DEMOCRATISING PROGRESS

ANNUAL REPORT

© 2024 PhonePe Private Limited. All rights reserved.

 CONTENTS
1. LETTER FROM THE CEO 01

2. WHAT WE ARE TRYING TO ACCOMPLISH 02

Our Vision 03
The Businesses We Are In 05

3. HOW WE ARE BUILDING A GREAT COMPANY 07

Culture and Values 08

Our Leadership Team 09

Our Investors 10

Corporate Structure 10

Board & Committee Structure 11

Governance & Regulatory Compliance 13

4. HOW WE ARE BUILDING GREAT PRODUCTS 14

Technology Infrastructure 15

Core Platforms 16

Data Intelligence 17

Resilience @ PhonePe 17

5. HOW WE ARE BUILDING A GREAT BUSINESS 18

Indian Digital Payments - Industry Outlook 19

Operating Performance 20

Financial Performance 21

6. STATUTORY REPORTS AND FINANCIAL STATEMENTS 25

Board’s Report and Annexures 28

Standalone and Consolidated Financial Statements 52

| ANNUAL REPORT | AUGUST 2024

 By 2015, when Rahul, Burzin and I started PhonePe, it was clear that India was on the cusp of a tectonic shift that
promised to not only turbocharge India’s digital economy, but also play an instrumental role in positively transforming
a billion lives.

Rapid penetration of affordable smartphones, access to low-cost high-speed Internet service, forward-looking
governmental policies such as the PM Jan Dhan Yojana and ongoing investments in Digital Public Infrastructure (DPI)
such as Aadhaar were creating unique tailwinds for population-scale financial inclusion solutions to be developed in
India.

At PhonePe, our ambition is to build Internet platforms that help all Indian citizens improve their lives, realize their
aspirations and unlock their true potential.

From providing access to affordable Insurance, formalized Credit, and customized Wealth Management products, to
powering growth of Micro, Small and Medium Enterprises (MSMEs) via Pincode, and developing a Made-for-India app
store via Indus Appstore, we believe that continuous innovation is the key to building a modern, developed economy by
the hundred-year anniversary of India’s independence.

We believe that free market competition and an environment where businesses compete through product innovation
and service offerings will drive the future.

Doing so requires us to place transparency at the center of our business. This is why we are proud to publish our first
annual report.

A couple of years ago, when we decided to make our data publicly available through PhonePe Pulse, many questioned
the logic of sharing all our data, down to the PIN code level, with the world. Our view was - and remains - that as a market
leader, we should be transparent and shed light on how and why we do business.

This annual report is another step in that direction, and we hope that it will give
readers a better understanding of our operating philosophy, culture and
governance model, and our business strategy. I hope you enjoy reading it!

Sameer Nigam
Co-Founder & CEO, Whole-time Director, PhonePe

LETTER FROM
THE CEO
01 | ANNUAL REPORT | AUGUST 2024
WHAT WE ARE TRYING
TO ACCOMPLISH
 WHAT WE ARE TRYING TO ACCOMPLISH

Our Vision
Our vision is to offer every Indian equal opportunity to accelerate their progress by unlocking the flow of
money and providing access to goods and services digitally.

At a societal level, we aspire to contribute meaningfully and substantively to India’s goal of becoming the
world’s third largest economy, fueled by a digital ecosystem that contributes a trillion dollars to GDP by
2030(1).

At a corporate level, we aspire to build an iconic, multi-generational Indian company that solves population
scale problems, across multiple sectors.

To realize our vision and aspirations, PhonePe is building world-class digital platforms across multiple
sectors, in a safe, secure and affordable manner so that all 1.4 billion Indians can use our services.

03 (1) Source: Economic Times | ANNUAL REPORT | AUGUST 2024

 WHAT WE ARE TRYING TO ACCOMPLISH

Our journey started with the launch of the PhonePe digital payments app in 2016. It was the country’s first
Unified Payments Interface (UPI) based payments app launched by a non-bank fintech company. Over these
past eight years, we have revolutionized the way digital payments are made and received, providing
convenience and security for both consumers and merchants across the length and breadth of the country.

Here are a few stories of the different ways in which PhonePe is helping transform lives across India,

Anita: R e d u c i n g f r i c t i o n i n h e r e ve r yd ay l i f e

Anita, a working mom and busy executive in Delhi, uses the PhonePe
app’s UPI mandate feature to schedule all her regular household bill

CONSUMERS
and rent payments. The Bharat Bill Payment System (BBPS),
integrated within PhonePe, provides her with instant confirmation
every time a bill is paid, ensuring peace of mind in an otherwise
hectic schedule.

Kupamma: P rov i d i n g fi n a n c i a l i n c l u s i o n & s e c u r i t y t o a l l

Kupamma, a cook in Dharward working in multiple homes/houses,

now receives all her salaries and pays her monthly rent using
PhonePe. For Kupamma, who previously relied on cash payments
only, storing her cash safely was a constant worry. Now, thanks to
PhonePe and UPI, her salary is deposited directly into her bank
account, making her financial transactions more safe, secure and
trackable.

Het Ram Vinay Kumar: M o re c u s t o m e r s a l e s a n d s m i l e s

Nitin is a PhonePe merchant partner who runs a store in Main Bazaar,

Leh Ladakh. Since he joined the PhonePe network, his daily
customers, especially tourists, have increased. He also makes fewer
visits to the bank since customer payments are directly transferred
to his bank account now. Customers, especially tourists, are also
MERCHANTS

happier since they don’t need cash to spend at his store.

Parmar Boot House: M a n a g i n g a c h a i n o f s t o re s s e a m l e s s l y

Chintan Parmar runs the Parmar Boot House in Gujarat. With

PhonePe’s merchant solutions, he now gets real-time verification of
successful customer payments across all his 18 stores in Gujarat. The
streamlined payment process has saved him and his staff considerable
time, boosting the company’s operational efficiency and bottom-line.

04 | ANNUAL REPORT | AUGUST 2024

 WHAT WE ARE TRYING TO ACCOMPLISH

The Businesses
We Are In

Made in India, By Indians, aspirations of India’s next generation of digital

natives.
For Indians
The PhonePe Group is now a diversified portfolio of
PhonePe has always been India-first in its focus and businesses, that is well poised to leverage India’s
ethos consumption and digital-led growth model (See
Exhibit 1).
We are domiciled in India, with one hundred
percent operational control based in India.
Exhibit 1: PhonePe Business Portfolio

We have generated 22,000+ jobs across India Financial Services New Consumer
Distribution Platforms
and employ 1,500+ of the country’s finest
engineers who are building world-class
Insurance
technology solutions to power India’s digital
payments revolution.
Core: Payments
Credit Business

We have invested over INR 2,800 Crore in

infrastructure CapEx (e.g., servers, data Mutual Funds
centers) across multiple locations in India.
On Payments App On Separate Apps

Our entire Payments technology stack runs

exclusively on local data centers. Our core PhonePe app allows consumers to send
and receive money, make bill payments, book travel
Our entire Payments data is 100% localized and transit tickets and much more.
and only resides in India.
The PhonePe app also allows our customers to
We have developed a world-class, Made in seamlessly pay for purchases at over 4 Crore online
India, technology stack that powers digital and online merchant locations across India, and at a
payments across the country. rapidly growing international UPI acceptance
network.
We remain an early adopter of most India’s
DPI initiatives, being amongst the largest In the last few months, we have expanded globally
players in the UPI, Bharat Bill Pay Systems, with partnerships in 6 countries (Singapore, United
Account Aggregator, ONDC and other such Arab Emirates, Nepal, Sri Lanka, Bhutan and
Made in India DPI ecosystem. Mauritius), thus enabling UPI payments for our
consumers traveling abroad.
We have made several industry-leading
investments with a focus on product On the back of our success in payments, we began
innovation and fostering free market distribution of financial services - Insurance, Credit,
competition in the Indian consumer Internet and Wealth products. We have done so by
economy – best exemplified by the launch of leveraging our distribution advantage with both
the Indus Appstore, India’s first Android app consumers and merchants. A key enabler has been
store and one of the first companies globally our investments in a multi-tenanted technology
to challenge Google Playstore’s virtual stack that can be adapted not only for new use
monopoly in the Indian market. cases, but also across multiple businesses. The
combination of our distribution and technology has
Moving forward, PhonePe will continue to create allowed us to enter and scale our financial services
homegrown solutions that enable the ambitions and businesses efficiently.

05 | ANNUAL REPORT | AUGUST 2024

 WHAT WE ARE TRYING TO ACCOMPLISH

Discipline matters in these sectors, and we remain committed to growing these businesses in a measured and
sustainable manner. This is critical to ensuring our partners and our regulators are comfortable with the pace,
quality, and nature of growth.

While payments and financial services remain the more mature parts of PhonePe, we have also made next-gen
investments in emerging business lines that we believe are critical to solving for India’s long-term success.

Through Pincode, we are offering Offline Stores access to high quality real-time inventory management, order
management and logistics capabilities that previously were available only to closed loop, vertically integrated
ecommerce platforms. Pincode’s mission is to help neighborhood stores directly participate in the burgeoning
hyperlocal ecommerce market.

Similarly, in the app store market, PhonePe recognized the need for a homegrown competitor and made the
bold choice of launching the “Indus Appstore” - India’s first and only indigenous app store.

Indus Appstore localizes the experience for India’s vast and diverse consumer base, allowing consumers to
discover apps conveniently in 12 Indian languages, which represents 93% of India’s language preferences.(2)

Indus Appstore also allows app developers to choose any 3rd-party payment gateway for their in-app billing
needs. While we believe that PhonePe’s own Payment Gateway (PG) is amongst the best in the country,
consumers and app developers should still have a choice in deciding which payment tools they wish to use, and
that app stores should not insist on app developers exclusively using their proprietary payment solutions.

This approach is consistent with our core operating philosophy: progress is driven by free market competition
where businesses compete through product innovation and service offerings.

06 (2) Source: Indian Government Language Census | ANNUAL REPORT | AUGUST 2024
HOW WE ARE BUILDING
A GREAT COMPANY
 HOW WE ARE BUILDING A GREAT COMPANY

Culture and Values

PhonePe aspires to build a multi-generation company that all its societal stakeholders - employees, customers,
partners and investors - are proud of. The foundational bedrock for creating such an iconic and durable
company lies in fostering great culture and embedding strong values within the organization from an early
stage.

Accordingly, we adopted a set of 14 values very early on, and these values continue to guide our employees’
behavior as an organization every day.

• Our first value is Integrity - Integrity and honesty are the price of admission to PhonePe and we follow a
zero-tolerance policy towards bribery, corruption, dishonesty, discrimination and internal politics.

• The next 6 values are related to how we conduct our business. These values guide our business models and
decision-making process. For example:
Positive Disruption - we build open, inclusive and empowering business models that benefit all ecosystem
participants.
Learn Fast. Fail Fast - PhonePe’s road to success is paved with multiple failures like the PhonePe
Calculator, Merchant-ATMs, Switch platform etc. We celebrate our product successes and failures equally,
and never hesitate to innovate.

• Finally, we have defined values, specific to the “organizational context in which an employee is operating”.
For example:
Company-level values such as Perseverance & Conviction, which allow us to focus on long-term,
sustainable value creation.
Team-level values such as Collaboration to hold the organisation’s goals above those of the team.
Individual values such as Learn More. It’s Free! that encourage our employees to stay hungry to acquire
new skills and experiences.

Read the Code of Conduct here to better understand PhonePe’s culture and ethos.

Company-level
Primary Value

Values
Individual Values

Team Level
values
Conduct Business
How We

08 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT COMPANY

Our Leadership Team

Long-term tenures at the leadership level help build an unparalleled level of trust and alignment of vision
throughout the larger organization. Stability at the top also allows us to navigate our dynamic competitive
environment more seamlessly. The trust and stability at the top have resulted in multiple benefits for
PhonePe, as the company has scaled and spawned new businesses. Many of our leaders have helmed different
businesses over time and have rotated from large successful verticals to new nascent opportunities. Also,
the leadership team has a diverse set of professional skills, ranging from building cutting-edge technology
startups to managing national supply chains to working at hedge funds. This diversity gives us the confidence
to compete across a wide spectrum of business segments successfully. (See Exhibit 2 & 3)

Exhibit 2: Organisation Structure: Horizontal Functions

Aniruddha
Manmeet Patwardhan
Adarsh Nahata Sandhu Head of
C FO HR
Engineering,
Consumer
Payments

1 2 ye a r s 5 ye a r s 1 2 ye a r s

Shalini C Srijon Biswas

Head Of
Compliance Engineering, BFSI

4 ye a r s 1 2 ye a r s

Sameer Nigam 2 7 ye a r s Rahul Chari

CEO C TO

Parag Mathur Santanu Sinha

Legal C h i e f A rc h i t e c t

6 ye a r s 1 2 ye a r s

Karthik R
S t ra t e g y Priya Patankar Burzin Engineer
Communications CRO
& IR

17 ye a r s
9 ye a r s 2 3 ye a r s

X years: Tenure of relationship with the founders

Exhibit 3: Organisation Structure: Business Functions

8 ye a r s 8 ye a r s

Priya Narasimhan Ritesh Pai

C B O, I n d u s A p p s t o re C E O, P h o n e P e
International

7 ye a r s 3 ye a r s

Vivek Lohcheb Ujjwal Jain

C E O, P i n c o d e C E O, S h a re . M a r k e t

Sameer Nigam 2 7 ye a r s Rahul Chari

CEO C TO

Yuvraj Singh
Shekhawat Hemant Gala
C E O, L e n d i n g
C B O, M e rc h a n t
Payments

8 ye a r s 1 0 ye a r s

Sonika Chandra Vishal Gupta

C B O, C o n s u m e r C E O, I n s u ra n c e
Payments

6 ye a r s 1 2 ye a r s
X years: Tenure of relationship with the founders

09 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT COMPANY

Our Investors Corporate Structure

PhonePe has attracted an incredible set of high Just like having the right culture, leadership, and
quality, marque investors, who have invested over investors are essential ingredients in building a
INR 18,000 Crore in the company till date. great company, it is also important to have a
proper corporate structure that best reflects the
Led by our majority shareholder, Walmart Inc, our company’s long-term strategy and focus.
list of investors includes some of the most iconic
strategic investors, sovereign funds and Private In a series of corporate restructuring actions,
Equity investors globally: starting in 2022, PhonePe first moved its domicile
from Singapore to India permanently, and then
further set up separate Indian subsidiaries to
house each of our new core businesses.

The domicile was changed to India, because we

strongly believed that as a homegrown and highly
regulated Indian fintech company, we should
eventually publicly list in the Indian bourses. Our
investors, led by Walmart, paid almost INR 8,000
Crore (close to USD 1 Bn) in taxes to the Indian
government to affect PhonePe’s domicile shift to
India.

Today, “PhonePe Private Limited” houses our core

Payments business. It is also the holding company
for all our other businesses (See Exhibit 4).

PhonePe Insurance
Broking Services

Exhibit 4: PhonePe
(3)(4) Lending Services
Corporate Structure

PhonePe Wealth
Broking Services

Private Limited
(incl. Payments & Advertisements)

Pincode
Shopping Solutions

Indus Appstore

PhonePe
Technology Services
(Account Aggregator)

We have consciously chosen to house each of

these subsidiaries in a separate entity, with its own
CEOs, to ensure more independence to each
We are fortunate to have such high-quality investors business’s leadership teams, better local corporate
backing us in our mission. Without their patient governance accountability, and finally more
long-term support, it would not have been easy to transparency by creating clear arms-length
pursue our vision of bringing financial inclusion to separation and cross-charging mechanisms across
every Indian. businesses.

10 (3) The text appearing within brackets specifies entity names. (4) All entities are private limited. | ANNUAL REPORT | AUGUST 2024
 HOW WE ARE BUILDING A GREAT COMPANY

Board and Committee Structure

PhonePe Group is governed by a professional Board of Directors, along with its Committees:

• Audit Committee
• Risk Management Committee
• Nomination & Remuneration Committee
• Related Party Transactions Committee
• Investment Committee.

Rohit Bhagat, C h a i r p e r s o n o f t h e B o a rd
R o h i t B h a g a t s e r v e s a s t h e C h a i r p e r s o n o f P h o n e P e ' s B o a rd o f
Our Origins
D i re c t o r s . M r. B h a g a t h a s o v e r t h re e d e c a d e s o f b u s i n e s s e x p e r i e n c e
i n c l u d i n g C h a i r m a n , A s i a P a c i fi c f o r B l a c k R o c k , G l o b a l C h i e f O p e ra t i n g
O ffi c e r f o r B a rc l a y s G l o b a l I n v e s t o r s , a n d c o - H e a d o f U S F i n a n c i a l
S e r v i c e s , a n d M a n a g i n g P a r t n e r, I n d i a f o r T h e B o s t o n C o n s u l t i n g G ro u p.
H e c u r re n t l y a l s o s e r v e s a s a n I n d e p e n d e n t D i re c t o r / T r u s t e e o n t h e
b o a rd s o f A s s e t M a r k , F ra n k l i n Te m p l e t o n E T F T r u s t a n d M e e s h o I n c . H e
h o l d s a n M BA f ro m t h e Ke l l o g g S c h o o l , N o r t h w e s t e r n U n i v e r s i t y, a n
M S E f ro m T h e U n i v e r s i t y o f Te x a s a t A u s t i n a n d a B .Te c h f ro m t h e I n d i a n
I n s t i t u t e o f Te c h n o l o g y, D e l h i .

Tarun Bajaj, Chairperson of the Risk Management Committee

T a r u n B a j a j b e l o n g s t o t h e I n d i a n A d m i n i s t ra t i v e S e r v i c e , 1 9 8 8 ,
H a r ya n a C a d re . H e wa s t h e R e v e n u e S e c re t a r y w i t h i n t h e F i n a n c e
M i n i s t r y o f t h e G o v e r n m e n t o f I n d i a w h e re h e wa s re s p o n s i b l e f o r
va r i o u s i m p o r t a n t p o l i c y m a t t e r s re l a t e d t o re v e n u e c o l l e c t i o n a n d
t a x a t i o n . M r. B a j a j h a s a B a c h e l o r ’ s D e g re e f ro m S h r i R a m C o l l e g e o f
C o m m e rc e , D e l h i U n i v e r s i t y, a n M BA f ro m I I M A h m e d a b a d , a n d a
P o s t g ra d u a t e d e g re e f ro m t h e L o n d o n S c h o o l o f E c o n o m i c s a n d
Political Science.

Binny Bansal
B i n n y B a n s a l c o - f o u n d e d F l i p k a r t i n 2 0 07, p l a y i n g a p i v o t a l ro l e i n
e s t a b l i s h i n g i t a s I n d i a ’ s l e a d i n g e - c o m m e rc e m a r k e t p l a c e . I n 2 0 1 8 , a s
G ro u p C E O, h e s t e e re d F l i p k a r t t o c l o s e t h e l a rg e s t g l o b a l M & A d e a l i n
e - c o m m e rc e w h e n Wa l m a r t a c q u i re d a m a j o r i t y s t a k e i n t h e c o m p a n y a t
a n e n t e r p r i s e va l u a t i o n o f U S $ 2 2 b i l l i o n . M r. B a n s a l a l s o c o - f o u n d e d
X t o 1 0 X Te c h n o l o g i e s , a c o m p a n y t h a t h a s h e l p e d 3 5 0 + s t a r t u p s a c ro s s
t h e g l o b e s c a l e m e a n i n g f u l l y i n t o w o r l d - c l a s s c o m p a n i e s . M r. B a n s a l i s a
p h i l a n t h ro p i s t , s e r i a l e n t re p re n e u r, p ro l i fi c i n v e s t o r, a n d a c t i v e m e n t o r
in the startup ecosystem.

Leigh Hopkins, Chairperson of the Audit Committee

L e i g h H o p k i n s i s t h e f o r m e r E V P o f I n t e r n a t i o n a l S t ra t e g y a n d R e g i o n a l
C E O f o r Wa l m a r t ’ s A s i a b u s i n e s s e s a n d Wa l m e x . D u r i n g h i s 1 5 y e a r
c a re e r w i t h Wa l m a r t , L e i g h wa s re s p o n s i b l e f o r I n t e r n a t i o n a l M & A ,
R e a l E s t a t e a n d S t ra t e g y F u n c t i o n s . P r i o r t o Wa l m a r t , L e i g h w o r k e d a s
a n I n v e s t m e n t B a n k e r f o r 17 y e a r s . L e i g h i s n o w a C o n s u l t a n t t o a n d a
B o a rd M e m b e r o f va r i o u s b u s i n e s s e s a n d n o n - p ro fi t s .

11 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT COMPANY

Donna Catherine Morris

C h a i r p e r s o n o f t h e N o m i n a t i o n a n d R e m u n e ra t i o n C o m m i t t e e

D o n n a C a t h e r i n e M o r r i s i s E x e c u t i v e V i c e P re s i d e n t a n d C h i e f P e o p l e
O ffi c e r f o r Wa l m a r t . A m e m b e r o f t h e e x e c u t i v e c o m m i t t e e , M s .
M o r r i s i s s t r i v i n g t o m a k e Wa l m a r t a g re a t p l a c e t o w o r k f o r t h e m o re
t h a n 2 0 L a k h a s s o c i a t e s a ro u n d t h e w o r l d . S h e j o i n e d Wa l m a r t i n
2 0 2 0 f ro m A d o b e , w h e re s h e s e r v e d a s C h i e f H u m a n R e s o u rc e s
O ffi c e r a n d E x e c u t i v e V i c e P re s i d e n t o f e m p l o y e e e x p e r i e n c e . D o n n a
h a s a B a c h e l o r ’ s D e g re e i n P o l i t i c a l S c i e n c e f ro m C a r l e t o n U n i v e r s i t y.

John David Rainey JR

J o h n D a v i d R a i n e y i s t h e E x e c u t i v e V i c e P re s i d e n t a n d C h i e f Financial
O ffi c e r f o r Wa l m a r t . H e i s re s p o n s i b l e f o r Wa l m a r t ’ s fi n a n c i a l
o p e ra t i o n s , c o r p o ra t e s t ra t e g y, g l o b a l p ro c u re m e n t , a n d investor
re l a t i o n s . P re v i o u s l y, M r. R a i n e y wa s t h e C FO o f P a y P a l p r i o r to which
h e wa s t h e C FO o f U n i t e d A i r l i n e s . J o h n D a v i d e a r n e d h i s M BA a n d
B a c h e l o r o f B u s i n e s s A d m i n i s t ra t i o n f ro m B a y l o r U n i v e r s i t y.

Sameer Nigam
S a m e e r N i g a m i s t h e C o - F o u n d e r a n d C h i e f E x e c u t i v e O ffi c e r o f
P h o n e P e . B e f o re P h o n e P e , h e s e r v e d a s t h e S V P E n g i n e e r i n g a n d V P
Marketing at Flipkart. His Flipkart journey started in 2011 when the
c o m p a n y a c q u i re d h i s e a r l i e r s t a r t u p - M i m e 3 6 0 , a d i g i t a l m e d i a
d i s t r i b u t i o n p l a t f o r m . H e h o l d s a n M BA f ro m t h e W h a r t o n B u s i n e s s
S c h o o l ( U n i v e r s i t y o f P e n n s y l va n i a ) , a n d a M a s t e r ’ s d e g re e i n
C o m p u t e r S c i e n c e f ro m t h e U n i v e r s i t y o f A r i z o n a .

Rahul Chari
R a h u l C h a r i i s t h e C o - F o u n d e r a n d C h i e f Te c h n o l o g y O ffi c e r o f
PhonePe. He comes with two decades of experience spanning
e m b e d d e d s y s t e m s , e n t e r p r i s e s o f t wa re d e v e l o p m e n t , e - c o m m e rc e
platforms and apps. Prior to PhonePe, he served as the VP Engineering
a t F l i p k a r t a n d wa s re s p o n s i b l e f o r b u i l d i n g t h e b e s t - i n - c l a s s s u p p l y
c h a i n s y s t e m f o r e - c o m m e rc e . R a h u l h o l d s a M a s t e r s d e g re e i n
C o m p u t e r S c i e n c e f ro m P u rd u e U n i v e r s i t y a n d a B a c h e l o r ' s d e g re e
(G o l d M e d a l l i s t ) i n C o m p u t e r E n g i n e e r i n g f ro m B o m b a y ( M u m b a i )
U n i v e r s i t y.

Our Board of Directors represent a diverse mix of work experiences spanning several continents, industries,
sectors and fields. Collectively, the Board of Directors steers the company’s long-term strategy, governance
and organizational health.

12 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT COMPANY

Governance & Regulatory Compliance

Over the past decade PhonePe has also invested heavily in building world-class institutional practices and
best-in-class teams across key governance functions including Finance, Regulatory Compliance, Internal
Audit, Cybersecurity, Legal, Data Privacy, Statutory Compliance, and Fraud & Risk Assessment.

Given its business interests across multiple financial service sectors, the company is also heavily regulated.
At a group level, we collectively have multiple licenses (See Exhibit 5) from across all major Indian financial
regulators - Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Insurance
Regulatory & Development Authority of India (IRDAI).

PhonePe Group companies undergo close to 40 regulatory & statutory audits and certifications annually. We
take our responsibility seriously and continue to invest resources to ensure that we set the gold standard for
governance and compliance not only in India, but the world.

Exhibit 5: Licenses held by PhonePe

Payment Aggregator (RBI) Pre-Paid Instrument (RBI)

Operate in-path payment settlement systems Issue & operate a wallet of our own

Bharat Bill Payment Operating Account Aggregator (RBI)

Unit (RBI) Share consented data from FIP to FIUs
Directly work with billers as an aggregator

Insurance Broking (IRDAI) KYC User Agency (UIDAI)

Tie up all insurers and distribute policies KYC customers based on Aadhaar card

Stock Broking (SEBI) Research Analyst (SEBI)

Operate a stock trading platform Provide wealth product recommendations

We follow a three-tiered governance model.

• Business teams own the first line of defense.

• A large, independent risk management and compliance team operates at an arms-length from business
operations, but partner with business teams, to ensure objectivity and strong compliance.
• A totally independent Internal Audit team provides the third line of defense.

Our governance culture is built around a commitment of transparency to all our stakeholders - regulators,
investors, business partners, and employees. This culture of transparency also influences how we share data.
For example, PhonePe launched Pulse(5), a global-first, open-source repository of up-to-date district and
pincode level data on digital payments across India.

13 (5) visit: https://www.phonepe.com/pulse/ | ANNUAL REPORT | AUGUST 2024

HOW WE ARE BUILDING
GREAT PRODUCTS
 HOW WE ARE BUILDING GREAT PRODUCTS

In today's world, open-source software for building Our in-house technology efforts can be categorized
applications, low-cost public cloud infrastructure into three main areas (See Exhibit 6):
services, and hosted pay-as-you-go business 1. Technology Infrastructure
solutions have made the barrier to entry for building 2. Core Platforms
consumer internet businesses very low. However, 3. Data Intelligence
being able to handle immense scale in a highly
efficient and performant manner is still a massive These define the common denominator technology
differentiator that creates an enduring competitive for all the products and businesses that we build. Our
advantage in the Consumer Internet sector. ability to scale our core businesses quickly as well as
Additionally, there are multiple other advantages to launch new ones with incredible speed is a standing
building and operating one’s own hardware testimony to the quality and robustness of the
infrastructure, including easier compliance with the numerous platforms we have built over the years.
Data Localization norms of financial regulators, and
being able to optimize our infrastructure costs at
scale. When we launched the PhonePe app in 2016,
we designed our payments platform around this core
design principle, so that it could scale seamlessly to
tens of millions of users and transactions.

This early investment in building a future-provisioned

payments platform meant that, with just limited
incremental improvements to the system, we have
been able to successfully scale our day one
architecture to support a registered user base of
more than 50 Crore, processing more than 25 crore
daily payments transactions. Our platform
architecture choices have also allowed us to keep
innovating rapidly on top of the core payments layer,
to deliver numerous first-to-market solutions for our
users. Today PhonePe powers 35+ crore app-opens
on a daily basis, driving more than 7 lakh requests
Technology
per second to our servers, generating more than
8,000 crore events per day as signals of interest.
Infrastructure
Nowadays, most nascent Internet companies are
building on top of 3rd-party cloud infrastructure.
While this model works for a lot of startups, being in
the highly regulated BFSI domain we decided to build
our own technology infrastructure in co-location
facilities where we own and operate our entire
hardware footprint. This early strategic choice served
us really well, since we were already fully data
localized well before the RBI mandated the same.

We were always very clear that sensitive consumer

data generated from processing billions of payments
transactions must reside locally within the
geographical boundaries of the country.

Also, we always had the bold ambition of becoming

India’s largest digital payments company, which
meant that the cost of leveraging public-cloud
infrastructure would eventually become exorbitant

PhonePe’s
TECH JOURNEY
By Rahul Chari
Co-Founder & CTO, Whole-time Director, PhonePe

15 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING GREAT PRODUCTS

and highly inefficient. So investing in our own • We are taking giant strides to ensure sustainability
Infrastructure made both long-term financial and in our ever increasing Data Center footprint. We
strategic sense for us. have built India's first large scale alternative
cooling Data Center using Direct Contact Liquid
Today our hardware footprint covers close to 7 Lakh Cooling (DCLC) and Liquid Immersion Cooling (LIC).
cores under management across 3 different data Equipped with this state-of-the-art smart cooling
centres in India, with our own software stack technology, we are becoming more energy efficient,
designed to deliver Infrastructure-As-A-Service (IaaS) saving significantly on electricity consumption and
to the rest of the technology organization. This are substantially reducing the company’s carbon
ensures that compute, storage and networking footprint.
infrastructure along with the hypervisor for compute
is managed centrally for efficient deployment and
usage.

Exhibit 6: IP as SaaS for agility in new product development

Technology
Core Platforms Data Intelligence
Infrastructure

Login with PhonePe CRM(6) Offer Engine / Referral

Faster login, Lower drop-offs at the time of user Driving growth, app adoption and awareness Multi-variate offer configuration at a cohort
creation. Plus, saved user address and payment through consumer journeys and cohort level level, offer manifestation/ application and
preference, enable us to offer a seamless data-led messaging. disbursement.
payment experience.

App Device Security FRA and KYC Services(7)(8) Advertisements

KYC: Large KYCed merchants base, enables us to Banner: Ad space management, location or
Allows for user/ Cohort level personalisation, A/B onboard any store on the seller platform within preference-based targeting. Rewards: Targeted
testing, real-time app level changes. minutes. FRA: Close to 300 Mn user profiles distribution, search-based coupon destination.
enables proactive fraud prevention.

B2B Payment Gateway CX(9) Data Infra / Analytics

Plug-and-play integration with the full payments Bot automation plus issue-response logic tree Low effort / costs (Just 7 days from Launch) to
stack (entire cycle from payments to invoicing to enable us to deliver fast, cost efficient and setup entire journey from capturing events to
settlements) along with peripheral payment satisfactory resolution to customer tickets. data warehousing to building analytics /
products like mandates. intelligence platforms on top.

Benefits of building and managing

our own Tech Infra:
Core Platforms
• Managing our own infrastructure boosts our Our Core Platforms power horizontal capabilities that
ability to meet the dynamic control and audit are foundational to all products and businesses in the
requirements of any new regulated business that PhonePe Group. These platforms can be classified as
we enter with 100% confidence of being compliant. either PaaS (Platform-as-a-Service) and SaaS
(Software-as-a-Service).
• We don’t have to deal with hardware abstraction
layers that public-cloud companies impose, leaving Scale, Performance and Reliability - are the primary
us free to maximize performance and efficiency, and focus areas for our Core Platforms teams. The north
build critical customizations like physical location star metrics for these focus areas are total volume of
awareness for Disaster Recovery (DR) / Business transactions, transactions processed per second and
Continuity Planning (BCP) and custom security and the success rate of transactions, respectively. The
compliance practices in deployment to meet our pursuit of excellence for the Core Platforms teams,
regulatory requirements. leads us to continuously raise the performance
benchmark of systems against these metrics.
• We can also constantly improve our CapEx
efficiency by deploying servers with denser CPUs, • PaaS: Core Payment services, Accounting & Payout
more memory, and larger and faster storage to systems are a few examples. These systems are in the
minimize our hardware footprint without real-time processing path across all transactions and
compromising performance. are therefore classified as mission-critical. Core

(6) CRM - Customer Relationship Management (7) FRA - Fraud & Risk Assesment
16 (8) KYC - Know Your Customer (9) Cx - Customer Support | ANNUAL REPORT | AUGUST 2024
 HOW WE ARE BUILDING GREAT PRODUCTS

Payments process more than 25 crore transactions Our Knowledge Stores are high-throughput, steam
on a daily basis with a peak of more than 12,000 computation data stores, powering real-time
transactions per second. The Accounting system decisioning based on a variety of variables for a
computes real time settlement entries for all specific user or a cohort of users. An example is,
payment transactions and powers more than 3 “Yatra”, which is designed to track an individual
million merchant settlements on a daily basis. user's early journey on the PhonePe app and drive
programmatic nudges for new users to get easily
• SaaS: The “Login using PhonePe” service that acclimatized to the PhonePe App.
powers user authentication and profile
management across all group assets is a great
example of an internal SaaS platform. We have
strategically invested in building dozens of such
in-house SaaS over the years, and now we are able
to launch new products and applications using
these mature ready-to-deploy plug-ins much faster
than others. We do so at a reduced cost and lower
time to market. Each of our SaaS capabilities has the
potential to be externalized for the market. For
example, “Guardian by PhonePe” – our in-house Risk
and Fraud detection platform runs more than
3,000 crore evaluations daily, and now it’s being
externalized as a licensed product for the global
markets.
Resilience @ PhonePe
Exhibit 7: Scale, Performance To ensure that the PhonePe’s technology platforms
and Reliability of Core Platforms remain resilient to failures ranging from “Gray
failures” that are localized and intermittent, to
catastrophic failures that can impact an entire data
center or region, PhonePe follows a multi-tiered
approach to implementing business continuity.
Within a data center, resilience to localized failures
is achieved through redundancy at a hardware level
14 Lakh 1.7 Lakh 27 for storage, network and compute. All the
Requests per second Successful Peta Byte
at edge Traffic Payments/minute Data Warehouse databases are always sharded with deployment in a
rack-aware manner to ensure that database
availability with any planned or unplanned downtime
of servers is not impacted. Furthermore, multiple
application services with health monitoring to
automatically bring up new instances ensure end-to
-end high up-time within a site. For cross-site
redundancy, services operate in Active-Active mode
1800+ 8.5 7 Lakh or Active-Passive mode with a very low time to
Number of Petabyte of RAM Number of Cores failover in case of an outage. Capacity planning for
Services all sites is designed to handle the full workload of
any single site if necessary, even though the usual
practice is to distribute these requests evenly
across multiple data sites.
Data Intelligence
Starting with the vision of building India's largest
For a company to be data-driven, it has to have a transaction platform to becoming a group of
strong foundation in the collection, transformation, applications that are unified by the opportunity to
storage and processing of data at scale. Our data build on top of open APIs, distribute products and
strategy comprises a robust Data Warehousing services through population-scale reach and use
platform for all our (Online Analytical Processing) data to drive constant innovation, it has been a
OLAP workloads and a set of real-time stream journey that every technology leader dreams of
computation databases called Knowledge Stores (See Exhibit 7). In the process, we have not only
that power (Online Transaction Processing) OLTP built a treasure chest of technology IP but also a
like use cases. world-class engineering team that rivals the best of
best. We look forward to leveraging this strong
Our Data Warehousing Platform supports business foundation to continue building India’s digital
analytics, data science experimentation, partner economy. To learn more about specific technology
reporting and audit management across all PhonePe innovations at PhonePe please refer to
business lines. https://tech.phonepe.com/

17 | ANNUAL REPORT | AUGUST 2024

HOW WE ARE BUILDING
A GREAT BUSINESS
 HOW WE ARE BUILDING A GREAT BUSINESS

Indian Digital Payments - Digital payments are being embedded in all forms of
commerce, both offline and online, and India is also

Industry Outlook witnessing the progression from embedded

payments to embedded finance. As an increasing
number of merchants begin to accept digital
Digitalization is India’s superpower, opening doors to payments, it will unlock a significant change in
unimaginable opportunities for over a billion people. access to credit for consumers and merchants, using
Critical to meeting these goals, and furthering India’s the underlying payments infrastructure as the
economic aspirations, is a frictionless economy that “digital rails.”
accelerates the flow of money. This is where India's
digital payments and fintech ecosystem, led by UPI, till date, has been used as a direct bank-to-bank
PhonePe, play a pivotal role. debit instrument, but is now quickly expanding to
become the “digital rails” to distribute other
One of the key catalysts has been the rapid expansion payment products like Credit on UPI, Wallet on UPI,
of Digital Public Infrastructure (DPI) across the and Central Bank Digital Currency (CBDC).
country, of which UPI is the poster child.
For example, India’s domestic card network, RuPay,
The accelerated migration from cash to digital is now interoperable with UPI. RuPay Credit Cards
transactions, led by UPI, has been a game-changer have garnered instant acceptance (1) from
and a bellwether of India’s technological prowess. The merchants across the country, without RuPay having
adoption of UPI has been nothing short of to incur the cost, time, or logistics of deploying any
phenomenal (See Exhibit 8), making India the global new Point of Sale (POS) hardware, and (2) from
leader of digital payments and PhonePe the most customers who can simply link their RuPay cards on
popular UPI enabler. This represents a significant any UPI app such as PhonePe. This overnight
increase from previous years, showcasing the pan-India acceptance has helped RuPay cards gain
growing reliance on digital channels for financial exponential growth.
transactions.
These trends are only strengthening, and in the
coming years we anticipate that a new chapter in the
fintech revolution in India will unfold. This revolution
Exhibit 8: Industry UPI Transactions and TPV(10)
is already leading to an exponential increase in
access to Insurance, Credit, and Wealth
Management. In the same way the first wave led to
13,116 an exponential increase in access to digital
payments, we believe that the ongoing wave of
growth will fundamentally transform people’s access
to sophisticated financial services and products.
8,375 These products are the building blocks critical to
achieving the goal of a modern, developed economy
leading up to the hundred-year anniversary of India’s
4,597 independence.

