Accounting Policies of Route Mobile Ltd. Company

Mar 31, 2025

C. Material accounting policies and
assumptions

(i) Statement of compliance

The Company has prepared its standalone
financial statements in accordance with
the Indian Accounting Standards (Ind AS)
notified under the Companies (Indian
Accounting Standards) Rules, 2015 notified
under Section 133 of the Companies Act,
2013 (the ‘Act’) and other relevant provisions
under the Act (as amended).

The standalone financial statements
have been prepared on a going concern
basis and using material accounting
policies measurement basis summarised
in the policies mentioned below. These
accounting policies have been used
throughout all periods presented in the
standalone financial statements, unless
otherwise stated.

Current and non-current classification:

All assets and liabilities have been classified
as current or non-current as per the
Company’s normal operating cycle and
other criteria set out in Schedule III of the
Act. Based on the nature of service and

time taken between acquisition of assets/
services for processing and their realisation
in cash and cash equivalents, the Company
has ascertained its operating cycle as twelve
months for the purpose of the classification
of assets and liabilities into current and non¬
current.

(ii) Functional and presentation
currency

These Standalone Financial Statements
are presented in Indian rupee (R), which is
also the Company’s functional currency.
All amounts have been rounded off to the
nearest crores, unless otherwise stated.

(iii) Basis of measurement

The Standalone Financial Statements
have been prepared on historical cost
convention on the accrual basis, except
for current investments which is a fair
value measurement.

(iv) Measurement of fair values

Certain accounting policies and disclosures
of the Company require the measurement of
fair values, for financial assets and liabilities.

The Company has an established control
framework with respect to the measurement
of fair values. The management has overall
responsibility for overseeing all significant
fair value measurements and it regularly
reviews significant unobservable inputs
and valuation adjustments. If third party
information, such as broker quotes or pricing
services, is used to measure fair values, then
the valuation team assesses the evidence
obtained from the third parties to support
the conclusion that these valuations meet
the requirements of Ind AS, including the
level in the fair value hierarchy in which the
valuations should be classified. Fair values
are categorised into different levels in a fair
value hierarchy based on the inputs used in
the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.

Level 2: inputs other than quoted prices
included in Level 1 that are observable for
the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).

When measuring the fair value of an asset
or a liability, the Company uses observable
market data as far as possible. If the inputs
used to measure the fair value of an asset
or a liability fall into different levels of the
fair value hierarchy, then the fair value
measurement is categorised in its entirety
in the same level of the fair value hierarchy
as the lowest level input that is significant
to the entire measurement. The Company
recognises transfers between levels of
the fair value hierarchy at the end of the
reporting period during which the change
has occurred. Further information about
the assumptions made in measuring fair
values is included in note 36.

Estimates andjudgements are continuously
evaluated. They are based on historical
experience and other factors including
expectation of future events that may have
a financial impact on the Company and
that are believed to be reasonable under
the circumstances.

(v) Material accounting judgements,
estimates and assumptions

Use of estimates and judgements

The preparation of financial statements
requires management to makejudgements,
estimates and assumptions that may
impact the application of accounting
policies and the reported value of assets,
liabilities, income, expenses and related
disclosures concerning the items involved
as well as contingent assets and liabilities
at the balance sheet date. The estimates
and management’s judgements are based
on previous experience and other factors
considered reasonable and prudent in the
circumstances. Actual results may differ
from these estimates.

Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimates are revised
and in any future periods affected.

In order to enhance understanding of
the financial statements, information
about significant areas of estimation,
uncertainty and critical judgements in
applying accounting policies that have the
most significant effect on the amounts
recognised in the standalone financial
statements is as under:

• Impairment of investments in
subsidiaries

Determining whether the investments
in subsidiaries are impaired requires an
estimate in the value in use of investments.
The Company reviews its carrying value
of investments carried at cost annually,
or more frequently when there is an
indication for impairment. If the recoverable
amount is less than its carrying amount,
the impairment loss is accounted for.
In considering the value in use, the
management has anticipated the future
market conditions and other parameters
that affect the operations of these entities.

• Useful lives of property, plant and
equipment and intangible assets

The Company reviews the useful lives
of property, plant and equipment and
intangible assets periodically. In case of
any revision, the unamortised depreciation
amount is charge over the remaining useful
life of the assets. Assets constructed on
such leasehold properties are depreciated
over their respective lease terms or useful
life, whichever is lower.

• Recognition of deferred tax assets

The extent to which deferred tax assets can
be recognised is based on an assessment
of the probability of the Company’s future
taxable income (supported by reliable
evidence) against which the deferred tax
assets can be utilised.

• Defined benefit obligation (DBO)

Management’s estimate of the DBO is based
on a number of underlying assumptions
such as standard rates of inflation, mortality,
discount rate and anticipation of future salary
increases. Variation in these assumptions
may significantly impact the DBO amount
and the annual defined benefit expenses.

• Fair value measurement of financial
instruments

When the fair values of financial assets
and financial liabilities recorded in the
balance sheet cannot be measured based
on quoted prices in active markets, their fair
value is measured using certain valuation
techniques. The inputs to these models
are taken from observable markets where
possible, but where this is not feasible,

a degree of judgement is required in
establishing fair values. Judgements
include considerations of inputs such as
volatility risk, credit risk and volatility.

• Evaluation of indicators for
impairment of assets

The evaluation of applicability of indicators
of impairment of assets requires assessment
of several external and internal factors which
could result in deterioration of recoverable
amount of the assets.

• Impairment of goodwill

The Company estimates the value in use of
the cash generating unit (CGU) to which the
goodwill is associated, based on the future
cash flows, growth rate, applicable discount
rate and anticipated future economic and
regulatory conditions. The estimated cash
flows are developed using internal forecasts.
The discount rate used for the said CGU
represents the weighted average cost
of capital based on the historical market
returns of comparable companies.

• Loss allowance

Trade receivables do not carry any interest
and are stated at their nominal value
as reduced by appropriate allowances
for estimated irrecoverable amounts.
In accordance with Ind AS, impairment
allowance has been determined based
on Expected Credit Loss (ECL) model.
Estimated irrecoverable amounts are based
on the ageing of the receivable balance
and historical experience. Individual trade
receivables are written off if the same are
not collectible.

• Share-based payment

At the end of each period, the Company
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
the Standalone Statement of Profit and
Loss, with a corresponding adjustment to
the equity.

• Contingent liabilities

At each balance sheet date basis the
management’s judgement, changes in facts
and legal aspects, the Company assesses

the requirement of provisions against the
outstanding contingent liabilities. However,
the actual future outcome may be different
from this judgement.

• Leases

The Company evaluates if an arrangement
qualifies to be a lease as per the requirements
of Leases ("Ind AS 116”). Identification of
a lease requires significant judgement.
The Company uses significant judgement
in assessing the lease term (including
anticipated renewals) and the applicable
discount rate. The Company determines the
lease term as the non-cancellable period of
a lease, together with both periods covered
by an option to extend the lease if the
Company is reasonably certain to exercise
that option; and periods covered by an
option to terminate the lease if the Company
is reasonably certain not to exercise that
option. In assessing whether the Company
is reasonably certain to exercise an option to
extend a lease, or not to exercise an option
to terminate a lease, it considers all relevant
facts and circumstances that create an
economic incentive for the Company to
exercise the option to extend the lease, or
not to exercise the option to terminate the
lease. The Company revises the lease term
if there is a change in the non-cancellable
period of a lease.

(vi) Current/non-current classification

All assets and liabilities have been classified
as current or non-current as per the
Company’s normal operating cycle and
other criteria set out in the Schedule III to
the Act.

Assets

An asset is classified as current when it
satisfies any of the following criteria:

(a) it is expected to be realised in, or is
intended for sale or consumption in,
the Company’s normal operating cycle;

(b) it is held primarily for the purpose of
being traded;

(c) it is expected to be realised within 12
months after the reporting date; or

(d) it is cash or cash equivalent unless it
is restricted from being exchanged or
used to settle a liability for at least 12
months after the reporting date.

