You should read the following discussion in conjunction with our Restated Consolidated Financial Information included herein as of and for the six month period ended September 30, 2024 and Financial Years 2024, 2023 and 2022, including the related notes, schedules and annexures on page 377. Our Restated Consolidated Financial Information has been prepared in accordance with Ind AS, Section 26 of the Companies Act, 2013, the SEBI ICDR Regulations and the Guidance Note.
We have included various operational and financial performance indicators in this Red Herring Prospectus, many of which may not be derived from our Restated Consolidated Financial Information or otherwise be subject to an examination, audit or review by our auditors or any other expert. The manner in which such operational and financial performance indicators are calculated and presented, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions. Investors are accordingly cautioned against placing undue reliance on such information in making an investment decision and should consult their own advisors and evaluate such information in the context of the Restated Consolidated Financial Information and other information relating to our business and operations included in this Red Herring Prospectus.
Unless otherwise indicated, industry and market data used in this section has been derived from the report titled
"Global and Indian Dental Labs and Branded Products" dated December 26, 2024 (the "F&S Report") prepared and issued Frost & Sullivan (India) Private Limited, pursuant to an engagement letter dated April 12, 2024. The F&S Report has been exclusively commissioned and paid for by us in connection with the Offer. The data included herein includes excerpts from the F&S Report and may have been re-ordered by us for the purposes of presentation. A copy of the F&S Report will be available on the website of our Company at www.laxmidentallimited.com/Investor_Relations from the date of the filing of this Red Herring Prospectus. Unless otherwise indicated, financial, operational, industry and other related information derived from the F&S Report and included herein with respect to any particular Fiscal/ Calendar Year refers to such information for the relevant Fiscal/ Calendar Year. Frost & Sullivan (India) Private Limited is not a related party as per the definition of "related party" under the Companies Act, 2013 or the SEBI LODR Regulations to our Company or any of our
Directors, Promoters, Key Managerial Personnel or Senior Management or the Book Running Lead Managers. For further information, see "Risk Factors - Certain sections of this Red Herring Prospectus disclose information from the F&S Report which has been prepared exclusively for the Offer and commissioned by our Company and paid for by our Company exclusively in connection with the Offer, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks." on page 108.
Our Financial Year commences on April 1 and ends on March 31 of the subsequent year, and references to a particular Financial Year are to the 12 months ended March 31 of that year. Unless otherwise stated, or the context otherwise requires, the financial information used in this section is derived from our "Restated Consolidated Financial Information" on page 377. Please note that the financial information with respect to our Jointly Controlled Entity has been consolidated in the Restated Consolidated Financial Information only as a Jointly Controlled Entity as per Indian Accounting Standard - 28. The separate financial information disclosed in this section in respect of our Jointly Controlled Entity has been included from its special purpose financial statement read with corresponding auditors report dated December 13, 2024 issued by M S K A & Associates, Chartered Accountants. For further information, see "Restated Consolidated Financial Information" and "Risk Factors Kids-e-Dental LLP in which we hold 60% of the total equity share capital is classified as a Jointly Controlled Entity, respectively, in our Restated Consolidated Financial Information in accordance with Ind AS 28. Consequently, the impact of its consolidation on our financial statements is limited." on pages 377 and 105.
This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forward-looking statements as a result of factors such as those set forth under "Forward-looking Statements" and "Risk Factors" on pages 19 and 37, respectively.
Overview
Offering a comprehensive portfolio of dental products, we are Indias only end-to-end integrated dental products company as at September, 2024. (Source: F&S Report, as replicated on page 288). Our offerings include custom-made crowns and bridges, branded dental products such as clear aligners, thermoforming sheets and aligner related products as a part of aligner solutions, and paediatric dental products. We have had a presence of more than 20 years and according to the F&S Report, based on revenue for Fiscal 2024, we are amongst the top two largest Indian dental laboratories. Based on the revenue from operations and PAT Margin for Fiscal 2023 and the product offered, we are the largest and most profitable vertically integrated and indigenous B2B2C dental aligner solutions company. (Source: F&S Report, as replicated on page 286) We manufacture our dental products across our six manufacturing facilities spread across 147,029.63 square feet.
Laboratory offerings
As per the F&S Report, in terms of retail sales, the Indian market for custom-made crowns and bridges is estimated to grow from USD 1.4 billion in 2023 to USD 3.1 billion in 2030 at a higher rate of 11.8% compared to the global market which is estimated to grow from USD 71 billion in 2023 to USD 121.6 billion in 2030 at a rate of 8.0%. The Indian dental laboratories market is characterised by the presence of fragmented and unorganized dental laboratories with less than ten technicians and a dearth of quality management standard compliant dental products. (Source: F&S Report, as replicated on page 264) Changing regulatory requirements in the medical devices sector is expected to transition the fragmented and unorganized dental products and consumables market to organized and consolidated market dominated by companies focusing on quality, operational efficiency, and consumer experience. (Source: F&S Report, as replicated on page 264) In terms of export revenue for the Fiscal 2023 among the Indian dental labs, we are the largest exporter for custom made dental prosthesis, catering primarily to US and UK. (Source: F&S Report, as replicated on page 264) Having evolved from a dental laboratory with a few members to an integrated dental products company, we now have a presence of 20 years in the dental laboratories business with a reach of over 22,000 dental clinics, dental companies and dentists between Fiscals 2022 to September 30, 2024 ("Dental Network").
Primary dental products offered by our laboratory include custom made dental prosthesis such as metal free crowns and bridges, including our range of branded premium zirconia crowns and bridges "Illusion Zirconia", porcelain fused to metal ("PFM") crowns, bridges, and dentures. Metal-free products contributed to 53.70% of the total revenue from our dental laboratory business catering to the Indian market and to 36.31% of total revenue from our dental laboratory business catering to international markets respectively in Fiscal 2024. We have launched iScanPro on August 9, 2024, branded intraoral scanners for digital dentistry, currently being employed by 264 dentists. Dental restoration units prepared using digital impression constituted 48.61%, by volume, of the total units sold by our domestic laboratory business and constituted 55.48%, by volume, of the total units sold by our international laboratory business in Fiscal 2024. Our facilities in Boisar are in compliance with the quality system regulations enforced by the United States Food and Drug Administration ("US FDA") and our manufacturing facilities in Mira Road and Boisar have received certifications for ISO 13485:2016 compliance, an internationally recognized standard for medical device quality.
Aligner Solutions
As per the F&S Report, in terms of retail sales, the Indian clear aligner market is estimated to grow from USD 133.6 million in 2023 to USD 569.0 million in 2030 at a much higher rate of 23.0% compared to the global market which is estimated to grow from USD 20.7 billion in 2023 to USD 54.9 billion in 2030 at a rate of 15.0%. Increasing number of patients are opting for clear aligner treatment compared to traditional braces for malocclusion, which refers to misalignment of the upper and/or lower teeth measurable enough to interfere with the persons ability to bite properly. (Source: F&S Report, as replicated on page 268). Increased treatment adoption among kids and adults alike, especially adults with poor treatment rate in the past, is one of the key factors driving adoption of clear aligners. (Source: F&S Report, as replicated on page 269). Growth in Indian clear aligner market is further expected to be driven by factors such as growing emphasis of Indian consumers on dental aesthetics (driving the adoption of clear aligners as alternative to braces), increasing number of general practitioners providing care for malocclusion, rising disposable income and propensity to spend on health products with cosmetic elements, and increased awareness through social media. (Source: F&S Report, as replicated on page 272). The global clear aligner market is sizable, and the Indian clear aligner market is expected to grow very rapidly over the next few years. (Source: F&S Report, as replicated on page 270).
We have a more focussed approach towards capturing the Indian aligner market share and we launched clear aligners under our brand Illusion Aligners which is the first Indian brand to receive 510(k) clearance from US FDA in 2021 to market clear aligners (Source: F&S Report, as replicated on page 273). We have adopted B2B2C business model for sale of our customised clear aligner solutions while offering a flexible ‘pay as you go model along with the upfront payment model, making our aligners more affordable to the end customers. Adoption of a B2B2C model involves sale of clear aligners through our Dental Network who in turn offer our dental products to end customers, which has helped us grow rapidly owing to our already established Dental Network with reach of over 22,000 dental clinics, dental companies and dentists between Fiscals 2022 to September 30, 2024. We are able to leverage our Dental Network, which has been built through our laboratory business, to scale up our offerings across metropolitan and non-metropolitan cities in a short span of time. Below table sets forth contribution of customers of our aligner solutions from tier I, tier II, and tier III cities to total customers served for aligners in the six month period ended September 30, 2024 and Fiscals 2024, 2023, and 2022.
| total customers served for aligners in Six month period ended September 30, 2024 (in number) | total customers served for aligners in Six month period ended September 30, 2024 (in %) | total customers served for aligners in Fiscal, 2024 (in number) | total customers served for aligners in Fiscal 2024 (in %) | Fiscal, 2023 (in number) | Fiscal 2023 (in %) | Fiscal 2022 (in number) | Fiscal 2022 (in %) | |
| Tier I | 1,810 | 46.90% | 2,348 | 47.09% | 2,109 | 51.33% | 1,027 | 50.37% |
| Tier II | 1,423 | 36.87% | 1,774 | 35.58% | 1,323 | 32.20% | 704 | 34.53% |
| Tier III | 626 | 16.22% | 864 | 17.33% | 677 | 16.48% | 308 | 15.11% |
Note: Classification of Tiers as per Ministry of Finance (Government of India) HRA classification of X Tier 1(Population of 50 lakh and above) Y Tier 2 (Population of 5 to 50 lakh) and Z Tier 3 (Population below 5 lakh) Notification No. 2/5/17-E II(B), 7th July 2017. (Source: F&S Report, as replicated on page 294).
We are the only aligner company in India which is fully vertically integrated having end-to-end capabilities from raw material to distribution, enabling significant control on the supply chain. (Source: F&S Report, as replicated on page 288). We are one of the very few companies in India to manufacture and supply thermoforming sheets, thermoforming machines, dental consumables, biocompatible resins for 3D printing under our brand ‘Taglus tailored for manufacturing of clear aligners. (Source: F&S Report, as replicated on page 279). Our thermoforming machines, thermoforming sheets, and biocompatible resins have also received certificate of conformity under Regulation EU 2017/745.