2,233

1,252
539
92

FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24

109 877 2,132 4,104 8,417 13,920 19,986

Transactions (Crore) TPV (Thousand Crore)

Amidst India's G20 Presidency in 2023, UPI’s success

story and India’s digital prowess has garnered global
attention. The Indian government has already inked
30+ bilateral partnerships, enabling international UPI
acceptance in countries having sizeable trade, tourism,
and diaspora ties with India, including the UAE,
Singapore, Nepal and France, among others. PhonePe
has also played its role in this global expansion,
cementing strategic agreements from Singapore to
the United Arab Emirates, to enable seamless access to
digital payments for all Indian citizens traveling abroad.

From 50 Crore transactions a day, UPI is expected to

reach 200 Crore transactions a day by 2030(11).

19 (10) Source: NPCI (11) Source: Money Control | ANNUAL REPORT | AUGUST 2024
 HOW WE ARE BUILDING A GREAT BUSINESS

Operating Performance
Our flagship product, the PhonePe Digital Payments app was launched in Aug 2016. Over the last 8 years, we
have scaled rapidly to become India’s leading fintech company. As of March 2024, we have about 53 Crore
registered users, approximately 20 Crore monthly active customers, 50+ Lakh net payment devices deployed,
and we process 770+ Crore transactions monthly amounting to INR 10.5 Lakh Crore (USD 1.5 Tn on an
Annualized basis) in Total Payment Value (See Exhibit 9).

Exhibit 9: Key Operating Metrics

Registered User Base (Crore) Monthly Transactions (Crore) 772

53

11x
x
158
5
5

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Monthly Active Customers (Crore) Monthly Total Payment Value (INR Crore)
10,47,080
20

21x
151x
1
6,933

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Undoubtedly, the most satisfying aspect of our payments business is the democratized way in which this has
been achieved. More than 80% of our users and merchants are outside the top 8 districts of India. Payments
has truly reached every “nook and corner” of India (reference figure below) across various demographic
cohorts - location, affluence, gender, and age.

Please visit pulse.phonepe.com for further data and insights.

20 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT BUSINESS

Definitions of Key Operating Metrics

The number of unique users who downloaded the PhonePe

app life-till-date, and accepted the Terms and Conditions
Life till date Registered displayed during the onboarding process. The user is
Users identified by their mobile phone number - each unique
mobile phone number is treated as a separate user.

A customer is a registered user who makes a forward

Monthly Active Customers payment transaction. Users only receiving money are not
(MAC) counted as a customer. MAC is the count of unique
customers in a month.

Count of transactions processed in a month. A transaction

is a successful payment, either sent by a PhonePe
Monthly Transactions Customer or received by a PhonePe Registered Merchant.
Transactions made by a PhonePe Customer to a PhonePe
Registered Merchant are counted only once.

Monthly Total Payment Total amount or value (in rupees) of transactions

Value (TPV) processed in a month.

Count of Devices present with the merchants as on the

Net Payment Devices specified date. Devices constitute both Smart Speakers
Deployed and EDC (Electronic Data Capture) Machines.

Financial Performance 1. Predictable and Sustainable Growth in

Revenue:
In FY23-24, our revenue crossed INR 5,000 Cr
mark, as it grew 74% Y-o-Y, while turning adjusted At a Consolidated level, PhonePe has
PAT positive, i.e., PAT excluding costs related to demonstrated sustainable growth in Revenue
Employee Stock Options (ESOP). from Operations over the past five years from INR
184 Cr in FY18-19 to INR 5,064 Cr in FY23-24
The PhonePe Group recorded revenue of INR 5064 Cr which represents a CAGR of 94%.
for FY23-24 (fiscal year ending March 31, 2024)
which represents 74% top-line growth from FY22-23 2. Diversification of Revenue Streams:
revenue of INR 2914 Cr. The Group also reported an
Adjusted Profit After Tax (i.e., PAT excluding ESOP The PhonePe consumer app has become an
costs) of INR 197 Cr for FY23-24 versus INR 738 Cr essential part of our users’ lives, with a steady
loss for FY22-23. Furthermore, the standalone 99+% 30-day retention rate. The PhonePe
Payments business recorded Adjusted PAT of INR 710 Consumer app, offers a wide range of services to
Cr for FY23-24 versus INR 194 Cr loss for FY22-23. consumers, including Mobile Recharges, Bill
Payments, Peer-to-Peer money transfers, travel
We believe this achievement of top-line growth in bookings and transit payments. We have also
conjunction with sustainable bottom-line developed an in-house Ads platform that provides
improvement is a result of PhonePe’s focus on driving enhanced brand and performance marketing value
operating leverage through automation and cost to our advertisers.
efficiencies. PhonePe has been able to achieve growth
and diversification of revenue through a combination Since 2020, we have also started distributing
of market leadership, platform reliability and various financial services, including Mutual Funds,
cross-selling a diverse product portfolio. Gold SIPs, Insurance, and most recently Personal
Loans to PhonePe app customers. This has helped
Our financial strategy is anchored on three key pillars: further diversify our revenue streams.
(1) predictable and sustainable growth in revenue, (2)
diversification of revenue streams, and (3) continuous On the merchant side, we have started monetizing
improvements to the bottom line. These pillars have our vast national network of 4+ Crore merchants,
guided our strategic decisions, enabling us to scale by providing Smart Speakers (Voice based
rapidly while maintaining focus on profitability and a Payment Confirmation Devices) and launching our
healthy financial position. own EDC (Electronic Data Capture) devices.

21 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT BUSINESS

Apart from this, we also garner Digital Payment The above levers have delivered rapidly improving
subsidies in lieu of the zero MDR on UPI. The Indian operating leverage.
Government grants these subsidies to banks and
This approach has transformed our financial
digital payment players to support the Digital
performance, turning a Profit After Tax (“PAT”) loss
Payments sector. These subsidies contribute to
(excluding ESOPs) of INR 1,513 Crores in FY18-19
approximately 10% of our revenues. In summary,
into a profit of INR 197 Crores in FY23-24,
highly diversified revenue streams makes us more
underscoring our disciplined financial management
resilient against external changes, ensuring steady
and commitment to long-term shareholder value. In
and sustainable revenue growth quarter over
particular, our standalone Payments business has
quarter.
achieved a PAT (excluding ESOPs) profit of INR 710
Crores in FY23-24.
3. Continuing Improvements to the Bottom Line:
In conclusion, we believe a focus on disciplined
Focus on Automation - Despite significant
financial management will help us continue in the
external challenges over the past five years,
progression towards profitability, especially in our
including the “Zero MDR” law and the COVID-19
Payments business which by itself is a unique
pandemic, our relentless focus on process
aspiration in the Indian context. Furthermore, the
automation and unit economics has driven a clear
optimization of investments and capital allocation, in
path to profitability. From FY18-19 to FY23-24,
conjunction with building a diversified revenue model,
transactions surged over 40X, while our customer
and remaining customer-focused, will provide a solid
service team has reduced by 60% from
foundation for sustained future success.
approximately 1,100 to 400+ agents. This
efficiency was achieved by increasing automated
customer service issue resolutions powered by
AI-driven chatbots, to over 90%. This significant
cost savings was achieved without compromising
customer satisfaction in any way. In fact, our
customer NPS has grown meaningfully every year
over the last 5 years.

Focus on Cross Sell/Up Sell - Leveraging our

expansive UPI-based distribution network, we’ve
successfully launched and scaled Fintech
distribution services like Insurance and Mutual
Funds for customers, and EDI-based lending for
merchants. These cross-selling initiatives have
strengthened customer loyalty and differentiated
us in the market.

Focus on Reliability - Since inception, we have

operated with a strong belief that winning in Indian
digital payments requires best-in-class tech
reliability at massive scale. This conviction has led
us to core technology architecture decisions (as
described in Chapter 4) as well as resultant
financial decisions including the CapEx investments
we have made in our own data centres and servers.
Our CapEx oriented investment model has resulted
in significant long term financial benefits with lower
cost of operations (versus an opex model that relies
on third parties or cloud-based service providers).

Focus on Efficiency - In early 2019, we made the

strategic decision to drastically reduce payment
transaction incentives (Cashbacks), lowering
incentives from approximately INR 950+ Crs in
FY18-19 to INR 15+ Crs in FY23-24. We were also
the pioneers in introducing a nominal platform fee
on Recharges and utility transactions. Despite
these measures, we were able to hold on to our
retention ratios, driven by our customer-first
approach and industry-leading payment reliability.

22 | ANNUAL REPORT | AUGUST 2024

 HOW WE ARE BUILDING A GREAT BUSINESS

Consolidated Financials

Consolidated Financials Trajectory

Revenue from Operations, INR Crore PAT-excluding ESOPs Cost, INR Crore

5,064 197

-738
2,914 -828
-886
GR
CA
94%
1,646

-1,513 -1,565

690
372
184

FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24

FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24

Consolidated P&L Summary

P&L (INR Crore) FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24

Total Income (a + b) 246 427 726 1,693 3,085 5,725

a. Revenue from Operations 184 372 690 1,646 2,914 5,064

b. Other Income 62 55 36 47 171 661

Employee Benefit Expenses(12) 139 274 392 555 1,039 1,410

Other Expenses(13) 1,596 1,632 1,086 1,761 2,248 3,001

D&A 24 87 134 204 536 1,117

PAT-excluding-ESOPs -1,513 -1,565 -886 -828 -738 197

ESOPs 392 206 843 1,186 2,057 2,193

PAT -1,905 -1,772 -1,729 -2,014 -2,795 -1,996

(12) Excludes ESOPs

(13) Other Expenses include Other operating expenses,
23 finance costs net of share of profit from our associates.
| ANNUAL REPORT | AUGUST 2024
 HOW WE ARE BUILDING A GREAT BUSINESS

Standalone Financials

Standalone Financials Trajectory

Revenue from Operations, INR Crore PAT-excluding ESOPs Cost, INR Crore

710
4,910

-194

2,859 -609

GR
CA -885
%
93
1,640

-1,513 -1,565
690
372
184

FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24

FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24

Standalone P&L Summary

P&L (INR Crore) FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24

Total Income (a + b) 246 427 725 1,683 3,025 5,636

a. Revenue from Operations 184 372 690 1,640 2,859 4,910

b. Other Income 62 55 36 43 166 726

Employee Benefit Expenses(14) 139 274 392 528 882 1,159

Other Expenses(15) 1,596 1,632 1,085 1,563 1,840 2,739

D&A 24 87 134 202 497 1,028

PAT-excluding-ESOPs -1,513 -1,565 -885 -609 -194 710

ESOPs 392 206 843 1,167 1,914 1,876

PAT -1,905 -1,771 -1,728 -1,776 -2,108 -1,166

(14) Excludes ESOPs

(15) Other Expenses include Other operating expenses,
24 finance costs
| ANNUAL REPORT | AUGUST 2024
STATUTORY REPORTS
AND FINANCIAL
STATEMENTS
PhonePe Private
Limited
Board’s Report

FY 2023-2024
 STATUTORY REPORTS AND FINANCIAL STATEMENTS

CORPORATE INFORMATION
Board of Directors:

Mr. Rohit Bhagat [Director and Chairperson of the Board]

Mr. Binny Bansal [Director]

Ms. Donna Catherine Morris [Director]

Mr. John David Rainey JR [Director]

Mr. Leigh Douglas Hopkins [Director]

Mr. Rahul Chari [Whole-time Director]

Mr. Sameer Nigam [Whole-time Director and Chief Executive Officer]

Mr. Tarun Bajaj [Independent Director]

Company Secretary

Mr. Ankit G Popat

Statutory Auditor

S.R. Batliboi & Associates LLP

Registered Office
Office-2, Floor 5, Wing A, Block A, Salarpuria Softzone, Bellandur Village,
Varthur Hobli, Outer Ring Road, Bellandur, Bangalore, Bangalore South,
Karnataka, India, 560103

Website
https://www.phonepe.com/

27 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Dear Members,

The Directors are pleased to present the 12th (Twelfth) Board’s report pursuant to the provisions of the
Companies Act, 2013 (the “Act”) on behalf of the Board of Directors (the “Board”) of PhonePe Private
Limited (the “Company” or “PhonePe”) along with the standalone and consolidated Balance Sheet, Profit
and Loss account and Cash Flow statements, for the Financial Year (“FY”) ended 31 March 2024 (“FY
2023-24”).

OVERVIEW OF THE COMPANY

• The Company is a private limited company having its registered office situated at Office-2, Floor 5, Wing A,
Block A, Salarpuria Softzone, Bellandur Village, Varthur Hobli, Outer Ring Road, Bellandur, Bangalore,
Bangalore South, Karnataka, India, 560103. The Company was incorporated on 18 December 2012, under
the provisions of the Companies Act, 1956, and holds the Corporate Identification Number (“CIN”):
U67190KA2012PTC176031.

• PhonePe Group is India’s leading fintech company. Its flagship product, the PhonePe digital payments app,
was launched in August 2016. The Company has scaled rapidly to become India’s leading consumer and
merchant payments network. On the back of its leadership in digital payments, PhonePe Group has expanded
into financial services (Insurance, Lending, Wealth) as well as new consumer tech businesses (Pincode -
hyperlocal e-commerce and Indus App Store - India's first localized App Store). PhonePe has reached every
nook and corner of India and has become a household brand across all demographic cohorts – location,
affluence, gender, and age (visit pulse.phonepe.com for further data and insights).

Corporate actions undertaken during FY 2023-24:

• Raised an amount of INR 16,38,77,37,600 (Indian Rupees One Thousand Six Hundred Thirty-Eight Crores
Seventy-Seven Lakhs Thirty-Seven Thousand and Six Hundred only) by way of preferential issue cum private
placement;

• Received the required approvals for shifting the registered office from the State of Maharashtra to the
State of Karnataka at Office-2, Floor 4,5,6,7, Wing A, Block A, Salarpuria Softzone, Service Road, Green Glen
Layout, Bellandur, Bangalore South, Bangalore, Karnataka- 560103, India;

• Received the required approvals for shifting the registered office within the State of Karnataka at Office-2,
Floor 5, Wing A, Block A, Salarpuria Softzone, Bellandur Village, Varthur Hobli, Outer Ring Road, Bellandur,
Bangalore, Bangalore South, Karnataka, India, 560103;

• Ms. Judith Jane Mckenna (DIN: 09834492) ceased to be Director of the Company with effect from 31
January 2024; and

• Ms. Donna Catherine Morris (DIN: 07177193) and Mr. John David Rainey JR (DIN: 10464085) were
appointed as Nominee Directors and Mr. Tarun Bajaj (DIN: 02026219) as an Independent Director of the
Company with effect from 24 January 2024.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

FINANCIAL HIGHLIGHTS
The key financial parameters depicting the performance of the Company for FY 2023-24 are provided
hereunder:

(Amount in INR Crores except earnings per share)

Particulars Standalone Consolidated

2023-2024 2022-2023 2023-2024 2022-2023

Revenue from Operations 4,910 2,859 5,064 2,914

Finance and Other income 726 166 661 171

Total income 5,636 3,025 5,725 3,085

Less: Expenses 6,802 5,133 7,756 5,907

Share of profit of equity - - 25 20

accounted investee

Profit /loss before taxes (1,166) (2,108) (2,006) (2,802)

Less: Current Taxes - - - -

Less: Deferred Tax - - (10) (7)

Profit/(Loss) after taxes (1,166) (2,108) (1,996) (2,795)

Other Comprehensive
- 5 (1) 3
Income/(loss)

Profit/Loss carried to (1,166) (2,103) (1,997) (2,792)

balance sheet

Basic Earnings per share

(263.83) (515.67) (451.64) (683.46)
of INR 10 each

Diluted Earnings per share (263.83) (515.67) (451.64) (683.46)

of INR 10 each

On a consolidated basis, your Company’s revenue increased to INR 5,064 Crores for FY 2023-24 as against
INR 2,914 Crores in the previous FY recording an increase of ~74%. Further, your Company’s net loss on a
consolidated basis was INR 1,996 Crores as compared to INR 2,795 Crores in the previous FY.

On a standalone basis, your Company’s revenue increased to INR 4,910 Crores for FY 2023-24 as against
INR 2,859 Crores in the previous FY, an increase of ~72%. Further, your Company’s net loss on a standalone
basis was INR 1,166 Crores as compared to INR 2,107 Crores in the previous FY.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

SUBSIDARIES, JOINT VENTURES & ASSOCIATES

Sr. No. Name of the Company Date of becoming subsidiary Nature of relationship

Indus Appstore 06 October 2022 (Date Wholly-owned Subsidiary

(Singapore) Pte. Ltd. of approval for transfer
1. (Formerly Known as of shares to the
‘OSlabs Pte. Ltd.’) Company)
(Registration No.:
201536408Z)

Indus Appstore Private 06 October 2022 Step-down subsidiary

Limited (Formerly known (Date of approval for
2. as ‘OSlabs Technology transfer of shares to
(India) Private Limited’) Indus Appstore
(CIN: U74120- (Singapore) Pte. Ltd.)
KA2015PTC174871)

PhonePe Finance Private 27 August 2021 Wholly-owned Subsidiary

Limited (Date of incorporation)
3. (CIN: U63119-
KA2021PTC151118)

PhonePe Insurance 02 September 2021 Wholly-owned Subsidiary

Broking Services Private (Date of approval for
4. Limited transfer of shares to the
(CIN: U66000- Company)
KA2020FTC132814)

PhonePe Lending Services 16 March 2022 Wholly-owned Subsidiary

Private Limited (Formerly (Date of approval for
5. known as ‘PhonePe Credit transfer of shares to the
Services Private Limited’ Company)
and ‘Explorium Innovative
Technologies Private
Limited’)
(CIN:
U63119KA2016PTC174
869)

PhonePe Technology 27 September 2019 Wholly-owned Subsidiary

Services Private Limited (Date of incorporation)
6. (CIN: U65999-
KA2019PTC174321)

PhonePe Wealth Broking 27 April 2021

Private Limited Wholly-owned Subsidiary
7. (Date of incorporation)
(CIN: U65990-
KA2021PTC146954)

Quantech Capital 28 September 2022

Investment Advisors (Date of approval for Step-down subsidiary
8. Private Limited transfer of shares to
(CIN: PhonePe Wealth Broking
U67190KA2018PTC175 Private Limited)
882)

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Wealth Technology & 04 August 2022

Services Private Limited Step-down subsidiary
9. (Date of approval for
(CIN: U74999- transfer of shares to
KA2016PTC173993) PhonePe Wealth Broking
Private Limited)

Pincode Shopping Solutions

03 May 2021
Private Limited (Formerly Wholly-owned Subsidiary
(Date of incorporation)
10. known as ‘PhonePe Shop-
ping Solutions Private
Limited’ and ‘PhonePe
Payment Technology
Services Private Limited’)
(CIN: U72100-
KA2021PTC147100)

None of the companies ceased to be a subsidiary of the Company during the FY under review.

As on date of this report, C.E. Info Systems Limited (CIN: L74899DL1995PLC065551) is an Associate
Company.

A statement containing the performance and salient features of the Financial Statements of the subsidiary
companies evidencing their contribution to the overall performance of the Company along with the
information related to the Associate Company, as of 31 March 2024 in Form AOC-1 is provided as
Annexure - I.

The Company has received the necessary certificate from the Statutory Auditor of the Company towards
compliance under the provisions of the Foreign Exchange Management Act, 1999 (“FEMA”), in relation to
the Downstream Investments made during FY 2023-24.

DETAILS RELATING TO CAPITAL STRUCTURE

Authorized share capital of the Company:

The Authorized share capital of the Company as of 31 March 2024 was INR 100,00,00,000 (Indian Rupees
One Hundred Crores only) divided into 10,00,00,000 (Ten Crores) equity shares of INR 10 (Indian Rupees
Ten only).

During FY 2023-24, there was no change in the Authorized share capital of the Company.

Issued, subscribed and paid-up share capital of the Company:

As of 01 April 2023: The issued, subscribed, and paid-up share capital of the Company was INR
43,45,36,610 (Indian Rupees Forty-Three Crores Forty-Five Lakhs Thirty-Six Thousand Six Hundred and Ten
only) divided into 4,34,53,661 (Four Crore Thirty-Four Lakhs Fifty-Three Thousand Six Hundred and Sixty
One) equity shares of INR 10 (Indian Rupees Ten only).

As of 31 March 2024: The issued, subscribed, and paid-up share capital of the Company was INR
44,27,43,610 (Indian Rupees Forty-Four Crores Twenty-Seven Lakhs Forty-Three Thousand Six Hundred
and Ten only) divided into 4,42,74,361 (Four Crore Forty-Two Lakhs Seventy-Four Thousand Three
Hundred and Sixty One) equity shares of INR 10 (Indian Rupees Ten only).

The disclosure pertaining to the changes in issued, subscribed, and paid-up share capital made during FY
2023-24, are provided as under:

A. Preferential Issue cum Private Placement

The details of the issue and allotment of shares by way of preferential issue cum private placement basis
during FY 2023-24 are as provided below:

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Date of allotment Class of Name of the Method of No. of Premium Face

Sr. No. of shares shares shareholder Allotment shares (INR) Value
allotted (INR)

General Preferential
Atlantic basis through
1. 12 April 2023 Equity 4,10,000 19,958 10
Singapore Private
PPIL Pte. Ltd. Placement

General Preferential
Atlantic basis through
2. 31 May 2023 Equity 4,10,700 19,958 10
Singapore Private
PPIL Pte. Ltd. Placement

B. Rights Issue
The Company has not issued any shares via right issue during FY 2023-24.

C. Buyback of Securities

The Company has not bought back any of its securities during FY 2023-24.

D. Details of issue of Sweat Equity Shares

The Company has not issued any sweat equity shares during FY 2023-24.

E. Disclosure in respect of voting rights not exercised directly by the employees in

respect of shares to which the scheme relates

No such cases during FY 2023-24.

F. Details of Issue of Equity Shares with Differential Rights

The Company has not issued any equity shares with differential rights during FY 2023-24.

G. Bonus Shares

No bonus shares were issued during FY 2023-24.

H. Employees Stock Option Plan (ESOP)

The Company grants stock options to eligible employees with a view to attracting and retaining talent,
encouraging employees to align individual performance with the Company objectives and to promote their
increased participation in the growth of the Company basis the PhonePe Stock Option Scheme 2022 (“PSOP
2022”) under the Act.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

The details of options granted, vested, and exercised are provided in the notes to the standalone Financial
Statements of the Company. Further, the information pertaining to rule 12 (9) of Companies (Share Capital
and Debentures) Rules, 2014, is available for inspection at the registered office of the Company during
business hours.

I. International Securities Identification Number (“ISIN”)

PhonePe adheres to rule 9B of Companies (Prospectus and Allotment of Securities) Rules, 2014 as notified
by the Ministry of Corporate Affairs and effective from 01 October 2024 which require that every private
limited company issue its securities only in dematerialized form and facilitate dematerialization of all its
securities. The Company has proactively taken steps and obtained ISIN from NSDL to provide its shareholders
with the facility to convert their shareholding into dematerialized mode.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board as on 31 March 2024 is as below:

Sr. No. Name of the Director DIN Designation

1. Mr. Rohit Bhagat 02968574 Director

2. Mr. Binny Bansal 02356492 Director

3. Ms. Donna Catherine Morris 07177193 Director

4. Mr. John David Rainey JR 10464085 Director

5. Mr. Leigh Douglas Hopkins 09002888 Director

6. Mr. Rahul Chari 03052804 Whole-time Director

7. Mr. Sameer Nigam 02292840 Whole-time Director

8. Mr. Tarun Bajaj 02026219 Independent Director

Changes in the composition of the Board during FY 2023-24:

Resignation:

• Ms. Judith Jane Mckenna (DIN: 09834492) ceased to be Director of the Company with effect from 31
January 2024. The Board places on record its appreciation for her invaluable contribution and guidance.

Appointments:

• Ms. Donna Catherine Morris (DIN: 07177193) was appointed as an Additional Director (Nominee
Director), with effect from 24 January 2024, and was later regularized as Nominee Director in the
Extraordinary General Meeting held on 28 March 2024;

• Mr. John David Rainey JR (DIN: 10464085) was appointed as an Additional Director (Nominee Director),
with effect from 24 January 2024, and was later regularized as Nominee Director in the Extraordinary
General Meeting held on 28 March 2024;

• Mr. Tarun Bajaj (DIN: 02026219) was appointed as an Additional Director (in the capacity of an
Independent Director), with effect from 24 January 2024, and was later regularized as an Independent
Director in the Extraordinary General Meeting held on 28 March 2024;

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

• Mr. Sameer Nigam (DIN: 02292840) was designated as Chief Executive Officer for the purposes of the Act,
with effect from 06 March 2024; and

• Mr. Sameer Nigam (DIN: 02292840) and Mr. Rahul Chari (DIN: 03052804) were re-appointed as
Whole-time Directors with effect from 01 April 2024.

Company Secretary:

As on 31 March 2024 and as on date of this report, Mr. Ankit G Popat (ICSI Membership Number: A20774)
is the Company Secretary of the Company.

NUMBER OF MEETINGS OF THE BOARD

During FY 2023-24, the Board met 7 (Seven) times. The dates of the Meetings are as follows:

Quarter in which the Dates on which the

Sr. No. Meetings were held Meetings were held

1. Quarter – April to June 2023 13 June 2023

2. 26 July 2023
Quarter – July to September 2023
3. 12 September 2023

4. 04 December 2023
Quarter – October to
December 2023
5. 05 December 2023

6. 06 March 2024
Quarter – January to March 2024
7. 07 March 2024

The Board Meetings of the Company were duly convened and conducted in accordance with the relevant
provisions of the Act and applicable Secretarial Standard on Meetings of the Board of Directors (“SS-1”)
issued by the Institute of Company Secretaries of India.

The details of the attendance of the Directors at the Board Meetings are as follows:

No. of Board Meetings No. of Board

Sr. No. Name of Director
entitled to attend Meetings attended

1. Mr. Binny Bansal 07 05

2. Ms. Donna Catherine Morris^ 02 02

3. Mr. John David Rainey JR^ 02 02

4. Ms. Judith Jane Mckenna* 05 05

5. Mr. Leigh Douglas Hopkins 07 07

6. Mr. Rahul Chari 07 05

7. Mr. Rohit Bhagat 07 07

8. Mr. Sameer Nigam 07 07

9. Mr. Tarun Bajaj^ 02 02

*Ms. Judith Jane Mckenna (DIN: 09834492) ceased to be Director of the Company with effect from 31 January 2024.
^Ms. Donna Catherine Morris (DIN: 07177193), Mr. John David Rainey JR (DIN: 10464085) and Mr. Tarun Bajaj (DIN: 02026219) were appointed
as Directors on the Board of the Company w.e.f. 24 January 2024.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

The intervening gap between the two consecutive Board Meetings was not more than 120 days as
prescribed under the provisions of section 173(1) of the Act.

GENERAL MEETINGS OF THE COMPANY

During FY 2023-24, the following General Meetings of the Members of the Company were held:

Type of the Meeting Date of the Time (IST) Location

Meeting

Annual General Meeting 21 August 2023 05:00 P.M. Through Video Conference

Extraordinary General Meeting 28 March 2024 09:30 A.M. Through Video Conference

The General Meetings of the Company were duly convened and conducted in accordance with the relevant
provisions of the Act and applicable Secretarial Standard on General Meetings (“SS-2”) issued by the
Institute of Company Secretaries of India.

GENERAL SHAREHOLDER INFORMATION

Date, Time, and Venue of the 12th (Twelfth) Monday, 12 August 2024 at 09:30 A.M. (IST)
Annual General Meeting through Video Conferencing/Other Audio
Visual Means facility

CIN U67190KA2012PTC176031

ISIN INE0KM101019

Registered Office Address Office-2, Floor 5, Wing A, Block A, Salarpuria

Softzone, Bellandur Village, Varthur Hobli,
Outer Ring Road, Bellandur, Bangalore,
Bangalore South, Karnataka, India, 560103

FY followed by the Company 01 April to 31 March

Date of incorporation 18 December 2012

E-mail address of the Company corp.sec@phonepe.com

Registrar & Share Transfer Agent KFin Technologies Limited

DIRECTORS’ RESPONSIBILITY STATEMENT UNDER SECTION

134 (5) OF THE ACT

Pursuant to the provisions of section 134(3)(c) and section 134(5) of the Act, the Board of the Company to
the best of their knowledge and belief, confirms that:

a. in the preparation of the annual accounts, the applicable Indian Accounting Standards (“Ind-AS”) has been
followed along with proper explanation relating to material departures;

b. we have selected such accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the FY and of the loss of the Company for the financial period;

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

c. we have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;

d. we have prepared the annual accounts on a going concern basis; and

e. we have devised proper systems to ensure compliance with the provisions of all applicable laws and that
such systems were adequate and operating effectively.

STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD

TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE
PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED
DURING THE YEAR
With regard to the integrity, expertise, and experience (including proficiency) of the Independent Director
appointed during FY 2023-24, the Board has taken on record the declarations and confirmations submitted
by the Independent Director and is of the opinion that Mr. Tarun Bajaj (DIN: 02026219), Independent
Director of the Company, is a person of integrity, possess the relevant expertise and experience and his
association as Director will be of immense benefit and in the best interest of the Company.

With regard to the proficiency of the Independent Director, Mr. Tarun Bajaj (DIN: 02026219) in view of his
past experience is exempt from the online proficiency self-assessment test conducted by the Indian Institute
of Corporate Affairs under the jurisdiction of the Ministry of Corporate Affairs, Government of India, as
notified under sub-section (1) of section 150 of the Act.

FAMILIARIZATION OF DIRECTORS
The Company has voluntarily taken steps to familiarize its newly inducted directors including the
Independent Director via an orientation session, about the Company, its values, ethics, code of conduct,
business overview and governance, and their duties, roles, and responsibilities as a director prescribed under
the Act. Further, at the time of the appointment of Mr. Tarun Bajaj (DIN: 02026219), Independent Director,
the Company issued a formal letter of appointment outlining his role, function, duties, and responsibilities.

STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR

The Company received the requisite declarations from Mr. Tarun Bajaj (DIN: 02026219), Independent
Director of the Company confirming that he has met the criteria of Independence as prescribed under
section 149(6) of the Act. Further, Mr. Tarun Bajaj (DIN: 02026219), Independent Director of the Company,
has furnished a declaration stating compliance with the Code for Independent Directors prescribed in
Schedule IV of the Act.

ANNUAL RETURN
Pursuant to section 92(3) and section 134(3)(a) of the Act, the annual return will be placed on the website
of the Company i.e. https://www.phonepe.com/.

LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186

OF THE ACT
The details of loans, guarantees and investments covered under the provisions of section 186 of the Act are
given in Note 6 of the notes to accounts to the standalone Financial Statements.

The Company has duly complied with the provisions of section 186 of the Act and FEMA, wherever
applicable.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH

RELATED PARTIES
The transactions with related parties as per the applicable Ind-AS form part of the Note 19 of the notes to
accounts to the standalone Financial Statements for FY 2023-24 and are provided as part of Form AOC-2
of this Report. The transactions entered into by the Company with its holding Company including
intermediate/ultimate holding Company and fellow subsidiaries are not considered as related party
transactions under section 188 of the Act pursuant to the exemption notification issued to private limited
companies by the Ministry of Corporate Affairs dated 05 June 2015.

The Form AOC-2 as prescribed under section 188 of the Act is attached as Annexure - II.

STATUTORY AUDITOR
The Statutory Auditor of the Company, M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm
Registration Number: 101049W/E300004), holds office upto the conclusion of the upcoming Annual
General Meeting of the Company. It is proposed to re-appoint M/s. S.R. Batliboi & Associates LLP as the
Statutory Auditor of the Company in the upcoming 12th (Twelfth) Annual General Meeting of the Company
scheduled to be held on Monday, 12th August 2024 for the tenure of five years i.e., up to the 17th
(Seventeenth) Annual General Meeting of the Company to be held for the FY 2028-29 on the basis of the
consent and eligibility certificate as issued by the Statutory Auditor per section 139(1) of the Act.

EXPLANATION REGARDING QUALIFICATION, RESERVATION,

ADVERSE REMARK OR DISCLAIMER IN STATUTORY AUDITORS’
REPORT

The Boards' explanation on the qualification on the standalone Financial Statements pertaining to undisputed
dues in respect of Provident Fund ("PF") which were outstanding at the year-end for a period of more than 6
months from the date they became payable is as follows:

The undisputed dues in respect of PF were outstanding primarily due to employees not being identified as
"International Workers". This led to lower remittances of PF to the government, resulting in interest and penalties. The
Company has paid the statutory dues as of the date of the Board's report and also put in place the necessary
processes to avoid non-compliance in the future.

SECRETARIAL STANDARDS AND ITS COMPLIANCE

The Company has complied with the mandatorily applicable SS-1 and SS-2, as issued by the Institute of
Company Secretaries of India, to the best of its knowledge and belief.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR

DIRECTORS AND EMPLOYEES
PhonePe has in place a robust vigil/whistle-blower mechanism which is embedded in the Company’s code of
conduct. The vigil mechanism provides adequate safeguards against victimization of persons who use such a
mechanism and the existence of the mechanism has been appropriately communicated within the
organization. It outlines the procedures for reporting, handling and deciding on the course of action to be
taken in case inappropriate conduct is noticed or suspected.

RISK MANAGEMENT
PhonePe is committed to fostering a culture of risk awareness, continuous improvement, and innovation
across all levels of the organization. The Company strives to enhance its ability to anticipate, adapt to, and
capitalize on emerging risks and opportunities, thereby driving sustainable value creation for all
stakeholders.

The Risk management framework of the Company seeks to create transparency, minimize adverse impact on
the business objectives, and enhance the Company’s competitive advantage. The business risk framework
defines the risk management approach across the enterprise at various levels. The framework has different
risk models that help in identifying risk trends, exposure, and potential impact analysis at a Company level as
also separately for business segments. The Company has identified various risks and has mitigation plans for
each risk identified. The summary of identified risks and actions taken against them along with mitigation
steps are being placed before the Risk Management Committee of the Company in its quarterly meetings.

As on date of this report, the Company has also adopted PhonePe Group’s Enterprise Risk Management
Policy.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL

CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has adequate internal financial controls with reference to the standalone and consolidated
Financial Statements and the internal financial controls are commensurate with the nature, scale, and
complexity of its operations. Internal audits are regularly conducted across various processes in the
organization by external firms who periodically report on the state of financial controls and adherence to
prescribed policies and documentation protocols of the Company.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
AS PER SECTION 134(3)(M) OF THE ACT
A. CONSERVATION OF ENERGY:

The Company is in the service industry and has adopted various practices wherein its operations and
activities are not energy intensive. Further, the Company is taking conscious steps to move to alternate
sources of energy and is proactively taking steps to conserve energy in its office premises.

B. TECHNOLOGY ABSORPTION:

The Company is keeping itself abreast with the latest technology and is working with the latest technological
tools available, where possible. The Company is putting continuous efforts in acquisition, development,
assimilation, and utilization of technological knowledge.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

During FY 2023-24, the Foreign Exchange earned in terms of actual inflows and the Foreign Exchange
outgo in terms of actual outflows is mentioned below:

Foreign exchange earnings and outgo

Particulars Amount (INR in Crores)

Foreign exchange earned in actuals during FY 2023-24 20

Foreign exchange outgo/ expenditure in actuals during

FY 2023-24 127

DISCLOSURES RELATING TO SEXUAL HARASSMENT OF

WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013

The Company has implemented the Policy for Prevention of Sexual Harassment at Workplace which operates
under the umbrella of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 (“POSH Act”).

The responsibility for administering the Prevention of Sexual Harassment (“POSH”) at Workplace Policy rests
with the POSH Committee which comprises, amongst others, of external representatives. The POSH
Committee has been designated as the Internal Committee (“IC”) as required under the POSH Act. Further, a
detailed report on actions taken by IC is presented to the Risk Management Committee in its quarterly
Meetings.