Current assets include the current portion
of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it
satisfies any of the following criteria:

(a) it is expected to be settled in the
Company’s normal operating cycle;

(b) it is held primarily for the purpose of
being traded;

(c) it is due to be settled within 12 months
after the reporting date; or

(d) the company does not have an
unconditional right to defer settlement
of the liability for at least 12 months
after the reporting date. Terms of a
liability that could, at the option of the
counterparty, result in its settlement by
the issue of equity instruments do not
affect its classification.

Current liabilities include current portion of
non-current financial liabilities.

All other liabilities are classified as non¬
current.

Deferred tax assets and liabilities
are classified as non-current assets
and liabilities.

(vii) Revenue recognition

Revenue from rendering of services

Revenue from contracts with customers
includes revenue for provision of services.
Revenue from contracts with customers is
recognised when control of the services are
transferred to the customer at an amount
that reflects the consideration to which
the Company expects to be entitled in
exchange for those goods or services. The
Company determines at contract inception
whether each performance obligation will
be satisfied (i.e. control will be transferred)
over time or at a point in time.

Revenue from contract with customers is
recognised when the Company satisfies
performance obligation by transferring
promised services to the customer.
Performance obligations may be satisfied
at a point of time or over a period of time.
Performance obligations satisfied over a
period of time are recognised as per the

term of relevant contractual agreements/
arrangements. Performance obligations are
said to be satisfied at a point of time when
the customer obtains controls of the asset.

a) Revenue from messaging services
- The Company recognises revenue
based on the usage of messaging
services. The revenue is recognised
when the Company’s services are used
based on the specific terms of the
contract with customers.

Technical and support services -
Income from technical and support
services rendered to its group
companies is recorded per agreement
on an accrual basis at a cost plus mark¬
up on such costs.

Revenue in excess of invoicing are
classified as unbilled revenue while
invoicing/collection in excess of revenue
for services to be performed in future
are classified as deferred revenue/
advances from customers.

Liquidated damages and penalties are
accounted as per the contract terms
wherever there is a delayed delivery
attributable to the Company and when
there is a reasonable certainty with
which the same can be estimated.

b) Dividend are recognised in profit or loss
only when the right to receive payment
is established, it is probable that the
economic benefits associated with
the dividend will flow to the Company,
and the amount of the dividend can be
measured reliably.

(viii) Trade receivables

Trade receivables are amounts due from
customers for sale of messaging services
in the ordinary course of business and
reflects the entity’s unconditional right to
consideration because only the passage of
time is required before the payment is due,
which are otherwise recorded as contract
assets. No significant element of financing
is deemed present.

(ix) Leases

Company as a lessee - Right-of-use
assets and lease liabilities

A lease is defined as ‘a contract, or part of
a contract, that conveys the right-to-use an

asset (the underlying asset) for a period of
time in exchange for consideration’.

Classification of leases

The Company enters into leasing
arrangements for various assets. The
assessment of the lease is based on
several factors, including, but not limited
to, transfer of ownership of leased asset at
end of lease term, lessee’s option to extend/
purchase etc.

Recognition and initial measurement of
right of use assets

At lease commencement date, the
Company recognises a right-of-use asset
and a lease liability on the balance sheet.
The right-of-use asset is measured at cost,
which is made up of the initial measurement
of the lease liability, any initial direct costs
incurred by the Company, an estimate of
any costs to dismantle and remove the
asset at the end of the lease (if any), and
any lease payments made in advance of
the lease commencement date (net of any
incentives received).

Subsequent measurement of right of
use assets

The Company depreciates the right-of-use
assets on a straight-line basis from the lease
commencement date to the earlier of the
end of the useful life of the right-of-use asset
or the end of the lease term. The Company
also assesses the right-of-use asset for
impairment when such indicators exist.

Lease liabilities

At lease commencement date, the
Company measures the lease liability at the
present value of the lease payments unpaid
at that date, discounted using the interest
rate implicit in the lease if that rate is readily
available or the Company’s incremental
borrowing rate. Lease payments included
in the measurement of the lease liability
are made up of fixed payments (including
in substance fixed payments) and variable
payments based on an index or rate.
Subsequent to initial measurement, the
liability will be reduced for payments made
and increased for interest. It is re-measured
to reflect any reassessment or modification,
or if there are changes in in-substance fixed
payments. When the lease liability is re-

measured, the corresponding adjustment
is reflected in the right-of-use asset.

The Company has elected to account
for short-term leases using the practical
expedients. Instead of recognising a right-
of-use asset and lease liability, the payments
in relation to these short-term leases are
recognised as an expense in the Statement
of Profit and Loss on a straight-line basis
over the lease term.

(x) Foreign currency

Functional and presentation currency

Items included in the Standalone Financial
Statements of the Company are measured
using the currency of the primary economic
environment in which the entity operates
(‘the functional currency’). The standalone
financial statements have been prepared
and presented in Indian Rupees (INR),
which is the Company’s functional and
presentation currency.

Transactions and balances

Foreign currency transactions are recorded
in the functional currency, by applying to
the exchange rate between the functional
currency and the foreign currency at the
date of the transaction.

Foreign currency monetary items
outstanding at the balance sheet date are
converted to functional currency using
the closing rate. Non-monetary items
denominated in a foreign currency which
are carried at historical cost are reported
using the exchange rate at the date of
the transaction.

Exchange differences arising on monetary
items on settlement, or restatement as at
reporting date, at rates different from those
at which they were initially recorded, are
recognised in the Statement of Profit and
Loss in the year in which they arise.

(xi) Taxes

Tax expense comprises current and deferred
tax. Current and deferred tax is recognised
in the Statement of Profit and Loss except to
the extent that it relates to items recognised
directly in equity or Other Comprehensive
Income (''OCI'').

The current income-tax charge is calculated
on the basis of the tax laws enacted or

substantively enacted at the end of the
reporting period in the countries where
the company operate and generate
taxable income. Management periodically
evaluates positions taken in tax returns with
respect to situations in which applicable
tax regulation is subject to interpretation
and considers whether it is probable that a
taxation authority will accept an uncertain
tax treatment. The Company measures
its tax balances either based on the most
likely amount or the expected value,
depending on which method provides
a better prediction of the resolution of
the uncertainty.

Deferred tax is provided in full, on temporary
differences arising between the tax base
of assets and liabilities and their carrying
amounts in the financial statements.
Deferred tax is determined using tax
rates (and laws) that have been enacted
or substantially enacted by the end of the
reporting period and are expected to apply
when the related deferred income-tax asset
is realised or the deferred tax liability is
settled. Deferred tax assets are recognised
for all deductible temporary differences and
unused tax losses only if it is probable that
future taxable amounts will be available
to utilise those temporary differences
and losses.

Current tax assets and tax liabilities are
offset where the entity has a legally
enforceable right to offset and intends
either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and
when the deferred tax balances relate to the
same taxation authority.

(xii) Financial instruments

A financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument
of another entity.

Initial recognition and measurement

All financial assets are recognised initially
at fair value, plus, in the case of financial
assets not recorded at fair value through
profit or loss (FVTPL), transaction costs
that are attributable to the acquisition
of the financial asset. However, trade
receivables that do not contain a significant
financing component are measured at
transaction price.

Financial assets and financial liabilities are
recognised when the Company becomes
a party to the contractual provisions of the
financial instrument and are measured
initially at fair value adjusted for transaction
costs, except for those carried at fair value
through profit or loss which are measured
initially at fair value.

The classification depends on the Company’s
business model for managing the financial
assets and the contractual terms of the cash
flows. For assets measured at fair value,
gains and losses will either be recorded in
the Statement of Profit and Loss or Other
Comprehensive Income. For investments in
debt instruments, this will depend on the
business model in which the investment is
held. For investments in equity instruments,
this will depend on whether the Company
has made an irrevocable election at the
time of initial recognition to account for
the equity investment at fair value through
Other Comprehensive Income (‘FVOCI’).