Paediatric dental products
As per the F&S Report, in terms of retail sales, the Indian paediatric dental crown market is estimated to grow from USD 63.9 million in 2023 to USD 164.8 million in 2030 at a higher rate of 14.5% compared to the global market which is estimated to grow from USD 2.1 billion in 2023 to USD 3.5 billion in 2030 at a rate of 7.5%. We entered the paediatric dental market through our Jointly Controlled Entity Kids-E-Dental LLP by acquiring a 60% stake in 2021. In terms of revenue from operations as of March 31, 2024, we are one of the leading paediatric dental product brands in India. (Source: F&S Report, as replicated on page 283) Kids-E-Dental LLP is the only Indian company specialized in paediatric dental products and manufacturing of pre-formed metal free paediatric dental crowns. (Source: F&S Report, as replicated on page 283) We offer a comprehensive range of paediatric products, including pre-formed branded paediatric crowns, Silver Diamide Fluoride ("SDF"), space maintainers, fissure sealant, reinforced splint and mineral trioxide aggregate. We are the only Indian manufacturer of US FDA cleared SDF. (Source: F&S Report, as replicated on page 283) We have been granted a design registration on "Bioflx", a semi-flexible tooth coloured pre-formed dental crown for children in India. Further, we have partnered with a leading paediatric dental company for distribution of Bioflx crowns manufactured by us globally across 81 countries. (Source: F&S Report, as replicated on page 283) Set forth below is a breakup of our revenue across our various product offerings for six month period ended September 30, 2024 and Fiscals 2024, 2023 and 2022:
| Revenue Segment | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Revenue from sale of goods and services (in million) | Percentage of Revenue from sale of goods and services | Revenue from sale of goods and services (in million) | Percentage of Revenue from sale of goods and services | Revenue from sale of goods and services (in million) | Percentage of Revenue from sale of goods and services | Revenue from sale of goods and services (in million) | Percentage of Revenue from sale of goods and services | |
| Laboratory | 729.61 | 63.07% | 1,239.59 | 64.75% | 1,055.10 | 66.38% | 932.13 | 71.99% |
| Aligner solutions | 359.76 | 31.10% | 538.44 | 28.12% | 350.63 | 22.06% | 229.71 | 17.74% |
| Others | 67.42 | 5.83% | 136.47 | 7.13% | 183.69 | 11.56% | 132.95 | 10.27% |
| Total | 1,156.79 | 100.00% | 1,914.50 | 100.00% | 1,589.41 | 100.00% | 1,294.78 | 100.00% |
The following table sets forth our revenues from sales and services for the periods indicated:
| Product category* | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Revenue from sales and services (in million) | Percentage of revenue from Operations | Revenue from sales and services (in million) | Percentage of revenue from Operations | Revenue from sales and services (in million) | Percentage of revenue from Operations | Revenue from sales and services (in million) | Percentage of revenue from Operations | |
| Branded dental products | 471.45 | 40.37% | 740.89 | 38.28% | 463.21 | 28.66% | 239.42 | 17.50% |
*Represents revenue from sale of goods derived from sale of branded dental products, that is Illusion Zirconia, Illusion Aligners, Taglus.
In addition to our above revenue from operations, set forth below is a table depicting revenues from sale of branded and non-branded paediatric dental products by Kids-E-Dental LLP in the six month period ended September 30, 2024 and the last three fiscals:
| Product category | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Revenue from Paediatric Operations (in million) | Percentage of Revenue from Paediatric Operations | Revenue from Paediatric Operation s (in million) | Percentage of Revenue from Paediatric Operations | Revenue from Paediatric Operations (in million) | Percentage of Revenue from Paediatric Operations | Revenue from Operation s (in million) | Percentage of Revenue from Paediatric Operations | |
| Branded paediatric dental products | 160.00 | 100.00% | 266.71 | 100.00% | 79.28 | 100.00% | 21.81 | 100.00% |
Management and operations
Our Company is promoted by Rajesh Vrajlal Khakhar, our Founder, Chairperson and Whole-Time Director, Sameer Kamlesh Merchant, our Managing Director and Chief Executive Officer and Dharmesh Bhupendra Dattani, the Chief Financial Officer of our Company. Rajesh Vrajlal Khakhar founded our Company as a dental laboratory business on July 8, 2004, and expanded its reach domestically and internationally. He manages business partnerships with leading international customers and oversees business development activities. He has more than 30 years of experience. Sameer Kamlesh Merchant has more than 20 years of experience and he has contributed in diversifying the offerings of our Company. He also oversees digital initiatives and technology transformation in our Company. Dharmesh Bhupendra Dattani has more than 15 years of experience. The growth story of our Company has also benefitted from our private equity investor OrbiMed Asia II Mauritius FDI Investments Limited since amalgamated into OrbiMed Asia II Mauritius Limited, a healthcare-focused fund associated with us since 2015, which has provided us continuous support through our growth in business. We have benefited significantly from the vision and leadership of our Promoters and investors, and they along with our board of directors and the senior management, have been instrumental in formulating and executing the core strategy of our Company. As of September 30, 2024, we have six manufacturing facilities, three of which are located in Mira Road, Mumbai Metropolitan Region, two in Boisar, Mumbai Metropolitan Region, Maharashtra and one in Kochi, Kerala, and further five supporting facilities two of which are located in Mumbai, and one each in Delhi, Bengaluru, and Ahmedabad with manufacturing capabilities. Our manufacturing facilities in Boisar and one of our manufacturing facilities in Mira Road have been registered with the US FDA, and all of our manufacturing facilities in Mira Road and Boisar have been certified by ISO (International Organization for Standardization). There are certain pending government approvals in relation to the operations of our Company, which we believe will not have material impact on the financials and operations of the Company. For further information, see "Government and Other Approvals" on page 510. Further, we have also obtained registration from ANVISA (Brazilian health regulatory agency) in relation to thermoforming sheets, offered by us.
Performance track record
Our leadership position (in terms of the parameters discussed in this section) and scale of operations have translated to our track record of consistent financial performance. The table below sets out some of our financial and other metrics as at and for the six month period ended September 30, 2024 and financial years ended March 31, 2024, March 31, 2023, and March 31, 2022, based on our Restated Consolidated Financial Information:
| As at and for the Financial Years ended March 31, | |||||
| Sr. No. Particulars | Unit | Six month period ended September 30, 2024 | 2024 | 2023 | 2022 |
| Financial | |||||
| 1. Net Revenue | |||||
| (a) Laboratory business | |||||
| (i) Domestic(1) | million | 447.62 | 804.09 | 681.18 | 584.49 |
| (ii) Domestic | % of Revenue from sale of goods and services | 38.69% | 42.00% | 42.86% | 45.14% |
| (iii) International(2) | million | 281.99 | 435.50 | 373.93 | 347.64 |
| (iv) International | % of Revenue from sale of goods and services | 24.38% | 22.75% | 23.53% | 26.85% |
| (b) Aligners | |||||
| (i) Bizdent(3) | million | 222.88 | 357.29 | 178.30 | 48.19 |
| (ii) Bizdent | % of Revenue from sale of goods and services | 19.27% | 18.66% | 11.22% | 3.72% |
| (iii) Vedia(4) | million | 136.88 | 181.15 | 172.32 | 181.52 |
| (iv) Vedia | % of Revenue from sale of goods and services | 11.83% | 9.46% | 10.84% | 14.02% |
| I Paediatric | |||||
| (i) Kids-E-Dental(5) | million | 160.00 | 266.71 | 79.28 | 21.81 |
| (ii) Kids-E-Dental | % of Revenue from paediatric operations | 100.00% | 100.00% | 100.00% | 100.00% |
| (d) Others(6) | million | 67.42 | 136.47 | 183.69 | 132.95 |
| (i) Others | % of Revenue from sale of goods and services | 5.83% | 7.13% | 11.56% | 10.27% |
| 2. Revenue from Operations(7) | million | 1,167.80 | 1,935.55 | 1,616.31 | 1,368.43 |
| 3. EBITDA(8) | million | 227.33 | 237.90 | 89.64 | 54.13 |
| 4. Adjusted EBITDA(9) | million | 279.84 | 326.78 | 95.66 | 52.68 |
| 5. PBT(10) | million | 211.03 | 85.24 | (42.61) | (147.12) |
| 6. PAT(11) | million | 227.39 | 252.29 | (41.63) | (186.79) |
| 7. PAT Margin(12) | % | 19.47% | 13.03% | (2.58%) | (13.65%) |
| 8. Return on Capital Employed(13) | % | 24.64%* | 19.97% | (0.33%) | (19.40%) |
| 9. Return on Equity(14) | % | 40.73%* | 78.78% | (19.62%) | (60.47%) |
| 10. Asset Turnover(15) | % | 79.78%* | 167.54% | 162.21% | 128.46% |
| Operational | |||||
| 16. Domestic lab | |||||
| (a) Total units(16) | Number | 257,609 | 452,330 | 393,163 | 361,166 |
| (b) Digital units(17) | Number | 160,830 | 219,887 | 142,958 | 101,514 |
| (c) Digital units penetration(18) | % | 62.43% | 48.61% | 36.36% | 28.11% |
| (d) Product categories (volume) | |||||
| (i) Metal-free(19) | Number | 114,416 | 186,958 | 149,781 | 105,249 |
| (ii) Metal-free revenue share(20) | % | 54.80% | 53.70% | 53.19% | 47.59% |
| 17. International Lab() | |||||
| (a) Total units(21) | Number | 150,004 | 198,920 | 155,998 | 145,350 |
| (b) Digital units(22) | Number | 92,661 | 110,360 | 43,584 | 17,985 |
| (c) Digital units penetration(23) | % | 61.77% | 55.48% | 27.94% | 12.37% |
| (d) Product Categories (Volume) | |||||
| (i) Metal-free(24) | Number | 30,872 | 54,874 | 42,732 | 51,537 |
| (ii) Metal-free revenue share(25) | % | 32.49% | 36.31% | 34.43% | 39.59% |
| 18. Aligners & Allied Products | |||||
| (a) Total aligner cases(26) | Number | 12,373 | 17,978 | 10,791 | 4,254 |
| (b) Customers served | Number | 3,859 | 4,986 | 4,109 | 2,039 |
| (i) Tier I(27) | % | 46.90% | 47.09% | 51.33% | 50.37% |
| (ii) Tier II(27) | % | 36.87% | 35.58% | 32.20% | 34.53% |
| (iii) Tier III(27) | % | 16.22% | 17.33% | 16.48% | 15.11% |
| 19. Kids-E-Dental | |||||
| (a) Total units(28) | Number | 445,358 | 538,638 | 86,339 | 22,132 |
| (b) Revenue share (geography) | |||||
| (i) Domestic(29) | % | 22.69% | 24.16% | 45.93% | 74.08% |
| (ii) International(30) | % | 77.31% | 75.84% | 54.07% | 25.92% |
| 20. Consolidated | |||||
| (a) Number of employees(31) | Number | 2,372 | 2,299 | 2,013 | 1,925 |
| (b) Branded sales as a percentage of revenue from operations (32) | % | 40.37% | 38.28% | 28.66% | 17.50% |
*Not annualised Notes:
33. Net revenue for domestic laboratory business refer to revenue from dental lab catering to the Indian market. 34. Net revenue for international laboratory business refers to dental lab catering to international markets. 35. Net revenue for Aligners from Bizdent refers to revenue from aligners sold by Bizdent Devices Private Limited.
36. Net revenue for Aligners from Vedia refers to revenue from other aligner related products sold by Vedia Solutions a division of Laxmi Dental Limited. 37. Net revenue for paediatric division from Kids-E refers to revenue of jointly controlled entity Kids-E Dental LLP.
38. Other net revenue refers to other diversified revenue of the Company and its Subsidiaries.
39. Revenue from operations is total revenue generated by the Company from the sales and services and other operating income. 40. EBITDA refers to earnings before interest, tax, depreciation and amortization and is calculated as restated profit before income tax and exceptional items added with finance cost, depreciation, and amortization, and deducted by other income. 41. Adjusted EBITDA is calculated by adjusting share of profit/(loss) of Jointly Controlled Entity to EBITDA.