The key details relating to the aforesaid Policy and POSH Act are as follows:

1. No. of complaints of sexual harassment pending

01 (Case of FY 2022-23)
as on 01 April 2023

2. No. of complaints of sexual harassment received

06
during FY 2023-24

No. of complaints investigated of sexual

3. 07
harassment during FY 2023-24

No. of complaints disposed of sexual 06

4.
harassment during FY 2023-24 *1 case of FY 2022-23 (Reported on 31 January
2023) was disposed-off in FY 2023-24 (06 April
2023) within the 90-days timeline.

**1 case of FY 2023-24 (Reported on 21 March

2024) was disposed-off in FY 2024-25 (12 June
2024) within the 90-days timeline.

5. Total no. of cases pending for more than

00
90 days

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

The Company has conducted numerous workshops and awareness programs that were carried out during FY
2023-24 and are provided below:

• Online POSH training & certification for all employees - This is a mandatory online training and certification
for all employees;
• All new hires are sensitized on POSH as part of mandatory New Hire Orientation;
• Instructor led training is conducted for the leadership on POSH, to maintain the tone at the top.
Additionally, an update is also shared with the leadership on POSH Trends;
• All IC members were trained during annual IC capacity building session conducted on 15 December 2023;
• Awareness communications sent through various communication platforms;
• Integrity campaign during FY 2023-24 was launched to create awareness and sensitization among the
employees through gamification, that had extensive employee engagement and booth activities, overarching
the scenarios/quiz on POSH aspects;
• Interactive POSH computer based learning module is launched, to create awareness and disseminate the
Company’s stand on zero tolerance towards Sexual Harassment at workplace;
• Quarterly validation of display of POSH posters and IC notification is carried out for all regional facilities;
• POSH targeted trainings are delivered to HR business partners on ad-hoc basis, to edify them on key trends,
to proactively identify and report matters on POSH to IC; and
• POSH ad-hoc training are conducted for certain targeted teams, based on recent trends and high-risk
locations/teams identified on POSH violations.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND

INITIATIVES TAKEN DURING FY 2023-24

The Company is an eligible entity for making expenditures towards Corporate Social Responsibility (“CSR”)
activities. The Company is required to spend at least 2% of the average net profits made by the Company
during the three immediately preceding FY under the provisions of section 135 of the Act. However,
considering the continuing losses from the three preceding FYs, the Company is not an eligible entity for
CSR spending.

As per sub-section (9) of section 135 of the Act, where the amount to be spent by a company under
sub-section (5) of section 135 (i.e. towards CSR) does not exceed INR 50,00,000 (Indian Rupees Fifty Lakhs
only), the requirement for constitution of the CSR Committee shall not be applicable and the functions of
such Committee, in such cases, can be discharged by the Board of the Company.

The Company has a Board approved CSR Policy in place and the key contents of the same is as below:

Purpose/Objectives of the CSR Policy

The key purpose and objectives of this CSR Policy are to:
1. Establish the CSR governance structure of the Company;
2. Establish a CSR framework in accordance with the Applicable Laws within which the efforts of the
Company and its employees towards achievement of the CSR objectives shall be channelized;
3. Identify broad areas in which CSR projects will be undertaken by the Company;
4. Serve as a guiding document to help define, execute, monitor and evaluate impact, and report all CSR
projects undertaken or proposed to be undertaken by the Company; and
5. Define the manner in which the surpluses from CSR projects will be treated.

40 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Policy Statement

The Company’s CSR vision is to empower the community and transform lives. The Company will use its
resources to support India’s development through the communities in which it operates. The Company plans
to do this through community engagement in partnership with its employees, customers, partners,
government bodies, and civil society.

Key Focus Areas

The Company is committed to using its resources and infrastructure of innovation and technology to create
opportunities in the communities it operates in, through its CSR projects. As per the existing CSR policy,
once CSR spending becomes applicable, the Company will undertake projects that support and further
India’s development in the fields of:
i. livelihood enhancement;
ii. education;
iii. sanitation and preventive health care;
iv. disaster relief management; and
v. promotion of sports (‘CSR Focus Areas’), through various initiatives involving community engagement.

The Company will undertake long-term projects which have measurable as well as verifiable outcomes and
impact on society. These projects will be implemented either directly by the Company or through
implementation partners with a proven track record in the CSR Focus Areas. The Company also plans to
expand to other focus areas, in accordance with Schedule VII of the Act, as and when required to ensure
maximum impact in empowering communities and transforming lives.

The Company will file the requisite Form CSR 2 (Report on Corporate Social Responsibility) for FY 2023-24
with the concerned authority within the prescribed timelines.

The Report on CSR for FY 2023-24 is enclosed as Annexure - III to this board’s report.

DIVIDEND
In view of the losses, the Board has not recommended any dividend on equity shares for FY 2023-24.

DEPOSITS
During FY 2023-24, the Company has not accepted any deposits i.e. deposits within the meaning of rule
2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014, under section 73 of the Act and as such, no
amount of principal or interest on deposits from public was outstanding as on 31 March 2024.

TRANSFER TO RESERVES
The Company has not transferred any amount to reserves during FY 2023-24.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during FY 2023-24.

DETAILS IN RESPECT OF FRAUDS REPORTED BY STATUTORY

AUDITOR UNDER SUB-SECTION (12) OF SECTION 143 OTHER
THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL
GOVERNMENT
No fraud was reported by the Statutory Auditor in their report under section 143(12) of the Act.

41 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION

DONE AT THE TIME OF ONE-TIME SETTLEMENT AND THE
VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR
FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

This disclosure is not applicable for FY 2023-24.

APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE

INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE FY
2023-24 ALONGWITH THEIR STATUS AS AT THE END OF THE FY
2023-24

During FY 2023-24, there has been no application made by the Company or any proceeding pending against
the Company under the Insolvency and Bankruptcy Code, 2016.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE

FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF
FY 2023-24 AND THE DATE OF REPORT:

Except above and elsewhere stated in this report, there were no material changes and commitments
affecting the financial position of the Company between the end of FY 2023-24 and the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE

REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING
CONCERN STATUS AND COMPANY’S OPERATIONS

There are no significant material orders passed by the Regulators/Courts which would impact the going
concern status of your Company and its future operations.

DISCLOSURE ON MAINTENANCE OF COST RECORDS

Section 148(1) of the Act does not prescribe the requirement to maintain the cost records for any of the
products/services of the Company. Accordingly, the Company is not required to maintain cost records as
specified under section 148 of the Act.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION

AND PROTECTION FUND
The provisions of section 125 (2) and 124 (5) of the Act do not apply to the Company as there was no
dividend declared and paid in the past period.

42 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

PARTICULARS OF EMPLOYEES
Pursuant to rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
statement of the particulars of employees is not applicable to the Company.

APPRECIATION
The Board expresses its deep sense of gratitude to all the stakeholders including its investors, Government,
Regulators, banks, business associates, vendors, customers and employees for their cooperation and
support, and look forward to their continued support in future.

We take this opportunity to acknowledge and appreciate the exemplary efforts by all our employees at all
levels for their hard work, solidarity, cooperation, and support, as they are instrumental in your Company
scaling new heights, year after year.

For and on behalf of the Board of Directors of

PhonePe Private Limited

Sd/- Sd/-
Sameer Nigam Rahul Chari
Whole-time Director and Chief Whole-time Director
Executive Officer DIN: 03052804
DIN: 02292840 Address: Villa no 455, Adarsh Palm Retreat,
Address: Villa 127, Adarsh Palm Retreat Villas Near Intel office, Devara Beesana Halli,
Devarabisanahalli, Bellandur Bangalore- 560103, Karnataka, India
Bangalore- 560103, Karnataka, India

Date: 17 July 2024

Place: Bengaluru, India

43 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

ANNEXURE - I

Form AOC-1

(Pursuant to the first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the Financial Statement of subsidiaries/associate

companies/joint ventures

Part “A”: Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in INR Crores)

Sr No Particulars Details

1. Name of the Indus Indus PhonePe PhonePe PhonePe PhonePe PhonePe Quantech Wealth Pincode
subsidiary Appstore Appstore Finance Insurance Lending Technology Wealth Capital Technology Shopping
(Singapore) Private Private Broking Services Services Broking Investment & Solutions
Pte. Ltd. Limited Limited Services Private Limited Private Private Advisors Services Private
(Formerly (Formerly Private (Formerly Limited Limited Private Private Limited
Known As known as Limited known as Limited Limited (Formerly
‘Oslabs Pte ‘Oslabs ‘PhonePe known as
Ltd.’) Technology Credit Services ‘PhonePe
(India) Private Private Limited’ Shopping
Limited’) and ‘Explorium Solutions
Innovative Private
Technologies Limited’ and
Private ‘PhonePe
Limited’) Payment
Technology
Services
Private
Limited’)

The date since 06 October 06 October 27 August 02 16 March 2022 27 27 April 28 04 August 03 May
2.
when subsidiary 2022 2022 2021 September September 2021 September 2022 2021
was acquired 2021 2019 2022

Reporting period Not Not Not Not Not Not Not Not Not Not
3. for the subsidiary Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable
concerned, if
different from the
holding
company’s
reporting period

Reporting Reporting Not Not Not Not Not Not Not Not Not
4. currency and currency – Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable
Exchange rate as US$
on the last date Exchange
of the relevant rate – INR
FY in the case of 83.3414
foreign
subsidiaries

5. Share capital 202 12 15 1,063 0 30 700 19 58 100

Reserves &
6. 55 (244) 0 (905) (128) (25) (229) (18) (55) (107)
surplus

7. Total assets 258 102 16 205 258 10 513 4 5 30

8. Total Liabilities 1 334 1 48 386 5 42 2 2 38

9. Investments - - - 14 - - 437 - - -
(current + non-
current)

10. Turnover 0 0 - 108 66 - 24 0 5 3

11. Profit/ (Loss) 80 (123) 0 (247) (128) (22) (134) (15) (25) (107)
before taxation

12. Provision for - - 0 - - - - - - -

taxation
13. Profit/ (Loss) 80 (123) 0 (247) (128) (22) (134) (15) (25) (107)
after taxation

14. Proposed - - - - - - - - - -
Dividend

15. Extent of 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
shareholding (in %)

44 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

1. Names of subsidiaries which are yet to commence operations: PhonePe Finance Private Limited
2. Names of subsidiaries which have been liquidated or sold during the year: Nil

Notes:
• Turnover excludes other Income;
• Profit/(Loss) figures do not include other Comprehensive Income;
• The Financial Statement of the foreign subsidiary is converted into Indian Rupees on the basis of the
exchange rate as on closing day of the FY.

<<Remainder of the page has been intentionally left blank>>

45 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Part “B”: Associates and Joint Ventures

Statement pursuant to section 129 (3) of the Act related to Associate Companies and Joint Ventures:

Name of associates or Joint Ventures C.E. Info Systems Limited

Limited
1. Latest audited Balance Sheet Date 31 March 2024

2. Date on which the Associate or Joint Venture was

01 October 2021
associated or acquired

3. Shares of Associate/Joint Ventures held by the company

on the year end

No. 1,01,97,966

Amount of Investment in Associates or Joint Venture INR 2,03,95,932 (As per face value)
INR 96,75,32,088 (As per book value)

Extend of Holding (in percentage) 18.86% (on non-diluted basis)

[as per the shareholding pattern
as on 31 March 2024 on the BSE
website]

4. Description of how there is significant influence The Company holds 18.86% shares (on
non-diluted basis) along with right to
nominate a Director on the Board of
associate Company.

5. Reason why the associate/joint venture is not

-
consolidated

6. Net worth attributable to shareholding* as per latest 124

audited Balance Sheet (Amount in INR Crores)

7. Profit/(Loss) for the year (Amount in INR Crores)

i. Considered in Consolidation 25

ii. Not Considered in Consolidation 109

*It represents PhonePe’s shareholding in C.E. Info Systems Limited

1. Names of associates or joint ventures which are yet to commence operations- Nil
2. Names of associates or joint ventures which have been liquidated or sold during the year- Nil

46 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

For and on behalf of the Board of Directors of

PhonePe Private Limited

Sd/- Sd/-
Sameer Nigam Rahul Chari
Whole-time Director and Chief Whole-time Director
Executive Officer DIN: 03052804
DIN: 02292840 Address: Villa no 455, Adarsh Palm Retreat,
Address: Villa 127, Adarsh Palm Retreat Villas Near Intel office, Devara Beesana Halli,
Devarabisanahalli, Bellandur Bangalore- 560103, Karnataka, India
Bangalore- 560103, Karnataka, India

Sd/-
Ankit G Popat
Company Secretary
Membership No. A20774
Address: 1706 D, Sobha Mayflower, Green Glen
Layout,
Bellandur, Bangalore,
Karnataka- 560103, India

Date: 17 July 2024

Place: Bengaluru, India

47 | ANNUAL REPORT | JUNE 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

ANNEXURE - II

Form AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and rule 8(2) of the Companies (Accounts)
Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related
parties referred to in sub-section (1) of section 188 of the Act including certain arms’ length transactions
under the third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm's length basis:

Not applicable

2. Details of material contracts or arrangements or transactions at arm's length basis:

The transactions with related party as per the accounting standards form part of the Notes to Account of
the Financial Statements for FY 2023-24. Further, the transactions entered into by the Company with its
Holding Company, subsidiary and fellow subsidiaries are not considered as related party transactions under
section 188 of the Act pursuant to the Exemption Notification issued to Private Companies by the Ministry
of Corporate Affairs dated 05 June 2015. Accordingly, no transactions are required to be reported.

For and on behalf of the Board of Directors of

PhonePe Private Limited

Sd/- Sd/-
Sameer Nigam Rahul Chari
Whole-time Director and Chief Whole-time Director
Executive Officer DIN: 03052804
DIN: 02292840 Address: Villa no 455, Adarsh Palm Retreat,
Address: Villa 127, Adarsh Palm Retreat Villas Near Intel office, Devara Beesana Halli,
Devarabisanahalli, Bellandur Bangalore- 560103, Karnataka, India
Bangalore- 560103, Karnataka, India

Date: 17 July 2024

Place: Bengaluru, India

48 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

ANNEXURE - III

ANNUAL REPORT ON CSR ACTIVITIES FOR FY 2023-24

1. Brief outline of the CSR Policy of the Company: The Company is committed to use its resources and
infrastructure of innovation and technology to create opportunities in the communities it operates in,
through its CSR projects. The Company will undertake projects that support and further India’s
development in the fields of:

1. Livelihood enhancement;
2. Education;
3. Sanitation and preventive health care;
4. Disaster relief management; and
5. Promotion of sports (‘CSR Focus Areas’), through various initiatives involving community
engagement.

The Company will undertake long-term projects which have measurable as well as verifiable outcomes and
impact on the society. These projects will be implemented either directly by the Company or through
implementation partners with a proven track record in the CSR Focus Areas. The Company also plans to
expand to other focus areas, in accordance with Schedule VII of the Act, as and when required to ensure
maximum impact in empowering communities and transforming lives.

2. Composition of CSR Committee:

As per section 135(9) of the Act, where the amount to be spent by a company under sub-section (5) of
section 135 (i.e. towards CSR) does not exceed INR 50,00,000 (Indian Rupees Fifty Lakhs only), the
requirement for constitution of the CSR Committee shall not be applicable and the functions of such
Committee, in such cases, can be discharged by the Board of the Company.

3. Provide the web-link(s) where Composition of CSR committee, CSR Policy and CSR Projects approved
by the board are disclosed on the website of the company: https://www.phonepe.com/

4. Provide the executive summary along with web-link(s) of Impact Assessment of CSR Projects carried
out in pursuance of sub-rule (s) of rule 8, if applicable: Not Applicable

5.
a) Average net profit of the company as per sub-section (5) of section 135: The Company is
not an eligible entity for CSR spending.
b) Two percent of average net profit of the company as per sub-section (5) of section 135:
The Company is not an eligible entity for CSR spending.
c) Surplus arising out of the CSR projects or programmes or activities of the previous FYs: Nil
d) Amount required to be set off for the FY, if any: Nil
e) Total CSR obligation for the FY [(b)+(c)-(d)] : Nil

6.
a) Amount spend on CSR Projects (both Ongoing Project and other than Ongoing Project): Nil
b) Amount spent in Administrative Overheads: Nil
c) Amount spent on Impact Assessment, if applicable: Nil
d) Total amount spend for the FY [(a)+(b)+(c)] : Nil
e) CSR amount spent or unspent for the FY:

49 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Amount Unspent (in INR.)

Total Amount Spent Total Amount transferred Amount transferred to any fund
for the FY (in INR) to Unspent CSR Account as per specified under Schedule VII as
sub-section (6) of section 135 per second proviso to sub- section
(5) of section 135

Name of the Date of

Amount Date of transfer Amount
Fund transfer

Nil

(f) Excess amount for set-off, if any: Not Applicable

Sr. Particulars Amount (in INR)

No.

(1) (2) (3)

i. Two percent of average net profit of the company as The Company is not an eligible
per sub-section (5) of section 135 entity for CSR spending.

ii. Total amount spent for the FY Nil

iii. Excess amount spent for the FY [(ii)-(i)] Nil

iv. Surplus arising out of the CSR projects or Nil

programmes or activities of the previous FYs, if any
v. Amount available for set off in succeeding FYs [(iii)- Nil
(iv)]

7. Details of Unspent Corporate Social Responsibility amount for the preceding three FYs:

1 2 3 4 5 6 7 8

Sr. Preceding Amount Balance Amount spent Amount transferred to Amount Deficiency,
No. FY(s) transferred to Amount in in the FY (in a fund as specified remaining to if any
Unspent CSR Unspent CSR Rs.) under Schedule VII as be spent in
Account under Account per second proviso to succeeding
sub-section (6) under sub- sub-section (5) of FYs (in Rs.)
section 135 (in section (6) of section 135, if any
Rs.) section 135 (in
Rs.)
Amount Date of
(in INR) Transfer

Nil

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility
amount spent in the FY: Nil
If Yes, enter the number of Capital assets created/ acquired: Not Applicable
Furnish the details relating to such asset(s) so created or acquired through Corporate Social
Responsibility amount spent in the FY:

50 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Sr. Short particulars of Pincode Date of Amount of

No. the property or of the creation CSR Details of entity/ Authority/ beneficiary of the
asset(s) property or amount registered owner
asset(s) spent
[including complete
address and location
of the property]

(1) (2) (3) (4) (5) (6)

CSR Registration Name Registered

Number, if applicable address

Not Applicable

(All the fields should be captured as appearing in the revenue record, flat no, house no, Municipal Office/ Municipal
Corporation/ Gram panchayat is to be specified and also the area of the immovable property as well as boundaries)

9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per
sub-section (5) section 135: The Company is not an eligible entity for CSR spending.

Sd/- Sd/-
Sameer Nigam Rahul Chari
Whole-time Director and Chief Whole-time Director
Executive Officer DIN: 03052804
DIN: 02292840 Address: Villa no 455, Adarsh Palm Retreat,
Address: Villa 127, Adarsh Palm Retreat Villas Near Intel office, Devara Beesana Halli,
Devarabisanahalli, Bellandur Bangalore- 560103, Karnataka, India
Bangalore- 560103, Karnataka, India

Date: 17 July 2024

Place: Bengaluru, India

51 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Consolidated Ind-AS Financial Statements

Year ended March 31, 2024

| ANNUAL REPORT | JUNE 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Consolidated Balance Sheet as at March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
As at As at
Notes March 31, 2024 March 31, 2023
Assets
Non-current assets
Property, plant and equipment 3(i) 2,012 1,646
Capital work-in-progress 3(ii) 83 269
Goodwill 4 1,059 1,059
Other intangible assets 4 228 121
Right-of-use assets 5 364 328
Investment in associate 29 146 125
Financial assets
(i) Investments 6(i) 15 12
(ii) Other financial assets 6(v) 45 31
Other non-current assets 7 220 202
4,172 3,793
Current assets
Financial assets
(i) Investments 6(i) 1,144 4,690
(ii) Trade receivables 6(ii) 544 205
(iii) Cash and cash equivalents 6(iii) (a) 858 670
(iv) Bank balances other than (iii) above 6(iii) (b) 3,574 411
(v) Loans 6(iv) 5 154
(vi) Other financial assets 6(v) 1,126 691
Other current assets 7 1,288 1,226
8,539 8,047
Total assets 12,711 11,840
Equity and liabilities
Equity
Equity share capital 9 44 43
Other equity 9,411 7,475
Equity attributable to the equity holders of the Company 9,455 7,518

Non-current liabilities
Financial liabilities
(i) Lease liabilities 10(ii) 270 262
(ii) Cash-settled share based payment liability 951 -
Provisions 12 48 164
Deferred tax liabilities (net) 8 24 34
1,293 460
Current liabilities
Financial liabilities
(i) Trade payables 10(i) 487 2,468
(ii) Lease liabilities 10(ii) 114 76
(iii) Other financial liabilities 10(iii) 675 761
Other current liabilities 11 577 482
Provisions 12 110 75
1,963 3,862
Total equity and liabilities 12,711 11,840

Summary of material accounting policies 2

The accompanying notes are an integral part of these Consolidated Ind-AS Financial Statements.
As per our report of even date For and on behalf of Board of Directors of

For S.R. Batliboi & Associates LLP Phonepe Private Limited

Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774
Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru
Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

53 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Consolidated Statement of Profit and Loss for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
For the year ended For the year ended
Notes March 31, 2024 March 31, 2023
Income
Revenue from operations 14 5,064 2,914
Finance and other income 15 661 171
Total income (i) 5,725 3,085
Expenses
Payment processing charges 1,166 667
Employee benefits expense 16 3,603 3,096
Finance costs 17 35 24
Depreciation and amortization expense 18 1,117 536
Other expenses 19 1,835 1,584
Total expenses (ii) 7,756 5,907
Share of profit of an associate (iii) 29 25 20
Loss before tax [(i)-(ii)+(iii)] (2,006) (2,802)
Tax expense
Deferred tax 13 (10) (7)
Loss for the year (1,996) (2,795)

Other comprehensive income

Items that will not be reclassified to Profit or Loss
Remeasurement gains/ (losses) on defined benefit plan, net of taxes (4) 2
Changes in the fair value of equity investments at FVOCI, net of taxes 3 4
Share of other comprehensive income of associate, net of taxes (0) (0)
Items that will be reclassified to Profit or Loss
Exchange differences on translation of foreign operations 0 (2)
Total other comprehensive income/ (loss) for the year, net (1) 3
Total comprehensive loss for the year (1,997) (2,792)

Basic and diluted earnings per share computed on the basis of loss for the year
attributable to equity holders of the Group [Nominal value of share
22 (451.64) (683.46)
Rs.10 (March 31, 2023 : Rs.10 )]
(Rs. per share)

Summary of material accounting policies 2

The accompanying notes are an integral part of these Consolidated Ind-AS Financial Statements.

As per our report of even date For and on behalf of Board of Directors of

For S.R. Batliboi & Associates LLP Phonepe Private Limited

Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

54 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Consolidated Statement of Changes in Equity for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

a. Equity share capital

Changes in equity
As at share capital As at
As at March 31, 2024
April 01, 2023 during the current March 31, 2024
year
Equity share capital (refer note 9) 43 1 44
Total 43 1 44

Changes in equity
As at share capital As at
As at March 31, 2023
April 01, 2022 during the previous March 31, 2023
year
Equity share capital (refer note 9) 40 3 43
Total 40 3 43

b. Other equity
Reserves and Surplus Other comprehensive income
Non-
Other items of other Foreign currency
Share-based Retained controlling Total
As at March 31, 2024 Capital reserve Securities premium Other reserve comprehensive translation
payment reserve earnings interests #
income / (loss) reserve
Balance as at April 1, 2023 133 16,553 2,183 (260) (11,136) 4 (2) - 7,475

Loss for the year - - - - (1,996) - - - (1,996)

Remeasurement loss on net defined benefit liability, net of taxes - - - - - (4) - - (4)
Exchange differences on translation of foreign operations - - - - - - 0 - 0
Equity instruments through other comprehensive income, net of taxes - - - - - 3 - - 3
Share of other comprehensive income of associate, net of taxes - - - - - (0) - - (0)
Total comprehensive loss for the year - - - - (1,996) (1) - - (1,997)
Security premium on issue of equity shares - 1,638 - - - - - - 1,638
Transaction cost on issue of equity shares - (0) - - - - - - (0)
Settlement/ compensation related to share-based payments (Refer note 23) - - 1,640 (14) - - - - 1,626
Modification of equity settled share-based payments to cash settled share-
- - (781) (445) - - - - (1,226)
based payments (Refer note 23)
Migration of equity settled share-based payments [PFA 2020 to PFA 2023]
- - 1,892 - - - - - 1,892
(Refer note 23)
Others - - - 3 - - - - 3
Balance as at March 31, 2024 133 18,191 4,934 (716) (13,132) 3 (2) - 9,411
- 1,638 2,751 (456) (1,996) (2) - - 1,936

55 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Consolidated Statement of Changes in Equity for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

Reserves and Surplus Other comprehensive income

Non-
Other items of other Foreign currency
Share-based Retained controlling Total
As at March 31, 2023 Capital reserve Securities premium Other reserve comprehensive translation
payment reserve earnings interests #
income / (loss) reserve
Balance as at April 1, 2022 (3) 10,434 - - (8,341) (2) - 15 2,103
Loss for the year - - - - (2,795) - - - (2,795)
Remeasurement gains on net defined benefit liability, net of taxes - - - - - 2 - - 2
Exchange differences on translation of foreign operations - - - - - - (2) - (2)
Equity instruments through other comprehensive income, net of taxes - - - - - 4 - - 4
Total comprehensive loss for the year - - - - (2,795) 6 (2) - (2,791)
Security premium on issue of equity shares - 6,122 - - - - - - 6,122
Transaction cost on issue of equity shares - (3) - - - - - - (3)
Settlement/ compensation related to share-based payments (Refer note 23) - - 2,183 (274) - - - - 1,909
Stake purchase in common control entity 136 - - - - - - - 136
Acquisition of subsidiary - - - - - - - 27 27
Acquisition of non-controlling interests - - - 14 - - - (42) (28)
Balance as at March 31, 2023 133 16,553 2,183 (260) (11,136) 4 (2) - 7,475
136 6,119 2,183 (260) (2,795) 6 (2) (15) 5,371
c. Nature and purpose of reserves
Capital reserve
The capital reserve represents the excess of the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the purchase consideration.
Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for the limited purposes in accordance with the provisions of the Companies Act, 2013.
Share-based payment reserve
It represents reserve in respect of equity settled share options granted to the Group’s employees in pursuance of the employee stock option plan.
Other reserve
It is used to recognise the difference between grant date fair value of options issued to employees versus the modification date fair value of options.
Retained earnings
Retained earnings comprises of accumulated balance of profits/ (losses) of current and prior years including transfers made to/ from other reserves from time to time.
Other comprehensive income reserve
i. Any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments.
ii. Cumulative gains and losses arising on the revaluation of equity instruments on the balance sheet date measured at fair value through other comprehensive income.
Foreign Currency Translation Reserve
The exchange differences arising from the translation of financial statements of foreign operations with functional currency other than Indian Rupee is recognised in other comprehensive income and is presented within equity in the foreign currency translation
reserve.
# Non-controlling interests
During the previous year ended March 31, 2023, the Group purchased subsidiary's non-controlling interest.
The accompanying notes are an integral part of these Consolidated Ind-AS Financial Statements.
As per our report of even date. For and on behalf of Board of Directors of

For S.R. Batliboi & Associates LLP Phonepe Private Limited

Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774
Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru
Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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Phonepe Private Limited

Consolidated Statement of Cash Flows for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
For the year ended For the year ended
March 31, 2024 March 31, 2023
Cash flows from operating activities
Loss before tax (2,006) (2,802)
Adjustments to reconcile loss before tax to net cash flows:
Depreciation and amortization expense 1,117 536
(Gain) on sale of financial instruments (65) (33)
(Gain) on sale of overnight mutual funds (1) (10)
Unrealised (gain) on overnight mutual funds - (0)
Interest income (429) (101)
Finance costs 35 24
Effect of changes in exchange rate (151) 96
Bad debts, write-offs and provisions for doubtful debts and advances 34 15
Provision/ write off against property, plant and equipment 14 3
Liabilities no longer required written back (1) 1
Gain on sale of property, plant and equipment (1) (1)
Share of (profit) (net of tax) of associate (25) (20)
Share-based payment expense 2,149 1,425
Operating profit/ (loss) before working capital changes 670 (867)
Changes in working capital:
Financial liabilities 246 649
Other liabilities 96 10
Provisions 47 31
Financial assets (583) 103
Other assets (100) (214)
Cash-settled share based payment liability (994) (262)
Cash used in operations (618) (550)
Income tax paid (10) (29)
Net cash used in operating activities (A) (628) (579)

Cash flows from investing activities

Purchase of property, plant and equipment, including capital work in
(1,332) (1,393)
progress, intangible assets
Proceeds from sale of property, plant and equipment 1 6
Investment in financial instruments (10,565) (6,998)
Proceeds from sale of financial instruments 14,318 4,187
Investment in bank deposits (original maturity more than 3 months) (3,588) (411)
Redemption/ maturity of bank deposits (original maturity more than 3 months) 424 600
Dividend received from associate 3 -
Gain on sale of overnight mutual funds 1 10
Loan provided - (148)
Acquisition of entity under common control - (574)
Acquisition of subsidiaries (net of cash acquired) - (330)
Acquisition of non-controlling interest - (28)
Interest received 39 46
Net cash used in investing activities (B) (699) (5,033)

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Phonepe Private Limited

Consolidated Statement of Cash Flows for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
For the year ended For the year ended
March 31, 2024 March 31, 2023
Cash flows from financing activities
Proceeds from issue of equity share capital 1,639 6,125
Transaction costs on issue of shares (0) (4)
Payment of lease liabilities (124) (75)
Interest paid (1) (1)
Proceeds from short term borrowings (refer note 25 (b)) 830 699
Repayment of short term borrowings (830) (725)
Net cash generated from financing activities (C) 1,514 6,019
Net change in Cash and cash equivalents (A+B+C) 188 407
Cash and cash equivalents at the beginning of the year 670 265
Net unrealised gain on overnight mutual funds - 0
Exchange difference on translation of foreign currency cash and cash equivalents 0 (2)
Cash and cash equivalents at the end of the year [Note 6(iii)] 858 670
Summary of material accounting policies

The accompanying notes are an integral part of these Consolidated Ind-AS Financial Statements.
Note: The above Consolidated Statement of Cash Flows has been prepared under the “indirect method” as set out in ‘Indian Accounting Standard (Ind-AS) 7 -
Statement of Cash Flows’.
As per our report of even date. For and on behalf of Board of Directors of
For S.R. Batliboi & Associates LLP Phonepe Private Limited
Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774
Place : Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru
Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

1. Corporate information

The Consolidated Ind-AS Financial Statements comprise of the Ind-AS Financial Statements of Phonepe Private Limited (herein after referred to as the
"Company") (CIN: U67190KA2012PTC176031), its subsidiaries (collectively, the "Group") and an associate. The Company was incorporated on December
18, 2012 as a Private Limited Company under the Companies Act, 1956. The registered office of the Company is located at Office-2, floor 5, Wing A, Block A,
Salarpuria Softzone, Service road, Green Glen Layout, Bellandur, Bengaluru, Karnataka, India - 560103. The Company became a subsidiary of FIT Holdings
S.A.R.L. ("immediate holding company") with effect from December 23, 2022 (refer note 9) and Walmart Inc. continues to be the ultimate holding company of
the Group.

The Group is primarily involved in the business of a) operating payment system for semi-closed prepaid instruments services in India vide Reserve Bank India
(RBI) Certificate of Authorization No. 98/2016, b) online payment facilitating services through UPI, debit cards, credit cards and other allied services c)
insurance intermediary services as a direct insurance broker (life and general) (under registration code IRDA/DB 822/20 issued by Insurance Regulatory and
Development Authority of India on August 11, 2021), d) distribution of mutual funds vide Association of Mutual Fund in India (AMFI) registration no. ARN-
187821 and wealth broking services e) hyperlocal marketplace, f) development of an app store for smart phones and g) lending service provider. The services
are provided to customers through PhonePe and other associated applications.

These Consolidated Ind-AS Financial Statements were authorized for issue by the Board of Directors of the Group on July 17, 2024.

The entities included in the Consolidated Ind-AS Financial Statements is as under:

% of holding either
Country of
Name of the Company directly or through Date of incorporation
incorporation
subsidiaries
Direct subsidiaries (Indian)
Phonepe Technology Services Private Limited India 100% September 27, 2019
Phonepe Insurance Broking Services Private Limited India 100% February 19, 2020
Phonepe Wealth Broking Private Limited India 100% April 27, 2021
Pincode Shopping Solutions Private Limited
(formerly known as ‘Phonepe Shopping Solutions Private
India 100% May 03, 2021
Limited’ and ‘Phonepe Payment Technology Services Private
Limited’)
Phonepe Finance Private Limited India 100% August 27, 2021

Phonepe Lending Services Private Limited

(formerly known as 'Phonepe Credit Services Private Limited' India 100% October 20, 2016
and 'Explorium Innovative Technologies Private Limited')
Direct subsidiaries (Foreign)
Indus Appstore Pte. Ltd. (formerly known as 'OSLabs Pte.
Singapore 100% October 01, 2015
Limited')
Indirect subsidiaries

Quantech Capital Investment Advisors Private Limited India 100% August 13, 2018

Wealth Technology & Services Private Limited India 100% June 01, 2016
Indus Appstore Private Limited (formerly known as 'OSLabs
India 100% October 20, 2015
Technology (India) Private Limited')
Associate
CE Info Systems Limited India 18.86% February 17, 1995

2. Summary of material accounting policies

2.1(a) Basis of preparation of financial information and statement of compliance

The Consolidated Ind-AS Financial Statements of the Group have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the
Companies Act, 2013, (Ind-AS compliant Schedule III), as applicable to the Consolidated Ind-AS Financial Statements.
The Consolidated Ind-AS Financial Statements have been prepared under the historical cost convention on the accrual basis, except for certain items
measured at fair value.
The Consolidated Ind-AS Financial Statements are presented in Indian Rupees (Rs.) and all values in the tables are reported in Crores of Indian rupees
(Rupees in Crores) except share data, unless otherwise stated. Certain notes and disclosures in the Consolidated Ind-AS Financial Statements have been
represented as Zero ("0"), where the absolute amount is below the rounding off norms adopted by the Group.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing
accounting standard requires a change in the accounting policy hitherto in use.
The Group has prepared these Consolidated Ind-AS Financial Statements on the basis that it will continue to operate as a going concern.

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Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.1(b) Basis of consolidation

The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements listed above. In assessing control, potential voting rights that currently are exercisable are taken into account.
The Ind-AS Financial Statements of subsidiaries are consolidated from when the date control is obtained until the date that control ceases.

The Ind-AS Financial Statements of the Group companies are consolidated on a line-by-line basis and all inter-company transactions, balances, income and
expenses are eliminated in full on consolidation.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions, that is, as transactions with the
owners in their capacity as owners. The carrying amount of the Group’s interests are adjusted to reflect the changes in their relative interests in the subsidiary.

When the Group ceases to have control, any retained interest is remeasured to its fair value, with the change in the carrying value recognised in the
Consolidated Statement of Profit and Loss. In addition, any amounts previously recognised in OCI in respect of de-consolidated entities are accounted for as
if the Group had directly disposed off related assets or liabilities.

2.2 Business Combination

In assessing whether an acquired set of assets and activities is a business or an asset, the Group elects whether to apply an optional concentration test to
simplify the assessment. Where the concentration test is applied, the acquisition will be treated as the acquisition of an asset if substantially all of the fair
value of the gross assets acquired (excluding cash and cash equivalents, deferred tax assets, and related goodwill) is concentrated in a single asset or group
of similar identifiable assets.

Business combinations, except those under common control, are accounted for by applying the acquisition method as at the date of acquisition, which is the
date on which control is transferred to the Group. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation. In accordance with contractual terms, economic circumstances and pertinent conditions as at acquisition date, the excess of
the cost of acquisition over the interest in the fair value of the identifiable net assets acquired and attributable to the owners of the Group is recorded as
goodwill. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at the acquisition date fair value and
the amount of a non-controlling interest in the acquiree. Transaction costs incurred in connection with a business acquisition are expensed as and when
incurred. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, then the gain is recognised in Other
comprehensive income (OCI) and accumulated in equity as Capital reserve.

The following assets and liabilities acquired in a business combination are measured at the basis indicated below:
(i) Deferred tax assets or liabilities, and the liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with
Ind-AS 12 Income Tax and Ind-AS 19 Employee Benefits respectively.
(ii) Potential tax effects of temporary differences and carry forwards of an acquiree that exist at the acquisition date or arise as a result of the acquisition are
accounted in accordance with Ind-AS 12.
(iii) Liabilities or equity instruments related to share based payment arrangements of the acquiree or share – based payments arrangements of the Group
entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind-AS 102 Share-based Payments at the
acquisition date.
(iv) Assets (or disposal groups) that are classified as held for sale in accordance with Ind-AS 105 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that Standard.
(v) Reacquired rights are measured at a value determined on the basis of the remaining contractual term of the related contract. Such valuation does not
consider potential renewal of the reacquired right.
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Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an
asset or liability that is a financial instrument and within the scope of Ind-AS 109 Financial Instruments, is measured at fair value with changes in fair value
recognised in profit and loss in accordance with Ind-AS 109. If the contingent consideration is not within the scope of Ind-AS 109, it is measured in
accordance with the appropriate Ind-AS and shall be recognised in profit and loss. Contingent consideration that is classified as equity is not re-measured at
subsequent reporting dates and subsequent its settlement is accounted for within equity.

Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group’s equity. The interest of
non-controlling shareholders may be initially measured either at fair value or at the non-controlling interest’s proportionate share of the recognised amount of
the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition to acquisition basis. Subsequent to acquisition, the
carrying amount of non-controlling interest is the amount of those interests at initial recognition plus the non-controlling interest’s share of subsequent
changes in equity. Total comprehensive income is attributed to non-controlling interests even if it results in the non-controlling interest having a deficit
balance.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the measurement
period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition
date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The
measurement period does not exceed one year from the acquisition date.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the
disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these
circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Common control transactions

Business combinations involving entities or businesses under common control shall be accounted for using the pooling of interest method. Assets and
liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of reserves of the transferor
company is preserved by reflecting them in the same form in the Consolidated Ind-AS Financial Statements in which they appeared in the financial
statements of the transferor company.
The financial information in the financial statements in respect of prior periods is restated from the beginning of the preceding period in the Consolidated Ind-
AS Financial Statements if the business combination date is prior to that date. However, if business combination date is after that date, the financial
information in the Consolidated Ind-AS Financial Statements is restated from the date of business combination.
The gain/loss on common control transactions is recognised in the other equity under Capital reserve.

2.3 Investment in associate

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies. The considerations made in determining whether significant influence exists is
similar to those necessary to determine control over the subsidiaries.

The Group’s investments in its associate is accounted for using the equity method. Under the equity method, the investment in an associate is initially
recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate since the
acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment individually.

The statement of profit and loss reflects the Group’s share of the results of operations of the associate. Any change in OCI of those investees is presented as
part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any
changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the
associate are eliminated to the extent of the interest in the associate or joint venture.

The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the
accounting policies in line with those of the Group.

Investments in associate are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. The
impairment review compares the net carrying value with the recoverable amount, where the recoverable amount is the higher of the value in use calculated as
the present value of the group’s share of the associate’s future cash flows and its fair value less costs of disposal.
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Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.4 Functional and Foreign currency

Functional and presentation currency

The functional currency of the Company, its subsidiaries and associate is determined on the basis of the primary economic environment in which it operates.
The presentation currency of the Group is determined as Indian Rupees (₹) or Rs.

Transactions and balances

Transactions in foreign currencies i.e. other than the Company’s functional currency of Indian Rupees are recognised at the rates of exchange prevailing at the
dates of the transactions. At each Balance Sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated to the
functional currency at the rates prevailing at the Balance Sheet date. Exchange differences are recognised in the Group Consolidated Statement of Profit and
Loss in the period in which they arise, apart from exchange differences on monetary items forming part of the net investment in a foreign operation.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the spot exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated using the spot exchange rates at the date when the fair value
was determined.
The assets and liabilities of the Group’s foreign operations are translated into Rs. at exchange rates prevailing at the Balance Sheet date. Profits and losses
are translated at average exchange rates for the relevant accounting periods. Exchange differences arising are recognised in Other Comprehensive Income
(OCI) and are included in the Group’s Foreign currency translation reserve. Such translation differences are recognised as income or expenses in the period in
which the operation is disposed of.

2.5(i) Property, plant and equipment

(a) Recognition and measurement

All items of property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and impairment
loss, if any. Costs include expenditure directly attributable to acquisition of assets. The cost of an item of property, plant and equipment is recognised as an
asset, if and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repair and maintenance costs are recognised in Consolidated Statement of Profit and Loss as incurred. Any subsequent cost incurred is
recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied.

(b) Depreciation

The Group depreciates property, plant and equipment over the estimated useful life on a straight-line basis from the date the assets are available for use.
Leasehold improvements are amortised over the estimated useful life or the lease period, whichever is lower. Depreciation is not recorded on capital work-in-
progress until installation are complete and the asset is ready for its intended use.

Reviews are made annually of the estimated remaining lives and depreciation method of individual assets, taking account of commercial and technological
obsolescence as well as normal wear and tear. The estimated useful lives of material assets are as follows:

Category of assets Estimated useful life

Computers 3 years
Electronic Data Capture machines (included under "Computers") 3 years
Computer servers (included under "Computers") 5 years
Smart speakers (included under "Computers") 1.5 years
Others 5 years

The Group, based on technical evaluation done by management's expert, depreciates certain items of property, plant and equipment over estimated useful
lives which are different from the useful life prescribed in Schedule II to the Act. The management believes that these estimated useful lives are realistic and
reflect fair approximation of the period over which the assets are likely to be used.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain
or loss on de-recognition of the asset is included in the Consolidated Statement of Profit and Loss in the year the asset is derecognised and are presented as
adjustments in the note to Property, plant and equipment in these Consolidated Ind-AS Financial Statements.

2.5(ii) Capital advances and Capital work-in-progress

Advances paid towards the acquisition of property, plant and equipment outstanding at each Consolidated Balance Sheet date is classified as capital
advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under ‘Capital work-in-progress’, net of
accumulated impairment loss, if any.

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Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.6 Goodwill and Other intangible assets

Goodwill
Goodwill is initially measured at cost (excess of the purchase price and the amount recognised for non-controlling interests over the fair value of the
identifiable assets and liabilities acquired in a business combination). If the fair value of net assets acquired is in excess of aggregate consideration
transferred, the bargain purchase gain is recognized immediately in OCI and accumulated in equity as capital reserve.

Goodwill is subsequently measured at cost less amounts provided for impairment. Goodwill acquired in a business combination is assessed to determine
whether new cash generating units (CGUs) are created, and if not, is allocated to the Group’s CGUs. These might not always be the same as the CGUs that
include the assets and liabilities of the acquired business.

Cash generating units

For the purpose of impairment testing, assets are grouped in cash generating units (CGUs). A CGU is identified as the lowest aggregation of assets that
generate largely independent cash inflows, and which is looked at by management for monitoring and managing the business.

Other intangible assets

Separately purchased intangible assets are initially measured at cost, being the purchase price as at the date of acquisition. On acquisition of new interests in
group companies, Group recognises any specifically identifiable intangible assets separately from goodwill. These intangible assets are initially measured at
fair value as at the date of acquisition. The determination of the fair values of the separately identified intangibles, is based, to a considerable extent, on
management’s judgement.
Following initial recognition, intangible assets are carried at cost less any accumulated amortization and impairment loss, if any. Internally generated
intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in the Consolidated Statement of Profit and
Loss when it is incurred. Subsequent expenditure are capitalized only when they increase the future economic benefits embodied in the specific asset to
which they relate.
The useful lives of the material intangible assets assessed by the management are as follows and these amortized on a straight line basis over the period of
the assets:

Category of assets Estimated useful life

Computer software 1-3 years
Intellectual property rights 3 years

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

2.7 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. Financial
instruments in the form of financial assets and financial liabilities are generally presented separately. Financial instruments are recognized on the
Consolidated Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.

Upon initial recognition, financial instruments are measured at fair value. Transaction costs directly attributable to the acquisition or issue of financial
instruments are recognized in determining the carrying amount, if it is not classified as at Fair Value through profit and loss. Subsequently, financial
instruments are measured according to the category in which they are classified.
Financial assets are classified into following categories:
- Financial assets carried at amortised cost
- Financial assets Fair Value Through Other Comprehensive Income (FVTOCI)
- Financial assets at Fair Value Through profit and loss (FVTPL)

Financial liabilities are classified into financial liabilities at amortized cost and other financial liabilities.

Financial assets

Financial assets primarily comprise of trade receivables, loan and receivables, cash and bank balances and marketable securities and investments.

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Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:

Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it meets both of the following criteria:
(i) the asset is held within a business model whose objective is to hold the asset to collect contractual cash flows, and
(ii) the contractual terms of the financial assets give rise on a specified date to cash flows that are solely payments of principal and interest on the principal
outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is
included in finance income in the Consolidated Statement of profit and loss. The losses arising from impairment are recognised in the Consolidated
Statement of profit and loss. The Group’s financial assets at amortised cost includes trade receivables, investments in non-convertible debentures and
investments in commercial paper included under other current and non-current financial assets.

Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI):

A financial asset is subsequently measured at FVTOCI if it meets both of the following criteria:

(i) the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and
(ii) the contractual terms of the financial asset give rise on a specified date to cash flows that are solely payments of principal and interest on the principal
amount outstanding.

Further, in cases where the Group has made an irrevocable election based on its business model, for its investments which are classified as equity
instruments, the subsequent changes in fair value are recognized in OCI. The classification is determined on an instrument-by-instrument basis. For Financial
assets at FVTOCI, all fair value changes in the instruments excluding dividends, are recognised in OCI and is never recycled to the Consolidated Statement of
Profit and Loss, even on sale of the instrument. Interest income earned on FVTOCI instruments are recognised in the Consolidated Statement of Profit and
Loss. Dividends are recognised as other income in the statement of profit and loss when the right of payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment assessment.

Financial assets at Fair Value Through profit and loss (FVTPL) :

A financial asset which does not meet the amortised cost or FVTOCI criteria is measured as FVTPL. Financial assets at FVTPL are measured at fair value at the
end of each reporting period, with any gains or loss on re-measurement recognised in the Consolidated Statement of Profit and Loss. The gain or loss on
disposal is recognised in the Consolidated Statement of Profit and Loss. Interest income earned on FVTPL instruments are recognised in the Consolidated
Statement of Profit and Loss.
Financial liabilities:
Financial liabilities primarily include trade payables, lease liabilities and other liabilities are measured at fair value on initial recognition.
Financial liabilities measured at amortized cost
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest method, except for contingent
considerations recognized in a business combination which is subsequently measured at FVTPL. For trade and other payables, the carrying amounts
approximate fair value due to the short term maturity of these instruments.

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Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

De-recognition of financial assets and liabilities

Financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to
recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

On de-recognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration
received and receivable is recognised in Consolidated Statement of Profit and Loss. In addition, on de-recognition of an investment in a debt instrument
classified as at FVTOCI, the cumulative gain or loss previously accumulated is reclassified to Consolidated Statement of profit and loss. In contrast, on de-
recognition of an investment in equity instrument which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss
previously accumulated in the investments revaluation reserve is not reclassified to Consolidated Statement of profit and loss, but is transferred to retained
earnings.

Financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between
the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities
assumed, is recognised in Consolidated Statement of Profit and Loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group currently has a legally
enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

2.8 Impairment
Financial assets
Ind-AS 109 requires the Group to record expected credit loss on all of its debt securities, loans and receivables, either on a 12-month or life time expected
credit loss. The Group recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit
and loss. Loss allowance for trade receivable with no significant financing component is measured at an amount equal to life time ECL. For all other financial
assets, ECL are measured at an amount equal to 12-month ECL, unless there is a significant increase in the credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount of expected credit loss (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognized is recognized as an impairment gain or loss in Consolidated Statement of Profit and Loss.

Non - financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill and intangible assets with
indefinite economic lives are tested for impairment annually and at other times when such indicators exist.

An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to dispose and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the
carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are
taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples or other available fair value indicators.

Impairment loss are recognised in profit and loss in those expense categories consistent with the nature of the impaired asset. Other non-financial assets are
tested for impairment when there are indicators that the carrying amounts may not be recoverable.

2.9 Trade and other receivables

In accordance with Ind-AS 109 para 5.1.3, at initial recognition, an entity measures trade receivables at their transaction price (as defined in Ind-AS 115) if the
trade receivables do not contain a significant financing component. The Group holds the Trade receivables with the objective to collect the contractual cash
flows and therefore measures them subsequently at amortised cost using the effective interest method, less any impairment.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.10 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and highly liquid investments with maturities of three
months or less when acquired and subject to an insignificant risk of changes in value. They are readily convertible into known amounts of cash and are held at
amortised cost, where they meet the hold to collect ‘solely payments of principal and interest’ test criteria under Ind-AS 109. Those not meeting these criteria
are held at fair value through profit and loss.

2.11 Restricted Cash

Cash that is restricted as to withdrawal for use or pledged as security is reported separately under other assets, and is not included in the total cash and cash
equivalents in the statements of cash flows and cash and cash equivalents in the balance sheet. The Group’s restricted cash mainly represents (a) amounts
underlying customer wallet balances held in escrow bank account and (b) the secured deposits held in designated bank accounts for which Bank
Guarantee/Letter of Credit/Buyer Credit/ Overdraft facility has been issued/utilized.

2.12 Semi-closed wallet

The Group operates semi-closed wallet (SCW), wherein monies received from subscribers are deposited in escrow bank account.

The amounts received from subscribers are recorded as wallet balance and disclosed under restricted cash. The restricted cash and corresponding wallet
liabilities are presented on the Consolidated Balance Sheet.

2.13 Provisions

Provisions are liabilities of uncertain timing or amount. A provision is recognised if, as a result of a past event, the group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions are measured at management’s best estimate of the most likely outcome of the expenditure required to settle the obligation at the reporting date
and are discounted to present value where the effect is material. Provisions are classified as non-current where the exact timing of settlement is uncertain but
they are expected to be settled in more than 12 months.

2.14 Employee benefits

Defined benefit plan

In accordance with applicable laws in India, the Group provides for gratuity, a defined benefit retirement plan (“the Gratuity Plan”) for every employee who
has completed 5 years or more of service on separation at 15 days salary (last drawn salary) for each completed year of service. The Gratuity Plan provides for
a lump sum payment to eligible employees at retirement, death, incapacitation or termination of employment based on last drawn salary and tenure of
employment with the Group. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date using projected unit credit
method and are discounted to present value by reference to market yields at the end of the reporting period on government bonds. The gratuity scheme is not
funded.

The operating and financing costs of such plans are recognised separately; current service costs are spread systematically over the period of rendered service
and financing costs are recognised in full in the periods in which they arise. Remeasurements of the net defined benefit liability, including actuarial gains and
losses, are recognised immediately in Other comprehensive income.

Defined contribution plan

The Group makes contributions to the Provident Fund scheme, a defined contribution plan. These contributions are deposited with Government administered
fund and recognised as an expense in the period in which the related service is performed. There is no further obligation of the Group on this defined
contribution plan.

Compensated absences
Employee entitlements to annual leave are recognised as a liability when they accrue to the employees. The estimated liability for leave is recognised for
services rendered by employees up to the end of the reporting period.

The Group treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such
long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial
gains/loss are immediately taken to the Consolidated Statement of Profit and Loss and are not deferred. The Group presents the entire leave as a current
liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

Share based payments

Equity-settled transactions:
The fair value of employee share option plans, which are equity-settled, is calculated at the grant date using the Finnerty model. The resulting cost is charged
to the Consolidated Statement of Profit and Loss over the vesting period. The value of the charge is adjusted to reflect expected and actual levels of vesting.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the
original terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the
total fair value of the share-based payment transaction, or is otherwise beneficial to the employee.

Cash-settled transactions:
The fair value of employee share option plans, which are cash-settled, is calculated at the grant date fair value. At the end of each reporting period until the
liability is settled and at the date of settlement, the fair value of the liability is re-measured, with any changes in the fair value recognised in ‘Employee
benefits expense’ in the Consolidated Statement of Profit and Loss for the year. The liability is presented as employee benefit obligation, under Financial
Liability, in the Consolidated Balance Sheet.

Cash outflows relating to the cash-settled plan are recognised within operating activities, as they relate to employee remuneration.

2.15 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A lease conveys the right to direct the use
and obtain substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration.

The Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases. The Group recognises lease liabilities to make
lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets
The right of use asset is initially measured at cost, comprising: the initial lease liability; any lease payments already made less any lease incentives received;
and initial direct costs. The right of use asset is subsequently depreciated on a straight-line basis over the shorter of the lease term or the useful life of the
underlying asset. The right of use asset is tested for impairment if there are any indicators of impairment.
ii) Lease liabilities
The lease liability is measured at the present value of the lease payments, discounted at the lessee’s incremental borrowing rate specific to the term, country,
currency and start date of the lease. Lease payments include: fixed payments; variable lease payments dependent on an index or rate, initially measured
using the index or rate at commencement; the exercise price under a purchase option if the Group is reasonably certain to exercise; penalties for early
termination if the lease term reflects the Group exercising a break option; and payments in an optional renewal period if the Group is reasonably certain to
exercise an extension option or not exercise a break option.

The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is remeasured, with a corresponding adjustment to
the right of use asset, when there is a change in future lease payments resulting from a rent review, change in an index or rate, or change in the Group’s
assessment of whether it is reasonably certain to exercise a purchase, extension or break option.

iii) Short-term leases

The Group has elected not to recognise right-of-use assets and liabilities for short-term leases that have a lease term of 12 months or less. The Group
recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.16 Revenue from operations

Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Group expects to receive in
exchange for those services.

Revenues in excess of invoicing, which are dependent upon both performance and passage of time, are classified as contract assets. Such assets are
classified as unbilled receivables when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting
for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone
selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for
prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract
and creation of a new contract if not priced at the standalone selling price.
The Group presents revenue net of applicable taxes in the Consolidated Statement of Profit and Loss.
The following is a description of principal activities from which the Group generates its revenue:

(a) Sale of services

(i) Payments and allied services
Revenue from processing payment transactions is based upon a fixed percentage/ amount applied to the transaction value or is determinable as per terms of
the agreement with customers. Revenue is recognised in the period in which the related transactions occur. Revenue from allied services includes
advertising services, deployment of POS devices recognised at a point in time and related subscription fee recognised over time. For advertising services, we
use the output method and apply the practical expedient to recognize advertising revenue for the amount to which we have a right to invoice. Promotion and
incentives provided to end users on wallet and payment platform are recognised as marketing expenses as the performance obligation of the Company is to
provide payment processing service to merchants in exchange for commissions. Promotions and incentives which are consideration payable to a customer
are recognised as a reduction of revenue at the later of when revenue is recognised or when the Company pays or promises to pay the incentive.

The Group recognises revenue on facilitation of electronic recharge transactions to the extent of net consideration it expects to receive on such transactions.

(ii) Financial services

(a) Commission from sale of Insurance

The Group earns commission from insurance companies on placement of insurance policies and revenue is recognized from the policy risk start date when
the policy placement is substantially completed and the ultimate collection thereof is reasonably certain.

(b) Commission from distribution of mutual funds

Performance obligations are satisfied over a period of time and commission on mutual fund distribution is recognized on monthly basis based on daily
average assets under management (AUM) of the Schemes.
(c) Revenue as Lending Service Provider
Revenue as Lending service provider consists of two components: lead generation fees, and servicing fees.

Lead generation fees: Lead generation fees are paid by Lenders for identifying the borrower. These fees are recognized as a component of operating revenue
at the time of loan disbursal. The amount of these fees is based upon the loan amount and other terms of the loan.

Servicing Fees: The servicing fee compensates the Group for managing payments from borrowers. The Group records servicing fees as a component of
operating revenue.

(iii) Other operating revenue

Government grants are recognised where there is a reasonable assurance that the grant will be received and all attached conditions will be complied with.

A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial
support to the entity with no future related costs is recognised in profit or loss of the period in which it becomes receivable.

Such grant income is presented as other operating revenue, under revenue from operations, in the Consolidated Statement of Profit and Loss.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

(b) Finance and other income

Interest income is recognised using the effective interest method. Effective interest is the rate that exactly discounts the estimated future cash receipts over
the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is
included in finance income in the Consolidated Statement of Profit and Loss. Finance income comprises of interest income on fixed deposits, escrow
account for wallet operations and changes in fair value and gains/(loss) on disposal of financial instruments classified as FVTPL.

2.17 Marketing expenses

The Group provides incentives to its users in various forms including cashback. These are provided to users to promote PhonePe application and enhance
participation in the platform for various use cases. Incentives and promotion benefits given to its end users, other than customer consideration are recorded
as marketing expenses under Other expenses.

2.18 Finance cost

Finance cost comprises of interest on lease liabilities, interest on dues to micro and small enterprises and interest on borrowings.

2.19 Income Tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the Consolidated Statement of Profit and Loss except to the extent it
relates to a business combination, or items directly recognized in equity or in OCI.
Current income tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on
the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by
the reporting date and applicable for the period. The Group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set
off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and liability simultaneously.

Current income tax relating to items recognised outside Consolidated Statement of Profit and Loss is recognised outside Consolidated Statement of Profit
and Loss (either in OCI or equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation, and it
establishes provisions where appropriate.
Deferred tax
Deferred income tax is recognized using the Balance Sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable
temporary differences arising between the tax base of assets and liabilities and their carrying amount in Consolidated Ind-AS Financial Statements, except
when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profits or loss at the time of the transaction. Deferred income tax assets are recognized to the extent it is probable that
taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax loss can be
utilized.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting period.
Deferred tax relating to items recognised outside Consolidated Statement of Profit and Loss are recognised in correlation to the underlying transaction either
in OCI or directly in equity.
The Group offsets deferred income tax assets and liabilities, where it has a legally enforceable right to offset current tax assets against current tax liabilities,
and they relate to taxes levied by the same taxation authority, where there is an intention to settle the current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.

2.20 Fair value measurement

A number of financial instruments are measured at fair value as of each reporting date after initial recognition. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in
their economic best interest by using quoted market rates, discounted cash flow analyses and other appropriate valuation models. The Group uses valuation
techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair values are being measured or disclosed in the
Consolidated Ind-AS Financial Statements are categorized within the fair value hierarchy, described as follows:

• Level 1– This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets
or liabilities. This category consists of mutual fund investments.
• Level 2 – This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
• Level 3 – This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable
inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable
current market transactions in the same instrument nor are they based on available market data.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.21 Contingencies

Contingent Liability:
Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-occurrence of uncertain
future events outside the Group’s control, or present obligations that are not recognised because it is not probable that a settlement
will be required or the value of such a payment cannot be reliably estimated. The Group does not recognise contingent liabilities but
discloses them.
Contingent Asset:

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Group. The Group does not recognise contingent assets but discloses them.

2.22 Earnings per share

Basic earnings per share is computed by dividing the profit/(loss) attributable to ordinary equity holders of the Group by weighted average number of equity
shares outstanding during the period, if any. Diluted earnings per share is computed by dividing the profit/(loss) attributable to ordinary equity holders of the
Group using the weighted-average number of equity shares considered for deriving basic earnings per share and weighted average number of dilutive
equivalent shares outstanding during the period, except where the results would be anti-dilutive. Dilutive potential shares are deemed converted at the
beginning of the period, unless issued at later date.

2.23 Current and non-current classification

The Group prepares assets and liabilities in the statement of financial position based on current and non-current classification. An asset is classified as
current when:

- It is expected to be realise the asset, or intends to sell or consume it, in Group's normal operating cycle
- It holds the asset primarily for the purpose of trading
- It expects to realise the asset within twelve months after the reporting period or
- The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.

The Group classifies all other assets as non-current.

A liability is current when:

- It is expected to be settled in the normal operating cycle

- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period or
- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Group classifies all other liabilities as non-current.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2A . Significant accounting estimates and judgements

The preparation of the Group's Consolidated Ind-AS Financial Statements in conformity with Ind-AS requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of
contingent liabilities at the reporting period. Actual results may differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future
periods. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most
significant effect on the amounts recognized in the Consolidated Ind-AS Financial Statements are included in the following notes:

(a) Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is tested for impairment
annually and at other times when such indicators exist. The recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of estimates. Other non-financial assets are tested for impairment when there are indicators that the carrying
amounts may not be recoverable.

(b) Employees benefits plan

The cost of defined and other long-term benefits as well as the present value of the obligation are determined using actuarial valuations. The actuarial
valuation involves making various assumptions. These include the determination of the discount rates, expected rates of return of assets, future salary
increase, mortality rates and future pension increases.

(c) Employee share options

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they
are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on
the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life
of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-
based payment transactions are disclosed in Note 23 to the Consolidated Ind-AS Financial Statements.

(d) Business Combination

The determination of whether an acquired set of assets and activities is a business or an asset can be judgemental, management uses a number of factors to
make this determination, which are primarily focused on whether the acquired set of assets and activities include substantive processes that mean the set is
capable of being managed for the purpose of providing a return.

2B. Standards issued but not yet 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. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable
to the Group.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
3(i) Property, plant and equipment
Leasehold
Computers Others* Total
improvements
At cost
As at April 1, 2022 988 8 6 1,002
Additions 1,435 - 7 1,442
Acquisition on business combination 2 - 1 3
Assets written off (2) - - (2)
Disposals/ adjustments (7) - (0) (7)
As at March 31, 2023 2,416 8 14 2,438
Additions 1,276 4 3 1,283
Assets written off (9) - - (9)
Disposals/ adjustments (4) (0) (0) (4)
As at March 31, 2024 3,679 12 17 3,708

Accumulated depreciation
As at April 1, 2022 362 6 2 370
Charge for the year 423 2 2 427
Acquisition on business combination 1 - 0 1
Assets written off (1) - - (1)
Disposals/ adjustments (4) - (0) (4)
As at March 31, 2023 781 8 4 793
Charge for the year 898 1 3 902
Assets written off (6) - - (6)
Disposals/ adjustments ** 7 (0) (0) 7
As at March 31, 2024 1,680 9 7 1,696

Net Block
As at March 31, 2023 1,635 0 10 1,646
As at March 31, 2024 1,999 3 10 2,012

* Others includes office equipments, furnitures and fixtures and electrical installations.
** Includes provision on smart speakers.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

3(ii) Capital work-in-progress

As at As at
March 31, 2024 March 31, 2023
Capital work-in progress 83 269
Total 83 269

Capital work-in-progress (CWIP) ageing schedule

As at March 31, 2024
Amount of CWIP for a period of
Less than 1 year 1-2 years 2-3 years 3-4 years Total
Projects in progress 83 - - - 83
83 - - - 83
As at March 31, 2023
Amount of CWIP for a period of
Less than 1 year 1-2 years 2-3 years 3-4 years Total
Projects in progress 269 - - - 269
269 - - - 269

As at March 31, 2024 and March 31, 2023, there are no projects/ CWIP assets which are overdue for capitalisation/ have exceeded estimated cost.
4. Goodwill and Other intangible assets
Intellectual property
Computer software Total Goodwill Grand total
rights*
At cost
As at April 1, 2022 8 29 37 68 105
Additions 0 - 0 991 991
Acquisition on business combination - 152 152 - 152
As at March 31, 2023 8 181 189 1,059 1,248
Additions (refer note 6(iv)) 0 214 214 - 214
Disposals - - - - -
As at March 31, 2024 8 395 403 1,059 1,462
Accumulated amortisation and impairment
As at April 1, 2022 6 26 32 - 32
Charge for the year 2 34 36 - 36
Disposals - - - - -
As at March 31, 2023 8 60 68 - 68
Charge for the year 0 107 107 - 107
Disposals - - - - -
As at March 31, 2024 8 167 175 - 175
Net Block
As at March 31, 2023 0 121 121 1,059 1,180
As at March 31, 2024 - 228 228 1,059 1,287

* Includes assets whose carrying value amounts to Rs. 159 (March 31, 2023: Nil) which is co-owned, without any restriction on use or sale.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

4a. Impairment assessment of Payments and allied services (including financial services)
The Payments and allied services (including financial services) represents one single cash generating unit (“CGU”) considering the commonality in payment and allied services offered to its users and
merchants from PhonePe/ other associated platforms of the entities within the Group. Carrying amount of goodwill allocated to this CGU as at March 31, 2024 amounts to Rs. 374 (March 31, 2023 - Rs.
374).
For the purpose of segment reporting, Indus Appstore & Payment and allied services CGUs have been aggregated to form one segment in accordance with Ind-AS 108, considering the same is operated
and monitored by the Group as one.
Key assumptions which the Group has used in determination of value in use includes:

Value in use calculation:

The recoverable amount of the CGUs as at March 31, 2024, have been determined based on value in use using cash flow projections from financial budgets approved by senior management covering a
five year period and cash flow projections has been extrapolated for the next 21 years based on the estimated cash flows of initial 5 years. The Group has considered a terminal growth rate of 5% to arrive
at the value in use to perpetuity beyond 20 years. The post-tax discount rate is applied to cash flow projections for impairment testing during the financial years. It is concluded that the carrying value of
goodwill does not exceed the value in use. As a result of this analysis, the management concluded that impairment is not required for this CGU.

Discount rates:
Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not
been incorporated in the cash flow estimates. The discount rate calculation of each CGU is derived from its Weighted Average Cost of Capital (WACC).

Growth rate estimates:

Growth rate is based on the Group’s projection of business and growth of the industry in which the respective CGU is operating.
List of key assumptions used in the value in use calculation for the CGU is as given below.

Assumptions For the year ended For the year ended

March 31, 2024 March 31, 2023
Long term growth rate 5% 5%
Discount rate 19% 19%
An analysis of the calculation’s sensitivity to a change in the key parameters (discount rate and long-term growth rate) based on reasonably probable assumptions, did not identify any probable scenarios
where the remaining CGU’s recoverable amount would fall below its carrying amount.

4b. Impairment assessment of Indus Appstore CGU

During the previous year ended March 31, 2023, the Group acquired 100% stake in Indus Appstore Singapore Pte. Ltd. (formerly known as 'OSLabs Pte. Ltd') ("Indus Appstore"). It is involved in the
development of the Indus Appstore, an enhanced app store ecosystem for smartphones with a focus on localization, personalization and ease of use. In February 2024, the Group has launched the Indus
Appstore Platform for app developers and customers to register and upload their apps using the self-serve developer platform. Indus Appstore caters to unique customer base, which is different from the
existing Payments and allied services (including financial services) CGU, thus it is considered as a separate CGU. Carrying amount of goodwill allocated to Indus Appstore CGU as at March 31, 2024
amounts to Rs. 685 (March 31, 2023 - Rs. 685).
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

Key assumptions which the Company has used in determination of value in use includes:

Value in use calculation:

The recoverable amount of the CGUs as at March 31, 2024, have been determined based on value in use using cash flow projections from financial budgets approved by senior management covering a
five year period and cash flow projections for the remaining years has been extrapolated to demonstrate the tapering of growth rate for computation of perpetual cash flows. The Company has considered
a terminal growth rate of 5% to arrive at the value in use to perpetuity beyond five year period. The post-tax discount rate is applied to cash flow projections for impairment testing during the financial
years. It is concluded that the carrying value of goodwill does not exceed the value in use. As a result of this analysis, the management concluded that impairment is not required for these CGUs.

Discount rates:
Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not
been incorporated in the cash flow estimates. The discount rate calculation of each CGU is derived from its Weighted Average Cost of Capital (WACC).

Growth rate estimates:

Growth rate is based on the Company’s projection of business and growth of the industry in which the respective CGU is operating.
List of key assumptions used in the value in use calculation for the CGU is as given below.
Assumptions For the year ended For the year ended
March 31, 2024 March 31, 2023
Long term growth rate 5% 5%
Discount rate 20% 25%

Based on the above assessment, no impairment has been recognised during the year. Further, the Group has also performed sensitivity analysis around the base assumptions and has concluded that
there are no reasonably possible changes to key assumptions that would cause the carrying amount of the aforesaid assets to exceed their recoverable values.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
5. Right-of-use assets
8ROUA 8ROUB
The changes in the carrying value of Right-of-use assets (RoU) are as follows: 8ROUAB 8ROUBB
Buildings Data Centers Motor vehicles Total RoU Assets
Gross carrying value at cost
As at April 1, 2022 149 20 0 169
Additions 150 122 - 272
Disposals/ adjustments (3) (0) - (3)
As at March 31, 2023 296 142 0 438
Additions 60 84 - 144
Disposals/ adjustments (6) - - (6)
As at March 31, 2024 350 226 0 576
Accumulated amortisation
As at April 1, 2022 41 1 0 42
Charge for the year 43 28 0 71
Disposals/ adjustments (3) (0) - (3)
As at March 31, 2023 81 29 0 110
Charge for the year 66 42 - 108
Disposals/ adjustments (6) - - (6)
As at March 31, 2024 141 71 0 212

Net carrying value

As at March 31, 2023 215 113 - 328
As at March 31, 2024 209 155 - 364

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
6. Financial assets

(i) Investments Non-current Current

As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023

At amortised cost
Investment in non-convertible debentures (quoted) - - - 15
Investment in commercial papers (quoted) - - 1,110 3,236
Sub-total (a) - - 1,110 3,251

At fair value (through OCI)

Investment in equity shares (unquoted)
National Payments Corporation of India
15 12 - -
fully paid equity shares 61,320 (March 31, 2023 - 61,320)
Sub-total (b) 15 12 - -

At fair value (through profit and loss)

Investment in liquid mutual funds (quoted) - - 34 1,439
Sub-total (c) - - 34 1,439

Total (a)+(b)+(c) 15 12 1,144 4,690

Set out below is the aggregate amount of quoted and unquoted investments disclosed above:

Book value of quoted investments - - 1,144 4,690

Market value of quoted investments - - 1,142 4,688
Unquoted investments 15 12 - -

(ii) Trade receivables

As at As at
March 31, 2024 March 31, 2023

Unsecured, considered good* 544 205

Unsecured, credit impaired 53 32
597 237
Allowance for impairment of trade receivables (53) (32)
Total 544 205

Set out below is the movement in the allowance for impairment of trade receivables:
As at As at
March 31, 2024 March 31, 2023
Opening balance (32) (35)
Provision made during the year (38) (16)
Provision reversed during the year 16 19
Write-off 1 0
Closing balance (53) (32)

Trade receivables are non-interest bearing and are generally due on a defined credit period. They are recognised at their original invoice amounts which
represent their fair values on initial recognition.
No trade or other receivables are due from directors or other officers of the Group either severally or jointly with any other person nor any trade or other
receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

*includes receivables from related parties (refer note 20).

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

As at March 31, 2024

Outstanding for following periods from due date of payment
Current but
Less than 6 6 months – 1 More than 3 Total
not due 1-2 years 2-3 years
months year years
Undisputed Trade
receivables – considered 480 64 - - - - 544
good
Undisputed Trade
receivables – credit 10 19 14 9 1 0 53
impaired
490 83 14 9 1 0 597

As at March 31, 2023

Outstanding for following periods from due date of payment
Current but
Less than 6 6 months – 1 More than 3 Total
not due 1-2 years 2-3 years
months year years
Undisputed Trade
receivables – considered 121 84 - - - - 205
good
Undisputed Trade
receivables – credit 12 7 5 7 1 0 32
impaired
133 91 5 7 1 0 237

(iii) Cash and cash equivalents and Bank balances

As at As at
March 31, 2024 March 31, 2023

a) Cash and cash equivalents

Balances with banks 703 105
Overnight mutual funds - 32
Short term deposits * 155 533
Total 858 670

* The deposits with bank comprise time deposits, which can be withdrawn at any time with prior notice (ranging from 0 - 31 days) and without any penalty on the
principal and accordingly considered as cash and cash equivalents for cash flow purposes.
As at As at
March 31, 2024 March 31, 2023
Cash and cash equivalents as per Ind-AS 7 (Statement of Cash flows) 858 670

b) Bank balances other than Cash and cash equivalents

Short term deposits * 3,574 411
3,574 411

* Represents deposits with original maturity of more than 3 months, having remaining maturity of less than 12 months from the reporting date.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
(iv) Loans
Non-current Current
As at As at As at As at
March 31, March 31, 2021 March 31, 2024 March 31, 2023
2022
Unsecured, considered good
Loans and advances to employees 5 6
Secured, considered good
Intercorporate loans - others - 148
Unsecured, credit impaired
Intercorporate loans - others - 8
- - 5 162
Allowance for impairment - - (8)
Total - - 5 154

Disclosure required under Section 186(4) of the Companies Act, 2013

Particulars of intercorporate loan is disclosed below as required by Section 186(4) of the Companies Act, 2013:

Rate of Secured/ As at As at
Name of the loanee Due date
Interest unsecured March 31, 2024 March 31, 2023
Camden Town Technologies Private Limited 16.4% p.a. On demand Secured - 156

Camden Town Technologies Private Limited had given first charge over its trademarks and copy right works against the above loan. The loan was adjusted
against the intangible assets purchase consideration.

(v) Other financial assets

Non-current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Unsecured, considered good
Interest accrued on fixed deposits - - 241 5
Restricted cash [refer note 6(v)(a) below] 2 0 379 334
Other receivables [refer note 6(v)(b) below] - - 94 93
Unwithdrawn commission [refer note 6(v)(c) below] - - 406 254
Security deposits 43 31 6 5
Unsecured, credit impaired
Security deposits - - - 0
Other receivables - - 26 16
45 31 1,152 707
Allowance for impairment of doubtful assets - - (26) (16)
Total 45 31 1,126 691

(v)(a) Restricted cash (current) above consists of Rs. 334 (March 31, 2023: Rs. 331) in escrow account and fixed deposits amounting to Rs. 47 (March 31, 2023 :
Rs. 3) under lien/ given as collateral against bank guarantees.

(v)(b) includes receivables from related parties (refer note 20).