(i) Non-derivative financial asset

Subsequent measurement

Financial assets at amortised cost

A ‘financial asset’ is measured at the
amortised cost if both the following
conditions are met:

• The asset is held within a business
model whose objective is to hold
assets for collecting contractual
cash flows; and

• Contractual terms of the asset
give rise on specified dates to cash
flows that are solely payments of
principal and interest (SPPI) on the
principal amount outstanding.

After initial measurement, such
financial assets are subsequently
measured at amortised cost using the
effective interest rate (EIR) method.

Financial assets are measured at ‘Fair
value through other comprehensive
income’ (FVOCI) if these financial
assets are held within a business model
whose objective is to hold these assets
in order to collect contractual cash

flows or to sell these financial assets and
the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding. Movements
in the carrying amounts are taken
through OCI, except for the recognition
of impairment gains or losses and
interest income and foreign exchange
gains and losses, which are recognised
in profit and loss. When the financial
asset is derecognised, the cumulative
gain or loss previously recognised in
OCI is reclassified from equity to profit
or loss and recognised in other gains/
(losses). Interest income from these
financial assets are included in other
income using the effective interest
rate method.

Financial asset not measured at
amortised cost or at fair value through
other comprehensive income is carried
at ‘Fair value through the statement of
profit and loss’ (FVPL).

Investments in equity instruments of
subsidiaries

These are measured at cost in
accordance with Ind AS 27 ‘Separate
Financial Statements’.

De-recognition of financial assets

A financial asset is de-recognised when
the contractual rights to receive cash
flows from the asset have expired or
the Company has transferred its rights
to receive cash flows from the asset.

(ii) Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, all
non-derivative financial liabilities are
measured at amortised cost using the
effective interest method.

De-recognition of financial
liabilities

A financial liability is de-recognised
when the obligation under the liability
is discharged or cancelled or expires.
When an existing financial liability is
replaced by another from the same
lender on substantially different terms,

or the terms of an existing liability
are substantially modified, such an
exchange or modification is treated
as the de-recognition of the original
liability and the recognition of a new
liability. The difference in the respective
carrying amounts is recognised in the
Statement of Profit and Loss.

(iii) Offsetting of financial instruments

Financial assets and financial liabilities
are offset and the net amount is
reported in the balance sheet if there
is a currently enforceable legal right
to offset the recognised amounts
and there is an intention to settle on
a net basis, to realise the assets and
settle the liabilities simultaneously.
The legally enforceable right must not
be contingent on future events and
must be enforceable in the normal
course of business and in the event of
default, insolvency or bankruptcy of the
Company or the counterparty.

(xiii) Cash and cash equivalents

Cash and cash equivalents include cash and
cash-on-deposit with banks. The Company
considers all highly liquid investments with
a remaining maturity at the date of purchase
of three months or less and that are readily
convertible to known amounts of cash to be
cash equivalents.

(xiv) Cash flow statement

Cash flows are reported using the indirect
method, whereby profit for the year is
adjusted for the effects of transactions of a
non-cash nature, any deferrals or accruals
of past or future operating cash receipts or
payments and item of income or expenses
associated with investing or financing
cash flows. The cash flows from operating,
investing and financing activities of the
Company are segregated.

(xv) Equity investment

Equity investments in subsidiaries are
measured at cost. The investments
are reviewed at each reporting date to
determine whether there is any indication
of impairment considering the provisions of
Ind AS 36 ‘Impairment of Assets’. If any such
indication exists, policy for impairment of
non-financial assets is followed.

(xvi) Property, plant and equipment and
capital work-in-progress

Recognition and measurement

Property, plant and equipment are carried
at cost of acquisition or construction less
accumulated depreciation and impairment
losses, if any. The cost of an item of property,
plant and equipment comprises its
purchase price and other non-refundable
taxes or levies and any directly attributable
cost of bringing the asset to its working
condition for its intended use; any trade
discounts and rebates are deducted in
arriving at the purchase price.

Subsequent expenditure

Subsequent expenditures related to an item
of property, plant and equipment are added
to its book value only if it is probable that
future economic benefits associated with
the item will flow to the enterprise and the
cost of the item can be measured reliably.

Depreciation

Depreciation in respect of all the assets is
provided on written down value method
over their useful lives, as estimated by the
management. Useful lives so estimated
are in line with the useful lives indicated
by Schedule II of the Act except for lease
hold improvements which have been
depreciated over the useful lives or on
the period of underlying lease agreement
whichever is lower and in the case of severs
and networks (part of computers) which are
based on technical evaluation. Depreciation
is charged on a pro-rata basis for assets
purchased/sold during the year.

Depreciation method, useful lives and
residual values are reviewed at each financial
year-end and adjusted if appropriate. Based
on the management evaluation the useful
lives as given above best represent the
period over which management expects to
use these assets.

The estimated useful life of main category
of property, plant and equipment are:-

Servers and networks are depreciated over
a period of five years on WDV method,
based on internal assessment and technical
evaluation carried out by the management,
and which represents the period over which
they expect to use these assets.

Derecognition

An item of property, plant and equipment
is derecognised upon disposal or when
no future economic benefits are expected
to arise from continued use of the asset.
Any gain or loss arising on the disposal or
retirement of an item of property, plant and
equipment is determined as the difference
between the sale proceeds and the carrying
amount of the asset and is recognised in the
Standalone Statement of Profit and Loss.

Capital work-in-progress

Expenditure incurred during the period
of construction, including all direct and
indirect expenses, incidental and related
to construction, is carried forward and on
completion, the costs are allocated to the
respective property, plant and equipment.
Capital work-in-progress also includes
assets pending installation and not currently
available for intended use.

(xvii) Intangible assets

Recognition and measurement

I ntangible assets that are acquired by the
Company are measured initially at cost.
After initial recognition, an intangible
asset is carried at its cost less accumulated
amortisation and accumulated impairment
loss, if any.

Subsequent expenditure

Subsequent expenditures related to an
item of intangible assets are added to its
book value only if it is probable that future
economic benefits associated with the item
will flow to the enterprise and the cost of the
item can be measured reliably.

Goodwill

Goodwill is initially recognised based on
accounting policy for business combinations
and is tested for impairment annually.

Amortisation

Amortisation is calculated to write off the
cost of intangible assets less their estimated
residual values over their estimated
useful lives using the written down value
method/straight-line basis and is included
in depreciation and amortisation in the
Statement of Profit and Loss.

Computer software and technical know¬
how is amortised over a period of three
years on WDV method

Following table summarises the nature of
intangible and their estimated useful lives
and amortised on a straight-line basis:-

(xviii)Impairment

(i) Impairment of financial

instruments: financial assets

The Company assesses on a forward¬
looking basis the expected credit losses
associated with its financial assets and
the impairment methodology depends
on whether there has been a significant
increase in credit risk.

Trade receivables

In respect of trade receivables, the
Company applies the simplified
approach of Ind AS 109, which requires
measurement of loss allowance at an
amount equal to lifetime expected
credit losses. Lifetime expected credit
losses are the expected credit losses
that result from all possible default
events over the expected life of a
financial instrument.

Other financial assets

I n respect of its other financial assets,
the Company assesses if the credit
risk on those financial assets has
increased significantly since initial
recognition. If the credit risk has not
increased significantly since initial
recognition, the Company measures

the loss allowance at an amount equal
to 12-month expected credit losses,
else at an amount equal to the lifetime
expected credit losses.

When making this assessment, the
Company uses the change in the risk of
a default occurring over the expected
life of the financial asset. To make that
assessment, the Company compares
the risk of a default occurring on
the financial asset as at the balance
sheet date with the risk of a default
occurring on the financial asset as
at the date of initial recognition and
considers reasonable and supportable
information, that is available without
undue cost or effort, that is indicative
of significant increases in credit risk
since initial recognition. The Company
assumes that the credit risk on a
financial asset has not increased
significantly since initial recognition
if the financial asset is determined
to have low credit risk at the balance
sheet date.