42. PBT (Profit/(loss) before tax) is calculated as total income minus total expenses minus exceptional items of the Company for the year. 43. PAT (Profit for the year) means the profit for the year as appearing in the Restated Financial Statement.
44. PAT Margin is calculated as restated profit for the year divided by Revenue from Operations.
45. Return on capital employed is calculated as EBIT divided by average capital employed where EBIT is calculated as sum of profit before tax, and finance costs; and average capital employed is calculated as average of the opening capital employed and closing capital employed; capital employed is calculated as sum of total Equity and net debt; net debt is calculated as total borrowings less cash and cash equivalents and other bank balances. 46. Return on equity is calculated as restated net profit after tax divided by average total equity (net worth).
47. Asset Turnover Ratio is calculated as revenue from operations divided by average total assets.
48. Total units of domestic lab refer to number of units sold by domestic lab where domestic labs refer to dental lab catering to the
Indian market.
49. Digital units of domestic lab refer to number of units sold by domestic lab from digital impressions.
50. Digital units penetration for domestic lab is computed as digital units sold by domestic lab divided by total units sold by domestic lab; where digital units of domestic lab refer to number of units sold by domestic lab from digital impressions. 51. Metal free units of domestic lab refer to number of units sold by domestic lab of zirconia, lithium disilicate and other metal free materials. 52. Metal free revenue share for domestic lab is calculated as revenue from metal free units divided by total revenue from domestic lab. 53. Total units of international lab refer to number of units sold by international lab where international lab refers to dental lab catering to international markets. 54. Digital units of international lab refer to number of units sold by international lab from digital impressions.
55. Digital units penetration for international lab is computed as digital units sold by international lab divided by the total units sold by international lab, where digital units of international lab refer to number of units sold by international lab from digital impressions. 56. Metal free units of international lab refer to number of units sold by international lab of zirconia, lithium disilicate and other metal free materials. 57. Metal free revenue share for international lab is computed as revenue from metal free units divided by total revenue from international lab. 58. Total aligner cases refer to total number of cases of aligners sold by Subsidiary, Bizdent Devices Private Limited.
59. Customers served refer to total dental clinics, dental companies and dentists served by Subsidiary, Bizdent Devices Private Limited.
This represents locations of customers served by the Subsidiary, Bizdent Devices Private Limited across tier I, II and III cities Classification of Tiers as per Ministry of Finance (Government of India) HRA classification of X Tier 1 (Population of 50 Lakh and above), Y Tier 2 (Population of 5 to 50 Lakh) and Z Tier 3 (Population below 5 Lakh) Notification No. 2/5/17-E II(B), 7th July 2017. 60. Kids-E refers to paediatric dental products business through our Jointly Controlled Entity, Kids-E-Dental LLP. Total units for
Kids-E refers to number of units sold by Kids-E Dental LLP
61. Domestic revenue share for Kids-E refers to number of units sold in India market by Kids-E Dental LLP.
62. International revenue share for Kids-E refers to number of units sold in international market by Kids-E Dental LLP.
63. Number of employees means the number of employees of the Company as on March 31 of the respective Fiscal and as on September
30, 2024.
64. Branded Sales as a percentage of revenue from operations is computed as revenue from sale of own brand products divided by total revenue from operations. Represents revenue from operations derived from sale of branded dental products, that is Illusion Zirconia, Illusion Aligners, and Taglus. In addition, Kids-E-Dental LLP also generated a revenue from operations of 160.00 million, 266.71 million, 79.28 million, and 21.81 million in six month period ended Septemer 30, 2024 and Fiscals 2024, 2023, and 2022 respectively. For further details of revenue from branded products, please see "Our Business Overview" on page 292.
Significant Factors Affecting our Results of Operations
Our ability to retain and expand our Dental Network
As on September 30, 2024, we have a large Dental Network in India has a reach of over 22,000 dental clinics, dental companies and dentists over the past three Fiscals across 320 cities in India and have catered to global demand by exporting our dental products to more than 95 countries. Our results of operations are affected by our ability to retain and expand our Dental Network. Our Dental Network may grow slower than we expect or slower than it has grown in the past. If we fail to retain either our Dental Network or fail to add to it, the value of our network may be diminished. We have faced instances of dentists discontinuing their association with our Company and our Dental Network in the ordinary course of business in six month period ended September 30, 2024 and Fiscals 2024, 2023, and 2022, which did not lead to any material adverse effects on our business and operations. However, there can be no assurance that such events may not occur in future or adversely affect our business and operations in the future We cannot assure you that we will be able to grow our Dental Network in a timely manner or at all. Any failure to grow or retain our Dental Network would adversely affect our business, reputation, financial condition and results of operations. Further, to expand our market share we intend to continue cross selling our dental products to our existing Dental Network thereby increasing our wallet share from our Dental Network. Any failure to increase our wallet share by cross selling our dental products through our existing Dental Network could impact our business, financial condition and results of operation.
Our manufacturing capabilities
Our results of operations are affected by our manufacturing capabilities. A significant portion of our revenue is generated by sales of dental products manufactured at our manufacturing facilities located in and around Mumbai. As of September 30, 2024, we have six manufacturing facilities, three of which are located in Mira Road, Mumbai Metropolitan Region, Maharashtra, two in Boisar, Mumbai Metropolitan Region, Maharashtra, and one in Kochi, Kerala, and further five supporting facilities two of which are located in Mumbai, and one each in Delhi, Bengaluru, and Ahmedabad to support our manufacturing capabilities. In the table below, we have set forth details of the average capacity actual production and capacity utilisation under the various segments offered by us for the six month period ended September 30, 2024 and Fiscals 2024, 2023, and 2022, as follows:
Laboratory Offerings#
This segment includes metal free products, PMF products and removables and other products.
| Particulars | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Average Capacity in SKUs | 468,000 | 744,300 | 622,125 | 524,250 |
| Actual Production in SKUs | 407,613 | 651,250 | 549,161 | 506,516 |
| Capacity Utilisation % | 87.10%* | 87.50% | 88.27% | 96.62% |
*Not annualised
Aligner Solutions#
The segment is categorized into two broad groups on the basis of their different manufacturing process. As a result, each of these group have different average capacity, actual production and capacity utilization. Hence, the capacity utilization has been calculated separately.
1 ) Aligner products
| Particulars | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Average Capacity in SKUs | 275,063 | 489,375 | 229,500 | 222,750 |
| Actual Production in SKUs | 182,850 | 374,689 | 193,753 | 60,539 |
| Capacity Utilisation % | 66.48%* | 76.56% | 84.42% | 27.18% |
*Not annualised
2) Other aligner related products
| Particulars | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Average Capacity in SKUs | 2,568,000 | 5,136,000 | 4,848,000 | 3,048,000 |
| Actual Production in SKUs | 831,233 | 1,758,083 | 1,477,896 | 2,221,454 |
| Capacity Utilisation % | 32.37%* | 34.23% | 30.48% | 72.88% |
*Not annualised
Paediatric Dental Products#
The segment is categorized into two broad groups on the basis of their different manufacturing process. As a result, each of these group have different average capacity, actual production and capacity utilization. Hence, the capacity utilization has been calculated separately.
1) Paediatric products I#: Crown products
| Particulars | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022* |
| Average Capacity in SKUs | 810,000 | 1,620,000 | 1,080,000 | - |
| Actual Production in SKUs | 436,852 | 520,580 | 57,749 | - |
| Capacity Utilisation % | 53.93%^ | 32.13% | 5.35% | - |
^Not annualised
* These products were not offered by Kids-E-Dental LLP in the Fiscal Year 2022
2) Paediatric products II#: Crown products and other products
| Particulars | Six month period ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Average Capacity in SKUs | 56,700 | 113,400 | 59,400 | 37,800 |
| Actual Production in SKUs | 8,506 | 18,058 | 28,590 | 22,132 |
| Capacity Utilisation % | 15.00%* | 15.92% | 48.13% | 58.55% |
*Not annualised
#As certified by Santosh Ramlakhan Jaiswar, independent chartered engineer, by certificate dated October 18, 2024. Notes:
1. Average capacity refers to the arithmetic average of the total capacity across all types of machines used during the financial year, where total capacity for each type of machine is calculated as the product of the number of units that can be produced by each machine in a year and the number of machines operating in that segment.
2. Capacity utilisation percentage is calculated as quantum of actual production in the manufacturing facility in the relevant Fiscal, divided by the average capacity of manufacturing facility for the relevant Fiscal.
3. Machine utilization is based on a 15-hour operating day in case of Laboratory offering and Aligner Solutions, whereas, 12-hour in case of Paediatric dental products. The average monthly operating schedule is assumed to be 25 days, after accounting for holidays or unforeseen interruptions.
4. Based on the orders and production schedule, set up of machines could be modified in order to meet higher production requirements by increasing the number of operating hours or the number of days in the monthly operating schedule.
The continued operation of our manufacturing facilities can be substantially interrupted due to a number of factors, many of which are outside of our control, including fire, flood, earthquakes, power outages, fuel shortages, mechanical breakdowns, terrorist attacks and wars, or other natural disasters, as well as loss of licenses, certifications and permits, changes in governmental planning for the land underlying these facilities and regulatory changes. While we have not faced any such material instances of damage to our manufacturing equipment and inventories stored in our manufacturing facilities due to natural disasters or unanticipated catastrophic events in the past, we cannot assure you that we will not experience such disruptions in the future. If our manufacturing facilities are rendered unusable as a result of natural disasters, unanticipated catastrophic events or any other reason, our business, financial condition and results of operations may be adversely affected. We may not be able to source for alternative manufacturing facilities that meet the requirements of modern manufacturing operations for guaranteed storage safety, optimal and flexible space utilization and high operational efficiency are in short supply.
Further, we intend to purchase new machinery to enhance our capabilities and to provide us with a distinct competitive advantage. We intend to continue to focus on improving our operational efficiency to improve returns, including by increased technology integration in our business. Furthermore, the integration of these new machines into our operations will streamline our business processes, making them more efficient and effective. We will incur expenditure towards machinery including (i) CADCAM machines such as 3D printers, milling and thermoforming machines, computers, scanners and CADCAM software; (ii) injection moulding and extrusion equipment; (iii) research and development, and quality control equipment; (iv) infrastructural expenditure on solar panel, diesel generator sets, piping; and (v) other miscellaneous machinery such as laser marking machine, pumps, furnaces, weighing balance machines, polishing machines and packing machines. For further details, please see
"Objects of the Offer" beginning on page 171. However, this involves significant capital expenditure, which may affect our liquidity if we are unable to generate sufficient cash flow from operations or from financing activities. As a result, if we are unable to maintain a sufficient capacity utilization to offset the increased depreciation expenses, our profitability would suffer from the expansion.