(v)(c) The Company holds nodal account balances for transactions processed through payment gateway services and/ or unified payment interface, as
applicable, which are required by the Reserve Bank of India (RBI). The nodal bank account is an internal account of the bank. The Company does not have the
ability to withdraw funds from the nodal accounts except for limited purposes as defined in the circular given by the RBI. Further, the Company cannot create a
lien on the nodal accounts and acts merely as an administrator. The Company does not have an obligation to pay to the counterparty for amounts held in the said
nodal accounts and hence, the amount does not represent an asset or liability for the Company. The balance held in such nodal accounts include commission
attributable to the Company. As at the year end, the commission to be withdrawn is disclosed under other financial assets in the Consolidated Ind-AS Financial
Statements.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

7. Other assets
Non-current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Unsecured, considered good
Advances to vendors
- - 357 216
[net of provision Rs. 1 (March 31, 2023 : Rs. 1)]
Capital advances 11 46 - -
Balances with statutory authorities* #
125 87 821 930
[net of provision Rs. 8 (March 31, 2023 : Rs. 2)]
Prepaid expenses 21 21 110 80
Income tax receivables (net) 63 48 - -
Total 220 202 1,288 1,226

* Balances with statutory authorities includes Goods and Services tax (GST) input credit, including GST paid on gross value of electronic recharge transactions.
The Group recognises revenue on facilitation of electronic recharge transactions to the extent of net consideration it expects to receive on such transactions.
# Includes Rs. 2 (March 31, 2023 : Nil) paid under protest on account of Central Goods and Services Tax Act, 2017.

8. Deferred tax liabilities (net)

Non-current
As at As at
March 31, 2024 March 31, 2023

Intangible assets acquired under business combinations 17 31

Undistributed earnings of associate 6 3
Investments in equity shares (unquoted) (at FVOCI) 1 0
Total 24 34

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

9. Equity share capital

As at As at
March 31, 2024 March 31, 2023

Authorized share capital

10,00,00,000 (March 31, 2023: 10,00,00,000) equity shares of Rs.10 each 100 100

Issued, subscribed and fully paid-up share capital

4,42,74,361 (March 31, 2023: 4,34,53,661) equity shares of Rs.10 each 44 43
Total issued, subscribed and fully paid-up share capital 44 43
a. Reconciliation of shares outstanding at the beginning and at the end of the reporting year

As at March 31, 2024 As at March 31, 2023

No. of shares Amount No. of shares Amount
Equity shares of Rs. 10 each fully paid up
At the beginning of the year 43,453,661 43 40,386,345 40
Issued during the year 820,700 1 3,067,316 3
Outstanding at the end of the year 44,274,361 44 43,453,661 43

c. Terms and rights attached to equity shares

The Company has only one class of equity share having par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. In the event of
liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Company declares and pays dividends in Indian
rupees, if any. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

d. Details of shareholders holding more than 5% shares in the Company

As at March 31, 2024 As at March 31, 2023
No. of shares % holding No. of shares % holding
Equity shares of Rs.10 each fully paid up
FIT Holdings S.A.R.L. 37,151,789 83.91% 37,151,789 85.50%
Headstand Pte. Ltd. (Formerly 'Phonepe Private Limited')
2,966,664 6.70% 2,966,664 6.83%
(incorporated in Singapore) ("Headstand Pte. Ltd.")

General Atlantic Singapore PPIL Pte. Ltd. 2,275,528 5.14% 1,454,828 3.35%

As per the records of the Company, including its register of shareholders / members and other declarations received from the shareholders regarding beneficial
interest, the above shareholding represents both legal and beneficial ownership of shares.

e. Shares reserved for issue under Employee Share Option Plans

Refer note 23 for details of shares reserved for issue under share based options.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

f. Shares held by holding/ intermediate holding company/ ultimate holding company/ fellow subsidiary
As at As at
March 31, 2024 March 31, 2023

FIT Holdings S.A.R.L. 37 37

3,71,51,789 (March 31, 2023: 3,71,51,789) equity shares of Rs.10 each

Headstand Pte. Ltd. (Refer note 9d. above and note 20) - 3
Nil (March 31, 2023: 29,66,664) equity shares of Rs.10 each

g. Details of shares held by promoters

As at March 31, 2024

No. of shares at No. of shares at
Change during the % change during
Promoter name the beginning the end of the % of Total shares
year the year
of the year year
FIT Holdings S.A.R.L. (refer note 9(d) above)
[Subsidiary of Walmart Inc. (ultimate holding 37,151,789 - 37,151,789 83.91% -
company)]
Total 37,151,789 - 37,151,789 83.91% -

As at March 31, 2023

No. of shares at No. of shares at
Change during the % change during
Promoter name the beginning the end of the % of Total shares
year the year
of the year year
FIT Holdings S.A.R.L. (refer note 9(d) above)
[Subsidiary of Walmart Inc. (ultimate holding - 37,151,789 37,151,789 85.50% 100%
company)]
Total - 37,151,789 37,151,789 85.50% 100%

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

10. Financial liabilities

(i) Trade payables

Current
As at As at
March 31, 2024 March 31, 2023

Trade payables* 128 89

Accrued liabilities 359 2,379
Total 487 2,468

* includes payable to related parties (refer note 20)

Trade payables are non-interest bearing and are normally settled basis the agreed credit terms.

Trade payables ageing schedule

Less than 1
As at March 31, 2024 Not due 1-2 years 2-3 years More than 3 years Total
year
Total Trade payables 97 29 2 0 0 128

Less than 1
As at March 31, 2023 Not due 1-2 years 2-3 years More than 3 years Total
year
Total Trade payables 81 8 0 0 0 89

(ii) Lease liabilities

Non current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023

Lease liabilities 270 262 114 76

Total 270 262 114 76

The Group leases buildings including data centres which have a renewal option in the normal course of the business. Extension and termination options are
included in such leases across the Group. The majority of extension and termination options held are exercisable only by the Group and not by the respective
lessor. The Group assesses at the time of lease commencement whether it is reasonably certain to exercise the extension or termination option. The Group re-
assesses whether it is reasonably certain to exercise options if there is a significant event or significant change in circumstances within its control.

Possible future cash outflows amounting to Rs. 139 (March 31, 2023: Rs. 78) were not included in lease liabilities because it is not reasonably certain that the
leases will be extended (or not terminated). Leases that the Group has entered into as a lessee but that have not yet commenced result in possible future
The maturity analysis of lease liabilities are disclosed in note 25.

The following are the amounts recognized in the Consolidated Statement of profit and loss: For the year ended For the year ended
March 31, 2024 March 31, 2023
Interest on lease liabilities (refer note 17) 30 20
Amortization of right-of-use assets (refer note 18) 108 72
Expenses relating to short-term leases (refer note 19) 12 8
Variable lease payments not included in the measurement of lease liabilities (refer note 19) 7 4

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

(iii) Other financial liabilities

Non current Current
As at As at As at As at
March 31, 2023 March 31, 2022 March 31, 2024 March 31, 2023
Payable towards wallet balances - - 294 296
Capital creditors - - 218 423
Other liabilities - - 163 42
Total - - 675 761

11. Other current liabilities

As at As at
March 31, 2024 March 31, 2023
Payable to statutory authorities* 550 482
Deferred revenue** 27 -
Total 577 482

* Payable to statutory authorities pertains to GST obligation, including GST on gross value of electronic recharge transactions carried out through PhonePe
platform. The Company recognises revenue on facilitation of electronic recharge transactions to the extent of net consideration it expects to receive on such
transactions.
** Changes in deferred revenue are as follows:
Year ended Year ended
March 31, 2024 March 31, 2023
Balance as at the beginning of the year - -
Increase due to invoicing during the year, excluding amounts recognised as revenue during the year 27 -
Balance as at the end of the year 27 -

12. Provisions
Non current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Provision for gratuity (refer note 21) 48 32 7 5
Provision for compensated absences - - 103 70
Share appreciation rights (refer note 23) - 132 - -
Total 48 164 110 75

13. Income tax

a) Reconciliation of tax expense and the accounting loss As at As at

March 31, 2024 March 31, 2023

Accounting loss before taxes (2,006) (2,802)

At India’s statutory income tax rate of 25.17% (March 31, 2023 : 25.17%) (505) (705)
Adjustments:
Deferred tax assets not recognised on tax loss and unabsorbed depreciation 557 696
Permanent differences (19) 3
Deferred tax assets not recognised on timing differences (57) 9
Tax rate difference on undistributed earnings of associate (3) (3)
Tax on income at different rates (7) 0
Others 24 (7)
Deferred tax expense (10) (7)
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

b) Deferred tax liability (net)

As at March 31, 2024

Recognised in the Recognised in
Acquisition on
As at Consolidated Other As at
Particulars business
April 01, 2023 Statement of Comprehensive March 31, 2024
combination
Profit and Loss Income
Tax effect of items resulting in taxable temporary differences
Property, plant and equipment and intangible assets (107) 62 - - (45)
Right-of-use assets (83) (9) - - (92)
Unrealised Gain on investments (3) 3 - - 0
Undistributed earnings of associate (3) (3) - - (6)
Investments in equity shares (unquoted) (at FVOCI) (0) (0) - (0) (1)
Tax effect of items resulting in deductible temporary differences
Lease Liabilities 83 14 97
Carried forward loss allowed to be offset
79 (57) - - 22
against future profits
Deferred tax asset /(liabilities) (34) 10 - (0) (24)

As at March 31, 2023

Recognised in the Recognised in
Acquisition on
As at Consolidated Other As at
Particulars business
April 01, 2022 * Statement of Comprehensive March 31, 2023
combination
Profit and Loss Income
Tax effect of items resulting in taxable temporary differences
Property, plant and equipment and intangible
(49) (28) - - (77)
assets
Right-of-use assets (32) (51) - - (83)
Unrealised Gain on investments (1) (2) - - (3)
Undistributed earnings of associate (1) (2) - - (3)
Intangible assets acquired under business (1) 9 (38) - (30)
Investments in equity shares (unquoted) (at FVOCI) - - - (0) (0)
Tax effect of items resulting in deductible temporary differences
Lease Liabilities 32 51 - - 83
Carried forward loss allowed to be offset
50 29 - - 79
against future profits
Deferred tax asset /(liabilities) (2) 6 (38) (0) (34)

* Ministry of Corporate Affairs (“MCA”), under the Companies (Indian Accounting Standards) Amendment Rules, 2023, issued an amendment to Ind-AS 12
Income Taxes related Assets and Liabilities arising from a Single Transaction such as leases and decommissioning obligations. This amendment is effective from
the beginning of comparative period presented i.e. April 01, 2022. There is a change in Deferred tax component disclosure from net to gross for right to use assets
and lease liabilities for the Group.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

(b(i))Under the Income-tax Act, 1961, unabsorbed business losses expire 8 years after the year in which they originate and unabsorbed depreciation can be
carried forward indefinitely. Unrecognised deferred tax assets relate primarily to business loss, unabsorbed depreciation and temporary differences, if any,
which do not qualify for recognition as per the applicable accounting standards. The Group has not recognised any deferred tax assets on the unabsorbed
business losses and unabsorbed depreciation amounting to Rs. 10,579 (March 31, 2023: Rs. 8,818) and Rs. 2,004 (March 31, 2023: Rs. 1,143) respectively.
These unexpired business losses will expire based on the year of origination as follows:

These unexpired business losses will expire based on the year of origination as follows:
Unabsorbed
For the year ended
business loss
March 31, 2025 -
March 31, 2026 -
March 31, 2027 1,676
March 31, 2028 1,656
March 31, 2029 1,599
Thereafter 5,648
10,579

Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The
existence of unused tax loss is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent loss, the Group has
recognised deferred tax asset only to the extent that it has sufficient taxable temporary differences or there are other evidences that sufficient taxable profit will
be available against which such deferred tax asset can be realised.
Note: Pending reasonable certainty and as a matter of prudence, deferred tax asset has been recognised only to the extent of deferred tax liability.
(b(ii)) As at the year ended 31 March 2024 and 31 March 2023, the subsidiary of the Company (Indus Appstore Pte. Ltd.) is having brought forward tax losses of
Rs. 27 and Rs. 28 respectively. However, in the absence of reasonable certainty as to realisation of brought forward tax losses deferred tax assets (DTA) has not
been recognised. Such losses may be carried forward indefinitely subject to the conditions imposed by Singapore tax law.

c) Reflected in the balance sheet as follows:

As at As at
March 31, 2024 March 31, 2023
Deferred tax liabilities (143) (113)
Deferred tax assets 119 162
Deferred tax assets/ (liabilities), net (24) 49

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
As at As at
March 31, 2024 March 31, 2023
14. Revenue from operations
Payments and allied services (refer note 20) 4,789 2,707
Financial services 202 42
Others 1 26
4,992 2,775
Other operating revenue [refer 14(i) below] 72 139
Total 5,064 2,914

14(i) Other operating revenue includes the subsidy received by the Group in accordance with the circular issued by the Reserve Bank of
India on qualifying expenditure incurred towards deployment of payment acceptance devices amounting to Rs. 70 (March 31, 2023 - Rs.
139) and an amount of Rs 2 (March 31, 2023 - Rs. Nil) against the incentive scheme issued by the Open Network for Digital Commerce on
qualifying expenditure incurred towards promoting the buyer side digital orders.

14(ii) Disaggregation of revenue

As at As at
March 31, 2024 March 31, 2023
Type of business operations
Payments and allied services (refer note 20) 4,789 2,707
Financial services 202 42
Others 1 26
Total revenue from operations 4,992 2,775

As at As at
March 31, 2024 March 31, 2023
Timing of revenue recognition

Services transferred at a point in time 4,569 2,766

Services transferred over a period of time 423 9
Total revenue from operations 4,992 2,775

14(iii) Contract balances

Trade receivables [refer note 6(ii)] 544 205

Total contract balances 544 205

As at As at
March 31, 2024 March 31, 2023
15. Finance and other income

Interest income on deposits 275 39

Interest, others* 154 63
Gain on sale of investments 66 36
Unrealised gain / (loss) on investments (net) (0) 8
Gain on sale of property, plant and equipment (net) 1 1
Other income (refer note 20)** 14 24
Foreign exchange gain (net) 151 -
Total 661 171

* Interest, others includes interest income on financial assets carried at amortised cost amounting to Rs. 143 (March 31, 2023: 61).
** Includes an amount of compensation received, in the nature of insurance claims of Rs. 2 (March 31, 2023: Nil), for items of property,
plant and equipment.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

As at As at
March 31, 2024 March 31, 2023
16. Employee benefits expense

Salaries, wages and bonus (refer note 20) 1,272 964

Contribution to provident and other funds 31 16
Gratuity (refer note 21) 16 12
Staff welfare 91 47
Share based payments (refer note 20 and 23) 2,193 2,057
Total 3,603 3,096

As at As at
March 31, 2024 March 31, 2023
17. Finance costs

Interest expense on financial liabilities at amortised cost:

- Interest on working capital demand loan 1 1
- Interest on lease liabilities [refer note 10(ii)] 30 20
- Interest, others 4 3
Total 35 24

As at As at
March 31, 2024 March 31, 2023
18. Depreciation and amortization expense

Depreciation of property, plant and equipment (refer note 3(i)) 902 427
Amortization of intangible assets (refer note 4) 107 37
Amortization of right-of-use assets (refer note 5) 108 72
Total 1,117 536

As at As at
March 31, 2024 March 31, 2023
19. Other expenses

Advertisement & sales promotions (refer note 20) 693 680

Information technology infrastructure (refer note 20) 383 216
Subcontract expenses and customer support 351 311
License and service (refer note 20) 157 130
Travelling and logistics 66 33
Legal and professional (refer note 20) 50 48
Bad debts written-off and provisions for doubtful debts and advances 34 16
Repairs and maintenance 33 11
Provision/ amount written off against property, plant and equipment 14 3
Rent 19 20
Rates and taxes 13 11
Electricity and water 8 5
Auditor's remuneration 4 2
Insurance 4 2
Foreign exchange loss (net) - 95
Miscellaneous (refer note 20) 6 1
Total 1,835 1,584

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

20. Related party disclosures

Names of related parties and related party relationship

a) Related parties where control exists
Country of
Relationship Name of the entity
incorporation
United States of
Ultimate holding company Walmart Inc.
America

FIT Holdings S.A.R.L.(w.e.f. December 23, 2022)

Immediate holding company Luxembourg
(refer note 9)

Intermediate holding company Flipkart Private Limited (upto December 23, 2022) Singapore

Headstand Pte. Ltd. (upto December 23, 2022)

Immediate holding company Singapore
(refer note 9)

b) Related parties with whom transactions have taken place during the current and previous year

Country of
Relationship Name of the entity
incorporation
United States of
Ultimate holding company Walmart Inc.
America
Immediate holding company FIT Holdings S.A.R.L. (w.e.f. December 23, 2022) Luxembourg

Intermediate holding company Flipkart Private Limited (upto December 23, 2022) Singapore

Immediate holding company Headstand Pte. Ltd. (upto December 23, 2022) Singapore

Fellow subsidiaries Flipkart Private Limited (w.e.f. December 23, 2022) Singapore
Headstand Pte. Ltd. (w.e.f December 23, 2022 upto June 08, 2023) Singapore
Flipkart Internet Private Limited India
Flipkart India Private Limited India
Flipkart Health Limited India
Myntra Designs Private Limited India
Myntra Jabong India Private Limited India
Instakart Services Private Limited India
F1 Info Solutions & Services Private Limited India
Cleartrip Private Limited India
Wildcraft India Private Limited India

CE Info Systems Limited (formerly known as "CE Info Systems

Associate India
Private Limited") ("CE Info Systems")

Indus Appstore Singapore Pte.Ltd. (formerly known as 'OSLabs

Associate of immediate holding company Singapore
Pte Ltd') (upto July 28, 2022)

c) Key management personnel

Sameer Nigam Whole-time Director

Rahul Chari Whole-time Director
Judith Jane McKenna Director (w.e.f January 06, 2023 upto January 31, 2024)
Leigh Douglas Hopkins Director (w.e.f January 06, 2023)
Rohit Bhagat Director (w.e.f January 06, 2023)
Binny Bansal Director (w.e.f January 06, 2023)
Donna Catherine Morris Director (w.e.f January 24, 2024)
John David Rainey Jr Director (w.e.f January 24, 2024)
Tarun Bajaj Director (w.e.f January 24, 2024)
Adarsh Nahata Whole-time Director (upto December 22, 2022)

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

20. Related party disclosures (Contd.)

d) Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
For the year ended
Relationship Nature of Transactions March 31, 2024 March 31, 2023
Transactions
Ultimate holding company Cost Cross charges 3 3

Intermediate holding company ESOP Cross charges - 262

Other reimbursements - 8

Immediate holding company Allotment of shares - 2,402

ESOP Cross charges - 922
Reversal of ESOP liability on account of migration - 1,277
Other reimbursements - 22
Equity investment - 576
Cost Cross charges - 1
Other income - 21

Fellow subsidiaries Reversal of ESOP liability on account of migration 2,107 -

Payments and allied services 9 37
Other expenses 4 4
Other income - -
Cost Cross charges 44 3
Associate Other expenses 7 6
Dividend income 3 -

The following table provides the compensation paid to key management personnel, which comprises directors and executive officers for the relevant financial year:

For the year ended

March 31, 2024 March 31, 2023
Key management personnel
Remuneration - salary and other benefits* 5 7
(refer note below)
Remuneration - share based payments (including SARs) 226 917
Legal and professional 2 -

* Remuneration does not include the provisions made for gratuity and compensated absences, as they are determined for the Group as a whole.

20. Related party disclosures (Contd.)

For the year ended
Relationship Nature of Outstanding balances March 31, 2024 March 31, 2023
Transactions
Ultimate holding company Trade and Other receivables 2 1

Fellow subsidiaries Trade and Other payables 2 2,070

Trade and Other receivables 4 26
Loans and advances

Associate Trade and Other payables 0 2

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

21. Gratuity plan

The Group operates a gratuity plan covering qualifying employees. Under the gratuity plan, every employee who has completed at least five years of service
gets a gratuity on departure at 15 days of last drawn salary for each completed year of service. In case of death while in service, the gratuity is payable
irrespective of vesting. The plan is not funded by the Group. The gratuity plan is governed by the Payment of Gratuity Act, 1972.
Changes in interest rate risk
A decrease in government bond yields will increase plan liabilities.
Salary escalation risk
The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. As such, an
increase in the salary of the plan participants will increase the plan’s liability.
Life expectancy
The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants, both during and after
the employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
The following tables summarize the components of net benefit expense recognized in the Consolidated Statement of Profit and Loss and the funded status
and amounts recognized in the Consolidated Balance Sheet:
As at As at
March 31, 2024 March 31, 2023
Consolidated Statement of Profit and Loss
Current service cost 13 11
Interest cost 3 1
16 12
Remeasurement loss/ (gains) in Other comprehensive income
Actuarial (gains)/losses arising from changes in -
- experience adjustments 2 (0)
- financial assumptions 1 (1)
- demographic assumptions 1 (0)
4 (2)

Net benefit expense 20 10

Consolidated Balance Sheet

Defined benefit obligation (DBO) (refer note 12) 54 37
Net defined benefit liability 54 37

Change in the present value of the defined benefit obligation are as follows:
Opening defined benefit obligation 37 25
Current service cost 13 11
Interest cost 3 1
Amount recognised in OCI 4 (2)
Benefits paid (3) (1)
Effect of business combinations or disposals - 3
Closing defined benefit obligation 54 37

The principal assumptions used in determining gratuity and leave benefit obligations for the Group's plan are as follows:

Particulars As at As at
March 31, 2024 March 31, 2023
Discount rate 7.20% 7.30%
Expected rate of return on assets NA NA
10% until July 2024 12% until July 2023
Salary escalation rate
and 8% thereafter and 8% thereafter
100% of Indian 100% of Indian
Assured Lives Assured Lives
Mortality rate
Mortality (IALM) Mortality (IALM) 2012-
2012-14* 14*
Managers - 13.8%
Non-Managers Sales Managers and above
Withdrawal rate - 38.1% 15%,
Non-Managers - Non- Others -26%
Sales - 17.9%

* As published by IRDA and adopted as Standard Mortality Table as recommended by Institute of Actuaries of India effective April 1, 2019.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such
as supply and demand in the employment market.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

21. Gratuity plan (Contd.)

As at As at
Sensitivity analysis of assumptions used
March 31, 2024 March 31, 2023
Discount rate 7.20% 7.30%
Decrease in DBO due to 0.5% increase in discount rate (1) (1)
Increase in DBO due to 0.5% decrease in discount rate 2 1

10% until July 2024 12% until July 2023

Salary escalation rate
and 8% thereafter and 8% thereafter
Increase in DBO due to 0.5% increase in salary escalation rate 2 1
Decrease in DBO due to 0.5% decrease in salary escalation rate (1) 0

Attrition rate
Decrease in DBO due to 50% increase in attrition rate (3) (2)
Increase in DBO due to 50% decrease in attrition rate 3 2

Mortality rate
Increase in DBO due to 10% increase in mortality rate 0 1
Decrease in DBO due to 10% decrease in mortality rate 0 1

Method used for sensitivity analysis: The sensitivity analysis above determine their individual impact on the plan's end of year defined benefit obligation. In
reality, the plan is subject to multiple external experience items which may move the defined benefit obligation in similar or opposite directions, while the
plan's sensitivity to such changes can vary over time.

As at As at
Expected benefit payments
March 31, 2024 March 31, 2023
Within 1 year 7 5
2 - 5 years 30 23
More than 5 years 55 32
The weighted average duration of the defined benefit obligation is 6 years.
Expected best estimate for the benefit contribution for the next annual reporting period is Rs. Nil.
As at As at
22. Earnings per share (EPS)
March 31, 2024 March 31, 2023
The following reflects the loss and share data used in computation of basic EPS:

Loss for the year (1,996) (2,795)

Weighted average number of equity shares 44,194,711 40,879,161
Basic and diluted loss per share computed on total loss (Rs. per share) (451.64) (683.46)

23. Share based payments

The expense/ settlement recognised for employee services received during the year is shown in the following table:
As at As at
March 31, 2024 March 31, 2023
Expense arising from cash-settled share-based payment transactions
288 77
(refer 23 (a), (b) and (h) below)
Expense arising from equity-settled share-based payment transactions
1,623 1,922
(refer 23 (b), (c), (d) and (f) below)
Settlement related to equity-settled share based payment transactions (refer 23 (g) below) - 58
Modification related to equity-settled share based payment transactions (refer 23 (h) below) 282 -
Total expense recognized in the Consolidated Statement of Profit and Loss (i) 2,193 2,057

Settlement related to equity-settled share based payment transactions recognised

- 275
in Other equity (refer 23 (a) and (g) below) (ii)
Modification related to equity-settled share based payment transactions recognised
459 -
in Other equity (refer note 23 (b) and (h) below) (iii)
Total impact of share-based payment transactions (i)+(ii)+(iii) 2,652 2,332

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

23. Share based payments (Contd.)

(a). Phonepe Share Appreciation Rights Plan

The Group’s eligible employees or former employees are granted share appreciation rights (SARs), to be settled in cash under Phonepe SAR Plan I & Plan II
("SARs Plan 2022"). The SARs granted vest on the grant date, as the same is issued against the vested equity stock options. The liability for the SARs is
measured, initially and at the end of each reporting period until settled, at the fair value of the SARs.

SARs:
The following table illustrates the movement of the SARs during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 81,082 -
- Granted* 9,718 81,082
- Repurchased# (88,824) -
Outstanding as at the end of the year 1,976 81,082

Vested as at the year end 1,976 81,082

Exercisable at the year end - -

i. During the current year ended March 31, 2024, certain former employees of the Group were granted SARs under SARs Plan II against the equity stock
options held under PSOP 2022 plan (9,718 SARs).

Fair value of SARs granted

The liability for the SARs is measured, initially and at the end of each reporting period until settled, at the fair value of the SARs by applying a Finnerty model
taking into account the terms and conditions upon which the SARs were granted. The expected price volatility is based on the historic volatility (based on the
remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information. Weighted average fair value of the
SARs granted to the employees of the Company during the year is Rs. 16,234 per option (March 31, 2023: Rs. 16,234).
As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Dividend yield (% p.a.) 0% 0%
Expected volatility (% p.a.) 50.6% - 53.9% 50.60%
Expected life of option (years) 2.7 years - 3 years 3 years

ii. On December 05, 2023, the Company's Board of Directors approved the liquidation of all outstanding SARs amounting to Rs 181 issued under SARs Plans
2022. These SARs continues to be treated as cash-settled in the Consolidated Ind-AS Financial Statements.

(b). PhonePe Stock Option Plan, India (‘PSOP 2022’)

Eligible employees of the Group are granted share options of the Company under the PhonePe Stock Option Plan (‘PSOP 2022’). Time-based stock options
granted under PSOP 2022 would vest from one year and not more than four years from the date of grant of such options. Vesting of options would be subject
to continued employment with the Group or such other criteria determined by the Board and thus the options would vest on passage of time. The specific
vesting schedule and conditions subject to which vesting would take place would be outlined in the document given to the option grantee at the time of grant
of options. The options will lapse and be cancelled on its expiry date i.e., ten years after the date of the relevant Stock Option Agreement, or such other
expiry date as may be specified in the relevant Stock Option Agreement. The exercise price of the time-based share options is Rs. 10.

Time based options:

As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 4,055,270 -
- Granted 413,926 140,096
- Migrated # - 3,945,027
- Replaced with SARs* (9,718) (876)
- Forfeited unvested (139,809) (28,977)
- Repurchased (refer 23 (h) below) (408,426) -
Outstanding as at the end of the year 3,911,243 4,055,270

Vested as at the year end 2,497,796 -

# During the previous year ended March 31, 2023, the employees of the Group were granted 39,45,027 share options of the Company on the basis of derived
ratio to its employees as migration of share options of Headstand Pte Ltd.

* During the current year ended March 31, 2024, certain former employees of the Group were granted SARs under SARs Plan 2022 against the equity stock
options held under PSOP 2022 plan.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

23. Share based payments (Contd.)

Fair value of time based share options granted

The fair value of share options granted that are classified as time-based options is estimated at the grant date using Finnerty model, taking into account the
terms and conditions upon which the share options were granted. The expected price volatility is based on the historic volatility (based on the remaining life
of the options), adjusted for any expected changes to future volatility due to publicly available information. Weighted average fair value of the options
granted to the employees of the Company during the year is Rs. 16,234 per option (March 31, 2023: Rs. 16,234). As of March 31, 2024, the maximum
weighted average contractual life of time-based options is 4 years.

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Dividend yield (% p.a.) 0% 0%
Expected volatility (% p.a.) 50.6% - 53.9% 50.60%
Expected life of option (years) 2.7 years - 3 years 3 years

(c). PhonePe Stock Option Plan, Singapore (‘PSOP 2020’)

Eligible employees of the Group have been granted share options of Phonepe Private Limited (incorporated in Singapore) under the PhonePe Stock Option
Plan (‘PSOP 2020’). Time-based stock options granted under PSOP 2020 would vest between one day and not more than four years from the date of grant of
such options. Vesting of options would be subject to continued employment with the Group or such other criteria determined by the Board and thus the
options would vest on passage of time. The specific vesting schedule and conditions attached to vesting are outlined in the document given to the option
grantee at the time of grant of options. Weighted average fair value of the options granted to the employees of the Group during the year is USD Nil per option
(March 31, 2023: USD 112.82). The exercise price of the time-based share options is Rs. Nil. No additional grants were given during the year ended March
31, 2024.

Time based options:

The following table illustrates the movement of the time based options during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year - 3,189,929
- Granted - 3,500,380
- Replaced with SARs - (134,754)
- Migrated to PSOP 2022 plan # - (6,570,801)
- Forfeitures - (198,247)
- Repurchased - -
- Transfers (net)^ - 213,493
Outstanding as at the end of the year - -

Vested as at the year end - -

# During the previous year ended March 31, 2023, the employees of the Group were granted 39,45,027 share options of the Company on the basis of derived
ratio to its employees as migration of share options of Headstand Pte Ltd.
^ Transfers (net) pertains to transfer of employees.

Fair value of time based share options granted

The fair value of share options granted that are classified as time-based options is estimated at the grant date using Finnerty model, taking into account the
terms and conditions upon which the share options were granted. The expected price volatility is based on the historic volatility (based on the remaining life
of the options), adjusted for any expected changes to future volatility due to publicly available information. No fresh options were granted during current
year, as PSOP 2020 plan is no longer in existence.
As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Dividend yield (% p.a.) NA 0%
Expected volatility (% p.a.) NA 42.60%-50.6%
Expected life of option (years) NA 2.75 years -3 years
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93 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

23. Share based payments (Contd.)

(d). PhonePe Founder Awards, Singapore (‘PFA 2020’)

Certain eligible employees of the Company have been granted share options of Headstand Pte Ltd (incorporated in Singapore) under the PhonePe Founder
Awards (‘PFA 2020’). Time-based stock options granted under PFA 2020 would vest between one day and not more than five years from the date of grant of
such options. Vesting of options would be subject to continued employment with any Group Company or such other criteria determined by the Board and
thus the options would vest on passage of time. The specific vesting schedule and conditions attached to vesting are outlined in the document given to the
option grantee at the time of grant of options. The exercise price of the time-based share options is Nil.

Performance-based share options are granted to certain eligible employees of the Company. Vesting conditions include market conditions linked to the
Company's valuation with an underlying implied service period up to the date of achievement of the performance conditions. The performance awards will
expire unvested at the end of twelve years from the grant date if the performance conditions are not met within this period. The exercise price of the
performance-based share options is Nil.

No additional grants were given during the year ended March 31, 2024 and March 31, 2023.

Time based options:

The following table illustrates the movement of the time based options during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 3,129,445 3,129,445
- Migrated to PFA 2023 plan (refer note 23(e)) (3,129,445) -
Outstanding as at the end of the year - 3,129,445

Vested as at the year end (refer note 23(e)) NA 1,877,668

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Expected life of option (years) NA 1.72 years

Performance based options:

The following table illustrates the movement of the performance based options during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 2,738,265 2,738,265
- Migrated to PFA 2023 plan (refer note 23(e)) (2,738,265) -
Outstanding as at the end of the year - 2,738,265

Vested as at the year end (refer note 23(e)) NA 782,361

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Expected life of option (years) NA 10 years

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94 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

23. Share based payments (Contd.)

(e). Migration of share-based payment plan from PFA 2020 to PFA 2023

The PFA 2023 plan was approved by the Board of Directors of the Company during the current year ended March 31, 2024. Pursuant to such approval,
options granted under PFA 2020 by its erstwhile immediate holding company got migrated to new plan namely PFA 2023 by the Company. The migration of
share-based payment arrangement from PFA 2020 to PFA 2023 plan has been treated as a modification of an existing share-based payment plan. All the
options granted under PFA 2020 shall automatically stand cancelled and fresh options were granted by the Company to the eligible employees on the basis
of a pre-determined swap ratio.

The company also signed PhonePe Founder Share Appreciation Rights Plan (PFSARs). The plan has a one-year period beginning on the grant date of the
option provided under PFA 2023. As of the reporting date, March 31, 2024 probability of issuance of PFSARs is considered as remote.

(f). PhonePe Founder Awards, India (‘PFA 2023’)

Certain eligible employees of the Company have been granted share options of Phonepe Private Limited (incorporated in India) under the PhonePe Founder
Awards (‘PFA 2023’). Time-based stock options granted under PFA 2023 would vest between one day and not more than five years from the date of grant of
such options, subject to regulatory requirements. Vesting of options would be subject to terms and conditions set-out in PFA 2023. The stock options will
lapse and be cancelled following the expiry of a predetermined period after the date of grant. The exercise price of the time-based share options is Rs. 10 per
option.

Performance-based share options are granted to certain eligible employees of the Company. Vesting conditions include market conditions linked to the
Company's valuation with an underlying implied service period up to the date of achievement of the performance conditions. The stock options will lapse
and be cancelled following the expiry of a predetermined period after the date of grant. The exercise price of the performance-based share options is Rs. 10
per option.

Weighted average fair value of the options granted to the employees of the Company during the year is Rs. 19,968 per option (March 31, 2023: Rs. NA).

Time based options:

The following table illustrates the movement of the time based options during the financial year:
As at
March 31, 2024
(Number)
Outstanding as at the beginning of the year -
- Migrated (refer note 23(e)) 1,855,276
- Granted 842,040
Outstanding as at the end of the year 2,697,316

Vested as at the year end (refer note 23 (e)) -

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95 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024
Expected life of option (years) 1.19 years

Performance based options:

The following table illustrates the movement of the performance based options during the financial year:
As at
March 31, 2024
(Number)
Outstanding as at the beginning of the year -
- Migrated (refer note 23(e)) 1,623,366
Outstanding as at the end of the year 1,623,366

Vested as at the year end (refer note 23(e)) -

As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024
Expected life of option (years) 9 years

(g). Flipkart Stock Option Plan - ('FSOP 2012')

Eligible employees of the Group are granted share options of Flipkart Private Limited (erstwhile intermediate holding company) based upon performance,
and long-term potential for the Group. The share options granted under FSOP 2012 shall vest between day one and not more than five years from the date of
grant of such options. Vesting of options would be subject to continued employment with the Group and thus the options would vest on passage of time. The
specific vesting schedule and conditions subject to which vesting would take place would be outlined in the document given to the option grantee at the
time of grant of options.

The exercise price of the option is Rs. Nil. No additional grants were given during the year ended March 31, 2024 and March 31, 2023.

Movement of share options during the financial year

The following table illustrates the movement of the options during the financial year.
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 36,843 395,548
- Forfeited - -
- Repurchased - (358,705)
Outstanding as at the end of the year # 36,843 36,843

Vested as at the year end - 36,843

# Of the outstanding share options, none of the options (March 31, 2023: Nil) are classified as cash-settled awards to be repurchased subsequently .

(h). Modification of PSOP 2022 plan

During the year ended March 31, 2024, the Company's Board of Directors approved a modification to the PSOP 2022 plan, introducing liquidity to the
maximum of 25% of the total options issued. During the year ended March 31, 2024, the Company repurchased 408,426 options in accordance with the
Board resolution.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

24. Capital management

The Group’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix
of either equity and/or combination of short term/long term borrowings as may be appropriate. The Group does not have any borrowings as on March 31, 2024 (March
31, 2023 - Rs. Nil).

25. Financial risk management objectives and policies

The Group is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest
risk and foreign currency risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks.

The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the
management of these risks.

There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks, except as disclosed in note 25(c)
foreign currency risk section.
a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s exposure to credit risk
arises primarily from trade and other receivables. For other financial assets (including investment securities, loans, cash and short-term deposits), the Group minimise
credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising loss incurred due to increased credit risk exposure. The Group deals only with creditworthy
counterparties. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are with creditworthy debtors with good payment record with the Group. Cash and cash equivalents
and investment securities that are neither past due nor impaired are placed with reputable financial institutions or companies with high credit ratings and no history of
default.
As at As at
March 31, 2024 March 31, 2023
Financial assets that are neither past due nor impaired 2,800 6,042
Total neither past due nor impaired 2,800 6,042

Financial assets that are past due but not impaired

The aging analysis of the receivables has been considered from the date the invoice falls due. The age wise break up of receivables, net of allowances that are past due,

As at As at
March 31, 2024 March 31, 2023
Past due 0 – 90 days 63 79
Past due over 90 days 1 5
Total past due and not impaired 64 84

Financial assets that are impaired

As at As at
March 31, 2024 March 31, 2023
Information regarding financial assets that are impaired is disclosed below:
Trade receivables (note 6(ii)) 53 32
Loans (note 6(iv)) - 8
Other financial assets (note 6(v)) 26 16
Total past due and impaired 79 56

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The Group’s objective is to maintain a balance between continuity of funding and
flexibility.