(ii) Impairment of non-financial assets

Assessment is done at each balance
sheet date as to whether there is
any indication that an asset may be
impaired. For the purpose of assessing
impairment, the smallest identifiable
group of assets that generates cash
inflows from continuing use that are
largely independent of the cash inflows
from other assets and group of assets,
is consid ered as a cash generating
unit. If any such indication exists, an
estimate of the recoverable amount of
the asset/cash generating unit is made.
Assets whose carrying value exceeds
their recoverable amount are written
down to the recoverable amount.

Recoverable amount is higher of an
asset’s or cash generating unit’s selling
price and its value in use. Value in
use is the present value of estimated
future cash flows expected to raise
from continuing use of an asset and
from its disposal at the end of its useful
life. Assessment is also done at each
balance sheet date as to whether there
is any indication that an impairment
loss recognised for an asset in prior

accounting years may no longer exist
or may have decreased.

(xix) Employee benefits

The Company''s obligations towards various

employee benefits have been recognised

as follows:

Post employment benefits

(i) Short-term benefits

Short-term employee benefit
obligations are measured on an
undiscounted basis and are expensed
as the related service is provided. A
liability is recognised for the amount
expected to be paid e.g., under short¬
term cash bonus, if the Company has a
present legal or constructive obligation
to pay this amount as a result of past
service provided by the employee,
and the amount of obligation can be
estimated reliably.

Compensated absences

Accumulated compensated absences,
which are expected to be availed or
encashed within 12 months from the
end of the year are treated as short
term employee benefits. The obligation
towards the same is measured at
the expected cost of accumulating
compensated absences as the
additional amount expected to be paid
as a result of the unused entitlement as
at the year end.

(ii) Defined contribution plans

A defined contribution plan is a post¬
employment benefit plan under which
an entity pays fixed contributions
into a separate entity and will have
no legal or constructive obligation to
pay further amounts. The Company
makes specified monthly contributions
for employee provident fund to
Government administered provident
fund scheme, which are defined
contribution plans. Obligations for
contributions to defined contribution
plans are recognised as an employee
benefit expense in the Statement of
Profit and Loss in the years during
which the related services are rendered
by employees.

Prepaid contributions are recognised
as an asset to the extent that a
cash refund or a reduction in future
payments is available.

(iii) Defined benefit plans

A defined benefit plan is a post¬
employment benefit plan other than a
defined contribution plan.

The Company’s gratuity benefit
scheme is a defined benefit plan. The
Company’s net obligation in respect
of defined benefit plans is calculated
by estimating the amount of future
benefit that employees have earned in
the current and prior years, discounting
that amount and deducting the fair
value of any plan assets. The calculation
of defined benefit obligation is
performed annually by a qualified
actuary using the projected unit credit
method. When the calculation results
in a potential asset for the Company,
the recognised asset is limited to the
present value of economic benefits
available in the form of any future
refunds from the plan or reductions in
future contributions to the plan (‘the
asset ceiling’). In order to calculate the
present value of economic benefits,
consideration is given to any minimum
funding requirements.

Remeasurements of the net defined
benefit liability, which comprise
actuarial gains and losses, the return
on plan assets (excluding interest) and
the effect of the asset ceiling (if any,
excluding interest), are recognised
in Other Comprehensive Income
(OCI). The Company determines the
net interest expense (income) on the
net defined benefit liability (asset)
for the year by applying the discount
rate used to measure the defined
benefit obligation at the beginning
of the annual period to the then-net
defined benefit liability (asset), taking
into account any changes in the net
defined benefit liability (asset) during
the year as a result of contributions
and benefit payments. Net interest
expense and other expenses related to
defined benefit plans are recognised in
the Statement of Profit and Loss.

When the benefits of a plan are

changed or when a plan is curtailed, the
resulting change in benefit that relates
to past service (‘past service cost’ or
‘past service gain’) or the gain or loss on
curtailment is recognised immediately
in the Statement of profit and Loss. The
Company recognises gains and losses
on the settlement of a defined benefit
plan when the settlement occurs.

When the benefits of a plan are

improved, the portion of the increased
benefit related to past service by
employees is recognised in Statement
of Profit and Loss on a straight-line
basis over the average period until the
benefits become vested.

(iv) Other long-term employees benefits

The Company''s net obligation in
respect of long-term employee
benefits other than post-employment
benefits is the amount of future benefit
that employees have earned in return
of their service in the current and prior
periods; that benefit is discounted
to determine its present value, and
the fair value of any related assets is
deducted. The obligation is measured
on the basis of an annual independent
actuarial valuation using the projected
unit credit method. Remeasurement
gains or losses are recognised in profit
or loss in the year in which they arise.

---

Mar 31, 2024

C. Material accounting policies and assumptions

(i) Statement of compliance

The Company has prepared its standalone financial statements in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of the Companies Act,

2013 (the ‘Act’) and other relevant provisions under the Act (as amended).

The standalone financial statements have been prepared on a going concern basis and using material accounting policies measurement basis summarized in the policies mentioned below. These accounting policies have been used throughout all periods presented in the standalone financial statements, unless otherwise stated.

Current and non-current classification:

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III of the Act. Based on the nature of service and time taken between acquisition of assets/ services for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of the classification of assets and liabilities into current and noncurrent.

(ii) Functional and presentation currency

These Standalone Financial Statements are presented in Indian rupee (''), which is also the Company’s functional currency. All amounts have been rounded off to the nearest crores, unless otherwise stated.

(iii) Basis of measurement

The Standalone Financial Statements have been prepared on historical cost convention on the accrual basis, except for current investments which is a fair value measurement.

(iv) Measurement of fair values

Certain accounting policies and disclosures of the Company require the measurement of fair values, for financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The management has overall responsibility for overseeing all significant fair value measurements and it regularly reviews significant unobservable inputs and valuation adjustments. If third party

information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in note 33.

Estimates andjudgements are continuously evaluated. They are based on historical experience and other factors including expectation of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

(v) Material accounting judgments, estimates and assumptions

Use of estimates and judgements

The preparation of financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related

disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the standalone financial statements is as under:

• Impairment of investments in subsidiaries

Determining whether the investments in subsidiaries are impaired requires an estimate in the value in use of investments. The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for. In considering the value in use, the management has anticipated the future market conditions and other parameters that affect the operations of these entities.

• Useful lives of property, plant and equipment and intangible assets

The Company reviews the useful lives of property, plant and equipment and intangible assets periodically. In case of any revision, the unamortised depreciation amount is charge over the remaining useful life of the assets. Assets constructed on such leasehold properties are depreciated over their respective lease terms or useful life, whichever is lower.

• Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on

an assessment of the probability of the Company’s future taxable income (supported by reliable evidence) against which the deferred tax assets can be utilized.

• Defined benefit obligation (DBO)

Management’s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

• Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using certain valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as volatility risk, credit risk and volatility.

• Evaluation of indicators for impairment of assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

• Impairment of goodwill

The Company estimates the value in use of the cash generating unit (CGU) to which the goodwill is associated, based on the future cash flows, growth rate, applicable discount rate and anticipated future economic and regulatory conditions. The estimated cash flows are developed using internal forecasts. The discount rate used for the said CGU represents the weighted average cost of capital based

on the historical market returns of comparable companies.

• Loss allowance

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. In accordance with Ind AS, impairment allowance has been determined based on Expected Credit Loss (ECL) model. Estimated irrecoverable amounts are based on the ageing of the receivable balance and historical experience. Individual trade receivables are written off if the same are not collectible.

• Share-based payment

At the end of each period, the Company revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in the Standalone Statement of Profit and Loss, with a corresponding adjustment to the equity.

• Contingent liabilities

At each balance sheet date basis the management’s judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

• Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Leases ("Ind AS 116”). Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to

terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the noncancellable period of a lease.

(vi) Current / non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Act.

Assets

An asset is classified as current when it satisfies any of the following criteria:

(a) it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within 12 months after the reporting date; or

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

(a) it is expected to be settled in the Company’s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is due to be settled within 12 months after the reporting date; or

(d) the company does not have an unconditional right to defer settlement of the liability for at least 12 months

after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as noncurrent.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(vii) Revenue recognition

Revenue from rendering of services

Revenue from contracts with customers includes revenue for provision of services. Revenue from contracts with customers is recognised when control of the services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company determines at contract inception whether each performance obligation will be satisfied (i.e. control will be transferred) over time or at a point in time.