Our ability to control costs and expenses
Our results of operations are affected by our ability to control our cost of raw material and other expenses. Our cost of raw material consumed was 262.39 million, 464.18 million, 306.28 million and 306.37 million respectively in six month period ended September 30, 2024 and Fiscals 2024, 2023 and 2022, respectively, representing 22.25%, 23.77%, 18.69% and 22.19% of our total income for the same periods, respectively. We rely on our suppliers for the purchase of raw materials and during six month period ended September 30, 2024 and Fiscal 2024, 2023 and 2022 we purchased raw materials totaling to 244.98 million, 474.57 million, 285.40 million and 326.56 million. Prices of the raw materials we use may also fluctuate. If our raw materials become significantly more expensive, we may not be able to proportionately pass on the additional costs to our customers and our profit margins may be reduced. Moreover, our relationship with suppliers of key raw materials and components lacks exclusivity, thereby contributing to pricing pressures exerted by our suppliers. Such pricing pressure from our suppliers may adversely affect our business, gross margin, profitability, and ability to increase prices, impacting our business, results of operations, cash flows, and financial condition. This pricing pressure can limit our ability to set or maintain prices at levels that would sustain our gross margins and profitability.
Economic and Industry Trends in India
Our results of operations are affected by economic and industry trends in India. There is an increased regulatory scrutiny and greater emphasis on safety and quality of dental products in dental laboratories market in India. (Source: F&S Report, as replicated on page 263) For instance, ISO 13485 is required for organizations involved in the design, production, installation and servicing of medical devices and related services and to manufacture, import, sell, or distribute dental products in India, a valid license from the Central Drugs Standard Control
Organization ("CDSCO") is mandatory. (Source: F&S Report, as replicated on page 264) Clear aligners fall under Class IIA, medium risk medical devices category, which requires product testing and ISO 13485 quality system implementation. (Source: F&S Report, as replicated on page 264) Our dental laboratories which possess ISO 13485:2016 compliant quality management system and the quality system of our laboratories is in compliance with the quality system regulations enforced by the US FDA, an internationally recognized standard for medical device quality. We have also received a license from the CDSCO for manufacturing or selling or distributing Class A or Class B medical devices under the Medical Devices Rules, 2017.
Any changes in these regulations or accreditations can create uncertainty and necessitate significant adjustments to our operations. Non-compliance, whether due to unintentional oversight or the complexity of navigating new rules, could result in severe regulatory sanctions, fines, forced modifications, or even the discontinuation of our operations. These outcomes could have a significant impact on our business and financial performance. While we apply for renewal of applicable licenses, registrations and accredits in a timely manner, we cannot assure that such licenses and registrations will be granted before their expiry. If our operations continue pending the grant of renewal, it could be considered a violation of applicable laws. Any suspension, revocation, or termination of our operational licenses may also lead to adverse consequences under the terms of our other licenses. Furthermore, any changes in applicable laws, rules, or regulations, or stricter enforcement of existing laws, may require additional capital expenditures or operating costs, adversely affecting our business and financial condition.
International expansion
Our results of operations are affected by our ability to expand internationally and our revenue from our laboratories business outside of India. Our revenue from our laboratories business outside of India is concentrated in U.S., and the UK. Export of dental products depend on the availability of adequate reimbursement provided under public healthcare schemes or dental insurances available in in such jurisdictions. As healthcare costs could rise significantly in these jurisdiction, third-party payers may attempt to control costs by authorizing fewer elective implant and prosthetic treatments. These cost-control methods also potentially limit the amount that third-party payers may be willing to pay for prosthetic treatments. These cost containment measures could impact our business by adversely affecting the demand for our dental products or the price at which we can sell our dental products, thereby impacting our business, financial condition, and results of operations.
Investment in R&D
Modern dentistry is heavily reliant on digital technology and adoption of digital technologies is expected to increase the volumes of dental procedures. (Source: F&S Report, as replicated on page 252) Further, for precise fitment of dental prostheses, reduce visit time and improve patient experience, dental clinics are adopting digital workflows and demand dental laboratories to adopt new technologies and invest in digitalization. (Source: F&S Report, as replicated on page 263) As a result, our results of operations and long-term growth prospects will depend on our ability to innovate, our research and development ("R&D") efforts and enhanced technological capabilities. We seek to continually strengthen our R&D capabilities by maintaining a dedicated research and development team, in order to keep pace with the technological advancements and industrial trends. Such plans could increase our research and development expenses and may impact our results of operations and financial condition.
Changing Product Preferences
As per the F&S Report, in terms of retail sales, the Indian clear aligner market is estimated to grow from USD 133.6 million in 2023 to USD 569.0 million in 2030 at a much higher rate of 23.0% compared to the global market which is estimated to grow from USD 20.7 billion in 2023 to USD 54.9 billion in 2030 at a rate of 15.0%. (Source: F&S Report, as replicated on page 272) The penetration rate of clear aligners is expected to increase over the years and increasing awareness on aesthetics and clear aligners, expansion of orthodontic treatment to general dentists, expanding indications, technological advancements and increased treatment adoption among adults are drivers for clear aligner adoption. (Source: F&S Report, as replicated on page 270) The future demand of clear aligners may, however, be difficult to anticipate since it depends on a number of variables, most of which are beyond our control. Consumer spending habits are affected by, among other things, prevailing economic conditions, levels of employment, salaries and wage rates, consumer confidence and consumer perception of economic conditions. A general slowdown in economy of India or other overseas markets or an uncertain economic outlook would adversely affect consumer spending habits which may, among other things, result in a decrease in the number of overall orthodontic treatment cases or a reduction in consumer spending on elective or higher value orthodontic solutions, each of which would have a material adverse effect on our results of operations. If the demand for clear aligner treatment fails to increase as rapidly as we anticipate, our business, financial condition, results of operations and prospects may be materially and adversely affected.
Material Accounting Policy Information Summary of Material Accounting Policies 1.1 Basis of Preparation (i) Statement of Compliance
The Restated Consolidated Financial Information of Laxmi Dental Limited (Formerly known as Laxmi Dental Export Private Limited) (the "Company" or the "Holding Company" or the
"Issuer") and its subsidiaries (the Company and its subsidiaries together referred to as the "Group") and its jointly controlled entity which comprises of the Restated Consolidated
Statement of Assets and Liabilities as at September 30, 2024 and for the financial year ended March 31, 2024, March 31, 2023 and March 31, 2022, the Restated Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Restated Consolidated Statement of Changes in Equity and the Restated Consolidated Statement of Cash Flows along with the Statement of Material Accounting Policies and other explanatory information for the six month period ended September 30, 2024 and for the financial years ended March 31, 2024, March 31,
2023 and March 31, 2022 (collectively, the "Restated Consolidated Financial Information").
The Restated Consolidated Financial Information of Laxmi Dental Limited (Formerly known as Laxmi Dental Export Private Limited) (the "Company" or the "Holding Company" or the
"Issuer") and its subsidiaries (the Company and its subsidiaries together referred to as the "Group") and its jointly controlled entity which comprises of the Restated Consolidated
Statement of Assets and Liabilities as at September 30, 2024, and for the financial years ended March 31, 2024, March 31, 2023 and March 31, 2022, the Restated Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Restated Consolidated Statement of Changes in Equity and the Restated Consolidated Statement of Cash Flows along with the Statement of Material Accounting Policies and other explanatory information for the six month period ended September 30, 2024 and for the financial years ended March 31, 2024, March 31,
2023 and March 31, 2022 (collectively, the "Restated Consolidated Financial Information").
The Restated Consolidated Financial Information have been prepared by the management of the Group for the purpose of inclusion in the Red Herring Prospectus and Prospectus to be filed by the Holding Company with the Securities and Exchange Board of India ("SEBI"), National
Stock Exchange of India Limited and BSE Limited and the Registrar of Companies, Maharashtra at Mumbai ("RoC") in connection with the proposed Initial Public Offer of equity shares ("IPO") by the Company.
The Restated consolidated Financial Information have been prepared by the management of the Company to comply with the requirements of:
(a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (the "Act");
(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended (the "ICDR Regulations");
(c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI"), as amended (the "Guidance Note"); and
(d) Email dated October 28, 2021, from Securities and Exchange Board of India (SEBI) to Association of Investment Bankers of India ("SEBI Communication").
The Restated Consolidated Financial Information have been compiled by the management from:
a. Audited Ind AS consolidated financial statements of the Group as at and for the year ended 31
March 2024, prepared in accordance with Indian Accounting Standard (Ind AS), as prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended (referred to as "Ind AS"), and other accounting principles generally accepted in
India (Ind AS Consolidated financial statements), and have been approved by the Board of Directors at their meeting held on 3 September 2024.
b. Audited special purpose consolidated financial statements of the Group as at and for the year ended March 31, 2023, prepared by the management in accordance with the basis of preparation, as set out in Note 2.1 to the Restated Consolidated Financial Information, which have been approved by the Board of Directors at their meeting held on 3 September 2024; and
c. Audited special purpose consolidated financial statements of the Group as at and for the year ended March 31, 2022, prepared by the management in accordance with the basis of preparation, as set out in Note 2.1 to the Restated Consolidated Financial Information, which have been approved by the Board of Directors at their meeting held on 3 September 2024; and
Audited special purpose consolidated financial statement of the Group as at and for the year ended March 31, 2023, and audited special purpose consolidated financial statement of the Group as at and for the year ended March 31, 2022, together is referred as "Audited Special Purpose Consolidated Financial Statements".
Pursuant to the Companies (Indian Accounting Standard) Second Amendment Rules, 2015, the Company voluntarily adopted March 31, 2024, as reporting date for first time adoption of Ind AS, notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and consequently April
01, 2022, is the transition date for preparation of its statutory financial statements as at and for the year ended March 31, 2024. Hence, the financial statements as at and for the year ended March 31, 2024, were the first financials, prepared in accordance with Ind AS. Up to the financial year ended March 31, 2023, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with Companies (Accounting Standards) Rules, 2021 ("Indian GAAP" or
"Previous GAAP") due to which the Audited Special Purpose Consolidated Financial Statements are prepared as per SEBI Communication. Further, these Audited Special Purpose Consolidated Financial Statements are not the statutory financial statements under the Act.
The Audited Special Purpose Consolidated Financial Statements have been prepared after making suitable adjustments to the accounting heads from their Indian GAAP values following accounting policies and accounting policy choices (both mandatory exceptions and optional exemptions availed as per Ind AS 101) consistent with that used at the date of transition to Ind AS (April 01, 2022) and as per the presentation, accounting policies and grouping/classifications including Revised Schedule III disclosures followed as at and for year ended March 31, 2024, in accordance with Ind AS, pursuant to the SEBI Communication.
The Audited Special Purpose Consolidated Financial Statements referred above have been prepared solely for the purpose of preparation of Restated Consolidated Financial Information for inclusion in DRHP in relation to proposed IPO. Hence these special purpose audited financial statements are not suitable for any other purpose other than for the purpose of preparation of Restated Consolidated Financial Information.
The Restated Consolidated Financial Statements:
(a) have been prepared after incorporating adjustments for the changes in accounting policies, material errors, if any, and regrouping/reclassifications retrospectively in the six month period ended September 30, 2024 and financial year ended March 31, 2022 and March 31, 2023 to reflect the same accounting treatment as per the accounting policies and grouping/classifications followed as at and for the year ended March 31, 2024.