Considering the nature of business activity of the Group, the concentration of liquidity risk is low as business related merchant payments are to be made only on receipt
of the amount from the customer. Further, access to sources of funding is sufficiently available.
Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s financial liabilities at the end of the reporting period based on contractual undiscounted repayment

As at March 31, 2024

One year or less One to five years Over five years Total
Financial liabilities
Trade payables 487 - - 487
Lease liabilities 138 296 - 434
Other financial liabilities 675 - - 675
Cash-settled share based payment liability - 951 - 951
Total undiscounted financial liabilities 1,300 1,247 - 2,547

As at March 31, 2023

One year or less One to five years Over five years Total
Financial liabilities
Trade payables 2,468 - - 2,468
Lease liabilities 97 294 - 391
Other financial liabilities 761 - - 761
Total undiscounted financial liabilities 3,326 294 - 3,620

The table below shows the contractual expiry by maturity of the Group’s contingent liabilities and commitments.

As at March 31, 2024

One year or less One to five years Over five years Total
Capital commitments 358 1 - 359
358 1 - 359

As at March 31, 2023

One year or less One to five years Over five years Total
Capital commitments 595 - - 595
595 - - 595

Changes in liabilities arising from financing activities:

April 01, 2023 New leases/ loans* Cash flows Interest expense March 31, 2024
Lease liabilities 338 140 (124) 30 384
Short term borrowings - 830 (831) 1 -
338 970 (955) 31 384

April 01, 2022 New leases/ loans* Cash flows Interest expense March 31, 2023
Lease liabilities 126 267 (75) 20 338
Short term borrowings - 725 (726) 1 -
126 992 (801) 21 338

* New loans and cashflows during the year ended March 31, 2024 includes short-term borrowings acquired on business combination and settled thereafter amounting
to Rs. Nil (March 31, 2023: Rs. 26).
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

c) Currency risk
The Group’s exposure to currency risk relates primarily to the Group’s operating activities where the transactions are denominated in a currency other than the Group’s
functional currency.
The carrying amounts of the Group’s foreign currency exposure at the end of the reporting period are as follows :

As at March 31, 2024

Particulars USD AED SGD EUR Total
Financial assets 7 4 - 0 11
Financial liabilities 26 - 0 - 26

As at March 31, 2023

USD AED SGD EUR Total
Financial assets 23 - - - 23
Financial liabilities 2,079 - - - 2,079

Foreign exchange rate sensitivity

The fluctuation in foreign currency exchange rates may have potential impact on the Consolidated Statement of Profit and Loss and equity, where any transaction
references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Group.
As at March 31, 2024 and March 31, 2023, 5% increase /decrease in the exchange rate would result in Rs. 1 and Rs. 103 increase/ decrease in the loss before tax,
respectively, of the Group.

d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The
Group has investments in short term debt securities and deposits with counter parties having high quality credit ratings, bearing fixed interest rates. The Group is not
exposed to any interest rate risk since it has exposure only to fixed interest bearing short term instruments.

26. Fair value hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

Financial instruments whose carrying amounts approximate fair value

The carrying values of trade and other receivables, other assets, cash and short term deposits, trade and other payables and balances with related parties, based on
their notional amounts, reasonably approximate their fair values because these are mostly short term in nature.

Fair value of financial instruments that are carried at fair value (Refer note 6(i))
The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:

As at March 31, 2024

Assets measured at fair value: Significant
Quoted prices in Significant
Total unobservable inputs
active markets observable inputs
*
(Level 1) (Level 2) (Level 3)
Investments (through OCI) 15 - - 15
Investments (through profit and loss) 34 34 - -
49 34 - 15

As at March 31, 2023

Assets measured at fair value: Significant
Quoted prices in Significant
Total unobservable inputs
active markets observable inputs
*
(Level 1) (Level 2) (Level 3)
Investments (through OCI) 12 - - 12
Investments (through profit and loss) 1,439 1,439 - -
1,451 1,439 - 12

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

26. Fair value hierarchy (Contd.)

Set out below is the movement of the carrying amounts of the Group’s financial instruments classified under level 3:

As at As at
March 31, 2024 March 31, 2023

Opening balance 12 8
Fair value adjustments 3 4
Closing balance 15 12

Assets not measured at fair value:

As at March 31, 2024

Quoted prices in Significant Significant
Total
active markets observable inputs unobservable inputs
(Level 1) (Level 2) (Level 3)
Investments (at amortised cost) 1,110 - 1,110 -
1,110 - 1,110 -

As at March 31, 2023

Quoted prices in Significant Significant
Total
active markets observable inputs unobservable inputs
(Level 1) (Level 2) (Level 3)
Investments (at amortised cost) 3,251 - 3,251 -
3,251 - 3,251 -

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value
hierarchy have the following levels:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived
Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
* This investment in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind-AS 109,
the Group has chosen to designate these investments in equity instruments at FVTOCI as the Company believes this provides a more meaningful presentation for
medium or long term strategic investments, than reflecting changes in fair value immediately in profit and loss.

27. Contingent liabilities and commitments

As at As at
March 31, 2024 March 31, 2023

a. Contingent liability - -
b. Commitments
Estimated amount of contracts (net of advances) remaining to be 358 595
executed on capital account and not provided for
Leases not yet commenced to which the lessee is committed (refer note
10(ii)) 1 -
Total 359 595

The Group has reviewed all the pending litigations and proceedings, and has adequately provided for where provisions are required and disclosed the contingent
liabilities in its Consolidated Ind-AS Financial Statements where financial outflow is not probable.

28. The Company's Prepaid Payment Instruments ("PPIs") and Bharat Bill Payment Operating Unit ("BBPOU") Licences are subject to inspection by the Regulator. The
Company is in receipt of Inspection Report, dated May 27, 2024, from the Regulator. The Company is in the process of submitting responses on the observations noted
by the Regulator, based on its internal assessment, the Company is of the view that these will not have any material impact on the operations and financial results.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

29. Investment in associate

The Group holds 18.86 % (March 31, 2023: 19.00%) interest in the voting rights of CE Info Systems Limited ("CE Info") (incorporated in India).
Principal activities of CE Info include provision of GPS navigation and location based services. Based on management's assessment, the Group has
accounted its stake of 18.86 % (March 31, 2023: 19.00%) in CE Info as an equity accounted investee as at March 31, 2024.

Fair value of the associate based on the quoted market price as at March 31, 2024 amounts to Rs. 1,901 (March 31, 2023: Rs. 1,012).

The Group received dividend of Rs. 3 during the current year (March 31,2023: Nil).
The Group has determined its share of profits for the year ended March 31, 2024 based on audited financial results published by CE Info.
The following table illustrates the summarised financial information of the Group’s investment in CE Info's based on its audited Consolidated Ind-AS
Financial Results for the year ended March 31, 2024.
March 31, 2024 March 31, 2023
Audited Audited
Current assets 434 441
Non-current assets 358 229
Current liabilities (119) (113)
Non-current liabilities (13) (15)
Equity 660 542
Less: Share based payment reserve 16 17
Less: Non-controlling interest 1 0
Adjusted Equity 643 525

Group’s share (undiluted) 121 100

Amount identified as goodwill 25 25
Loss on deemed disposal (0) -
Group’s carrying amount of the investment 146 125

March 31, 2024 March 31, 2023

Audited Audited
Total income 379 281
Direct expenses (64) (48)
Employee benefits expense (75) (66)
Depreciation, amortization and impairment expense (15) (10)
Other expenses (85) (49)
Finance costs (3) (3)
Other income 38 34
Share of profit of equity accounted investee (2) (0)
Income tax (41) (32)
Profit after tax (PAT) for the year (continuing operations) 134 108
Other comprehensive income (2) (1)
Total comprehensive income for the year 132 107

PAT for the year attributable to owners of CE Info 134 107

OCI for the year attributable to owners of CE Info 2 0
Group’s share of profit 25 20
Group’s share of other comprehensive income for the year (net of taxes) (0) (0)

30. Other statutory information

(i) The Group has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the
understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities (Ultimate Beneficiaries) identified in any manner whatsoever by or on behalf of the
Group or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(ii) The Group has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether
recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities (Ultimate Beneficiaries) identified in any manner whatsoever by or on behalf of the
Funding Party or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
31. Additional information pursuant to para 2 of general instructions for the preparation of Consolidated Ind-AS Financial Statements

Net assets i.e. total assets minus total liabilities Share in profit or (loss) Share in Other Comprehensive Income Share in Total Comprehensive Income
Name of the entities in the Group As % of consolidated
As % of consolidated net As % of consolidated As % of consolidated other
Amount Amount Amount total comprehensive Amount
assets profit and loss comprehensive income
income
Holding company
India
Phonepe Private Limited
March 31, 2024 94.53% 11,196 61.00% (1,167) 0.00% - 61.04% (1,167)
March 31, 2023 91.71% 8,432 76.14% (2,107) 103.85% 5 76.09% (2,102)
Subsidiary
India
Phonepe Technology Services Private Limited
March 31, 2024 0.05% 6 1.10% (21) -5.46% (0) 1.10% (21)
March 31, 2023 0.03% 2 0.06% (2) -1.53% (0) 0.06% (2)
Phonepe Insurance Broking Services Private Limited
March 31, 2024 1.33% 157 12.96% (248) -43.75% (0) 12.97% (248)
March 31, 2023 1.95% 179 15.44% (427) 24.91% 0 15.44% (427)
Phonepe Wealth Broking Private Limited
March 31, 2024 3.98% 471 7.00% (134) -52.68% (0) 7.01% (134)
March 31, 2023 4.34% 399 2.87% (79) -0.42% (0) 2.87% (79)
Pincode Shopping Solutions Private Limited
(formerly known as ‘Phonepe Shopping Solutions Private Limited’ and
‘Phonepe Payment Technology Services Private Limited’)
March 31, 2024 -0.07% (8) 5.59% (107) -18.75% (0) 5.60% (107)
March 31, 2023 0.10% 10 0.00% - 0.00% - 0.00% -
Phonepe Finance Private Limited
March 31, 2024 0.13% 15 0.00% - 0.00% - 0.00% -
March 31, 2023 0.16% 15 0.00% - 0.00% - 0.00% -
Phonepe Lending Services Private Limited
(formerly known as 'Phonepe Credit Services Private Limited' and
''Explorium Innovative Technologies Private Limited")*
March 31, 2024 -1.08% (128) 6.69% (128) -19.53% (0) 6.69% (128)
March 31, 2023 0.01% 1 0.82% (23) 15.82% 0 0.82% (23)
Wealth Technology & Services Private Limited
March 31, 2024 0.03% 3 1.31% (25) -5.91% (0) 1.31% (25)
March 31, 2023* -0.21% (19) 1.25% (35) -21.26% (0) 1.25% (35)

Quantech Capital Investment Advisors Private Limited

March 31, 2024 0.01% 1 0.78% (15) -0.71% (0) 0.78% (15)
March 31, 2023* 0.16% 15 0.32% (9) 0.01% 0 0.32% (9)
Indus Appstore Private Limited
(formerly known as 'OSLabs Technology (India) Private Limited')
March 31, 2024 -2.07% (245) 6.43% (123) -68.31% (0) 6.43% (123)
March 31, 2023* -1.18% (109) 3.84% (106) 14.74% 1 3.82% (105)

Singapore
Indus Appstore Pte. Ltd.
(formerly known as 'OSLabs Pte. Limited')
March 31, 2024 1.94% 230 -4.18% 80 162.66% 1 -4.24% 81
March 31, 2023* 1.58% 146 -0.03% 1 -36.09% (1) 0.00% -

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

31. Additional information pursuant to para 2 of general instructions for the preparation of Consolidated Ind-AS Financial Statements (Contd.)

Net assets i.e. total assets minus total liabilities Share in profit or (loss) Share in Other Comprehensive Income Share in Total Comprehensive Income
Name of the entities in the Group As % of consolidated
As % of consolidated net As % of consolidated As % of consolidated other
Amount Amount Amount total comprehensive Amount
assets profit and loss comprehensive income
income

Associate (Investment as per the equity method)

CE Info Systems Limited
March 31, 2024 1.23% 146 1.31% (25) -47.66% (0) 1.31% (25)
March 31, 2023 1.35% 125 -0.74% (20) -0.45% (0) -0.74% (20)

Total
March 31, 2024 100% 11,844 100% (1,913) -100% 1 100% (1,912)
March 31, 2023 100% 9,196 100% (2,807) 100% 5 100% (2,802)

Adjustments arising out of consolidation

March 31, 2024 - (2,388) - (83) - (2) - (85)
March 31, 2023 - (1,678) - 12 - (1) - 10

Grand Total
March 31, 2024 9,455 (1,996) (1) (1,997)
March 31, 2023 7,518 (2,795) 3 (2,792)

* Profit or (loss), Other Comprehensive Income and Total Comprehensive Income disclosed in respect of these entities is from the date of acquiring control.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Consolidated Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

32. The Group has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation
under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in
nature, the Group is in the process of preparing the documentation for the international transactions entered into with the associated enterprises during
the financial year and expects such records to be in existence latest by November 30, 2024 as required under law. The Management is of the opinion that
its international transactions are at arm’s length so the aforesaid legislation will not have any impact on the Consolidated Ind-AS Financial Statements,
particularly on the amount of tax expense and that of provision for taxation.

33. Segment reporting

The Group is engaged in the business of providing technologies for online payment solutions and other allied services in India. The Group does not
distinguish revenues, costs and expenses between different businesses in its internal reporting, and reports costs and expenses by nature as a whole,
except where it is required as a regulatory requirement. The Board of Directors (chief operating decision maker) reviews the results when making
decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The
Group operates and manages its business as a single segment. As the Group's significant long-lived assets are all located in India and most of the
Group's revenues are derived from India, no geographical information is presented.

34. The Group maintains proper books of account with provision of daily back-up, in electronic mode on servers physically located in India in
accordance with the provisions of Section 128 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014 (as amended). The Group
maintains manual records/back-ups in India for certain ancillary application, supporting computation and acting as a repository where servers are
hosted outside India.
35. Audit Trail
The Holding Company and its nine subsidiaries, incorporated in India, have used an accounting software where the feature of recording audit trail (edit
log) facility which was not enabled throughout the year for all relevant transactions recorded in the software.

The Holding Company has used certain accounting software(s) for maintaining its books of account which does not have the feature of recording audit
trail (edit log) facility. The Holding Company and its eight subsidiaries, incorporated in India, have also used certain accounting software which are
operated by third-party software service providers, for maintaining its books of account and for such applications, the System and Organization Control
(SOC) reports do not include information related to audit trail.

The associate has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the
same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of audit, the respective auditor
of the above referred associate did not come across any instance of audit trail feature being tampered with.

36. Previous year amounts in the Consolidated Ind-AS Financial Statements, including notes thereto, have been re-arranged wherever required to
conform to the current year presentation/ classification. These do not affect the previously reported net loss or equity.

As per our report of even date

For S.R. Batliboi & Associates LLP For and on behalf of the Board of Directors of
Chartered Accountants Phonepe Private Limited
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Standalone Ind-AS Financial Statements

Year ended March 31, 2024

| ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Standalone Balance Sheet as at March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
As at As at
Notes March 31, 2024 March 31, 2023
Assets
Non-current assets
Property, plant and equipment 3(i) 2,011 1,643
Capital work-in-progress 3(ii) 83 269
Goodwill 4 16 16
Other intangible assets 4 1 0
Right-of-use assets 5 358 321
Financial assets
(i) Investments 6(i) 2,857 2,306
(ii) Other financial assets 6(v) 43 31
Other non-current assets 7 87 120
5,456 4,706
Current assets
Financial assets
(i) Investments 6(i) 1,110 4,449
(ii) Trade receivables 6(ii) 474 195
(iii) Cash and cash equivalents 6(iii) (a) 699 604
(iv) Bank balances other than (iii) above 6(iii) (b) 3,572 373
(v) Loans 6(iv) 630 206
(vi) Other financial assets 6(v) 1,188 861
Other current assets 7 1,209 1,203
8,882 7,891
Total assets 14,338 12,597

Equity and liabilities

Equity
Equity share capital 8 44 43
Other equity 11,154 8,389
Equity attributable to the equity holders of the Company 11,198 8,432
Non-current liabilities
Financial liabilities
(i) Lease liabilities 9(ii) 266 256
(ii) Cash-settled share based payment liability 951 -
Deferred tax liability (net) 12 1 0
Provisions 11 36 159
1,254 415
Current liabilities
Financial liabilities
(i) Trade payables 9(i)
Total outstanding dues of
6 3
micro enterprises and small enterprises
Total outstanding dues of creditors other than
451 2,378
micro enterprises and small enterprises
(ii) Lease liabilities 9(ii) 111 74
(iii) Other financial liabilities 9(iii) 672 760
Other current liabilities 10 560 470
Provisions 11 86 65
1,886 3,750
Total equity and liabilities 14,338 12,597
Summary of material accounting policies 2

The accompanying notes are an integral part of these Standalone Ind-AS Financial Statements.
As per our report of even date For and on behalf of Board of Directors of
For S.R. Batliboi & Associates LLP Phonepe Private Limited
Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Standalone Statement of Profit and Loss for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
For the year ended For the year ended
Notes March 31, 2024 March 31, 2023

Income
Revenue from operations 13 4,910 2,859
Finance and other income 14 726 166
Total income (i) 5,636 3,025

Expenses
Payment processing charges 1,166 630
Employee benefits expense 15 3,035 2,796
Finance costs 16 35 21
Depreciation and amortization expense 17 1,028 497
Other expenses 18 1,538 1,189
Total expenses (ii) 6,802 5,133
Loss before tax [(i) - (ii)] (1,166) (2,108)

Tax expense
Deferred tax 12 - -
Loss for the year (1,166) (2,108)

Other comprehensive income

Items that will not be reclassified to Profit or Loss

Remeasurement gain/ (loss) on defined benefit plan, net of taxes (3) 1

Fair value gain accounted on equity instrument, net of taxes 3 4

Total other comprehensive income for the year - 5

Total comprehensive loss for the year (1,166) (2,103)

Basic and diluted earnings per share computed on the basis of loss for
the year attributable to equity holders of the Company 21 (263.83) (515.67)
(Rs. per share)

Summary of material accounting policies 2

The accompanying notes are an integral part of these Standalone Ind-AS Financial Statements.

As per our report of even date For and on behalf of Board of Directors of

For S.R. Batliboi & Associates LLP Phonepe Private Limited

Chartered Accountants
Firm registration number:
101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Standalone Statement of Changes in Equity for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

a. Equity share capital

Changes in equity
As at March 31, 2024 As at April 01, 2023 share capital during As at March 31, 2024
the current year

Equity share capital (refer note 8) 43 1 44

Total 43 1 44

Changes in equity
As at March 31, 2023 As at April 01, 2022 share capital during As at March 31, 2023
the previous year

Equity share capital (refer note 8) 40 3 43

Total 40 3 43

b. Other equity

Reserves and Surplus Other

Share-based payment comprehensive Total
As at March 31, 2024 Capital reserve Securities premium Other reserve Retained earnings
reserve income
Balance as at April 1, 2023 137 16,553 2,183 (274) (10,213) 3 8,389

Loss for the year - - - - (1,166) - (1,166)

Remeasurement loss on net defined benefit liability - - - - - (3) (3)
Equity instruments through other comprehensive income,
- - - - - 3 3
net of taxes
Total comprehensive loss for the year - - - - (1,166) - (1,166)
Security premium on issue of equity shares - 1,638 - - - - 1,638
Transaction cost on issue of equity shares - (0) - - - (0)
Settlement/ compensation related to employee share-
- - 1,640 (14) - - 1,626
based payments (Refer note 22)
Modification of equity settled share-based payments to
- - (780) (445) - - (1,225)
cash settled share-based payments (Refer note 22)
Migration of equity settled share-based payments
- - 1,892 - - - 1,892
[PFA 2020 to PFA 2023] (Refer note 22)
Balance as at March 31, 2024 137 18,191 4,935 (733) (11,379) 3 11,154

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Standalone Statement of Changes in Equity for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
b. Other equity (Contd.)
Reserves and Surplus Other
Share-based payment comprehensive Total
As at March 31, 2023 Capital reserve Securities premium Other reserve Retained earnings
reserve income
Balance as at April 1, 2022 - 10,434 - - (8,105) (2) 2,327

Loss for the year - - - - (2,108) - (2,108)

Remeasurement gain on net defined benefit liability - - - - - 1 1
Equity instruments through other comprehensive income,
- - - - - 4 4
net of taxes
Total comprehensive loss for the year - - - - (2,108) 5 (2,103)
Security premium on issue of equity shares - 6,122 - - - - 6,122
Transaction cost on issue of equity shares - (3) - - - (3)
Settlement/ compensation related to employee share-
- - 2,183 (274) - - 1,909
based payments (refer note 22)
Stake purchase in common control entity 137 - - - - - 137
Balance as at March 31, 2023 137 16,553 2,183 (274) (10,213) 3 8,389

c. Nature and purpose of reserves

Capital reserve
The capital reserve represents the excess of the Company's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the purchase consideration.
Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for the limited purposes in accordance with the provisions of the Companies Act, 2013.
Share-based payment reserve
It represents reserve in respect of equity settled share options granted to the Company’s employees in pursuance of the employee stock option plan.
Other reserve
It is used to recognise the difference between grant date fair value of options issued to employees versus the modification date fair value of options.
Retained earnings
Retained earnings comprises of accumulated balance of profits/ (losses) of current and prior years including transfers made to/ from other reserves from time to time.
Other comprehensive income reserve
i. Any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments.
ii. Cumulative gains and losses arising on the revaluation of equity instruments on the balance sheet date measured at fair value through other comprehensive income.
The accompanying notes are an integral part of these Standalone Ind-AS Financial Statements.

As per our report of even date. For and on behalf of Board of Directors of
For S.R. Batliboi & Associates LLP Phonepe Private Limited
Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Standalone Statement of Cash Flows for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
For the year ended For the year ended
March 31, 2024 March 31, 2023
Cash flows from operating activities
Loss before tax (1,166) (2,108)
Adjustments to reconcile loss before tax to net cash flows:
Depreciation and amortization expense 1,028 497
(Gain) on sale of financial instruments (53) (39)
Interest income (439) (100)
Dividend income (3) -
Finance costs 35 20
Effect of changes in exchange rate (151) 91
Bad debts written-off and provisions for doubtful debts and advances 35 13
Provision/ amount written off against property, plant and equipment 14 3
(Gain)/ loss on sale of other intangible assets and property, plant and equipment (22) 1
Share-based payment expense 1,832 1,282
Liabilities no longer required written back (1) -
Operating profit/ (loss) before working capital changes 1,109 (340)
Changes in working capital:
Financial liabilities 298 681
Other liabilities 89 7
Provisions 27 23
Financial assets (61) 136
Other assets 5 (150)
Cash-settled share based payment liability (994) (262)
Cash from operations 473 95
Income tax (paid) (8) (25)
Net cash from operating activities (A) 465 70
Cash flows from investing activities
Purchase of property, plant and equipment, including capital work in progress, intangible assets (1,335) (1,386)
Proceeds from sale of property, plant and equipment and 215 1
intangible assets
Investment in subsidiaries (548) (1,096)
Acquisition of a subsidiary - (576)
Purchase of non-controlling interest in a subsidiary - (15)
Investment in financial instruments (10,092) (6,522)
Proceeds from sale of financial instruments 13,627 3,814
Investment in bank deposits (original maturity more than 3 months) (3,572) (373)
Redemption/ maturity of bank deposits (original maturity more than 3 months) 373 600
Loans given (598) (200)
Repayment of Loans 29 1
Interest received 12 43
Dividend received 3 -
Net cash used in investing activities (B) (1,886) (5,709)
Cash flows from financing activities
Proceeds from issue of equity share capital 1,639 6,125
Transaction costs on issue of shares (0) (3)
Payment of lease liabilities (122) (72)
Interest paid (1) (1)
Proceeds from short-term borrowings 830 699
Repayment of short-term borrowings (830) (699)
Net cash generated from financing activities (C) 1,516 6,049
Net change in Cash and cash equivalents (A+B+C) 95 410
Cash and cash equivalents at the beginning of the year 604 194
Cash and cash equivalents at the end of the year [Note 6(iii)] 699 604
Summary of material accounting policies 2
The accompanying notes are an integral part of these Standalone Ind-AS Financial Statements.

Note: The above Standalone Statement of Cash Flows has been prepared under the “indirect method” as set out in ‘Indian Accounting Standard (Ind-AS) 7 -
Statement of Cash Flows’.
As per our report of even date. For and on behalf of Board of Directors of
For S.R. Batliboi & Associates LLP Phonepe Private Limited
Chartered Accountants
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774
Place : Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru
Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

1. Corporate information

Phonepe Private Limited (herein after referred to as the "Company") (CIN: U67190KA2012PTC176031) was incorporated on December 18, 2012 as a Private Limited
Company under the Companies Act, 1956. The registered office of the Company is located at Office-2, Floor 5, Wing A, Block A, Salarpuria Softzone, Service road,
Green Glen Layout, Bellandur, Bengaluru, Karnataka, India - 560103. The Company became a subsidiary of FIT Holdings S.A.R.L. ("immediate holding company") with
effect from December 23, 2022 (refer note 8) and Walmart Inc. continues to be the ultimate holding company. The Company is involved in the business of a) operating
payment system for semi-closed prepaid instruments services in India vide Reserve Bank India (RBI) Certificate of Authorization No. 98/2016 b) online payment
facilitating services through UPI, debit cards, credit cards, c) provision of allied services associated with PhonePe application and d) operating as Bharat Bill Payment
Operating Unit vide Certificate of Authorization No. 148/2022. The services are provided to customers through PhonePe application.

These Standalone Ind-AS Financial Statements were authorized for issue by the Board of Directors of the Company on July 17, 2024.
2. Summary of material accounting policies
2.1 Basis of preparation of financial information and statement of compliance
These Standalone Ind-AS Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian
accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind-AS
compliant Schedule III), as applicable to these Standalone Ind-AS Financial Statements.

These Standalone Ind-AS Financial Statements have been prepared under the historical cost convention on the accrual basis, except for certain items measured at fair
value, as explained in the accounting policies below.

These Standalone Ind-AS Financial Statements are presented in Indian Rupees (Rs.) and all values in the tables are reported in Crores of Indian rupees (Rupees in
Crores) except share data, unless otherwise stated. Certain notes and disclosures in the Standalone Ind-AS Financial Statements have been represented as Zero ("0"),
where the absolute amount is below the rounding off norms adopted by the Company.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use. The Company has prepared these Standalone Ind-AS Financial Statements on the basis that it will
continue to operate as a going concern.
2.2 Business Combination
Common control transactions
Business combinations involving entities or businesses under common control shall be accounted for using the pooling of interest method. Assets and liabilities of the
combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of reserves of the transferor company is preserved by
reflecting them in the same form in the Standalone Ind-AS Financial Statements in which they appeared in the financial statements of the transferor company.
The financial information in the financial statements in respect of prior periods is restated from the beginning of the preceding period in the Standalone Ind-AS Financial
Statements if the business combination date is prior to that date. However, if business combination date is after that date, the financial information in the Standalone
Ind-AS Financial Statements is restated from the date of business combination.

The gain/loss on common control transactions is recognised in the other equity under Capital reserve.

Investment in subsidiaries and associate

The Company accounts for its equity investments in subsidiaries and associate at cost less accumulated impairment, if any.

2.3 Functional and foreign currency

Functional and presentation currency
The functional currency of the Company is determined on the basis of the primary economic environment in which it operates. The presentation currency of the
Company is determined as Indian Rupees (₹) or Rs.

Transactions and balances

At each Balance Sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated to the functional currency at the rates prevailing
at the Balance Sheet date. Exchange differences are recognised in the Standalone Statement of Profit and Loss in the period in which they arise.

Non-monetary items that are measured in historical cost in a foreign currency are translated using the spot exchange rates as at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the spot exchange rates at the date when the fair value was determined.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.4(i) Property, plant and equipment

(a) Recognition and measurement

All items of property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and impairment loss, if any.
Costs include expenditure directly attributable to acquisition of assets. The cost of an item of property, plant and equipment is recognised as an asset, if and only if, it is
probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repair and
maintenance costs are recognised in Standalone Statement of Profit and Loss as incurred. Any subsequent cost incurred is recognised in the carrying amount of the
property, plant and equipment as a replacement if the recognition criteria are satisfied.

(b) Depreciation
The Company depreciates property, plant and equipment over the estimated useful life on a straight-line basis from the date the assets are available for use. Leasehold
improvements are amortised over the estimated useful life or the lease period, whichever is lower. Depreciation is not recorded on capital work-in-progress and
installation are complete and the asset is ready for its intended use.
Reviews are made annually of the estimated remaining lives and depreciation method of individual assets, taking account of commercial and technological
obsolescence as well as normal wear and tear. The estimated useful lives of material assets are as follows:

Category of assets Estimated useful life

Computers 3 years
Electronic Data Capture machines (included under "Computers") 3 years
Computer servers (included under "Computers") 5 years
Smart speakers (included under "Computers") 1.5 years
Others 5 years

The Company, based on technical evaluation done by management's expert, depreciates certain items of property, plant and equipment over estimated useful lives
which are different from the useful life prescribed in Schedule II to the Act. The management believes that these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely to be used.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on
de-recognition of the asset is included in the Standalone Statement of Profit and Loss in the year the asset is derecognised and are presented as adjustments in the
note to Property, plant and equipment in these Standalone Ind-AS Financial Statements.

2.4(ii) Capital advances and Capital work-in-progress

Advances paid towards the acquisition of property, plant and equipment outstanding at each Standalone Balance Sheet date is classified as capital advances under
other non-current assets and the cost of assets not ready to use before such date are disclosed under ‘Capital work-in-progress’, net of accumulated impairment loss,
if any.

2.5 Goodwill and other intangible assets

Goodwill
Goodwill is initially measured at cost (excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in a business combination). If the
fair value of net assets acquired is in excess of aggregate consideration transferred, the bargain purchase gain is recognized immediately in Other Comprehensive
Income (OCI) and accumulated in equity as capital reserve.

Goodwill is subsequently measured at cost less amounts provided for impairment. Goodwill acquired in a business combination is assessed to determine whether new
cash generating units (CGUs) are created, and if not, is allocated to the existing CGUs. These might not always be the same as the CGUs that include the assets and
liabilities of the acquired business.

Cash generating units

For the purpose of impairment testing, assets are grouped in cash generating units (CGUs). A CGU is identified as the lowest aggregation of assets that generate largely
independent cash inflows, and which is looked at by management for monitoring and managing the business.

Other intangible assets

Separately purchased intangible assets are initially measured at cost, being the purchase price as at the date of acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization and impairment loss, if any. Internally generated intangible assets, excluding capitalised development
costs, are not capitalised and expenditure is recognised in the Standalone Statement of Profit and Loss when it is incurred. Subsequent expenditures are capitalized
only when they increase the future economic benefits embodied in the specific asset to which they relate.

The useful lives of the material intangible assets assessed by the management are as follows and these amortized on a straight line basis over the period of the assets:
Category of assets Estimated useful life
Computer software 1-3 years
Intellectual property rights 3 years

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.6 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. Financial instruments
in the form of financial assets and financial liabilities are generally presented separately. Financial instruments are recognized on the Standalone Balance Sheet when
the Company becomes a party to the contractual provisions of the instrument.
Upon initial recognition, financial instruments are measured at fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are
recognized in determining the carrying amount, if it is not classified as at Fair Value through profit and loss. Subsequently, financial instruments are measured
according to the category in which they are classified.
Financial assets are classified into following categories:
- Financial assets carried at amortised cost
- Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)
- Financial assets at Fair Value Through profit and loss (FVTPL)
Financial liabilities are classified into financial liabilities at amortized cost and other financial liabilities.

Financial assets
Financial assets primarily comprise of trade receivables, loan and receivables, cash and bank balances and marketable securities and investments.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:

Trade and other receivables

In accordance with Ind-AS 109 para 5.1.3, at initial recognition, an entity measures trade receivables at their transaction price (as defined in Ind-AS 115) if the trade
receivables do not contain a significant financing component. The Company holds the Trade receivables with the objective to collect the contractual cash flows and
therefore measures them subsequently at amortised cost using the effective interest method, less any impairment.
Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it meets both the following criteria:
(i) the asset is held within a business model whose objective is to hold the asset to collect contractual cash flows, and
(ii) the contractual terms of the financial assets give rise on a specified date to cash flows that are solely payments of principal and interest on the principal
outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance income in the Standalone Statement of profit and loss. The losses arising from impairment are recognised in the Standalone Statement of profit and loss. The
Company’s financial assets at amortised cost includes trade receivables, investments in non-convertible debentures and investments in commercial paper included
under other current and non-current financial assets.

Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI):

A financial asset is subsequently measured at FVTOCI if it meets both of the following criteria:

(i) the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and
(ii) the contractual terms of the financial asset give rise on a specified date to cash flows that are solely payments of principal and interest on the principal amount
outstanding.

Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the
subsequent changes in fair value are recognized in OCI. The classification is determined on an instrument-by-instrument basis. For Financial assets at FVTOCI, all fair
value changes in the instruments excluding dividends, are recognised in OCI and is never recycled to the Standalone Statement of Profit and Loss, even on sale of the
instrument. Interest income earned on FVTOCI instruments are recognised in the Standalone Statement of Profit and Loss. Dividends are recognised as other income in
the Statement of Profit and Loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the
cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment
assessment.

Financial assets at Fair Value Through profit and loss (FVTPL) :

A financial asset which does not meet the amortised cost or FVTOCI criteria is measured as FVTPL. Financial assets at FVTPL are measured at fair value at the end of
each reporting period, with any gains or loss on re-measurement recognised in the Statement of Profit and Loss. The gain or loss on disposal is recognised in
Standalone Statement of Profit and Loss. Interest income earned on FVTPL instruments are recognised in the Statement of Profit and Loss.

Financial liabilities
Financial liabilities primarily include trade payables, lease liabilities and other liabilities are measured at fair value on initial recognition.

Financial liabilities measured at amortized cost

After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest method, except for contingent considerations
recognized in a business combination which is subsequently measured at FVTPL. For trade and other payables, the carrying amounts approximate fair value due to the
short term maturity of these instruments.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

De-recognition of financial assets and liabilities

Financial assets
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have
to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial
asset and also recognizes a collateralized borrowing for the proceeds received.
On de-recognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and
receivable is recognised in Standalone Statement of Profit and Loss. In addition, on de-recognition of an investment in a debt instrument classified as at FVTOCI, the
cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to Standalone Statement of profit and loss. In contrast, on de-
recognition of an investment in equity instrument which the Company has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously
accumulated in the investments revaluation reserve is not reclassified to the Standalone Statement of Profit and Loss, but is transferred to retained earnings.
Financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the
carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is
recognised in the Standalone Statement of Profit and Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

2.7 Impairment
Financial assets
Ind-AS 109 requires the Company to record expected credit loss on all of its debt securities, loans and receivables, either on a 12-month or life time expected credit
loss. The Company recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Loss
allowance for trade receivable with no significant financing component is measured at an amount equal to life time ECL. For all other financial assets, ECL are
measured at an amount equal to 12-month ECL, unless there is a significant increase in the credit risk from initial recognition in which case those are measured at
lifetime ECL. The amount of expected credit loss (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be
recognized is recognized as an impairment gain or loss in Standalone Statement of Profit and Loss.

Non - financial assets

The Company assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill and intangible assets with indefinite
economic lives are tested for impairment annually and at other times when such indicators exist.

An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to dispose and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If
no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value
indicators.

Impairment loss are recognised in profit and loss in those expense categories consistent with the nature of the impaired asset. Other non-financial assets are tested for
impairment when there are indicators that the carrying amounts may not be recoverable.

2.8 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and highly liquid investments with maturities of three months
or less when acquired and subject to an insignificant risk of changes in value. They are readily convertible into known amounts of cash and are held at amortised cost,
where they meet the hold to collect ‘solely payments of principal and interest’ test criteria under Ind-AS 109. Those not meeting these criteria are held at fair value
through profit and loss.

2.9 Restricted cash

Cash that is restricted as to withdrawal for use or pledged as security is reported separately under other assets, and is not included in the total cash and cash
equivalents in the statements of cash flows and cash and cash equivalents in the Standalone Balance Sheet. The Company’s restricted cash mainly represents (a)
amounts underlying customer wallet balances held in escrow bank account and (b) the secured deposits held in designated bank accounts for which Bank
Guarantee/Letter of Credit/Buyer Credit/ Overdraft facility has been issued/utilized.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.10 Provisions
Provisions are liabilities of uncertain timing or amount. A provision is recognised if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions are measured at management’s best estimate of the most likely outcome of the expenditure required to settle the obligation at the reporting date and are
discounted to present value where the effect is material. Provisions are classified as non-current where the exact timing of settlement is uncertain but they are
expected to be settled in more than 12 months.