Revenue from contract with customers is recognised when the Company satisfies performance obligation by transferring promised services to the customer. Performance obligations may be satisfied at a point of time or over a period of time. Performance obligations satisfied over a period of time are recognised as per the term of relevant contractual agreements/ arrangements. Performance obligations are said to be satisfied at a point of time when the customer obtains controls of the asset.

a. Revenue from messaging services - The Company recognises revenue based on the usage of messaging services. The revenue is recognised when the Company’s services are used based on the specific terms of the contract with customers.

Technical and support services -Income from technical and support services rendered to its group companies is recorded per agreement on an accrual basis at a cost plus markup on such costs.

Revenue in excess of invoicing are classified as unbilled revenue while invoicing /collection in excess of revenue for services to be performed in future are classified as deferred revenue / advances from customers.

Liquidated damages and penalties are accounted as per the contract terms wherever there is a delayed delivery attributable to the Company and when there is a reasonable certainty with which the same can be estimated.

b. Dividend are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.

(viii) Trade receivables

Trade receivables are amounts due from customers for sale of messaging services in the ordinary course of business and reflects the entity’s unconditional right to consideration because only the passage of time is required before the payment is due, which are otherwise recorded as contract assets. No significant element of financing is deemed present.

(ix) Leases

Company as a lessee - Right of use assets and lease liabilities

A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.

Classification of leases

The Company enters into leasing arrangements for various assets. The assessment of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to extend/ purchase etc.

Recognition and initial measurement of right of use assets

At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance sheet.

The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease commencement date (net of any incentives received).

Subsequent measurement of right of use assets

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

Lease liabilities

At lease commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments) and variable payments based on an index or rate. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset.

The Company has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these short-term leases are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

(x) Foreign currency

Functional and presentation currency

Items included in the Standalone Financial Statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The standalone financial statements have been prepared and presented in Indian Rupees (INR), which is the Company’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate between the functional currency and the foreign currency at the date of the transaction.

Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction.

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the Statement of Profit and Loss in the year in which they arise.

(xi) Taxes

Tax expense comprises current and deferred tax. Current and deferred tax is recognised in the Statement of Profit and Loss except to the extent that it relates to items recognised directly in equity or Other Comprehensive Income (‘OCI’).

The current income-tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Deferred tax is provided in full, on temporary differences arising between the tax base of assets and liabilities and their carrying

amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income-tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

(xii) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Initial recognition and measurement

All financial assets are recognized initially at fair value, plus, in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset. However, trade receivables that do not contain a significant financing component are measured at transaction price.

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in the Statement of Profit and Loss or Other

Comprehensive Income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income (‘FVOCI’).

(i) Non-derivative financial asset

Subsequent measurement

Financial assets at amortised cost

A ‘financial asset’ is measured at the amortised cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.

Financial assets are measured at ‘Fair value through other comprehensive income’ (FVOCI) if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amounts are taken through OCI, except for the recognition of impairment gains or losses and interest income and foreign exchange gains and losses, which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets are included in other income using the effective interest rate method.

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at ‘Fair value through the statement of profit and loss’ (FVPL).

Investments in equity instruments of subsidiaries

These are measured at cost in accordance with Ind AS 27 ‘Separate Financial Statements’.

De-recognition of financial assets

A financial asset is de-recognised when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.

(ii) Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost using the effective interest method.

De-recognition of financial liabilities

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

(iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of

(xiii) Cash and cash equivalents

Cash and cash equivalents include cash and cash-on-deposit with banks. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

(xiv) Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

(xv) Equity investment

Equity investments in subsidiaries are measured at cost. The investments are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ‘Impairment of Assets’. If any such indication exists, policy for impairment of non-financial assets is followed.

(xvi) Property, plant and equipment and capital work-in-progress

Recognition and measurement

Property, plant and equipment are carried at cost of acquisition or construction less accumulated depreciation and impairment losses, if any. The cost of an item of property, plant and equipment comprises its purchase price and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure

Subsequent expenditures related to an item of property, plant and equipment are added to its book value only if it is probable that future economic benefits associated with

the item will flow to the enterprise and the cost of the item can be measured reliably.

Depreciation

Depreciation in respect of all the assets is provided on written down value method over their useful lives, as estimated by the management. Useful lives so estimated are in line with the useful lives indicated by Schedule II of the Act except for lease hold improvements which have been depreciated over the useful lives or on the period of underlying lease agreement whichever is lower and severs and networks (part of computers) which are mentioned below. Depreciation is charged on a prorata basis for assets purchased/sold during the year.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on the management evaluation the useful lives as given above best represent the period over which management expects to use these assets.

The estimated useful life of main category of property, plant and equipment are:-

Class of assets	Estimated useful life (years)
Furniture and fixtures	10 years
Office equipment	5 to 10 years
Vehicles	8 to 10 years
Computers	3 to 5 years
Building	60 years

Servers and networks are depreciated over a period of five years on WDV method, based on internal assessment and technical evaluation carried out by the management, and which represents the period over which they expect to use these assets.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the Standalone Statement of Profit and Loss.

Capital work-in-progress

Expenditure incurred during the period of construction, including all direct and indirect expenses, incidental and related to construction, is carried forward and on completion, the costs are allocated to the respective property, plant and equipment. Capital work-in-progress also includes assets pending installation and not currently available for intended use.

(xvii) Intangible assets

Recognition and measurement

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less accumulated amortisation and accumulated impairment loss, if any.

Subsequent expenditure

Subsequent expenditures related to an item of intangible assets are added to its book value only if it is probable that future economic benefits associated with the item will flow to the enterprise and the cost of the item can be measured reliably.

Goodwill

Goodwill is initially recognised based on accounting policy for business combinations and is tested for impairment annually.

Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the written down value method/ straight line basis, and is included in depreciation and amortisation in the Statement of Profit and Loss.

Computer software and technical know how is amortized over a period of three years on WDV method

Following table summarises the nature of intangible and their estimated useful lives and amortised on a straight line basis:-

Class of assets	Estimated useful life (years)
License	3 yea rs
Customer relationship	4 to 10.75 years
Non-compete fees	4 to 5 years

Amortisation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

(xviii) Impairment

(i) Impairment of financial

instruments: financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its financial assets and the impairment methodology depends on whether there has been a significant increase in credit risk.

Trade receivables

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

Other financial assets

In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.

When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.

(ii) Impairment of non-financial assets

Assessment is done at each balance sheet date as to whether there is any indication that an asset may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets and group of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

Recoverable amount is higher of an asset’s or cash generating unit’s selling price and its value in use. Value in use is the present value of estimated future cash flows expected to raise from continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each balance sheet date as to whether there is any indication that an impairment loss recognised for an assets in prior accounting years may no longer exist or may have decreased.

(xix) Employee benefits

The Company’s obligations towards various

employee benefits have been recognised

as follows:

Post employment benefits

(i) Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under shortterm cash bonus, if the Company has a present legal or constructive obligation

to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

Compensated absences

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

(ii) Defined contribution plans

A defined contribution plan is a postemployment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions for employee provident fund to Government administered provident fund scheme, which are defined contribution plans. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in the Statement of Profit and Loss in the years during which the related services are rendered by employees.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(iii) Defined benefit plans

A defined benefit plan is a postemployment benefit plan other than a defined contribution plan.

The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior years, discounting that amount and deducting the fair value of any plan assets. The calculation

of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in Other Comprehensive Income (OCI). The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the year by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the year as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in the Statement of profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognised in Statement of Profit and Loss on a straight-line basis over the average period until the benefits become vested.

(iv) Other long-term employees benefits

The Company’s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return of their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurement gains or losses are recognised in profit or loss in the year in which they arise.