(b) do not require any adjustment for modification as there are no modification in the underlying audit reports. There is an items relating to emphasis of matter and other matter which do not require any adjustments.
These Restated Consolidated Financial Information were approved in accordance with a resolution of the Board of Directors on December 21, 2024.
All amounts disclosed in Restated Consolidated Financial Information are reported in nearest millions of Indian Rupees and have been rounded off to the nearest millions, except per share data and unless stated otherwise.
(ii) Basis of measurement
The Restated consolidated Financial Information have been prepared on a historical cost convention on accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:-
i) Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments)
ii) Net Defined Benefit obligations
The Restated consolidated Financial Information have been prepared on a going concern basis.
(iii) Current versus Non-Current classification
All assets and liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and services and their realisation in Cash and Cash Equivalents, the Group has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
(iv) Use of estimates
The preparation of the Restated Consolidated Financial Information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. 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 and in any future periods affected.
Critical Accounting Estimates:
a) Expected credit Losses on trade Receivables
The impairment provision of trade receivables is based on assumptions about risk of default and expected timing of collection. The Group uses judgment in making these assumptions and selecting the inputs to theimpairment calculation, based on the Groups past history, customers creditworthiness, existing market conditions as well as forward looking estimates at the end of each reporting period.
b) Defined Benefit Plans andCompensated Absences
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These includethe determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
c) Leases
The Group evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116.Identification of a lease requires significant judgment. The Group uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Group determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. In assessing whether the Group is reasonably certain to exercise an option to extend a lease, or notto exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Group to exercise the option to extend the lease, or not to exercise the option toterminate the lease. The Group revises the lease term if there is a change in the non-cancellable period of alease.
The discount rate is generally based on the incremental borrowing rate.
1.2 Basis of Consolidation
The Restated Consolidated Financial Information comprises the Financial Statements of the Company and its Subsidiaries for the six month period ended September 30, 2024 and financial year ended March 31, 2024, March 31, 2023 and March 31, 2022.
The Group consolidates entity which are controlled by it.
The Group establishes control when; it has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect the entitys returns by using its power over the entity.
Subsidiaries are consolidated from the date control commences until the date control ceases. The results ofsubsidiaries acquired, or sold, during the year are consolidated from the effective date of acquisition and upto the effective date of disposal, as appropriate.
All inter-company transactions, balances and income and expenses are eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries is identified and presented in theRestated Consolidated Balance Sheet separately within equity.
Non-Controlling Interests in the net assets of consolidated subsidiaries consists of:
(a) The amount of equity attributable to non-controlling interests at the date on which investment in asubsidiaries
(b) The non-controlling interests share of movements in equity since the date parent subsidiaries relationship came into existence.
The Net Profit/ (Loss) and Other Comprehensive Income attributable to Non-Controlling Interests of subsidiaries are shown separately in the Restated Consolidated Statement of Profit and Loss and Restated Consolidated Statement of Changes in Equity.
Changes in the companys interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the companys interests and the non-controlling interests areadjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.
If the Group loses control over a subsidiary, it:
(i) Derecognises the assets (including goodwill) and liabilities of the subsidiary (ii) Derecognises the carrying amount of any non-controlling interests (iii) Recognises the fair value of the consideration received (iv) Recognises any surplus or deficit in profit and loss
(v) Reclassifies the parents share of components previously recognised in OCI to profit and loss or retainedearnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
1.3 Investments in Joint Ventures and Associates
When the Group has with other entities joint control of the arrangement and rights to the net assets of the joint arrangement, it recognises its interest as joint ventures. Joint control exists when the decisions about the relevant activities (i.e., activities that significantly affects the investees returns) require unanimous consent of the parties sharing the control. When the Group has significant influence over the other entity, itrecognises such interest as investment in associates. Significant influence is the power to participate in thefinancial and operating policy decisions of the entity but is not control or joint control over the entity.
The results, assets and liabilities of joint ventures and associates are incorporated in the Restated Consolidated Financial Information using equity method of accounting after making necessary adjustmentsto achieve uniformity in application of accounting policies, wherever required.
An investment in joint venture or associate is initially recognised at cost and adjusted thereafter to recognisethe Groups share of profit or loss and other comprehensive income of the joint venture or associate.
The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, ifany, when there is evidence of impairment.
1.4 Common Control Transactions
The transactions between entities under common control accounted for using the pooling of-interest method. The assets and liabilities of the acquired entity are recognised at their carrying amounts recorded in the parent entitys Consolidated Financial Statements with the exception of certain income tax and deferred tax assets. No adjustments are made to reflect fair values, or recognise any new assets or liabilities.The only adjustments that are made are to harmonise accounting policies. The components of equity of theacquired companies are added to the same components within the Companys equity. The difference, if any,between the amounts recorded as share capital issued plus any additional consideration in the form of cashor other assets and the amount of share capital of the transferor is transferred to capital reserve. The Companys shares issued in consideration for the acquired companies are recognised from the moment theacquired companies are included in these financial statements and the financial statements of the commonlycontrolled entities are combined, retrospectively, as if the transaction had occurred at the beginning of the earliest reporting period presented.
1.5 Revenue Recognition
Revenues are derived primarily from the sale of dental products and dental services. Revenue is measured as the amount of consideration the Group expects to receive in exchange for transferring goods or providingservices in accordance with Ind AS 115, Revenues from Contracts with Customers. Revenue is recognizedwhen performance obligations are satisfied; this occurs with the transfer of control of products and servicesto its customers, which for products generally occurs when title and risk of loss transfers to the customer, and for services generally occurs as the customer receives and consumes the benefit.
Revenue also excludes taxes collected from customers.
For the products pertaining to Dental Laboratory Offering and Aligners Solution, the Group transfers control and recognizes revenue when products are shipped from the Groups manufacturing facility or warehouse to the customer. For contracts with customers that contain destination shipping terms, revenue is not recognized until the goods are delivered to the agreed upon destination. As such, the Groups performance obligations related to product sales are satisfied at a point in time as this is when the customer obtains the use of and substantially all of the benefit of the product.
Revenue from Dental Clinical Services is recognized at point in time when the patients dental treatment iscompleted.
Revenue from Course Fees is recognised over time as per the course duration.
Revenue is measured based on the transaction price, which is the consideration, adjusted for revenue reduction due to sales returns. Reversal of revenue on account of sales returns is considered as variable consideration. The variable consideration is estimated at contract inception and constrained until it is highlyprobable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Estimated revenuereduction is recognised for expected sales returns using most likely amount method.
Contract Balances:
Contract Liability:
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities arerecognised as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).
Trade Receivable:
A trade receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
Other operating income represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and the right to receive the income is established as per the terms of the contract
Government grants are accounted when there is reasonable assurance that the Group will comply with the conditions attached to them and where there is a reasonable assurance that the grant will be received. The Group receives grants related to income and the same is recognised in the Restated Consolidated Statementof Profit and Loss as "other operating income" (Revenue from Operation).
1.6 Other income
Interest income is accrued on a time basis by reference to the principal amount and the effective interest rate. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably.
1.7 Inventories
Inventories are valued at the lower of cost and net realizable value. Cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present locationand condition. Net Realizable Value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw materials:
Cost includes purchase price, (excluding those subsequently recoverable by the enterprise from the concerned revenue authorities), freight inwards and other expenditure incurred in bringing such inventoriesto their present location and condition. Cost is determined on weighted average basis. Raw Materials are valued at lower of cost and net realisable value (NRV).
Finished Goods:
Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on thenormal operating capacity. The same is valued at lower of cost and NRV. Cost of Finished goods includescost of raw materials, cost of conversion and other costs incurred in bringing the inventories to their presentlocation and condition. Cost of inventories is computed on weighted average basis
Traded goods:
Cost includes purchase price, (excluding those subsequently recoverable by the enterprise from the concerned revenue authorities),freight inwards and other expenditure incurred in bringing such inventoriesto their present location and condition.
Provision for inventory:
Provision of obsolescence on inventories is considered on the basis of managements estimate based on demand and market of the inventories.
1.8 Property, Plant & Equipment
(a) Recognition and Measurement :
Property, Plant and Equipment are stated at cost, less accumulated depreciation and accumulated impairment loss, if any. Cost includes expenditures directly attributable to the acquisition of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is derecognised when discarded/scrapped. All other repairs and maintenance costs are charged to profit and loss in the reporting period inwhich they occur.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profitor loss.
(b) Depreciation:
Depreciation is provided, under the Written down value (WDV) basis, pro-rata to the period of use, based on useful lives specified in Schedule II to the Companies Act, 2013.
The useful lives of the property, plant and equipment are as follows: a) Building - 60 years b) Computers - 3 to 6 years c) Furniture and fixtures - 10 years d) Office Equipment - 5 years e) Vehicles - 8 to 10 years f) Plant & Equipment - 13 to 15 years
1.9 Leases
The Group leases most of its office facilities under operating lease agreements that are renewable on aperiodic basis at the option of the lessor and the lessee. The lease agreements contain rent escalation clauses.
The Group assesses whether a contract contains a lease at the inception of the contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of timein exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: (i) the contract involves the use of an identified asset, (ii) theGroup has the right to obtain substantially all of the economic benefits from the use of the asset through theperiod of the lease, and (iii) the Group has the right to direct the use of the asset.
At the date of commencement of the lease, the Group recognises a ROU asset and a corresponding lease liability for all lease arrangements under which it is a lessee, except for short-term leases and low value leases. ROU assets represent the Groups right to use an underlying asset for the lease term and lease liabilities represent the Groups obligation to make lease payments arising from the lease. The Group has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.
The lease arrangements include options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.
The ROU assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs. They are subsequently measured at cost less accumulated depreciation and accumulated impairment losses.
ROU assets are depreciated from the date of commencement of the lease on a straight-line basis over theshorter of the lease term and the useful life of the underlying asset.
The lease liability is initially measured at amortised cost at the present value of the future lease payments. The Group uses its incremental borrowing rate (as the interest rate implicit in the lease is not readily determinable) based on the information available at the date of commencement of the lease in determiningthe present value of lease payments. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made. Lease liabilities are remeasured with a corresponding adjustment to the related ROU assetif the Group changes its assessment as to whether it will exercise an extension or a termination option.
1.10 Investment Properties
Properties held to earn rentals are classified as investment property and are measured and reported at cost, including transaction costs, in accordance with the Groups accounting policy. Policies with respect to depreciation, useful life and derecognition are on the same basis as stated for Property, Plant & Equipmentabove.
1.11 Employee benefits
Groups employee benefit obligations include short-term obligations, compensated absences and post-employment obligations which includes gratuity plan and contributions to provident fund.
(a) Short-Term Obligations
Liabilities for salaries, wages and bonus, that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognised in respect of employees services up to the end of the reporting year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(b) Compensated Absences
The Group provides for the encashment of leave or leave with pay subject to certain rules. The employeesare entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on number of days of unutilized leave at each balance sheet date based on an estimated basis for theperiod end and on an independent actuarial valuation under Projected Unit Cost method at the year end.
