the Company’s earnings per share constitutes the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.

43 Employee Stock Option Plan (ESOP)

(a) ESOP Plan - 2017

The Company has implemented Employee Stock Option Plan for the certain eligible employees of the Company and its subsidiaries through Route Mobile Employee Welfare Trust (the ‘Trust’) formed for the purpose. All the options issued by the Company are equity share based options which have to be settled in equity shares only. The shares are to be allotted to employees under the Route Mobile Limited- Employee Stock Option Plan 2017 (the ‘ESOP scheme’). The shareholders at its meeting held on 12 October 2017 approved grant of 2,500,000 employee share options to eligible employees under the ESOP scheme.

(b) ESOP Plan - 2021

The Company has implemented Employee Stock Option Plan for the certain eligible employees of the Company and its subsidiaries through Route Mobile Employee Welfare Trust (the ‘Trust’) formed for the purpose. All the options issued by the Company are equity share based options which have to be settled in equity shares only. The shares are to be allotted to employees under the Route Mobile Limited- Employee Stock Option Plan 2021 (the ‘ESOP scheme’). The shareholders through postal ballot on 19 April 2021 approved grant of 2,800,000 employee share options to eligible employees under the ESOP scheme.

45 Funds amounting to ' 86750 crores raised by the Company pursuant to a Qualified Institutional Placement (QIP) in the previous years are being duly utilised as per the objects stated in the placement document and the unutilised amount from the aforementioned QIP has been temporarily invested in fixed deposits with scheduled commercial banks as on 31 March 2024.

46 Audit trail

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The audit trail feature was not enabled at the database level to log any direct data changes for accounting software, Odoo and the server Platform, used for maintenance of all accounting records by the Company. Audit trail (edit log) is enabled at the application level.

Further, the Company’s payroll processing is outsourced to third party service provider. The Company has obtained the ‘Independent Service Auditor’s Assurance Report on the Description of Controls, their Design and Operating Effectiveness’ (‘Type 2 report’ issued in accordance with SAE 3402, Assurance Reports on Controls at a Service Organization) for the year ended 31 March 2024. However, the service auditor has not specifically covered the maintenance of audit trail at database level in line with the requirement by MCA.

49 During the year, Proximus Opal S.A. (‘Acquirer’) entered into a share purchase agreement dated 17 July 2023 with all the promoters and members of the promoter group of the Company (hereinafter, referred to as the ‘Sellers’), pursuant to which the Acquirer will purchase 36,414,286 equity shares of the Company from the Sellers. This transaction is subject to completion of certain requisite formalities which are under process. Further, in compliance with the requirements of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, Proximus Opal S. A has duly completed the mandatory tender offer on 26 April, 2024 pursuant to which, it has acquired 15,768,803 equity shares of the Company.

50 The Board of Directors of the Company at its meeting held on 28 June 2022, approved a proposal for buyback by the Company of fully paid up equity shares for an aggregate amount not exceeding ' 120 crores (referred to as the “"Maximum Buyback Size””), at a price not exceeding ' 1,700/- per equity share from the shareholders of the Company excluding promoters, promoter group, and persons who are in control of the Company, payable in cash via the open market route through the stock exchange mechanism in accordance with the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018 (as amended) and the Companies Act, 2013 and rules made thereunder, as amended.

During the year ended 31 March 2023, the Company bought back 861,021 equity shares resulting in total cash outflow of ' 119.99 crores (including premium of ' 119.13 crores). In line with the requirements of the Companies Act, 2013, an amount of ' 119.13 crores has been utilized from the securities premium balance for the buyback. In addition, ' 29.25 crores (including buy back tax of ' 2796 crores) was incurred on account of buyback expenses which was also adjusted against the securities premium balance. The shares so bought back were extinguished and the issued and paid-up capital stands amended accordingly.

51 The Board of Directors have recommended a final dividend @ 20% (' 2 per share of face value ' 10 each) for the year ended 31 March 2024, subject to necessary approval by the members in the ensuing Annual General Meeting of the Company.

52 Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off under section 248 of the Act or section 560 of the Companies Act, 1956.

(iii) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

(v) The Company has not advanced or given loan or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall :

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the income-tax Act, 1961.

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(ix) The Company has not revalued its property , plant and equipment (including right-of-use asset) or intangible asset or both during the current or previous year.

(x) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(xi) The Company has complied with the number of layers prescribe under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules 2017.

53 Figures of the previous year has been re-grouped/re-arranged wherever necessary. The impact of the

same is not material to the financial statements.

As per our report of even date attached.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants Route Mobile Limited

Firm Registration No.: 001076N/N500013

Rajni Mundra Sandipkumar Gupta Rajdipkumar Gupta

Partner Chairman Managing Director

(Membership No.: 058644) (DIN No. 01272932) (DIN No. 01272947)

Rathindra Das Suresh Jankar

Company Secretary Chief Financial Officer

(Membership No.: F12663)

Place : Mumbai Place : Mumbai

Date : 06 May 2024 Date : 06 May 2024