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Mar 31, 2023

Company Overview

Route Mobile Limited ("the Company”) is a public limited company incorporated and domiciled in India. The registered office of the Company is located at 4^th Dimension, 3^rd Floor, Mind Space, Malad (West), Mumbai 400064. The Company was listed on BSE limited and National Stock Exchange of India Limited on 21 September 2020.

The Company was incorporated on 14 May 2004. The Company is a cloud communication provider to enterprises, over-the-top players and mobile network operators.

The standalone financial statements for the year ended 31 March 2023 were approved by Board of Directors and authorised for issue on 19 May 2023.

1 Significant accounting policies and assumptions(i) Statement of compliance

The Company has prepared its standalone financial statements to comply in all material respects with the provisions of the Companies Act, 2013 (the "Act”) and rules framed thereunder and guidelines issued by the Securities and Exchange Board of India (SEBI). In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act and other relevant provisions of the Act.

The standalone financial statements have been prepared under the historical cost convention and on accrual basis, except for certain financial assets and liabilities, defined benefit plan liabilities measured at fair value.

Current and non-current classification: All assets and liabilities have been classified as current or noncurrent as per the Company’s normal operating cycle and other criteria set out in Schedule III of the Act. Based on the nature of service and time taken between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of the classification of assets and liabilities into current and non-current.

(ii) Critical estimates and judgements

The preparation of these financial statements in conformity with Ind AS requires management to make estimates, assumptions and exercise judgement in applying the accounting policies that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year.

The Management believes that these estimates are prudent and reasonable and are based upon the Management’s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

• Impairment of investments in subsidiaries

Determining whether the investments in subsidiaries are impaired requires an estimate in the value in use of investments. The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for. In considering the value in use, the Board of directors have anticipated the future market conditions and other parameters that affect the operations of these entities.

• Useful lives of property, plant and equipment and Intangible assets

The Company reviews the useful lives of property, plant and equipment and intangible assets at the end of each reporting period. This reassessment may result in change in depreciation and amortisation expense in future periods.

• Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period.

• Defined benefit obligation

The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases and mortality rates. Due to the long term nature of these plans, such estimates are subject to significant uncertainty.

• Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

• Impairment of financial assets

The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

• Impairment of Goodwill

The Company estimates the value in use of the cash generating unit (CGU) to which Goodwill is associated, based on the future cash flows, growth rate, applicable discount rate and anticipated future economic and regulatory conditions. The estimated cash flows are developed using internal forecasts. The discount rate used for the CGU represents the weighted average cost of capital based on the historical market returns of comparable companies.

• Research and development costs

Management monitors progress of internal research and development projects by using a project judgement is required in distinguishing research from the development phase. Development costs are recognised as an asset when all the criteria

are met, whereas research costs are expensed as incurred.

Management also monitors whether the recognition requirements for development costs continue to be met. This is necessary due to inherent uncertainty in the economic success of any product development.

• Loss Allowance (Refer note 11)

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. In accordance with Ind AS, impairment allowance has been determined based on Expected Credit Loss (ECL) model. Estimated irrecoverable amounts are based on the ageing of the receivable balance and historical experience. Individual trade receivables are written off if the same are not collectible.

• Share-based payments

Estimating fair value for share-based payments requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. The estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about them.

• Contingencies

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

• Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

(iii) Revenue recognition

Revenue is measured at the fair value of consideration received or receivable. Revenue is recognised upon transfer of control of promised services to the customers at the consideration which the Company has received or expects to receive in exchange of those services. Amount disclosed as revenue are reported net of discounts and applicable taxes which are collected on behalf of the government.

a. Revenue from messaging services - The Company recognises revenue based on the usage of messaging services. The revenue is recognised when the Company’s services are used based on the specific terms of the contract with customers.

Technical and support services - Income from technical and support services rendered to its group companies is recorded on an accrual basis at a fully loaded cost plus mark-up on such costs.

Revenue in excess of invoicing are classified as unbilled revenue while invoicing /collection in excess of revenue for services to be performed in future are classified as deferred revenue / advances from customers.

Liquidated damages and penalties are accounted as per the contract terms wherever there is a delayed delivery attributable to the Company and when there is a reasonable certainty with which the same can be estimated.

b. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sale price and carrying value of the investment.

c. Dividend are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.

d. Interest income for all debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset. When

calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

(iv) Trade Receivables

Trade receivables are amounts due from customers for sale of Messaging services in the ordinary course of business and reflects entity’s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The entity holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.

(v) Measurement and recognition of leases

The Company considers whether contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

Company as a lessee

At lease commencement date, the Company recognises a right-of-use asset and lease liabilities on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company and any lease payments made in advance of the lease commencement date.

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of

the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist. For the purpose of impairment testing, the recoverable amount (i.e. higher of the fair value less cost to sell and the value in use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such case, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs.

At the commencement date of lease, the Company measures the lease liability at the present value of the lease payments to be made over the lease term, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance, fixed), and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest expenses. It is remeasured to reflect any reassessment or modification.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or Statement of profit and loss, as the case may be.

The Company has elected to account for shortterm leases and leases of low-value assets using the exemption given under Ind AS 116, Leases. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term or on another systematic basis if that basis is more representative of the pattern of the Company’s benefit.

Company as a lessor

Leases for which the Company is a lessor classified as finance or operating lease. Whenever the terms

of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as finance lease. All other leases are classified as operating leases.

Lease income from operating leases where the Company is a lessor is recognised as income on straight line basis over the lease term.

(vi) Borrowing costs

Borrowing costs attributable to the acquisition and construction of qualifying assets are capitalised as part of the cost of such assets up to the date such assets are ready for their intended use. Other borrowing costs are charged to profit or loss. Borrowing cost is calculated using effective interest rate on the amortised cost of the instrument.

(vii) Foreign currency

The functional currency of the Company is Indian rupee.

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the Balance sheet date and exchange gains or losses arising on settlement and restatement are recognised in the Statement of Profit and Loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated at year end.

(viii) Income taxes

Income tax expense comprises Current tax expenses and net change in the deferred tax assets or liabilities during the year. Current and deferred taxes are recognised in the Statement of profit and loss, except when they relate to items that are recognised in Other comprehensive income or directly in Equity, in which case, the current and deferred tax are also recognised in Other comprehensive income or directly in Equity respectively.

Current Income taxes

The current income tax includes income taxes payable by the Company computed in accordance

with the tax laws applicable in the jurisdiction in which Company operates and generate taxable income. Advance taxes and provision for current income tax are presented in the Balance sheet after offsetting the advance tax paid and income tax provision arising in the same jurisdiction and where the relevant tax paying units intend to settle the asset and liability on a net basis.

The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received after considering uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date in the country where the Company operates and generates taxable income.

Deferred income taxes

Deferred income tax is recognised using Balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of recognition.

Deferred tax assets are recognised to the extent future taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent it is no longer probable that sufficient taxable profit will be available to allow deferred income tax assets to be utilised. At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognizes unrecognised deferred tax assets to the extent it has become reasonably certain, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the

temporary differences are expected to be received or settled.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Cu rrent tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

(ix) Financial instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets or financial liability.

(I) Financial assets Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

• those measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets change.

Initial measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest, are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.

• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised

in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.

De-recognition of financial assets

A financial asset is de-recognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Cash and cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise of the cash on hand and at bank and current investments with an original maturity of three months or less. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and shortterm deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

(II) Financial liabilities

Borrowings and other financial liabilities are initially recognised at fair value (net of transaction costs incurred). Difference between the fair value and the transaction proceeds on initial recognition is recognised as an asset / liability based on the underlying reason for the difference.

Subsequently, all financial liabilities are measured at amortised cost using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. The gain / loss is recognised in other equity in case of transactions with shareholders.

(III) Derivative Financial Instruments

The Company uses currency swaps as derivative instrument to mitigate the risk of changes in currency rates. Such derivative instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value.

(x) Investment in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exist, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the statement of profit and loss. On disposal of investment, the differences between the net disposal proceeds and the carrying amount is charged or credited to the statement of profit and loss.