(c) Defined Benefit Plan
Employees are entitled to a defined benefit retirement plan (i.e. Gratuity) covering eligible employees of the Group. The plan provides for a lump-sum payment to eligible employees, at retirement, death, and incapacitation or on termination of employment, of an amount based on the respective employees salary and tenure of employment. Vesting occurs upon completion of five years of service.
Gratuity liabilities are determined by actuarial valuation, performed by an independent actuary, at each reporting date using the projected unit credit method. The Group recognises the obligation of a defined benefit plan in its balance sheet as a liability in accordance with Ind AS 19 "Employee Benefits." The discount rate is based on the government securities yield. Re-measurements, comprising actuarial gains and losses are recorded in other comprehensive income in the period in which they arise. Re-measurements recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in Restated Consolidated
Statement of Profit and Loss in the period of plan amendment.
Costs comprising service cost (including current and past service cost and gains and losses on curtailmentsand settlements) and net interest expense or income is recognised in profit or loss.
(d) Defined Contribution Plans
The defined contribution plan is a post-employment benefit plan under which the Group contributes fixed contribution to a Government Administered Fund and will have no obligation to pay further contribution. The Groups defined contribution plan comprises of Provident Fund and Labour Welfare Fund. The Groups contribution to defined contribution plans are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service.
1.12 Provisions andExpenses
A provision is recognised when the Group has a present legal or constructive obligation as a result of a pastevent, and it is probable that an outflow of economic benefits will be required to settle the obligation and areliable estimate can be made of the amount of the obligation
Provisions (excluding retirement benefits and compensated absences) are determined at present value basedon best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date adjusted to reflect the current best estimates.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which 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 or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimateof the amount cannot be made.
1.13 Financial Instruments (a) Financial assets: (i) Classification
The Group classifies its financial assets in the following measurement categories: - those to be measured subsequently at fair value through profit and loss, and - those measured at amortised cost
The classification depends on the entitys business model for managing the financial assets and thecontractual cash flow characteristics.
(ii) Initial Recognition
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. However trade receivables that do not contain a significant financing component are measured at transaction price.
(iii) Measurement
Subsequent to initial recognition, financial assets are measured as described below:
Cash and Cash Equivalents:
The Groups cash and cash equivalents consist of cash on hand and in banks and demand deposits with banks (three months or less from the date of acquisition). For the purposes of the cash flow statement, cashand cash equivalents include cash on hand, in banks and demand deposits with banks (three months or less from the date of acquisition), net of outstanding bank overdrafts that are repayable on demand and are considered part of the Groups cash management system. In the balance sheet, bank overdrafts are presented under borrowings within current liabilities.\
Financial Assets carried at Amortised Cost:
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at Fair Value through Other Comprehensive Income (FVOCI):
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 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 other comprehensive income.
Financial Assets at Fair Value through Profit or Loss (FVTPL)
A financial asset which does not meet the amortized 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 orlosses on re-measurement recognized in statement of profit or loss. The gain or loss on disposal and interestincome earned on FVTPL is recognized.
(iv) Impairment of Financial Assets
The Group assesses at each date of balance sheet whether a financial asset or a group of financial assets isimpaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance In determining the allowances for doubtful trade receivables, the Group has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at eachreporting date, right from its initial recognition.
For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses on a forward looking basis. However, if the credit risk on the financial instruments has increased significantly since the initial recognition, then the Group measures lifetime ECL.
The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date is recognised as an impairment gain/loss under "Other Expenses" in the Restated
Consolidated Statement ofProfit and Loss. (v) Derecognition of FinancialAssets The Group derecognises a financial asset when
- the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset andthe transfer qualifies for derecognition under IND AS 109.
- the Group retains contractual rights to receive the cash flows of the financial asset but assumes acontractual obligation to pay the cash flows to one or more recipients.
When the entity has neither transferred a financial asset nor retained substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Group has not retained control ofthe financial asset. Where the Group retains control of the financial asset, the asset is continued to be recognised to extent of continuing involvement in the financial asset.
(b) Financial Liabilities:
(i) Initial Recognition andMeasurement
Financial liabilities are classified as financial liabilities at amortised cost. All financial liabilities are recognized initially at fair value, except in the case of borrowings which are recognised at fair value, net ofdirectly attributable transaction costs. The Groups financial liabilities include trade and other payables, borrowings and lease liabilities.
(ii) Subsequent Measurement
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effectiveinterest method. For trade and other payables, the carrying amounts approximate fair value due to the short-term maturity of these instruments.
(iii) Derecognition
Financial liabilities are derecognised when the contractual obligations are discharged, cancelled or expired.The Group also derecognises financial liabilities when their terms are modified and the cash flows of the modified liabilities are substantially different, in which case new financial liabilities based on the modifiedterms are recognized at fair value.
1.14 Income Taxes
Income tax comprises of current tax and deferred tax.
(a) Current 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 profit for the period. The tax rates and tax lawsused to compute the amount are those that are enacted or substantially 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 realise the asset and liability simultaneously.
(b) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilitiesin the Restated Consolidated Balance Sheet and their tax bases. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or initial recognition of assets and liabilities(other than in a business combination) in a transaction that affects neither the taxable profit nor the accounting profit.
The Group recognises deferred tax liabilities for all taxable temporary differences except those associated with the investments in subsidiaries where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
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.
1.15 Discontinued Operation
A discontinued operation is a component of the Groups business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has been abandoned or that meets the criteria to be classified as held for sale.
The results of operations disposed during the year are included in the Restated Consolidated Statement ofProfit and Loss up to the date of disposal.
Discontinued operations are presented in the Restated Consolidated Statement of Profit and Loss as a singleline which comprises the post-tax profit or loss of the discontinued operation.
1.16 Asset held for Sale
The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale is highly probable. The Group measures a non-current asset (or disposal group) classified as held for sale at the lower of its carrying amount and fair value less costs to sell.
1.17 Foreign Currencies
The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign operations has been determined based on the primary economic environment in which the Group and its foreign operations operate considering the currency in which funds are generated,spent and retained.
Transactions in currencies other than the Groups functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary itemsare reported at the closing spot rate. Non- monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss.
Financial statements of foreign operations whose functional currency is different than Indian Rupee are translated into Indian Rupee as follows:
A. assets and liabilities are translated at the closing rate at the date of that Balance
Sheet;
B. income and expenses are translated at average exchange rate for the reporting period; and
C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal ofsuch foreign operations.
2. Recent Accounting Pronouncements:
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind AS which are effective for annual periods beginning on or after 1 April 2023. The Group applied for the first-time these amendments.
(a) Amendments to Ind AS 1 - Disclosure ofAccounting Policies
The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant accounting policies with a requirementto disclose their ‘material accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the disclosures of accounting policies, but not on the measurement,recognition or presentation of any items in the consolidated financial statements.
(b) Amendments to Ind AS 12 - Deferred Tax related to Assets andLiabilities arising from a Single Transaction.
The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.
The Group previously recognised for deferred tax on leases on a net basis. As a result of these amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. Since, these balances qualify for offset as per the requirements of paragraph 74 of Ind AS 12,there is no impact in the balance sheet. There was also no impact on the opening retained earnings as at 1 April 2022.
(c) Amendments to Ind AS 8 - Definition ofAccounting Estimates
The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques andinputs to develop accounting estimates.
Key Components of our Consolidated Statement of Profit and Loss
The following descriptions set forth information with respect to the key components of our consolidated statement of profit and loss.
Income
Income consists of revenue from operations and other income.
Revenue from operations. Revenue from operations comprises revenue from sale of goods and services in relation to our (i) dental products and related services and (ii) dental clinic services, and other operating revenue arising from license sale, duty drawback, freight charges income, other miscellaneous streams. For details of our services, please see "Our Business Product Portfolio" on page 308.
Set forth below is a breakdown of our revenue from operations based on our reporting categories for the six month period ended September 30, 2024 and Financial Years 2024, 2023 and 2022.
| Financial Year | ||||||||
| Particulars | Six month period ended September 30, 2024 | 2024 | 2023 | 2022 | ||||
Amount ( in millions) |
% of Revenue from Operations |
Amount ( in millions) |
% of Revenue from Operations |
Amount ( in millions) |
% of Revenue from Operations |
Amount ( in millions) |
% of Revenue from Operations |
|
| Revenue from operations from sales and services for dental products and related services | 1,127.59 | 96.56% | 1,850.48 | 95.60% | 1,531.96 | 94.78% | 1,273.55 | 93.07% |
| Sale and services from dental clinical services | 29.20 | 2.50% | 64.02 | 3.31% | 57.45 | 3.55% | 21.23 | 1.55% |
| Other operating income | 11.01 | 0.94% | 21.05 | 1.09% | 26.90 | 1.67% | 73.65 | 5.38% |
| Revenue from operations | 1,167.80 | 100.00% | 1,935.55 | 100.00% | 1,616.31 | 100.00% | 1,368.43 | 100.00% |
Other income. The key components of our other income are (i) interest income; (ii) rental income; (iii) foreign exchange gain; (iv) gain on sale of property, plant and equipment, and (v) miscellaneous other income.
Expenses
Expenses consist of cost of material consumed, employee benefits expense, finance costs, depreciation and amortization expense and other expenses.
Cost of material consumed: Cost of material consumed primarily comprises of inventory at the beginning of the year, purchases during the year, excluding the inventories written off and the inventory at the end of the year.
Purchase of stock-in-trade: This expense comprises purchase of traded goods and customs duty.
Employee benefit expenses: Employee benefit expenses include salaries, wages and bonus, staff welfare expense, partners remunerationfor consolidated LLPs, gratuity expense, share based compensation expense, contribution to provident fund and other funds.
Finance cost: Finance cost includes interest expense on borrowing from banks, interest expense on borrowings from others, interest expense from borrowings from related parties, interest on lease liabilities.
Depreciation and amortization expense: Depreciation and amortization expense includes depreciation of property, plant and equipment, depreciation on investment property, depreciation on right of use ("ROU") asset, and amortization of intangible assets.
Other expenses: Other expenses primarily comprise freight charges, business promotion expense, legal and professional charges, travel and conveyance, subcontract, courier charges, repair and maintenance, rent expenses and other miscellaneous expenses.
Tax expense: Tax expense consists of current tax, tax pertaining to earlier years and deferred tax.