2.11 Employee benefits

Defined benefit plan

In accordance with applicable laws in India, the Company provides for gratuity, a defined benefit retirement plan (“the Gratuity Plan”) for every employee who has
completed 5 years or more of service on separation at 15 days salary (last drawn salary) for each completed year of service. The Gratuity Plan provides for a lump sum
payment to eligible employees at retirement, death, incapacitation or termination of employment based on last drawn salary and tenure of employment with the
Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date using projected unit credit method. The gratuity scheme
is not funded.

The operating and financing costs of such plans are recognised separately; current service costs are spread systematically over the period of rendered service and
financing costs are recognised in full in the periods in which they arise. Remeasurements of the net defined benefit liability, including actuarial gains and losses, are
recognised immediately in Other comprehensive income.

Defined contribution plan

The Company makes contributions to the Provident Fund scheme, a defined contribution plan. These contributions are deposited with Government administered fund
and recognised as an expense in the period in which the related service is performed. There is no further obligation of the Company on this defined contribution plan.
Compensated absences
Employee entitlements to annual leave are recognised as a liability when they accrue to the employees. The estimated liability for leave is recognised for services
rendered by employees up to the end of the reporting period.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-
term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/loss are
immediately taken to the Standalone Statement of Profit and Loss and are not deferred. The Company presents the entire leave as a current liability in the Standalone
Balance Sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

Share based payments

Equity-settled transactions:
The fair value of employee share option plans, which are equity-settled, is calculated at the grant date using the Finnerty model. The resulting cost is charged to the
Standalone Statement of Profit and Loss over the vesting period. The value of the charge is adjusted to reflect expected and actual levels of vesting.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original
terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the
share-based payment transaction, or is otherwise beneficial to the employee.

Cash-settled transactions:
The fair value of employee share option plans, which are cash-settled, is calculated at the grant date fair value. At the end of each reporting period until the liability is
settled and at the date of settlement, the fair value of the liability is re-measured, with any changes in the fair value recognised in ‘Employee benefits expense’ in the
Standalone Statement of Profit and Loss for the year. The liability is presented as employee benefit obligation, under Financial Liability, in the Standalone Balance
Sheet.

Cash outflows relating to the cash-settled plan are recognised within operating activities, as they relate to employee remuneration.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.12 Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.

Company as a lessee:

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company
recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets
The right of use asset is initially measured at cost, comprising: the initial lease liability; any lease payments already made less any lease incentives received; and initial
direct costs;. The right of use asset is subsequently depreciated on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset. The
right of use asset is tested for impairment if there are any indicators of impairment.

ii) Lease liabilities

The lease liability is measured at the present value of the lease payments, discounted at the lessee’s incremental borrowing rate specific to the term, country, currency
and start date of the lease. Lease payments include: fixed payments; variable lease payments dependent on an index or rate, initially measured using the index or rate
at commencement; the exercise price under a purchase option if the Company is reasonably certain to exercise; penalties for early termination if the lease term reflects
the Company exercising a break option; and payments in an optional renewal period if the Company is reasonably certain to exercise an extension option or not
exercise a break option.

The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is remeasured, with a corresponding adjustment to the right of
use asset, when there is a change in future lease payments resulting from a rent review, change in an index or rate, or change in the Company’s assessment of whether

iii) Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value
assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2.13 Revenue from contracts with customers

Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in
exchange for those services.
Revenues in excess of invoicing, which are dependent upon both performance and passage of time, are classified as contract assets. Such assets are classified as
unbilled receivables when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.
Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for
modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price.
Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate
contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at
the standalone selling price.
The Company presents revenue net of applicable taxes in the Standalone Statement of Profit and Loss.
The following is a description of principal activities from which the Company generates its revenue:

(a) Sale of services

(i) Payments and allied services
Revenue from processing payment transactions is based upon a fixed percentage/ amount applied to the transaction value or is determinable as per terms of the
agreement with customers. Revenue is recognised in the period in which the related transactions occur. Revenue from allied services includes advertising services,
deployment of POS devices recognised at a point in time and related subscription fee recognised over time. For advertising services, we use the output method and
apply the practical expedient to recognize advertising revenue for the amount to which we have a right to invoice. Promotion and incentives provided to end users on
wallet and payment platform are recognised as marketing expenses as the performance obligation of the Company is to provide payment processing service to
merchants in exchange for commissions. Promotions and incentives which are consideration payable to a customer are recognised as a reduction of revenue at the
later of when revenue is recognised or when the Company pays or promises to pay the incentive.

The Company recognises revenue on facilitation of electronic recharge transactions to the extent of net consideration it expects to receive on such transactions.

(ii) Other operating revenue

Government grants are recognised where there is a reasonable assurance that the grant will be received and all attached conditions will be complied with.
A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the
entity with no future related costs is recognised in profit or loss of the period in which it becomes receivable.
Such grant income is presented as other operating revenue, under revenue from operations, in the Standalone Statement of Profit and Loss.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

(b) Finance and other income

Interest income is recognised using the effective interest method. Effective interest is the rate that exactly discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in finance
income in the Standalone Statement of Profit and Loss. Finance and other income comprises of interest income on fixed deposits, escrow account for wallet operations
and changes in fair value and gains/(loss) on disposal of financial instruments classified as FVTPL.

2.14 Marketing expenses

The Company provides incentives to its users in various forms including cashback. These are provided to users to promote PhonePe application and enhance
participation in the platform for various use cases. Incentives and promotion benefits given to its end users, other than customer consideration are recorded as
marketing expenses under Other expenses.

2.15 Finance cost

Finance cost comprises of interest on lease liabilities, interest on dues to micro and small enterprises and interest on borrowings.

2.16 Income Tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the Standalone Statement of Profit and Loss except to the extent it relates to a
business combination, or items directly recognized in equity or in OCI.
Current income tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable
income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and
applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts
and where it intends either to settle on a net basis, or to realize the asset and liability simultaneously.
Current income tax relating to items recognised outside profit and loss is recognised outside profit and loss (either in OCI or equity). Current tax items are recognized in
correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to interpretation, and it establishes provisions where appropriate.
Deferred tax
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary
differences arising between the tax base of assets and liabilities and their carrying amount in Standalone Ind-AS Financial Statements, except when the deferred
income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor
taxable profits or loss at the time of the transaction. Deferred income tax assets are recognized to the extent it is probable that taxable profit will be available against
which the deductible temporary differences and the carry forward of unused tax credits and unused tax loss can be utilized.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are
expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting period.
Deferred tax relating to items recognised outside Standalone Statement of Profit and Loss are recognised in correlation to the underlying transaction either in OCI or
directly in equity.
The Company offsets deferred income tax assets and liabilities, where it has a legally enforceable right to offset current tax assets against current tax liabilities, and
they relate to taxes levied by the same taxation authority, where there is an intention to settle the current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realized simultaneously.

2.17 Fair value measurement

A number of financial instruments are measured at fair value as of each reporting date after initial recognition. Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset or a liability is measured
using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest by
using quoted market rates, discounted cash flow analyses and other appropriate valuation models. The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable
inputs. All assets and liabilities for which fair values are being measured or disclosed in the Standalone Ind-AS Financial Statements are categorized within the fair
value hierarchy, described as follows:

• Level 1– This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or
liabilities. This category consists of mutual fund investments.

• Level 2 – This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• Level 3 – This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs).
Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market
transactions in the same instrument nor are they based on available market data.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2.18 Contingencies

Contingent Liability:
Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-occurrence of uncertain future events outside the
Company’s control, or present obligations that are not recognised because it is not probable that a settlement will be required or the value of such a payment cannot be
reliably estimated. The Company does not recognise contingent liabilities but discloses them.
Contingent Asset:
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company.

2.19 Earnings per share

Basic earnings per share is computed by dividing the profit/(loss) attributable to ordinary equity holders of the Company by weighted average number of equity shares
outstanding during the period, if any. Diluted earnings per share is computed by dividing the profit/(loss) attributable to ordinary equity holders of the Company using
the weighted-average number of equity shares considered for deriving basic earnings per share and weighted average number of dilutive equivalent shares outstanding
during the period, except where the results would be anti-dilutive. Dilutive potential shares are deemed converted at the beginning of the period, unless issued at later
date.

2.20 Current and non-current classification

The Company prepares assets and liabilities in the statement of financial position based on current and non-current classification. An asset is classified as current
when:

- It is expected to be realise the asset, or intends to sell or consume it, in Company's normal operating cycle
- It holds the asset primarily for the purpose of trading
- It expects to realise the asset within twelve months after the reporting period or
- The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting
period.
The Company classifies all other assets as non-current.

A liability is current when:

- It is expected to be settled in the normal operating cycle

- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period or
- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

2A . Critical accounting estimates and judgements

The preparation of the Company's Standalone Ind-AS Financial Statements in conformity with Ind-AS requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities
at the reporting period. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are
revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. In particular,
information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the
amounts recognized in the Standalone Ind-AS Financial Statements are included in the following notes:

(a) Impairment of non-financial assets

The Company assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is tested for impairment annually
and at other times when such indicators exist. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of estimates.
Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.

(b) Employees benefits plan

The cost of defined benefit pensions and other post retirement plans as well as the present value of the pension obligation are determined using actuarial valuations.
The actuarial valuation involves making various assumptions. These include the determination of the discount rates, expected rates of return of assets, future salary
increase, mortality rates and future pension increases.

(c) Employee share options

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are
granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and
conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option,
volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions
are disclosed in Note 23 to the Standalone Ind-AS Financial Statements.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

2B Standards issued but not yet 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. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
3(i) Property, plant and equipment
Computers Leasehold improvements Others* Total
At cost
As at April 1, 2022 988 9 6 1,003
Additions 1,433 - 7 1,440
Assets written off (2) - - (2)
Disposals/ adjustments (7) - - (7)
As at March 31, 2023 2,412 9 13 2,434
Additions 1,275 4 3 1,282
Assets written off (9) - - (9)
Disposals/ adjustments (3) (0) (0) (3)
As at March 31, 2024 3,675 12 16 3,703
Accumulated depreciation
As at April 1, 2022 362 6 2 370
Charge for the year 423 2 2 427
Assets written off (1) - - (1)
Disposals/ adjustments (5) - - (5)
As at March 31, 2023 779 8 4 791
Charge for the year 897 1 3 901
Assets written off (6) - - (6)
Disposals/ adjustments ** 7 (0) (0) 6
As at March 31, 2024 1,677 9 6 1,692
Net Block
As at March 31, 2023 1,633 1 9 1,643
As at March 31, 2024 1,998 3 10 2,011

* Others includes office equipments, furnitures and fixtures and electrical installations.
** Includes provision on smart speakers.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
3(ii) Capital work-in-progress
As at As at
March 31, 2024 March 31, 2023
Capital work-in progress 83 269
Total 83 269
Capital work-in-progress (CWIP) ageing schedule
As at March 31, 2024
Amount in CWIP for a period of
Less than 1 year 1-2 years 2-3 years 3-4 years Total
Projects in progress 83 - - - 83
83 - - - 83
As at March 31, 2023
Amount in CWIP for a period of
Less than 1 year 1-2 years 2-3 years 3-4 years Total
Projects in progress 269 - - - 269
269 - - - 269
As at March 31, 2024 and March 31, 2023, there are no projects/ CWIP assets which are overdue for capitalisation/ have exceeded estimated cost.
4. Goodwill and Other intangible assets*
Computer software Intellectual property rights Total Goodwill Grand total
At cost
As at April 1, 2022 8 26 34 16 50
Additions 0 - 0 - 0
Disposals - - - - -
As at March 31, 2023 8 26 34 16 50
Additions (refer note 6(iv)) 0 216 216 - 216
Disposals - (214) (214) - (214)
As at March 31, 2024 8 28 36 16 52
Accumulated amortisation and impairment
As at April 1, 2022 6 26 32 - 32
Charge for the year 2 - 2 - 2
Disposals - - - - -
As at March 31, 2023 8 26 34 - 34
Charge for the year 0 22 22 - 22
Disposals - (21) (21) - (21)
As at March 31, 2024 8 27 35 - 35

Net Block
As at March 31, 2023 0 - 0 16 16
As at March 31, 2024 - 1 1 16 17
* The management has identified the Company as a whole as one CGU.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

4. Goodwill and other intangible assets (Contd.)

Key assumptions which the Company has used in determination of value in use includes:

Value in use calculation:

The recoverable amount of the CGUs as at March 31, 2024, have been determined based on value in use using cash flow projections from financial budgets approved by senior management covering a five
year period and cash flow projections has been extrapolated for the next 21 years based on the estimated cash flows of initial 5 years. The Company has considered a terminal growth rate of 5% to arrive at the
value in use to perpetuity beyond 20 years. The post-tax discount rate is applied to cash flow projections for impairment testing during the financial years. It is concluded that the carrying value of goodwill does
not exceed the value in use. As a result of this analysis, the management concluded that impairment is not required for these CGUs.

Discount rates:
Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been
incorporated in the cash flow estimates. The discount rate calculation of each CGU is derived from its Weighted Average Cost of Capital (WACC).

Growth rate estimates:

Growth rate is based on the Company’s projection of business and growth of the industry in which the respective CGU is operating.

Assumptions
For the year ended For the year ended
March 31, 2024 March 31, 2023
Long term growth rate 5% 5%
Discount rate 19% 19%

An analysis of the calculation’s sensitivity to a change in the key parameters (discount rate and long-term growth rate) based on reasonably probable assumptions, did not identify any probable scenarios
where the remaining CGU’s recoverable amount would fall below its carrying amount.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

5. Right-of-use assets
8ROUA 8ROUB
The changes in the carrying value of Right-of-use assets (RoU) are as follows: 8ROUAB 8ROUBB
Buildings Data Centers Motor vehicles Total RoU Assets
Gross carrying value at cost
As at April 1, 2022 136 20 0 156
Additions 150 122 - 272
Disposals/ adjustments (1) (0) - (1)
As at March 31, 2023 285 142 0 427
Additions 58 84 - 142
Disposals/ adjustments (5) - - (5)
As at March 31, 2024 338 226 0 564

Accumulated amortisation
As at April 1, 2022 37 1 0 38
Charge for the year 41 28 - 69
Disposals/ adjustments (1) (0) - (1)
As at March 31, 2023 77 29 0 106
Charge for the year 63 42 - 105
Disposals/ adjustments (5) - - (5)
As at March 31, 2024 135 71 0 206

Net carrying value

As at March 31, 2023 208 113 - 321
As at March 31, 2024 203 155 - 358

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
6. Financial assets
(i) Investments Non-current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
At amortised cost
Investment in non-convertible debentures (quoted) - - - 15
Investment in commercial papers (quoted) - - 1,110 3,136
Sub-total (a) - - 1,110 3,151
At fair value (through OCI)
Investment in equity shares (unquoted)
National Payments Corporation of India
15 12 - -
fully paid equity shares 61,320 (March 31, 2023 - 61,320)
Sub-total (b) 15 12 - -
At fair value (through profit and loss)
Investment in liquid mutual funds (quoted) - - - 1,298
Sub-total (c) - - - 1,298
At cost
Investment in wholly-owned subsidiaries (fully paid) (unquoted)
Phonepe Technology Services Private Limited
2,95,00,000 equity shares of Rs. 10 each 30 4 - -
(March 31, 2023 - 45,00,000 equity shares of Rs. 10 each)
Phonepe Insurance Broking Services Private Limited
1,06,30,00,000 equity shares of Rs. 10 each 1,063 837 - -
(March 31, 2023 - 83,70,00,000 equity shares of Rs. 10 each)
Phonepe Wealth Broking Private Limited
70,01,50,000 equity shares of Rs. 10 each 700 493 - -
(March 31, 2023 - 49,31,50,000 equity shares of Rs. 10 each)
Pincode Shopping Solutions Private Limited
(formerly known as ‘Phonepe Shopping Solutions Private Limited’ and
‘Phonepe Payment Technology Services Private Limited’) 99 10 - -
9,99,00,000 equity shares of Rs. 10 each
(March 31, 2023 - 99,00,000 equity shares of Rs. 10 each)
Phonepe Finance Private Limited
1,49,00,000 equity shares of Rs. 10 each 15 15 - -
(March 31, 2023 - 1,49,00,000 equity shares of Rs. 10 each)
Phonepe Lending Services Private Limited
(formerly known as 'Explorium Innovative Technologies Private Limited' 76 76 - -
and 'Phonepe Credit Services Private Limited')
11,780 equity shares of face value of Rs. 10 each
(March 31, 2023 - 11,780 equity shares of Rs. 10 each)
Indus Appstore Singapore Pte. Ltd.
(formerly known as 'OSLabs Pte. Ltd.') 762 762 - -
21,55,502 equity shares (March 31, 2023 - 21,55,502)
Sub-total (d) 2,745 2,197 - -
Investment in associate (quoted)
C.E. Info Systems Ltd
1,01,97,966 equity shares of face value of Rs. 2 each (March 31, 2023 - 97 97 - -
1,01,97,966 of face value of Rs. 2 each)
Sub-total (e)
Total - (a)+(b)+(c)+(d)+(e) 2,857 2,306 1,110 4,449

Set out below is the aggregate amount of quoted and unquoted investments disclosed above:

Book value of quoted investments 97 97 1,110 4,449

Market value of quoted investments 1,901 1,012 1,108 4,448
Unquoted investments 2,760 2,209 - -

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

6. Financial assets (Contd.)

(ii) Trade receivables

As at As at
March 31, 2024 March 31, 2023

Unsecured, considered good* 474 195

Unsecured, credit impaired 52 30
526 225
Allowance for impairment of trade receivables (52) (30)
Total 474 195

Set out below is the movement in the allowance for impairment of trade receivables:

As at As at
March 31, 2024 March 31, 2023
Opening balance (30) (34)
Provision made during the year (37) (15)
Provision reversed during the year 15 19
Write-off 0 0
Closing balance (52) (30)

Trade receivables are non-interest bearing and are generally due on a defined credit period. They are recognised at their original invoice amounts which represent
their fair values on initial recognition.

No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person nor any trade or other
receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

*includes receivables from related parties (refer note 19).

Trade receivables Ageing Schedule

As at March 31, 2024

Outstanding for following periods from due date of payment

Current but Less
6 months – 1 More than 3 Total
not due than 6 1-2 years 2-3 years
year years
months

Undisputed Trade receivables –

418 56 - - - - 474
considered good
Undisputed Trade receivables –
10 19 13 8 1 1 52
credit impaired
428 75 13 8 1 1 526

As at March 31, 2023

Outstanding for following periods from due date of payment
Current but Less
6 months – 1 More than 3 Total
not due than 6 1-2 years 2-3 years
year years
months

Undisputed Trade receivables –

115 80 0 - - - 195
considered good
Undisputed Trade receivables –
12 6 4 7 1 0 30
credit impaired
127 86 4 7 1 0 225

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

6. Financial assets (Contd.)

(iii) Cash and cash equivalents and Bank balances

As at As at
March 31, 2024 March 31, 2023

a) Cash and cash equivalents

Balance with banks 695 100
Short term deposits * 4 504
Total 699 604

* The deposits with bank comprise time deposits, which can be withdrawn at any time with prior notice (ranging from 0 - 31 days) and without any penalty on the
principal and accordingly considered as cash and cash equivalents for cash flow purposes.
As at As at
March 31, 2024 March 31, 2023
Cash and cash equivalents as per Ind-AS 7 (Statement of cash flows) 699 604

b) Bank balances other than Cash and cash equivalents

Short term deposits * 3,572 373
3,572 373

* Represents deposits with original maturity of more than 3 months, having remaining maturity of less than 12 months from the reporting date.

(iv) Loans
Current
As at As at
March 31, 2024 March 31, 2023
Unsecured, considered good
Loans to employees 4 5
Intercorporate loans - related parties (refer note 19) 626 53
Secured, considered good
Intercorporate loans - others - 148
Secured, credit impaired
Intercorporate loans - others - 8
- - 630 214
Allowance for impairment - - (8)
Total - - 630 206

Disclosure required under Section 186(4) of the Companies Act, 2013

Included in loans are certain intercorporate loans the particulars of which are disclosed below as required by Section 186(4) of the Companies Act, 2013:

Rate of As at As at
Name of the loanee Due date Secured/ unsecured
Interest March 31, 2024 March 31, 2023
Camden Town Technologies Private Limited # 16.4% p.a. On demand Secured - 156
Indus Appstore Private Limited (refer note 19) *
(formerly known as 'OSLabs Technology (India) Private 7.8% p.a. On demand Unsecured 302 53
Limited')
Phonepe Lending Services Private Limited (refer note 19) *
(formerly known as 'Phonepe Credit Services Private
7.8% p.a. On demand Unsecured 324 -
Limited' and 'Explorium Innovative Technologies Private
Limited')

* The loans will be utilized for meeting liabilities and/ working capital requirements by recipients. The maximum amount outstanding for the above mentioned loans
at any point of time during the current and previous financial year are equivalent to the outstanding balance as at the respective year end.

# Camden Town Technologies Private Limited had given first charge over its trademarks and copy right works against the above loan. The loan was fully adjusted
against the purchase consideration of the intangible asset.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

(v) Other financial assets

Non-current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Unsecured, considered good
Interest accrued on fixed deposits and loans - - 259 4
Restricted cash [refer note 6(v)(a) below] 1 0 334 331
Other receivables [refer note 6(v)(b) below] - - 183 267
Unwithdrawn commission [refer note 6(v)(c) below] - - 406 255
Security deposits 42 31 6 4
Unsecured, credit impaired
Security deposits - - - 0
Other receivables - - 26 15
43 31 1,214 876
Allowance for impairment of doubtful assets - - (26) (15)
Total 43 31 1,188 861

(v)(a) Restricted cash (current) above consists of Rs. 334 (March 31, 2023: Rs. 331) in escrow account for wallet operations and fixed deposits amounting to Rs. 1
(March 31, 2023 : Rs. 0) given as collateral against bank guarantees.

(v)(b) includes receivables from related parties (refer note 19).

(v)(c) The Company holds nodal account balances for transactions processed through payment gateway services and/ or unified payment interface, as applicable,
which are required by the Reserve Bank of India (RBI). The nodal bank account is an internal account of the bank. The Company does not have the ability to
withdraw funds from the nodal accounts except for limited purposes as defined in the circular given by the RBI. Further, the Company cannot create a lien on the
nodal accounts and acts merely as an administrator. The Company does not have an obligation to pay to the counterparty for amounts held in the said nodal
accounts and hence, the amount does not represent an asset or liability for the Company. The balance held in such nodal accounts include commission
attributable to the Company. As at the year end, the commission to be withdrawn is disclosed under other financial assets in the Standalone Ind-AS Financial
Statements.

7. Other assets
Non-current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Unsecured, considered good
Advances to vendors
- - 355 215
[net of provision Rs. 1 (March 31, 2023 : Rs. 0)]
Capital advances 11 46 - -
Balances with statutory authorities * #
2 11 750 909
[net of provision Rs. 8 (March 31, 2023 : Rs. 2)]
Prepaid expenses 20 22 104 79
Income tax receivables (net) 54 41 - -
Total 87 120 1,209 1,203

*Balances with statutory authorities includes Goods and Services tax (GST) input credit, including GST paid on gross value of electronic recharge transactions. The
Company recognises revenue on facilitation of electronic recharge transactions to the extent of net consideration it expects to receive on such transactions.

# Includes Rs. 2 (March 31, 2023 : Nil) paid under protest on account of Central Goods and Services Tax Act, 2017.

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127 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
8. Equity share capital
As at As at
March 31, 2024 March 31, 2023
Authorized share capital
10,00,00,000 (March 31, 2023: 10,00,00,000) equity shares of Rs.10 each 100 100
Issued, subscribed and fully paid-up share capital
4,42,74,361 (March 31, 2023: 4,34,53,661) equity shares of Rs.10 each 44 43
Total issued, subscribed and fully paid-up share capital 44 43
a. Reconciliation of shares outstanding at the beginning and at the end of the reporting year
As at March 31, 2024 As at March 31, 2023
No. of shares Amount No. of shares Amount
Equity shares of Rs. 10 each fully paid up
At the beginning of the year 43,453,661 43 40,386,345 40
Issued during the year 820,700 1 3,067,316 3
Outstanding at the end of the year 44,274,361 44 43,453,661 43

c. Terms and rights attached to equity shares

The Company has only one class of equity share having par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. In the event of
liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Company declares and pays dividends in Indian
rupees, if any. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

d. Details of shareholders holding more than 5% shares in the Company

As at March 31, 2024 As at March 31, 2023
No. of shares % holding No. of shares % holding
Equity shares of Rs.10 each fully paid up
FIT Holdings S.A.R.L. 37,151,789 83.91% 37,151,789 85.50%
Headstand Pte. Ltd. (Formerly 'Phonepe
Private Limited') (incorporated in Singapore) 2,966,664 6.70% 2,966,664 6.83%
("Headstand Pte. Ltd.")
General Atlantic Singapore PPIL Pte. Ltd. 2,275,528 5.14% 1,454,828 3.35%

As per the records of the Company, including its register of shareholders / members and other declarations received from the shareholders regarding beneficial
interest, the above shareholding represents both legal and beneficial ownership of shares.

e. Shares reserved for issue under share based options

Refer note 22 for details of shares reserved for issue under share based options.
f. Shares held by holding/ intermediate holding company/ ultimate holding company/ fellow subsidiary
As at As at
March 31, 2024 March 31, 2023
FIT Holdings S.A.R.L.
37,151,789 (March 31, 2023: 37,151,789) equity shares of Rs.10 each 37 37
Headstand Pte. Ltd. (Refer note 8d above and note 19) - 3
Nil (March 31, 2023: 2,966,664) equity shares of Rs.10 each

g. Details of shares held by promoters

As at March 31, 2024
No. of shares at No. of shares
Change during % change during
Promoter name the beginning of at the end of % of Total shares
the year the year
the year the year
FIT Holdings S.A.R.L. (refer note 8(d) above)
37,151,789 - 37,151,789 83.91% 0%
[Subsidiary of Walmart Inc. (ultimate holding company)]
Total 37,151,789 - 37,151,789 83.91% 100%

As at March 31, 2023

No. of shares at No. of shares
Change during % change during
Promoter name the beginning of at the end of % of Total shares
the year the year
the year the year
FIT Holdings S.A.R.L. (refer note 8(d) above)
- 37,151,789 37,151,789 85.50% 100%
[Subsidiary of Walmart Inc. (ultimate holding company)]
Total - 37,151,789 37,151,789 85.50% 100%

128 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

9. Financial liabilities

(i) Trade payables

As at As at
March 31, 2024 March 31, 2023

Trade payables 115 73

Accrued liabilities 342 2,308
Total 457 2,381

Dues to suppliers who are registered as micro and small enterprises under "The Micro, Small and Medium and Enterprises Development Act, 2006 (MSMED Act)"
as at March 31, 2024 is Rs. 6 (March 31, 2023: Rs. 3).
Trade payables and accrued liabilities include amounts payable to related parties (refer note 19).
Trade payables are non-interest bearing and are normally settled basis the agreed credit terms.

Trade payables ageing schedule

More than 3
As at March 31, 2024 Not due Less than 1 year 1-2 years 2-3 years Total
years
Total outstanding dues of micro enterprises
5 1 0 0 0 6
and small enterprises
Total outstanding dues of creditors other than
80 27 2 - - 109
micro enterprises and small enterprises
Total 85 28 2 0 0 115

More than 3
As at March 31, 2023 Not due Less than 1 year 1-2 years 2-3 years Total
years
Total outstanding dues of micro enterprises 2 1 - - -
3
and small enterprises
Total outstanding dues of creditors other than 64 6 0 0 0
70
micro enterprises and small enterprises
Total 66 7 0 0 0 73

Details relating to Outstanding dues to Micro and Small Enterprises

As at As at
March 31, 2024 March 31, 2023
(a) the principal amount remaining unpaid to any supplier at the end of the accounting year 5 2

(b) the interest due thereon remaining unpaid to any supplier at the end of the accounting year 1 0

(c) the amount of interest paid in terms of Section 16 of the Micro, Small and Medium Enterprises - -
Development Act, 2006 (27 of 2006) (MSMED Act), along with the amount of the payment made to the
supplier beyond the appointed day during the acocunting year
(d) the amount of interest due and payable for the period of delay in making payment (which has been - -
paid but beyond the appointed day during the year) but without adding the interest specified under the
MSMED Act, 2006

(e) the amount of interest accrued and remaining unpaid at the end of the accounting year - -

(f) the amount of further interest remaining due and payable even in the succeeding years, for the
0 0
purpose of disallowance of a deductible expenditure under Section 23 of the MSMED Act

Total 6 3
Micro and Small enterprises have been identified by the Company on the basis of the information available.

129 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

(ii) Lease liabilities

Non current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Lease liabilities 266 256 111 74
Total 266 256 111 74

The Company leases buildings including data centres which have a renewal option in the normal course of the business. Extension and termination options are
included in such leases across the Company. The majority of extension and termination options held are exercisable only by the Company and not by the
respective lessor. The Company assesses at the time of lease commencement whether it is reasonably certain to exercise the extension or termination option.
The Company re-assesses whether it is reasonably certain to exercise options if there is a significant event or significant change in circumstances within its
control.
Possible future cash outflows amounting to Rs. 139 (March 31, 2023: Rs. 78) were not included in lease liabilities because it is not reasonably certain that the
leases will be extended (or not terminated). Leases that the Company has entered into as a lessee but that have not yet commenced result in possible future
payment outflows totalling Rs. 1 (March 31, 2023: Nil).

The maturity analysis of lease liabilities are disclosed in note 24.

The following are the amounts recognized in the Standalone Statement of Profit and Loss:
For the year For the year
March 31, 2024 March 31, 2023
Interest on lease liabilities (refer note 16) 30 19
Amortization of right-of-use assets (refer note 17) 105 69
Expenses relating to short-term leases (refer note 18) 11 8
Variable lease payments not included in the measurement of lease liabilities (refer note 18) 7 4

(iii) Other financial liabilities

Current
As at As at
March 31, 2024 March 31, 2023
Payable towards wallet balances 294 296
Capital creditors * 218 423
Other liabilities 160 41
Total 672 760

* Dues to suppliers who are registered as micro and small enterprises under "The Micro, Small and Medium and Enterprises Development Act, 2006 (MSMED
Act)" as at March 31, 2024 is Rs. 10 (March 31, 2023: Rs. 0).

10. Other current liabilities

As at As at
March 31, 2024 March 31, 2023
Payable to statutory authorities* 534 470
Deferred Revenue** 26 -
Total 560 470

* Payable to statutory authorities includes GST obligation, including GST on gross value of electronic recharge transactions carried out through PhonePe
platform. The Company recognises revenue on facilitation of electronic recharge transactions to the extent of net consideration it expects to receive on such
transactions.
** Changes in deferred revenue are as follows:
Year ended Year ended
March 31, 2024 March 31, 2023
Balance as at the beginning of the year - -
Increase due to invoicing during the year, excluding amounts recognised as revenue during the year 26 -
Balance as at the end of the year 26 -

11. Provisions
Non current Current
As at As at As at As at
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023

Provision for gratuity (refer note 20) 36 27 5 4

Provision for compensated absences - - 81 61
Share appreciation rights (refer note 22) - 132 - -
Total 36 159 86 65

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

12. Income tax

a) Reconciliation of tax expense and the accounting loss As at As at

March 31, 2024 March 31, 2023
Accounting loss before taxes (1,166) (2,108)
At India’s statutory income tax rate of 25.17% (March 31, 2023 : 25.17%) (293) (531)
Adjustments:
Deferred tax assets not recognised on tax loss and unabsorbed depreciation 361 526
Permanent differences (7) (1)
Deferred tax assets not recognised on timing differences (60) 5
Deferred tax expense 1 (1)

b) Deferred tax liability (net)

For the year ended March 31, 2024
Recognised in
Recognised in
the
As at Other As at
Particulars Standalone
April 01, 2023 Comprehensive March 31, 2024
Statement of
Income
Profit and Loss
Tax effect of items resulting in taxable temporary differences
Property, plant and equipment and intangible assets (77) 24 - (53)
Right-of-use assets (81) (9) - (90)
Unrealised gain on investments (2) 2 - -
Investments in equity shares (unquoted) (at FVOCI) (0) - (1) (1)
Tax effect of items resulting in deductible temporary differences
Carried forward loss allowed to be offset against future profits 78 (31) - 48
Lease liabilities 81 14 95
Deferred tax asset /(liability) (0) 0 (1) (1)

For the year ended March 31, 2023

Recognised in
Recognised in
the
As at Other As at
Particulars Standalone
April 01, 2022 * Comprehensive March 31, 2023
Statement of
Income
Profit and Loss
Tax effect of items resulting in taxable temporary differences
Property, plant and equipment and intangible assets (49) (28) - (77)
Right-of-use assets (30) (51) - (81)
Unrealised gain on investments (0) (2) - (2)
Intangible assets acquired under business combinations - - -
Investments in equity shares (unquoted) (at FVOCI) - - (0) (0)
Tax effect of items resulting in deductible temporary differences
Carried forward loss allowed to be offset against future profits 49 29 - 78
Lease liabilities 30 51 81
Deferred tax asset /(liability) - - (0) (0)

* Ministry of Corporate Affairs (“MCA”), under the Companies (Indian Accounting Standards) Amendment Rules, 2023, issued an amendment to Ind-AS 12
Income Taxes related Assets and Liabilities arising from a Single Transaction such as leases and decommissioning obligations. This amendment is effective
from the beginning of comparative period presented i.e. April 01, 2022. There is a change in Deferred tax component disclosure from net to gross for right to use
assets and lease liabilities for the Group.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

12. Income tax (Contd.)

Under the Income-tax Act, 1961, unabsorbed business losses expire 8 years after the year in which they originate and unabsorbed depreciation can be carried
forward indefinitely. Unrecognised deferred tax assets relate primarily to business losses, unabsorbed depreciation and temporary differences, if any, which do
not qualify for recognition as per the applicable accounting standards. The Company has not recognised any deferred tax assets on the unabsorbed business
losses and unabsorbed depreciation amounting to Rs.8,929 (March 31, 2023: Rs. 7,910) and Rs. 1,960 (March 31, 2023: Rs. 1,137) respectively. These
unexpired business losses will expire based on the year of origination as follows:

Unabsorbed
For the year ended
business loss
March 31, 2025 -
March 31, 2026 -
March 31, 2027 1,676
March 31, 2028 1,656
March 31, 2029 1,599
Thereafter 3,998
8,929

Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The
existence of unused tax loss is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent loss, the Company has
recognised deferred tax asset only to the extent that it has sufficient taxable temporary differences or there are other evidences that sufficient taxable profit will
be available against which such deferred tax asset can be realised.
c) Reflected in the Standalone Balance Sheet as follows:
As at As at
March 31, 2024 March 31, 2023
Deferred tax liability (144) (160)
Deferred tax assets 143 159
Deferred tax (liability)/ assets, net (1) (1)

d) Deferred tax liability relates to

As at As at
March 31, 2024 March 31, 2023
Investments in equity shares (unquoted) (at FVOCI) 1 0
Total 1 0

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

As at As at
March 31, 2024 March 31, 2023
13. Revenue from operations

Payments and allied services [refer note 19] 4,833 2,720

Other services 7 -
4,840 2,720
Other operating revenue [refer note 13 (i) below] 70 139
Total 4,910 2,859

(i) Other operating revenue includes the subsidy received by the Company in accordance with the circular issued by the Reserve Bank of India ("the
Regulator") on qualifying expenditure incurred towards deployment of payment acceptance devices amounting to Rs. 70 (March 31, 2023 - Rs. 139).

(ii) Disaggregation of revenue

The Company primarily engages in payment services under which Phonepe users settle merchant payments using PhonePe Platform. In the below table,
revenue from contracts with customers is disaggregated by categories of business operations.
As at As at
March 31, 2024 March 31, 2023
Type of business operations

Payments and allied services 4,833 2,720

Other services 7 -
Total revenue from contracts with customers 4,840 2,720

As at As at
March 31, 2024 March 31, 2023
Timing of revenue recognition

Services transferred at a point in time 4,432 2,720

Services transferred over a period of time 408 -
Total revenue from contracts with customers 4,840 2,720

(iii) Contract balances

Trade receivables [refer note 6(ii)] 474 195

Total contract balances 474 195

As at As at
March 31, 2024 March 31, 2023
14. Finance and other income

Interest income on deposits 267 35

Interest, others (refer note 19)* 172 65
Foreign exchange gain (net) 151 -
Gain on sale of investments 53 30
Dividend income (refer note 19) 3 -
Unrealised gain on investments - 9
Gain on sale of other intangible assets and property, plant and equipment (net) 22 1
Miscellaneous income (refer note 19)** 58 26
Total 726 166

* Interest, others includes interest income on financial assets carried at amortised cost amounting to Rs. 161 (March 31, 2023: Rs. 63).
** Includes an amount of compensation received, in the nature of insurance claims of Rs. 2 (March 31, 2023: Nil), for items of property, plant and
equipment.