(xi) Property, plant and equipment (including Capital Work-in-Progress)

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes inward freight, adjustment for GST credit, taxes and expenses incidental to acquisition and installation, up to the point the asset is ready for its intended use.

Assets acquired but not ready for use or assets under construction are classified under Capital work in progress.

(xii) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost.

Intangible assets acquired in a business combination are recognised at fair value at the acquisition date.

Subsequently, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

Goodwill is initially recognised based on accounting policy for business combinations and is tested for impairment annually.

Research and development

Expenses on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognised in the standalone statement of profit and loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, the assets are controlled by the Company, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in the standalone statement of profit and loss as incurred.

(xiii) Depreciation/Amortisation

Depreciation on Property, plant and equipment is provided to the extent of depreciable amount on written down value method (WDV) over the useful lives of assets as determined by the management which is in line with Part-C of Schedule II of the Act with residual value of 5%, except servers and network (part of Computers).

The estimated useful life of these Property, Plant and Equipment is mentioned below:

Type of asset	Estimated useful life of asset
Furniture and fittings	10 years
Office equipment	5 to 10 years
Vehicles	8 to 10 years
Computers	3 to 5 years
Building	60 years
Leasehold improvements	Lower of estimated useful life or lease term

Servers and networks are depreciated over a period of five years on WDV method, based on internal assessment and technical evaluation carried out by the management, and which represents the period over which they expect to use these assets.

Leasehold improvements are amortised over the period of lease or their estimated useful life, whichever is lower, on a straight-line basis.

Computer software and technical know how is amortised over a period of three years on WDV method

Following table summarises the nature of intangible and their estimated useful lives and amortised on a straight line basis:-

Nature of Intangibles	Useful lives
License	3 yea rs
Customer relationship	4 to 10.75 years
Non-compete fees	4 to 5 years

Depreciation/amortisation is calculated pro-rata from/to the date of addition/deletion.

(xiv)Impairment of assets Non-financial assets

The carrying amount of the non-financial assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the

higher of its net selling price and its value in use. Impairment loss is recognised in the statement of profit and loss.

After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation / amortisation if there was no impairment.

Financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised on initial recognition of the receivables.

(xv) Employee benefits

All short term employee benefits are accounted on undiscounted basis during the accounting period based on services rendered by employees and recognised as expenses in the Statement of Profit and Loss.

The Company''s contribution to Provident Fund and Employees State Insurance Scheme is determined based on a fixed percentage of the eligible employees'' salary and charged to the Statement of Profit and Loss on accrual basis. The Company has categorised its Provident Fund and the Employees State Insurance Scheme as a defined contribution plan since it has no further obligations beyond these contributions.

The Company’s liability towards gratuity, being defined benefit plan is accounted for on the basis of an independent actuarial valuation using the projected unit credit method, done at the year end.

Gratuity liability is not funded and the payments are made to the employees directly when they leave the organisation post completion of 5 years of service or at the time of retirement (with minimum 5 years of service), whichever is earlier.

Service cost and the net interest cost is included in employee benefit expense in the Statement of profit and loss. Actuarial gains and losses arising on the measurement of defined benefit obligation is credited/charged to other comprehensive income.

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

(xvi) Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on management estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

Contingent assets are not recognised in the financial statements. However, it is disclosed only when an inflow of economic benefits is probable.

(xvii) Earnings per share

Basic earnings per share are computed by dividing net profit after tax (excluding other comprehensive income) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing net profit after tax (excluding other comprehensive income) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share.

(xviii) 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.

(xix) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting, nature of the products / process, organisation structure as well as differential risks and returns, using the information provided to the board of directors and chief operating officer, together, the chief operating decision maker (''CODM'').

(xx) 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 nonmarket 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.

(xxi) 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 recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from retained earnings.

(xxii) Share issue expense

The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction.

(xxiii) Standards issued but not effective

Ministry of Corporate Affairs (‘MCA’) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31 March 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:

a. Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies.

b. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of ‘accounting estimates’ to help entities distinguish changes in accounting policies from changes in accounting estimates.

c. Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

The effective date for adoption of these amendments is annual periods beginning on or after 1 April 2023.

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Mar 31, 2022

Summary of the significant accounting policies and other explanatory information as at and for the year ended 31 March 2022

Company Overview

Route Mobile Limited (“the Company”) is a public limited company incorporated and domiciled in India. The registered office of the Company is located at 4th Dimension, 3rd Floor, Mind Space, Malad (West), Mumbai 400064. The Company is listed on BSE limited and National Stock Exchange of India Limited on 21 September 2020.

The Company was incorporated on 14 May 2004. The Company is a cloud communication provider to enterprises, over-the-top players and mobile network operators.

The standalone financial statements for the year ended 31 March 2022 were approved by Board of Directors and authorised for issue on 18 May 2022.

1 Significant accounting policies and assumptions(i) Statement of compliance

The Company has prepared its standalone financial statements to comply in all material respects with the provisions of the Companies Act, 2013 (the “Act”) and rules framed thereunder and guidelines issued by the Securities and Exchange Board of India (SEBI). In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act and other relevant provisions of the Act.

The standalone financial statements have been prepared under the historical cost convention and on accrual basis, except for certain financial assets and liabilities, defined benefit plan liabilities measured at fair value.

Current and non-current classification: All assets and liabilities have been classified as current or noncurrent as per the Company''s normal operating cycle and other criteria set out in Schedule III of the Act. Based on the nature of service and time taken between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of the classification of assets and liabilities into current and non-current.

(ii) Critical estimates and judgements

The preparation of these financial statements in conformity with Ind AS requires management to make estimates, assumptions and exercise judgement in applying the accounting policies that affect the reported amounts of a-ssets, liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year.

The Management believes that these estimates are prudent and reasonable and are based upon the Management''s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.

This note provides an overview of the areas that involved a higher degree ofjudgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

• Impairment of investments in subsidiaries

Determining whether the investments in subsidiaries are impaired requires an estimate in the value in use of investments. The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the

impairment loss is accounted for. In considering the value in use, the Board of directors have anticipated the future market conditions and other parameters that affect the operations of these entities.

• Useful lives of property, plant and equipment and Intangible assets

The Company reviews the useful lives of property, plant and equipment and intangible assets at the end of each reporting period. This reassessment may result in change in depreciation and amortisation expense in future periods.

• Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period.

• Defined benefit obligation

The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases and mortality rates. Due to the long term nature of these plans, such estimates are subject to significant uncertainty.

• Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

• Impairment of financial assets

The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates. The Company

uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

• Impairment of Goodwill

The Company estimates the value in use of the cash generating unit (CGU) to which Goodwill is associated, based on the future cash flows, growth rate, applicable discount rate and anticipated future economic and regulatory conditions. The estimated cash flows are developed using internal forecasts. The discount rate used for the CGU represents the weighted average cost of capital based on the historical market returns of comparable companies.

• Research and development costs

Management monitors progress of internal research and development projects by using a project judgement is required in distinguishing research from the development phase. Development costs are recognised as an asset when all the criteria are met, whereas research costs are expensed as incurred.

Management also monitors whether the recognition requirements for development costs continue to be met. This is necessary due to inherent uncertainty in the economic success of any product development.

• Share-based payments

Estimating fair value for share-based payments requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. The estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about them.

• Contingencies

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies/ litigations against the Company as it is not

possible to predict the outcome of pending matters with accuracy.

• Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

(iii) Revenue recognition

Revenue is measured at the fair value of consideration received or receivable. Revenue is recognised upon transfer of control of promised services to the customers at the consideration which the Company has received or expects to receive in exchange of those services. Amount disclosed as revenue are reported net of discounts and applicable taxes which are collected on behalf of the government.

a. Revenue from messaging services - The Company recognises revenue based on the usage of messaging services. The revenue is recognised when the Company''s services are used based on the specific terms of the contract with customers.

Technical and support services - Income from technical and support services rendered to its group companies is recorded on an accrual basis at a fully loaded cost plus mark-up on such costs.