Our Results of Operations
The following tables set forth select financial data from our restated consolidated statement of profit and loss for the six month period ended September 30, 2024 and Financial Years 2024, 2023, and 2022, the components of which are also expressed as a percentage of total income for such periods:
| Financial Year | ||||||||
| Six month period ended September 30, 2024 | 2024 | 2023 | 2022 | |||||
| Particulars | ( in millions) |
% of Total Income |
( in millions) |
% of Total Income |
( in millions) |
% of Total Income |
( in millions) |
% of Total Income |
| I Income | ||||||||
| Revenue from operations | 1,167.80 | 99.05% | 1,935.55 | 99.12% | 1,616.31 | 98.65% | 1,368.43 | 99.11% |
| Other Income | 11.20 | 0.95% | 17.09 | 0.88% | 22.13 | 1.35% | 12.27 | 0.89% |
| Total Income (A) | 1,179.00 | 100.00% | 1,952.64 | 100.00% | 1,638.44 | 100.00% | 1,380.70 | 100.00% |
| II Expenses | ||||||||
| Cost of raw materials consumed | 262.39 | 22.26% | 464.18 | 23.77% | 306.28 | 18.69% | 306.37 | 22.19% |
| Purchase of stock- in-trade | 24.77 | 2.10% | 38.35 | 1.96% | 100.70 | 6.15% | 100.58 | 7.28% |
| Changes in inventory of finished goods | (4.61) | (0.39%) | (17.64) | (0.90%) | 10.99 | 0.67% | (10.39) | (0.75%) |
| Employee benefits expense | 383.39 | 32.52% | 715.11 | 36.62% | 653.37 | 39.88% | 530.78 | 38.44% |
| Finance costs | 25.99 | 2.20% | 49.54 | 2.54% | 40.94 | 2.50% | 35.67 | 2.58% |
| Depreciation and amortisation expenses | 67.68 | 5.74% | 119.36 | 6.11% | 109.94 | 6.71% | 83.98 | 6.08% |
| Other expenses | 274.53 | 23.28% | 497.65 | 25.49% | 455.33 | 27.79% | 386.96 | 28.03% |
| Total Expenses (B) | 1,034.14 | 87.71% | 1,866.55 | 95.59% | 1,677.55 | 102.39% | 1,433.96 | 103.86% |
| Exceptional items (C) | 66.17 | 5.61% | 0.85 | 0.04% | 3.5 | 0.21% | 93.87 | 6.80% |
| Profit/ (loss) before tax D=(A-B-C) | 211.03 | 17.90% | 85.24 | 4.37% | (42.61) | (2.60%) | (147.12) | (10.66%) |
| Income tax expense | ||||||||
| Current tax | 9.72 | 0.82% | 17.85 | 0.91% | 1.96 | 0.12% | 0.00 | 0.00% |
| Adjustment of tax relating to earlier periods | (0.51) | (0.04%) | (0.14) | (0.01%) | 0.04 | 0.00% | 14.51 | 1.05% |
| Deferred tax | 19.85 | 1.68% | (111.88) | (5.73%) | (0.12) | (0.01%) | 9.2 | 0.67% |
| Total income tax expense (E) | 29.06 | 2.46% | (94.17) | (4.82%) | 1.88 | 0.11% | 23.71 | 1.72% |
| Profit/ (loss) before tax F=(D-E) | 181.97 | 15.43% | 179.41 | 9.19% | (44.49) | (2.72%) | (170.83) | (12.37%) |
| Share in profit after tax of joint venture (net) (G) | 52.51 | 4.45% | 88.88 | 4.55% | 6.02 | 0.37% | (1.45) | (0.11%) |
| Profit/(Loss) for the year from continuing operations H+(F+G) | 234.48 | 19.89% | 268.29 | 13.74% | (38.47) | (2.35%) | (172.28) | (12.48%) |
| Loss before tax from discontinuing operations | (8.09) | (0.69%) | (16.00) | (0.82%) | (3.16) | (0.19%) | (14.51) | (1.05%) |
| Tax | 1.00 | 0.08% | ||||||
| Income/(expenses) from discontinuing operations | - | - | - | |||||
| Loss after tax from discontinuing operations (H) | (7.09) | (0.60%) | (16.00) | (0.82%) | (3.16) | (0.19%) | (14.51) | (1.05%) |
| Profit/(loss) for the year I=(G+H) | 227.39 | 19.29% | 252.29 | 12.92% | (41.63) | (2.54%) | (186.79) | (13.53%) |
For the six month period ended September 30, 2024
Total income. Our total for the six month period ended September 30, 2024 was 1,179.00 million.
Revenue from operations. Revenue from operations was 1,167.80 million for the for the six month period ended September 30, 2024 and was 99.05% of our total income, and primarily constituted revenue from sales of our branded dental products and laboratory offerings. Our revenue from sales of dental products and related services during this period was 1,127.59 million and in dental clinical services was nil.
Other income. Other income was 11.20 million for the for the six month period ended September 30, 2024 and primarily constituted (i) foreign exchange gain of 8.27 million; (ii) interest income of 1.00 million; (iii) rental income of 0.71 million; and (iv) others of 1.22 million.
Total expenses. Our total expenses for the for the six month period ended September 30, 2024 were 1,034.14 million.
Cost of material consumed. Cost of material consumed for the for the six month period ended September 30, 2024 was 262.39. The cost of material consumed as a percentage of the revenue from operations during this period was 22.47%.
Employee benefit expenses. Employee benefit expenses for the for the six month period ended September 30, 2024 was 383.39 million primarily comprising salaries, wages and bonus of 350.26 million.
Finance costs. Finance costs for the for the six month period ended September 30, 2024 was 25.99 million primarily due to interest on borrowings from banks of 19.69 million.
Depreciation and amortization expense. Depreciation and amortization expense for the for the six month period ended September 30, 2024 was 67.68 million primarily due to (i) depreciation on property, plant and equipment of 42.32 million; and (ii) amortization on ROU of 23.39 million.
Other expenses. Other expenses for the for the six month period ended September 30, 2024 was 274.53 million primarily due to (i) freight charges of 30.25 million; (ii) power and fuel expense of 22.30 million; (iii) business promotion expense of 52.73 million; (iv) legal and professional charge of 37.05 million.
Total income tax expenses. Total income tax expenses for the six month period ended September 30, 2024 was
29.06 million. Our enacted tax rate applicable for this period was 29.12%.
Profit for the year. As a result of the foregoing, our restated profit for the for the six month period ended September 30, 2024 was 227.39 million.
Financial Year 2024 compared to Financial Year 2023
Total income. Total income increased by 19.18% to 1,952.64 million for the Financial Year 2024 from 1638.44 million for the Financial Year 2023 due to increases in revenue from operations, which offset the decrease in other income.
Revenue from operations. Revenue from operations increased by 19.75% to 1,935.55 million for the Financial Year 2024 from 1,616.31 million for the Financial Year 2023 primarily due to increase in revenue from sales of our branded dental products and laboratory offerings. Our revenue from sales of dental products and related services increased to 1,850.48 million for the Financial Year 2024 from 1,531.96 million for the Financial Year 2023 and in dental clinical services increased to 64.02 million for the Financial Year 2024 from 57.45 million for the Financial Year 2023.
Other income. Other income decreased by 22.77% to 17.09 million for the Financial Year 2024 from
22.13million for the Financial Year 2023 primarily due to decrease in (i) interest income to 1.70million from 1.72 million due to decrease in interest income on fixed deposits, interest income on loans given to related parties and interest income from other parties; (ii) miscellaneous other income to .0.76 million from 0.30million (iii)
Decrease in foreign exchange gain to 5.71 million from 12.90 million.
Total expenses. Total expenses increased by 11.27% to 1,866.55 million for the Financial Year 2024 from 1,677.55 million for the Financial Year 2023 primarily due to increases in cost of material consumed.
Cost of material consumed. Cost of material consumed increased by 51.55% to 464.18 million for the Financial Year 2024 from 306.28 million for the Financial year 2023. The cost of material consumed as a percentage of the revenue from operations increased from 18.95% in Financial Year 2023 to 23.98% in Financial Year 2024.
However, purchase of stock in trade decreased by 61.92% to 38.35 million for the Financial Year 2024 from
100.70 million for the Financial Year 2023. The change in inventories of finished goods decreased to (17.64) million for the Financial Year 2024 from 10.99 million for the Financial year 2023. As a result the above and improvement in margin per sale, the cost of goods sold as a percentage of revenue marginally decreased to 25.05% for Financial Year 2024 from 25.86% for the Financial year 2023
Employee benefit expenses. Employee benefit expenses increased by 9.45% to 715.11 million for the Financial Year 2024 from 653.37 million for the Financial Year 2023 due to increase in (i) salaries, wages and bonus to
647.74 million for the Financial year 2024 from 595.89 million for the Financial year 2023; (ii) contribution to provident fund and other funds to 25.64 million for the Financial year 2024 from 21.70 million for the Financial year 2023; (iii) staff welfare expenses to 33.93 million for the Financial year 2024 from 29.02 million for the Financial year 2023; and (iv) gratuity expense to 7.80 million for the Financial year 2024 from 6.76 million for the Financial year 2023. The increase was primarily on account of increase in employee head count and the increase in cost of employment.
Finance costs. Finance costs increased by 21.01% to 49.54 million for the Financial Year 2024 from 40.94 million for the Financial Year 2023 primarily due to an increase in interest expense due to increase in utilization of loans from banks and financial institutions, and specifically due to increase on interest (i) on borrowings from banks to 36.57 million for the Financial Year 2024 from 31.07 million for the Financial Year 2023; and (ii) on borrowings from related parties to 4.97 million for the Financial Year 2024 from 1.05 million for the Financial Year 2023. These were partially offset by a decrease in interest on lease liabilities to 7.99 million for the Financial Year 2024 from 8.65 million for the Financial Year 2023.
Depreciation and amortization expense. Depreciation and amortization expense increased by 8.57% to 119.36 million for the Financial Year 2024 from 109.94 million for the Financial Year 2023 due to increases in (i) depreciation on property, plant and equipment to 75.54 million from 71.87 million on account of new vehicles, computers, office equipment and furniture; (ii) amortization on ROU to 40.54 million from 36.36 million on account of reduction in lease liabilities; and (iii) amortization on other intangibles to 2.97 million from 1.38 million
Other expenses. Other expenses increased by 9.29% to 497.65 million for the Financial Year 2024 from 455.33 million for the Financial Year 2023 primarily due to increases in (i) freight charges to 36.97 million for the Financial Year 2024 from 29.01 million for the Financial Year 2023 due an increase in revenue from operations from increase in units sold; (ii) commission to 9.94 million for the Financial Year 2024 from 3.89 million for the Financial Year 2023 due an increase in revenue from operations from increase in units sold; (iii) increase in electricity and water consumption to 8.65 million for the Financial Year 2024 from 4.35 million for the Financial Year 2023; (iv) travel and conveyance to 40.94 million for the Financial Year 2024 from 37.17 million for the Financial Year 2023.These were partially offset by decrease in business promotion expenses to 93.97 million for the Financial Year 2024 from 99.78 million for the Financial Year 2023, and decrease in rent expenses to 10.40 million for the Financial Year 2024 from 23.68 million for the Financial Year 2023.
Total income tax expenses. Total income tax expenses decreased to (94.17) million for the Financial Year 2024 from 1.88 million for the Financial Year 2023. For the Financial Year 2024, we had a current tax expense of
17.85 million, adjustment of tax relating to earlier periods of (0.14) million and a deferred tax credit of (111.88) million. For the Financial Year 2023, we had a current tax expense of 1.96 million, adjustment of tax relating to earlier periods of 0.04 million and a deferred tax credit of (0.12) million. The increase in total tax expenses was primarily on account of increase in the restated profit/ (loss) before tax from (42.61) million to 85.24 million. Our enacted tax rate applicable for Financial Years 2024 and 2023 each was 27.82%.