As at As at
March 31, 2024 March 31, 2023
15. Employee benefits expense

Salaries, wages and bonus (refer note 19) 1,031 813

Contribution to provident and other funds 28 14
Gratuity (refer note 20) 13 10
Staff welfare 87 45
Share based payments (refer note 19 and 22) 1,876 1,914
Total 3,035 2,796

133 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

As at As at
March 31, 2024 March 31, 2023
16. Finance costs

Interest expense on financial liabilities at amortised cost:

- Interest on working capital demand loan 1 1
- Interest on lease liabilities [refer note 9(ii)] 30 19
- Interest, others 4 1
Total 35 21

As at As at
March 31, 2024 March 31, 2023
17. Depreciation and amortization expense

Depreciation of property, plant and equipment (refer note 3(i)) 901 426
Amortization of intangible assets (refer note 4) 22 2
Amortization of right-of-use assets (refer note 5) 105 69
Total 1,028 497

As at As at
March 31, 2024 March 31, 2023
18. Other expenses

Advertisement & sales promotions (refer note 19) 476 362

Information technology infrastructure (refer note 19) 353 195
Subcontract expenses and customer support 335 298
License and service (refer note 19) 138 117
Travelling and logistics (refer note 19) 64 30
Bad debts written-off and provisions for doubtful debts and advances 35 13
Provision/ amount written off against property, plant and equipment 14 3
Legal and professional (refer note 19) 46 43
Repairs and maintenance 33 11
Rent (refer note 19) 18 17
Rates and taxes 10 1
Auditor's remuneration * 3 1
Electricity and water 7 5
Insurance 4 1
Foreign exchange loss (net) - 91
Miscellaneous (refer note 19) 2 1
Total 1,538 1,189

As at As at
March 31, 2024 March 31, 2023
* Auditor's remuneration
As auditor:
Statutory audit fees 2 1
Tax audit fees 0 0
Limited reviews 1 -
In other capacity:
Other services 0 0
Out of pocket expenses 0 0
Total 3 1

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

19. Related party disclosures

Names of related parties and related party relationship

a) Related parties where control exists

Country of
Relationship Name of the entity
incorporation
Ultimate holding company Walmart Inc. United States of America
FIT Holdings S.A.R.L. (w.e.f. December 23, 2022)
Immediate holding company Luxembourg
Refer note 8

Intermediate holding company Flipkart Private Limited (upto December 23, 2022) Singapore

Headstand Pte. Ltd. (upto December 23, 2022)

Immediate holding company Singapore
Refer note 8

b) Related parties with whom transactions have taken place during the current and previous year

Country of
Relationship Name of the entity
incorporation
Ultimate holding company Walmart Inc. United States of America

Immediate holding company FIT Holdings S.A.R.L. (w.e.f. December 23, 2022) Luxembourg

Intermediate holding company Flipkart Private Limited (upto December 23, 2022) Singapore

Immediate holding company Headstand Pte. Ltd. (upto December 23, 2022) Singapore

Fellow subsidiaries Headstand Pte. Ltd. (w.e.f December 23, 2022 upto June 08, 2023) Singapore
Flipkart Private Limited (w.e.f December 23, 2022) Singapore
Flipkart Internet Private Limited India
Flipkart India Private Limited India
Flipkart Health Limited India
Myntra Designs Private Limited India
Myntra Jabong India Private Limited India
Instakart Services Private Limited India
F1 Info Solutions & Services Private Limited India
Cleartrip Private Limited India
Wildcraft India Private Limited India

Wholly owned subsidiaries Phonepe Technology Services Private Limited # India

Phonepe Insurance Broking Services Private Limited # ("Phonepe
India
Insurance")
Phonepe Wealth Broking Private Limited and its subsidiaries# India
Wealth Technology & Services Private Limited
India
(w.e.f. August 04, 2022)
Quantech Capital Investment Advisors Private Limited
India
(w.e.f. September 28, 2022)
Pincode Shopping Solutions Private Limited
(formerly known as ‘Phonepe Shopping Solutions Private Limited’ India
and ‘Phonepe Payment Technology Services Private Limited’)#
Phonepe Finance Private Limited# India
Phonepe Lending Services Private Limited
(formerly known as 'Phonepe Credit Services Private Limited' and India
'Explorium Innovative Technologies Private Limited')#
Indus Appstore Singapore Pte Ltd.#
(formerly known as 'OSLabs Pte Ltd.') Singapore
(w.e.f. July 28, 2022)
Indus Appstore Private Limited#
India
(formerly known as 'OSLabs (India) Private Limited')

CE Info Systems Limited (formerly known as "CE Info Systems

Associate India
Private Limited") ("CE Info Systems")
Associate of immediate holding Indus Appstore Singapore Pte.Ltd. (formerly known as 'OSLabs Pte
Singapore
company Ltd') (upto July 28, 2022)

135 | ANNUAL REPORT | AUGUST 2024

 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

c) Key management personnel

Sameer Nigam Whole-time Director

Rahul Chari Whole-time Director
Judith Jane McKenna Director (w.e.f January 06, 2023 upto January 31, 2024)
Leigh Douglas Hopkins Director (w.e.f January 06, 2023)
Rohit Bhagat Director (w.e.f January 06, 2023)
Binny Bansal Director (w.e.f January 06, 2023)
Donna Catherine Morris Director (w.e.f January 24, 2024)
John David Rainey Jr Director (w.e.f January 24, 2024)
Tarun Bajaj Director (w.e.f January 24, 2024)
Adarsh Nahata Whole-time Director (upto December 22, 2022)

# The Company along with its direct and indirect subsidiaries of Phonepe Private Limited (incorporated in India) and Headstand Pte Ltd (upto December 23, 2022)
are together considered as the Group for the purpose of disclosures in the Standalone Ind-AS Financial Statements.

19. Related party disclosures (Contd.)

d) Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
For the year ended
Relationship Nature of Transactions March 31, 2024 March 31, 2023
Transactions
Ultimate holding company Cost Cross charges 3 3

Intermediate holding company ESOP Cross charges - 262

Other reimbursements - 8

Immediate holding company Cost Cross charges - 1

ESOP Cross charges - 891
Other Income - 21
Other reimbursements - 22
Allotment of shares - 2,402
Reversal of ESOP liability on account of migration - 1,214
Equity investment - 576

Wholly owned subsidiaries Equity investment 547 1,096

Cost Cross charges - 0
Purchase/ sale of intangible assets (net) 213 -
ESOP Cross Charges 317 114
Other Income 61 7
Other reimbursements - 0
Payments and allied services 45 12
Loans provided 598 52
Loans repaid 29 1
Intra-group employee transfers asset / (liability) (net) 11 1

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

19. Related party disclosures (Contd.)

d) Related party transactions (Contd.)

For the year ended
Relationship Nature of Transactions March 31, 2024 March 31, 2023
Fellow subsidiaries Reversal of ESOP liability on account of migration 2,107 -
ESOP cross charges 44 3
Payments and allied services 9 34
Other expenses 4 4

Associate Dividend income 3 -

Other expenses 7 6

The following table provides the compensation paid to key management personnel, which comprises directors and executive officers for the relevant financial year:
For the year ended
March 31, 2024 March 31, 2023
Key management personnel
Remuneration - salary and other benefits* 5 7
(refer note below)
Remuneration - share based payments (including SARs) 226 917
Legal and professional 2 -

* Remuneration does not include the provisions made for gratuity and compensated absences, as they are determined for the Company as a whole.

19. Related party disclosures (Contd.)

For the year ended
Relationship Nature of Outstanding balances March 31, 2024 March 31, 2023

Transactions

Ultimate holding company Trade and Other receivables 2 1

Fellow subsidiaries Trade and Other payables 2 2,070

Trade and Other receivables 4 25

Wholly owned subsidiaries Trade and Other payables 15 4

Trade and Other receivables 124 189
Loans and advances 626 53

Associate Trade and Other payables 0 2

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
20. Gratuity plan
The Company operates a gratuity plan covering qualifying employees. Under the gratuity plan, every employee who has completed at least five years of service
gets a gratuity on separation at 15 days of last drawn salary for each completed year of service. In case of death while in service, the gratuity is payable
irrespective of vesting. The plan is not funded by the Company. The gratuity plan is governed by the Payment of Gratuity Act, 1972.
Changes in interest rate risk
A decrease in government bond yields will increase plan liabilities.
Salary escalation risk
The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. As such, an increase
in the salary of the plan participants will increase the plan’s liability.
Life expectancy
The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants, both during and
after the employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
The following tables summarize the components of net benefit expense recognized in the Standalone Statement of Profit and Loss and the funded status and
amounts recognized in the Standalone Balance Sheet:
As at As at
March 31, 2024 March 31, 2023
Standalone Statement of Profit and Loss
Current service cost 11 9
Interest cost 2 1
13 10
Remeasurement loss/ (gains) in Other Comprehensive Income
Actuarial (gains)/ losses arising from changes in -
- experience adjustments 2 (1)
- financial assumptions 1 0
- demographic assumptions 0 0
3 (1)
Net benefit expense 16 9

Standalone Balance Sheet

Defined benefit obligation (DBO) - Current (refer note 11) 5 4
Defined benefit obligation (DBO) - Non-Current (refer note 11) 36 27
Net defined benefit liability 41 31

Change in the present value of the defined benefit obligation are as follows:
Opening defined benefit obligation 31 22
Current service cost 11 9
Acquisition/ transfers (net) - cost* (5) (0)
Interest cost 2 1
Amount recognised in OCI 3 (1)
Benefits paid (1) (0)
Closing defined benefit obligation 41 31
*Acquisition/ transfers (net) - cost for the year ended March 31, 2024 and March 31, 2023 pertains to transfer of employees between the entities within the
group.
The principal assumptions used in determining gratuity and leave benefit obligations for the Company's plan are as follows:

As at As at
Particulars
March 31, 2024 March 31, 2023
Discount rate 7.20% 7.30%
Expected rate of return on assets NA NA
10% until July 2024 12% until July 2023
Salary escalation rate
and 8% thereafter and 8% thereafter
100% of Indian 100% of Indian
Assured Lives Assured Lives
Mortality rate
Mortality (IALM) Mortality (IALM)
2012-14* 2012-14*
Managers - 13.8%
Non-Managers Managers and above
Withdrawal rate Sales - 38.1% 15%,
Non-Managers - Others -26%
Non- Sales - 17.9%

* As published by IRDA and adopted as standard mortality table as recommended by Institute of Actuaries of India effective April 1, 2019.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as
supply and demand in the employment market.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

20. Gratuity plan (Contd.)

Sensitivity analysis of assumptions used As at As at

March 31, 2024 March 31, 2023
Discount rate 7.20% 7.30%
Decrease in DBO due to 0.5% increase in discount rate (1) (1)
Increase in DBO due to 0.5% decrease in discount rate 2 1
10% until July 2024 12% until July 2023
Salary escalation rate
and 8% thereafter and 8% thereafter
Increase in DBO due to 0.5% increase in salary escalation rate 1 (0)
Decrease in DBO due to 0.5% decrease in salary escalation rate (0) (1)
Attrition rate
Decrease in DBO due to 50% increase in attrition rate (2) (2)
Increase in DBO due to 50% decrease in attrition rate 3 1
Mortality Rate
Increase in DBO due to 10% increase in mortality rate 0 (1)
Decrease in DBO due to 10% decrease in mortality rate 0 (1)
Method used for sensitivity analysis: The sensitivity analysis above determine their individual impact on the plan's end of year defined benefit obligation. In
reality, the plan is subject to multiple external experience items which may move the defined benefit obligation in similar or opposite directions, while the
plan's sensitivity to such changes can vary over time.

As at As at
Expected benefit payments
March 31, 2024 March 31, 2023
Within 1 year 5 4
2 - 5 years 23 19
More than 5 years 42 27
The weighted average duration of the defined benefit obligation is 6 years.
Expected best estimate for the benefit contribution for the next annual reporting period is Rs. Nil.

21. Earnings per share (EPS) As at As at

March 31, 2024 March 31, 2023
The following reflects the loss and share data used in computation of basic LPS:

Loss for the year (1,166) (2,108)

Weighted average number of equity shares 44,194,711 40,879,161
Basic and diluted earnings per share computed on total loss (Rs. per share) (263.83) (515.67)

22. Share based payments

The expense/ settlement recognised for employee services received during the year is shown in the following table
As at As at
March 31, 2024 March 31, 2023

Expense arising from cash-settled share-based payment transactions 288 77

(refer 22 (a), (b) and (h) below)
Expense arising from equity-settled share-based payment transactions
1,306 1,779
(refer 22 (b), (c), (d) and (f) below)
Settlement related to equity-settled share based payment transactions(refer 22 (g) below) - 58
Modification related to equity-settled share based payment transactions (refer 22 (h) below) 282 -
Total expense recognized in the Standalone Statement of Profit and Loss (i) 1,876 1,914

Settlement related to equity-settled share based payment transactions recognised in Other

- 274
equity (refer 22 (a) and (g) below) (ii)
Modification related to equity-settled share based payment transactions recognised in
459 -
Other equity (refer 22 (b) and (h) below) (iii)
Total impact of share-based payment transactions (i)+(ii)+(iii) 2,335 2,188

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

22. Share based payments (Contd.)

a. Phonepe Share Appreciation Rights Plan

The Company’s eligible employees or former employees are granted share appreciation rights (SARs), to be settled in cash under Phonepe SAR Plan I & Plan II
("SARs Plan 2022"). The SARs granted vest on the grant date, as the same is issued against the vested equity stock options. The liability for the SARs is
measured, initially and at the end of each reporting period until settled, at the fair value of the SARs.

SARs:
The following table illustrates the movement of the SARs during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 81,082 -
- Granted 9,718 81,082
- Repurchased (88,824) -
Outstanding as at the end of the year 1,976 81,082

Vested as at the year end 1,976 81,082

Exercisable at the year end - -

i. During the current year ended March 31, 2024, certain former employees of the Company were granted SARs under SARs Plan II against the equity stock
options held under PSOP 2022 plan.

Fair value of SARs granted

The liability for the SARs is measured, initially and at the end of each reporting period until settled, at the fair value of the SARs by applying a Finnerty model
taking into account the terms and conditions upon which the SARs were granted. The expected price volatility is based on the historic volatility (based on the
remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information. Weighted average fair value of the
SARs granted to the employees of the Company during the year is Rs. 16,234 per option (March 31, 2023: Rs. 16,234).
As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Dividend yield (% p.a.) 0% 0%
Expected volatility (% p.a.) 50.6% - 53.9% 50.60%
Expected life of option (years) 2.7 years - 3 years 3 years

ii. On December 05, 2023, the Company's Board of Directors approved the liquidation of all outstanding SARs amounting to Rs 181 issued under SARs Plans
2022. These SARs continue to be treated as cash-settled in the Standalone Ind-AS Financial Statements.

b. PhonePe Stock Option Plan, India (‘PSOP 2022’)

Eligible employees of the Company are granted share options of the Company under the PhonePe Stock Option Plan (‘PSOP 2022’). Time-based stock options
granted under PSOP 2022 would vest from one year and not more than four years from the date of grant of such options. Vesting of options would be subject to
continued employment with the Phonepe Group or such other criteria determined by the Board and thus the options would vest on passage of time. The specific
vesting schedule and conditions subject to which vesting would take place would be outlined in the document given to the option grantee at the time of grant of
options. The options will lapse and be cancelled on its expiry date i.e., ten years after the date of the relevant Stock Option Agreement, or such other expiry date
as may be specified in the relevant Stock Option Agreement. The exercise price of the time-based share options is Rs. 10 per option.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
Time based options:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 3,588,251 -
- Granted 330,776 81,402
- Migrated # - 3,528,301
- Replaced with SARs* (9,718) (876)
- Forfeited unvested (77,084) (24,669)
- Repurchased (284,441) -
- Transfers (net)** (832,734) 4,093
Outstanding as at the end of the year 2,715,050 3,588,251

Vested as at the year end 1,756,735 -

# During the previous year ended March 31, 2023, the employees of the Company were granted 35,28,301 share options of the Company on the basis of derived
ratio on account of migration from PSOP 2020 plan.
* During the current year ended March 31, 2024, certain former employees of the Company were granted SARs under SARs Plan 2022 against the equity stock
options held under PSOP 2022 plan.
**Transfers (net) pertains to transfer of employees between the entities within the Group.

Fair value of time based share options granted

The fair value of share options granted that are classified as time-based options is estimated at the grant date using Finnerty model, taking into account the
terms and conditions upon which the share options were granted. The expected price volatility is based on the historic volatility (based on the remaining life of
the options), adjusted for any expected changes to future volatility due to publicly available information. Weighted average fair value of the options granted to
the employees of the Company during the year is Rs. 16,234 per option (March 31, 2023: Rs. 16,234). As of March 31, 2024, the maximum weighted average
contractual life of time-based options is 4 years.

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Dividend yield (% p.a.) 0% 0%
Expected volatility (% p.a.) 50.6% - 53.9% 50.60%
Expected life of option (years) 2.7 years - 3 years 3 years
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

22. Share based payments (Contd.)

c. PhonePe Stock Option Plan, Singapore (‘PSOP 2020’)

Eligible employees of the Company have been granted share options of Phonepe Private Limited (incorporated in Singapore) under the PhonePe Stock Option
Plan (‘PSOP 2020’). Time-based stock options granted under PSOP 2020 would vest between one day and not more than four years from the date of grant of
such options. Vesting of options would be subject to continued employment with the Group or such other criteria determined by the Board and thus the options
would vest on passage of time. The specific vesting schedule and conditions attached to vesting are outlined in the document given to the option grantee at the
time of grant of options. Weighted average fair value of the options granted to the employees of the Company during the year is USD Nil per option (March 31,
2023: USD 112.82). The exercise price of the time-based share options is Rs. Nil. No additional grants were given during the year ended March 31, 2024.

Time based options:

The following table illustrates the movement of the time based options during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year - 2,963,949
- Granted - 3,015,009
- Replaced with SARs - (134,754)
- Migrated to PSOP 2022 plan # - (5,868,219)
- Forfeitures - (142,354)
- Repurchased - -
- Transfers (net) - 166,369
Outstanding as at the end of the year - -

Vested as at the year end - -

# During the previous year ended March 31, 2023, the employees of the Company were granted 35,28,301 share options of the Company on the basis of derived
ratio on account of migration from PSOP 2020 plan.

Fair value of time based share options granted

The fair value of share options granted that are classified as time-based options is estimated at the grant date using Finnerty model, taking into account the
terms and conditions upon which the share options were granted. The expected price volatility is based on the historic volatility (based on the remaining life of
the options), adjusted for any expected changes to future volatility due to publicly available information. No fresh options were granted during current year, as
PSOP 2020 plan is no longer in existence.

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Dividend yield (% p.a.) NA 0%
Expected volatility (% p.a.) NA 42.60%-50.6%
Expected life of option (years) NA 2.75 years -3 years
d. PhonePe Founder Awards, Singapore (‘PFA 2020’)
Certain eligible employees of the Company have been granted share options of Headstand Pte Ltd (incorporated in Singapore) under the PhonePe Founder
Awards (‘PFA 2020’). Time-based stock options granted under PFA 2020 would vest between one day and not more than five years from the date of grant of such
options. Vesting of options would be subject to continued employment with any Group Company or such other criteria determined by the Board and thus the
options would vest on passage of time. The specific vesting schedule and conditions attached to vesting are outlined in the document given to the option
grantee at the time of grant of options. The exercise price of the time-based share options is Nil.

Performance-based share options are granted to certain eligible employees of the Company. Vesting conditions include market conditions linked to the
Company's valuation with an underlying implied service period up to the date of achievement of the performance conditions. The performance awards will
expire unvested at the end of twelve years from the grant date if the performance conditions are not met within this period. The exercise price of the
performance-based share options is Nil.

No additional grants were given during the year ended March 31, 2024 and March 31, 2023.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

22. Share based payments (Contd.)

d. PhonePe Founder Awards, Singapore (‘PFA 2020’) (Contd.)

Time based options:

The following table illustrates the movement of the time based options during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 3,129,445 3,129,445
- Granted - -
- Migrated to PFA 2023 plan (refer note 23(e)) (3,129,445) -
Outstanding as at the end of the year - 3,129,445

Vested as at the year end (refer note 23(e)) - 1,877,668

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Expected life of option (years) NA 1.72 years

Performance based options:

The following table illustrates the movement of the performance based options during the financial year:
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 2,738,265 2,738,265
- Granted - -
- Migrated to PFA 2023 plan (refer note 23(e)) (2,738,265) -
Outstanding as at the end of the year - 2,738,265

Vested as at the year end (refer note 23(e)) - 782,361

As at As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024 March 31, 2023
Expected life of option (years) NA 10 years

e. Migration of share-based payment plan from PFA 2020 to PFA 2023

The PFA 2023 plan was approved by the Board of Directors of the Company during the current year ended March 31, 2024. Pursuant to such approval, options
granted under PFA 2020 by its erstwhile immediate holding company got migrated to new plan namely PFA 2023 by the Company. The migration of share-based
payment arrangement from PFA 2020 to PFA 2023 plan has been treated as a modification of an existing share-based payment plan. All the options granted
under PFA 2020 shall automatically stand cancelled and fresh options were granted by the Company to the eligible employees on the basis of a pre-determined
swap ratio.

The Company also signed PhonePe Founder Share Appreciation Rights Plan (PFSARs). The plan has a one-year period beginning on the grant date of the option
provided under PFA 2023. As of the reporting date, March 31, 2024 probability of issuance of PFSARs is considered as remote.
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
f. PhonePe Founder Awards, India (‘PFA 2023’)

Certain eligible employees of the Company have been granted share options of Phonepe Private Limited (incorporated in India) under the PhonePe Founder
Awards (‘PFA 2023’). Time-based stock options granted under PFA 2023 would vest between one day and not more than five years from the date of grant of such
options, subject to regulatory requirements. Vesting of options would be subject to terms and conditions set-out in PFA 2023. The stock options will lapse and
be cancelled following the expiry of a predetermined period after the date of grant. The exercise price of the time-based share options is Rs. 10 per option.

Performance-based share options are granted to certain eligible employees of the Company. Vesting conditions include market conditions linked to the
Company's valuation with an underlying implied service period up to the date of achievement of the performance conditions. The stock options will lapse and
be cancelled following the expiry of a predetermined period after the date of grant. The exercise price of the performance-based share options is Rs. 10 per
option.

Weighted average fair value of the options granted to the employees of the Company during the year is Rs. 19,968 per option (March 31, 2023: Rs. NA).

Time based options:

The following table illustrates the movement of the time based options during the financial year:
As at
March 31, 2024
(Number)
Outstanding as at the beginning of the year -
- Migrated (refer note 23(e)) 1,855,276
- Granted 842,040
Outstanding as at the end of the year 2,697,316

Vested as at the year end (refer note 23 (e)) -

As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024
Expected life of option (years) 1.19 years

Performance based options:

The following table illustrates the movement of the performance based options during the financial year:
As at
March 31, 2024
(Number)
Outstanding as at the beginning of the year -
- Migrated (refer note 23(e)) 1,623,366
Outstanding as at the end of the year 1,623,366

Vested as at the year end (refer note 23 (e)) -

As at
The following table lists the inputs to the option pricing models for the year ended
March 31, 2024
Expected life of option (years) 9 years
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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated
g. Flipkart Stock Option Plan - ('FSOP 2012')

Eligible employees of the Company are granted share options of Flipkart Private Limited (erstwhile intermediate holding company) based upon performance,
and long-term potential for the Company. The share options granted under FSOP 2012 shall vest between on day one and not more than five years from the date
of grant of such options. Vesting of options would be subject to continued employment with the Phonepe Group and thus the options would vest on passage of
time. The specific vesting schedule and conditions subject to which vesting would take place would be outlined in the document given to the option grantee at
the time of grant of options.

The exercise price of the option is Rs. Nil. No additional grants were given during the year ended March 31, 2024 and March 31, 2023.

Movement of share options during the financial year

The following table illustrates the movement of the options during the financial year.
As at As at
March 31, 2024 March 31, 2023
(Number) (Number)
Outstanding as at the beginning of the year 36,843 395,548
- Forfeited - -
- Repurchased - (358,705)
Outstanding as at the end of the year 36,843 36,843

Vested as at the year end 36,843 36,843

h. Modification of PSOP 2022 plan

During the year ended March 31, 2024, the Company's Board of Directors approved a modification to the PSOP 2022 plan, introducing liquidity to the maximum
of 25% of the total options issued. During the year ended March 31, 2024, the Company repurchased 408,426 options in accordance with the Board resolution.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

23. Capital management

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done
through a mix of either equity and/or combination of short term/long term borrowings as may be appropriate. The Company does not have any borrowing as on
March 31, 2024 (March 31, 2023 - Rs. Nil).

24. Financial risk management objectives and policies

The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk,
foreign currency risk and interest risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks.
The following sections provide details regarding the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for
the management of these risks.
There has been no change to the Company’s exposure to these financial risks or the manner in which it manages and measures the risks, except as disclosed in
note 24(c) foreign currency risk section.

a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Company’s exposure to
credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities, loans, cash and short-term deposits), the
Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Company deals only
with creditworthy counterparties. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is
not significant.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are with creditworthy debtors with good payment record with the Company. Cash and cash
equivalents and investment securities that are neither past due nor impaired are placed with reputable financial institutions or companies with high credit ratings
and no history of default.
As at As at
March 31, 2024 March 31, 2023
Financial assets that are neither past due nor impaired 3,389 5,983
Total neither past due nor impaired 3,389 5,983

Financial assets that are past due but not impaired

The aging analysis of the receivables has been considered from the date the invoice falls due. The age wise break up of receivables, net of allowances that are past
due, is given below:
As at As at
March 31, 2024 March 31, 2023
Past due 0 – 90 days 55 74
Past due over 90 days 1 5

Total past due and not impaired 56 79

Financial assets that are impaired

As at As at
March 31, 2024 March 31, 2023
Information regarding financial assets that are impaired is disclosed below:
Trade receivables (note 6(ii)) 52 30
Loans (note 6(iv)) - 8
Other financial assets (note 6(v)) 26 15
Total past due and impaired 78 53

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company’s exposure to liquidity
risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company’s objective is to maintain a balance between continuity of
funding and flexibility.

Considering the nature of business activity of the Company, the concentration of liquidity risk is low as business related merchant payments are to be made only
on receipt of the amount from the customer. Further, access to sources of funding is sufficiently available.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Company’s financial liabilities at the end of the reporting period based on contractual undiscounted
repayment obligations.
As at March 31, 2024
One year or less One to five years Over five years Total
Financial liabilities
Trade payables 457 - - 457
Lease liabilities 135 292 - 427
Other financial liabilities 672 - - 672
Cash-settled share based payment liability - 951 951
Total undiscounted financial liabilities 1,264 1,243 - 2,507

As at March 31, 2023

One year or less One to five years Over five years Total
Financial liabilities
Trade payables 2,381 - - 2,381
Lease liabilities 94 287 - 381
Other financial liabilities 760 - - 760
Total undiscounted financial liabilities 3,235 287 - 3,522
The table below shows the contractual expiry by maturity of the Company’s contingent liabilities and commitments.

As at March 31, 2024

One year or less One to five years Over five years Total

Capital commitments 358 1 - 359

358 1 - 359

As at March 31, 2023

One year or less One to five years Over five years Total

Capital commitments 595 - - 595

595 - - 595
Changes in liabilities arising from financing activities:

New leases/
April 01, 2023 Cash flows Interest expense March 31, 2024
loans
Lease liabilities 330 139 (122) 30 377
Short-term borrowings - 830 (831) 1 -
330 969 (953) 31 377

New leases/
April 01, 2022 Cash flows Interest expense March 31, 2023
loans
Lease liabilities 117 266 (72) 19 330
Short-term borrowings - 699 (700) 1 -
117 965 (772) 20 330

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

c) Foreign currency risk

The Company’s exposure to currency risk relates primarily to the Company’s operating activities where the transactions are denominated in a currency other than
the Company’s functional currency.
The carrying amounts of the Company’s foreign currency exposure at the end of the reporting period are as follows :
As at March 31, 2024
Particulars USD AED SGD EUR Total
Financial assets 7 4 - 0 11
Financial liabilities 26 - - - 26
As at March 31, 2023
USD AED SGD EUR Total
Financial assets 23 - - - 23
Financial liabilities 2,079 - - - 2,079

Foreign exchange rate sensitivity

The fluctuation in foreign currency exchange rates may have potential impact on the Standalone Statement of Profit and Loss and equity, where any transaction
references more than one currency or where assets/ liabilities are denominated in a currency other than the functional currency of the Company.

As at March 31, 2024 and March 31, 2023, 5% increase /decrease in the exchange rate would result in Rs. 1 and Rs. 103 increase/ decrease in the loss before tax,
respectively, of the Company.

d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest
rates. The Company has investments in short term debt securities, deposits with counter parties having high quality credit ratings and loans bearing fixed interest
rates. The Company is not exposed to any interest rate risk since it has exposure only to fixed interest bearing short term instruments.
25. Fair value hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date (i.e. an exit price).
Financial instruments whose carrying amounts approximate fair value
The carrying values of trade and other receivables, other assets, cash and short term deposits, trade and other payables and balances with related parties, based
on their notional amounts, reasonably approximate their fair values because these are mostly short term in nature.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

25. Fair value hierarchy (Contd.)

Fair value of financial instruments that are carried at fair value (Refer note 6(i))
The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:
As at March 31, 2024
Assets measured at fair value: Significant
Quoted prices in Significant
Total unobservable inputs
active markets observable inputs
*
(Level 1) (Level 2) (Level 3)
Investments (FVTOCI) 15 - - 15
15 - - 15

As at March 31, 2023

Assets measured at fair value: Significant
Quoted prices in Significant
Total unobservable inputs
active markets observable inputs
*
(Level 1) (Level 2) (Level 3)
Investments (FVTOCI) 12 - - 12
Investments (through profit and loss) 1,298 1,298 - -
1,310 1,298 - 12

* These security instruments have been valued using recently available transaction price and earnings.

Set out below is the movement of the carrying amounts of the Company’s financial instruments classified under level 3:

As at As at
March 31, 2024 March 31, 2023
Opening balance 12 8
Fair value adjustments 3 4
Closing balance 15 12

As at March 31, 2024

Assets not measured at fair value: Quoted prices in Significant Significant
Total
active markets observable inputs unobservable inputs
(Level 1) (Level 2) (Level 3)
Investments (at amortised cost) 1,110 - 1,110 -
1,110 - 1,110 -

130 As at March 31, 2023

Assets not measured at fair value: Quoted prices in Significant Significant
Total
active markets observable inputs unobservable inputs
(Level 1) (Level 2) (Level 3)
Investments (at amortised cost) 3,151 - 3,151 -
3,151 - 3,151 -
Fair value hierarchy
The Company classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair
value hierarchy have the following levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e.,
derived from prices), and
Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
* This investment in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind-AS
109, the Company has chosen to designate these investments in equity instruments at FVTOCI as the Company believes this provides a more meaningful
presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit and loss.

26. Contingent liabilities and commitments

As at As at
March 31, 2024 March 31, 2023
a. Contingent - -

b. Commitments
Estimated amount of contracts (net of advances) remaining to be executed on capital 358 595
account and not provided for
Leases not yet commenced to which the lessee is committed (refer note 9(ii)) 1 -
Total 359 595
The Company has reviewed all the pending litigations and proceedings, and has adequately provided for where provisions are required and disclosed the
contingent liabilities in its Standalone Ind-AS Financial Statements where financial outflow is not probable.

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

27. The Company's Prepaid Payment Instruments ("PPIs") and Bharat Bill Payment Operating Unit ("BBPOU") Licences are subject to inspection by the Regulator.
The Company is in receipt of Inspection Report, dated May 27, 2024, from the Regulator. The Company is in the process of submitting responses on the
observations noted by the Regulator, based on its internal assessment, the Company is of the view that these will not have any material impact on the operations
and financial results.

28. Ratio Analysis and its elements

Reason for variances

As at As at exceeding 25% as
Ratio Numerator Denominator % Change
March 31, 2024 March 31, 2023 compared to
previous year

Due to lower current

Current ratio Current assets Current liabilities 4.71 2.10 124%
liabilities
Average Due to higher revenue
Return on Equity ratio Net profits after taxes -11.88% -39.03% -70%
shareholder’s equity from operations
Trade Receivable Revenue from Average Trade
14.68 12.52 17% NA
Turnover ratio operations Receivable
Payment processing
Trade Payable Average Trade Due to lower trade
charges+other expenses- 1.87 1.02 83%
Turnover ratio Payables payables
non-cash expenditure
Working capital =
Net Capital Turnover Revenue from
Current assets – 0.70 0.72 -3% NA
ratio operations
Current liabilities
Revenue from Due to higher revenue
Net Profit ratio Net Profit -23.75% -73.73% -68%
operations from operations
Capital Employed =
Return on Capital Earnings before interest Tangible Net
-10.11% -24.80% -59% Due to higher equity
Employed and taxes Worth+Deferred tax
liability
Income from Time weighted Due to higher
Return on Investment 7.66% 5.53% 39%
investments average investments investments

29. Other Statutory Information

(i) Except for the equity investments in wholly owned subsidiaries mentioned below, the Company (Funding Party) has not advanced or loaned or invested funds to
any persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) to directly or indirectly lend or
invest in other persons or entities (Ultimate Beneficiaries) on behalf of the Funding Party or provide any guarantee, security or the like to or on behalf of the
Ultimate Beneficiaries.
During the year ended March 31, 2024, from the equity investments made by the Company in Phonepe Wealth Broking Private Limited (a wholly owned subsidiary;
CIN : U65990KA2021PTC146954),
a. Amounts aggregating to Rs. 48 has been paid by Phonepe Wealth Broking Private Limited towards infusion of further equity investment in Wealth Technology &
Services Private Limited (an indirect subsidiary of the Company, CIN : U74999KA2016PTC173993) on October 25, 2023 and March 28, 2024.
b. Amounts aggregating to Rs. 1 has been paid by Phonepe Wealth Broking Private Limited towards infusion of further equity investments in Quantech Capital
Investment Advisors Private Limited (an indirect subsidiary of the Company, CIN : U67190KA2018PTC175882) on February 29, 2024.
The above transactions are in compliance with the relevant provisions of the Companies Act, 2013 and the transactions are not violative of the Prevention of
Money Laundering Act , 2002 (15 of 2003).

(ii). The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded
in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities (Ultimate Beneficiaries) identified in any manner whatsoever by or on behalf of the Funding Party
or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

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 STATUTORY REPORTS AND FINANCIAL STATEMENTS

Phonepe Private Limited

Notes to Standalone Ind-AS Financial Statements for the year ended March 31, 2024
All amounts are Rs. in Crores, unless otherwise stated

30. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under
sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the
Company is in the process of preparing the documentation for the international transactions entered into with the associated enterprises during the financial year
and expects such records to be in existence latest by November 30, 2024 as required under law. The Management is of the opinion that its international
transactions are at arm’s length so the aforesaid legislation will not have any impact on the Standalone Ind-AS Financial Statements, particularly on the amount of
tax expense and that of provision for taxation.

31. Segment information

The Company is engaged in the business of providing technologies for online payment solutions and other allied services in India. The Company does not
distinguish revenues, costs and expenses between different businesses in its internal reporting, and reports costs and expenses by nature as a whole, except
where it is required as a regulatory requirement. The Board of Directors (chief operating decision maker) reviews the results when making decisions about
allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates
and manages its business as a single segment. As the Company's long-lived assets are all located in India and most of the Company's revenues are derived from
India, no geographical information is presented.

32. The Company maintains proper books of account with provision of daily back-up, in electronic mode on servers physically located in India in accordance with
the provisions of Section 128 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014 (as amended). The Company maintains manual
records/back-ups in India for certain ancillary application, supporting computation and acting as a repository where servers are hosted outside India.

33. Audit Trail

The Company has used certain accounting software(s) for maintaining its books of account which does not have the feature of recording audit trail (edit log). The
Company has also used certain other accounting software which are operated by third-party software service providers, for maintaining its books of account and
for such applications, the System and Organization Control (SOC) reports do not include information related to audit trail.
In respect of one of the accounting software, there is feature of recording audit trail (edit log) facility which was not enabled throughout the year for all relevant
transactions recorded in the software.

34. Previous year amounts in the Standalone Ind-AS Financial Statements, including notes thereto, have been re-arranged wherever required to conform to the
current year presentation / classification. These do not affect the previously reported net loss or equity.

As per our report of even date

For S.R. Batliboi & Associates LLP For and on behalf of the Board of Directors of
Chartered Accountants Phonepe Private Limited
Firm registration number: 101049W/E300004

per Sumit Mehra Sameer Nigam Rahul Chari Ankit G Popat

Partner CEO & Whole-time Director Whole-time Director Company Secretary
Membership no.: 096547 DIN: 02292840 DIN: 03052804 Membership No.: A20774

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024 Date: July 17, 2024

151 | ANNUAL REPORT | AUGUST 2024

 For information, please contact PhonePe at investor.relations@phonepe.com
Find out more by visiting www.phonepe.com and pulse.phonepe.com
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