Revenue in excess of invoicing are classified as unbilled revenue while invoicing /collection in excess of revenue for services to be performed in future are classified as deferred revenue / advances from customers.

Liquidated damages and penalties are accounted as per the contract terms wherever there is a delayed delivery attributable to the Company and when there is a reasonable certainty with which the same can be estimated.

b. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sale price and carrying value of the investment.

c. Dividend are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.

d. Interest income for all debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

(iv) Measurement and recognition of leases

The Company considers whether contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration''.

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

Company as a lessee

At lease commencement date, the Company recognises a right-of-use asset and lease liabilities on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company and any lease payments made in advance of the lease commencement date.

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist. For the purpose of impairment testing, the recoverable amount (i.e. higher of the fair value less cost to sell

and the value in use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such case, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs.

At the commencement date of lease, the Company measures the lease liability at the present value of the lease payments to be made over the lease term, discounted using the interest rate implicit in the lease if that rate is readily available or the Company''s incremental borrowing rate.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance, fixed), and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest expenses. It is remeasured to reflect any reassessment or modification.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or Statement of profit and loss, as the case may be.

The Company has elected to account for shortterm leases and leases of low-value assets using the exemption given under Ind AS 116, Leases. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term or on another systematic basis if that basis is more representative of the pattern of the Company''s benefit.

Company as a lessor

Leases for which the Company is a lessor classified as finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as finance lease. All other leases are classified as operating leases.

Lease income from operating leases where the Company is a lessor is recognised as income on straight line basis over the lease term.

(v) Borrowing costs

Borrowing costs attributable to the acquisition and construction of qualifying assets are capitalised as part of the cost of such assets up to the date such assets are ready for their intended use. Other borrowing costs are charged to profit or loss. Borrowing cost is calculated using effective interest rate on the amortised cost of the instrument.

(vi) Foreign currency

The functional currency of the Company is Indian rupee.

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the Balance sheet date and exchange gains or losses arising on settlement and restatement are recognised in the Statement of Profit and Loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated at year end.

(vii) Income taxes

Income tax expense comprises Current tax expenses and net change in the deferred tax assets or liabilities during the year. Current and deferred taxes are recognised in the Statement of profit and loss, except when they relate to items that are recognised in Other comprehensive income or directly in Equity, in which case, the current and deferred tax are also recognised in Other comprehensive income or directly in Equity respectively.

Current Income taxes

The current income tax includes income taxes payable by the Company computed in accordance with the tax laws applicable in the jurisdiction in which the Company operates. Advance taxes and provision for current income tax are presented in the Balance sheet after offsetting the advance tax paid and income tax provision arising in the same jurisdiction and where the relevant tax paying units intend to settle the asset and liability on a net basis.

Deferred income taxes

Deferred income tax is recognised using Balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of recognition.

Deferred tax assets are recognised to the extent future taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent it is no longer probable that sufficient taxable profit will be available to allow deferred income tax assets to be utilised. At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent it has become reasonably certain, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.

(viii) Financial instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets or financial liability.

(I) Financial assets Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

• those measured at amortised cost.

The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets change.

Initial measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments

Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics

of the asset. There are three measurement

categories into which the Company classifies its debt

instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest, are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.

• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.

De-recognition of financial assets

A financial asset is de-recognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Cash and cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise of the cash on hand and at bank and current investments with an original maturity of three months or less. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

(II) Financial liabilities

Borrowings and other financial liabilities are initially recognised at fair value (net of transaction costs incurred). Difference between the fair value and the transaction proceeds on initial recognition is recognised as an asset / liability based on the underlying reason for the difference.

Subsequently, all financial liabilities are measured at amortised cost using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. The gain / loss is recognised in other equity in case of transactions with shareholders.

(III) Derivative Financial Instruments

The Company uses currency swaps as derivative instrument to mitigate the risk of changes in currency rates. Such derivative instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value.

(ix) Investment in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exist, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the statement of profit and loss. On disposal of investment, the differences between the net disposal proceeds and the carrying amount is charged or credited to the statement of profit and loss.

(x) Property, plant and equipment (including Capital Work-in-Progress)

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes inward freight, adjustment for GST credit, taxes and expenses incidental to acquisition and installation, up to the point the asset is ready for its intended use.

Assets acquired but not ready for use or assets under construction are classified under Capital work in progress.

(xi) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost.

Intangible assets acquired in a business combination are recognised at fair value at the acquisition date.

Subsequently, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

Goodwill is initially recognised based on accounting policy for business combinations and is tested for impairment annually.

Research and development

Expenses on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognised in the standalone statement of profit and loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved

products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, the assets are controlled by the Company, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in the standalone statement of profit and loss as incurred.

(xii) Depreciation/Amortisation

Depreciation on Property, plant and equipment is provided to the extent of depreciable amount on written down value method (WDV) over the useful lives of assets as determined by the management which is in line with Part-C of Schedule II of the Act with residual value of 5%, except servers and network (part of Computers).

The estimated useful life of these Property, Plant and Equipment is mentioned below:

Type of asset	Estimated useful life of asset
Furniture and fittings	10 years
Office equipment	5 to 10 years
Vehicles	8 to 10 years
Computers	3 to 5 years
Building	60 years
Leasehold improvements	Lower of estimated useful life or lease term

Servers and networks are depreciated over a period of five years on WDV method, based on internal assessment and technical evaluation carried out by the management, and which represents the period over which they expect to use these assets.

Leasehold improvements are amortised over the period of lease or their estimated useful life, whichever is lower, on a straight-line basis.

Computer software and technical know how is amortized over a period of three years on WDV method

Following table summarises the nature of intangible and their estimated useful lives and amortised on a straight line basis:-

Nature of Intangibles	Useful lives
License	3 years
Customer relationship	4 to 10.75 years
Non-compete fees	4 to 5 years
Computer Software	3 years
Technical know- how	3 years

Depreciation/amortisation is calculated pro-rata from/to the date of addition/deletion.

(xiii) Impairment of assetsNon-financial assets

The carrying amount of the non-financial assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal /external factors. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. Impairment loss is recognised in the statement of profit and loss.

After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation / amortisation if there was no impairment.

Financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised on initial recognition of the receivables.

(xiv) Employee benefits

All short term employee benefits are accounted on undiscounted basis during the accounting period based on services rendered by employees and recognised as expenses in the Statement of Profit and Loss.

The Company''s contribution to Provident Fund and Employees State Insurance Scheme is determined based on a fixed percentage of the eligible employees'' salary and charged to the Statement of Profit and Loss on accrual basis. The Company has categorised its Provident Fund and the Employees State Insurance Scheme as a defined contribution plan since it has no further obligations beyond these contributions.

The Company''s liability towards gratuity, being defined benefit plan is accounted for on the basis of an independent actuarial valuation using the projected unit credit method, done at the year end. Gratuity liability is not funded and the payments are made to the employees directly when they leave the organisation post completion of 5 years of service or at the time of retirement (with minimum 5 years of service), whichever is earlier.

Service cost and the net interest cost is included in employee benefit expense in the Statement of profit and loss. Actuarial gains and losses arising on the measurement of defined benefit obligation is credited/charged to other comprehensive income.

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

(xv) Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on management estimate of the amount required to settle the obligation at the Balance Sheet date. These

are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

Contingent assets are not recognised in the financial statements. However, it is disclosed only when an inflow of economic benefits is probable.

(xvi) Earnings per share

Basic earnings per share are computed by dividing net profit after tax (excluding other comprehensive income) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing net profit after tax (excluding other comprehensive income) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share.

(xvii) 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.

(xx) 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

(xviii) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting, nature of the products / process, organisation structure as well as differential risks and returns, using the information provided to the board of directors and chief operating officer, together, the chief operating decision maker (''CODM'').

(xix) 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 nonmarket 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.

recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from retained earnings.

(xxi) Share issue expense

The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction.

(xxii) Standards issued but not effective

There are no standards that are issued but not yet effective on 31 March 2022.