Profit for the year. As a result of the foregoing, our restated profit for the year increased to 252.29 million for the Financial Year 2024 from (41.63) million for the Financial Year 2023. The restated profit of the year for the
Financial Year 2024 also took into account of share of profit of Jointly Controlled Entity of 88.88 million, from
6.02 million for the Financial Year 2023.
Financial Year 2023 compared to Financial Year 2022
Total income. Total income increased by 18.67% to 1638.44 million for the Financial Year 2023 from 1,380.70 million for the Financial Year 2022 due to increases in revenue from operations, which offset the decrease in other income.
Revenue from operations. Revenue from operations increased by 18.11% to 1,616.31 million for the Financial Year 2023 from 1,368.43 million for the Financial Year 2022 primarily due to growth in increase in revenue from laboratory business by way of growth in the number of units sold and the improvement in customer response to our premium product offerings, and increase in revenue from aligner solutions business by way of growth of the number of units sold. Our revenue from sales and services of dental products and related services increased to
1,531.96 million for the Financial Year 2023 from 1,273.55 million for the Financial Year 2022, and dental clinical services to 57.45 million for the Financial Year 2023 from 21.23 million for the Financial Year 2022.
Other income. Other income increased by 80.36% to 22.13 million for the Financial Year 2023 from 12.27 million for the Financial Year 2022 primarily due to increase in (i) rental income to 7.21 million from 2.49 million; and (ii) Foreign exchange gain to 12.90 million from 5.40 million.
Total expenses. Total expenses increased by 16.99% to 1677.55 million for the Financial Year 2023 from 1433.96 million for the Financial Year 2022 primarily due to decrease in purchase of stock-in trade and change in inventories of finished goods.
Cost of material consumed. Cost of material consumed decreased by 0.03% to 306.28 million for the Financial Year 2023 from 306.37 million for the Financial year 2022. The cost of material consumed as a percentage of the revenue from operations stayed nearly the same, from 22.39% in Financial Year 2022 to 18.95% in Financial Year 2023. However, purchase of stock in trade increased by 0.12% to 100.70 million for the Financial Year 2023 from 100.58 million for the Financial year 2022. The change in inventories of finished goods increased by 205.77% to 10.99 million for the Financial Year 2023 from (10.39) million for the Financial year 2022. As a result the above and optimization of inventory levels, the cost of goods sold as a percentage of revenue decreased to 25.86% for Financial Year 2023 from 28.98% for the Financial year 2022.
Employee benefit expenses. Employee benefit expenses increased by 23.10% to 653.37 million for the Financial Year 2023 from 530.78 million for the Financial Year 2022 due to increase in (i) salaries, wages and bonus
595.89million for the Financial year 2023 from 480.09 million for the Financial year 2022; (ii) contribution to provident fund and other funds to 21.70 million for the Financial year 2023 from 18.13 million for the Financial year 2022; and (iii) staff welfare expenses to 29.02 million for the Financial year 2023 from 24.49 million for the Financial year 2022. The increase was primarily on account of increase in employee head count and the increase in cost of employment.
Finance costs. Finance costs increased by 14.77% to 40.94 million for the Financial Year 2023 from 35.67 million for the Financial Year 2022 primarily due to a increase in interest expense due to increase in utilization of loans from banks and financial institutions, and specifically due to increase on interest (i) on borrowings from banks to 31.07 million for the Financial Year 2023 from 25.63 million for the Financial Year 2022; (ii) on borrowings from others to 0.17 million for the Financial Year 2023 from 0.11 million for the Financial Year 2022. These were partially offset by a decrease in interest on lease liabilities to 8.65 million from 9.41 million.
Depreciation and amortization expense. Depreciation and amortization expense increased by 30.91% to 109.94 million for the Financial Year 2023 from 83.98 million for the Financial Year 2022 due to increases in (i) depreciation on property, plant and equipment to 71.87 million from 53.34 million on account of new vehicles, computers, office equipment and furniture; and (ii) amortization on ROU to 36.36 million from 29.81 million on account of reduction in lease liabilities.
Other expenses. Other expenses increased by 17.67% to 455.33 million for the Financial Year 2023 from 386.96 million for the Financial Year 2022 primarily due to increases in (i) business promotion expenses to 99.78 million for the Financial Year 2023 from 26.48 million for the Financial Year 2022 due an increase in marketing and other advertising expenses; (ii) increase in electricity and water consumption to 4.35 million for the Financial Year 2023 from 1.68 million for the Financial Year 2022; (iii) travel and conveyance to 37.17 million for the Financial Year 2023 from 33.39 million for the Financial Year 2022.These were partially offset by decrease in freight charges to 29.01 million for the Financial Year 2023 from 50.17 million for the Financial Year 2022, and decrease impairment allowance of expected credit loss to 12.73 million for the Financial Year 2023 from 19.19 million for the Financial Year 2022.
Total income tax expenses. Total income tax expenses decreased to 1.88 million for the Financial Year 2023 from 23.71 million for the Financial Year 2022. For the Financial Year 2023, we had a current tax expense of 1.96 million, adjustment of tax relating to earlier periods of 0.04 million and a deferred tax credit of (0.12) million. For the Financial Year 2022, we had a current tax expense of nil, adjustment of tax relating to earlier periods of 14.51 million and a deferred tax credit of 9.20 million. The decrease in total tax expenses was primarily on account of impact of adjustment of tax relating to earlier year done in Financial year 2022 by 14.51 million which was not there is Financial year 2023. Our enacted tax rate applicable for Financial Years 2023 and 2022 each was 27.82%.
Loss for the year. As a result of the foregoing and on account of decrease in cost of goods sold, increase in income from our Jointly Controlled Entity, our restated loss for the year decreased to (41.63) million for the Financial Year 2023 from (186.79) million for the Financial Year 2022. The restated loss of the year for the Financial
Year 2023 also took into account of share of profit of associate and Jointly Controlled Entity of 6.02 million, from (1.45) million for the Financial Year 2022.
Liquidity and Capital Resources
Our primary sources of liquidity include cash generated from operating activities. As of September 30, 2024, we had cash and cash equivalents of (128.43) million.
Cash flows
The following table summarizes our cash flows data for the periods indicated:
( in millions) |
||||
| For the Financial Year | ||||
| Particulars | Six month period ended September 30, 2024 | 2024 | 2023 | 2022 |
| Net cash flows (used in)/ or generated from operating activities (A) | 14.23 | 81.51 | 144.41 | (19.95) |
| Net cash flows (used in)/ or generated from investing activities (B) | 8.55 | (144.34) | (93.94) | 30.42 |
| Net cash flows used in financing activities (C) | 7.21 | 9.66 | (14.51) | (40.27) |
| Net (decrease) / increase in cash and cash equivalents (A+B+C) | 29.99 | (53.18) | 35.96 | (29.80) |
| Cash and cash equivalents at the beginning of the year | (159.08) | (104.14) | (138.92) | (108.75) |
| Cash and cash equivalents at the end of the year | (128.43) | (159.08) | (104.14) | (138.92) |
Net cash flows (used in)/ or generated from operating activities
Net cash flows generated from operating activities was 14.23 million for the six month period ended September 30, 2024. We had an operating profit before working capital changes of 231.55 million for the six month period ended September 30, 2024, which was primarily subject to adjustments for depreciation and amortization expense from continuing operations of 67.68 million and finance costs from continuing operations of 25.99 million. This was adjusted for working capital changes, which primarily consisted of decrease in trade payables of (32.58) million, increase in other current financial liabilities of 19.32 million, offset by increase in trade receivables of
(161.65) million, other non-current and current assets of (90.29) million. As a result, cash used in operating activities for the six month period ended September 30, 2024 was 14.23 million.
Net cash flows generated from operating activities was 81.51 million for the Financial Year 2024. We had an operating profit before working capital changes of 247.44 million for the Financial Year 2024, which was primarily subject to adjustments for depreciation and amortization expense from continuing operations of 119.36 million and finance costs from continuing operations of 49.54 million. This was adjusted for working capital changes, which primarily consisted of decrease in trade payables of (56.66) million, increase in other current financial liabilities of 13.66 million and increase other current liabilities of 47.80 million, offset by increase in trade receivables of (74.12) million, increase in inventories of (22.53) million, other non-current and current financial assets of (9.04) million, other non-current and current assets of (61.74) million. As a result, cash generated from operating activities for the Financial Year 2024 was 91.86 million before adjusting for income taxes paid (net) of (10.35) million.
Net cash flows generated from operating activities was 144.41 million for the Financial Year 2023. We had an operating profit before working capital changes of 107.31 million for the Financial Year 2023, which was primarily subject to adjustments for depreciation and amortization expense from continuing operations of 109.94 million, finance costs from continuing operations of 40.94 million. This was adjusted for working capital changes, which primarily consisted of trade payables of (41.35) million and other current liabilities of 0.39 million, partially offset by decrease in inventories of 52.35 million, other non-current and current financial assets of 29.94 million. As a result, cash generated from operating activities for the Financial Year 2023 was 147.05 million before adjusting for income taxes paid (net) of (2.64) million.
Net cash flows generated from operating activities was (19.95) million for the Financial Year 2022. We had an operating profit before working capital changes of 70.58 million for the Financial Year 2022, which was primarily subject to adjustments for depreciation and amortization expense from continuing operations of 83.98 million and finance costs of 35.67 million. This was further adjusted for working capital changes, which primarily consisted increase in trade payables of 46.89 million, increase in other current liabilities of 47.40 million, other financial liabilities of (31.64) million, partially offset by increase in trade receivables of (74.71) million, increase in inventories of (64.73) million, increase other non-current and current financial assets of (31.35) million and other current and non-current assets of 6.26 million. As a result, cash generated from operating activities for the Financial Year 2022 was (19.80) million before adjusting for income taxes paid (net) of (0.15) million.
Net cash flows (used in)/ generated from investing activities
Net cash flows from investing activities was 8.55 million for the six month period ended September 30, 2024. This was primarily due to Proceeds from sale of investment property (net of Tax) of 73.27 million offset by purchase of property, plant and equipment of (78.78) million.
Net cash flows used in investing activities was (144.35) million for the Financial Year 2024. This was primarily due to purchases of property, plant and equipment of (139.77) million offset by proceeds from sale of property, plant and equipment of 13.07 million.
Net cash flows used in investing activities was (93.34) million for the Financial Year 2023 This was primarily due to purchases of property, plant and equipment of (89.38) million.
Net cash flows generated from investing activities was 30.42 million for the Financial Year 2022. This was primarily due to proceeds from sale of property, plant and equipment of 112.41 million, offset by purchase of property, plant and equipment and other intangible assets of (96.11) million.
Net cash flows used in financing activities
Net cash flows used in financing activities was 7.21 million for the six month period ended September 30, 2024.
This was primarily due finance cost paid from continuing operations of (25.99) million and principal payment of lease liabilities (23.43) million, offset by proceeds from non current borrowings of 134.66 million and proceeds from issue of shares of 0.00 million.
Net cash flows used in financing activities was 9.66 million for the Financial Year 2024. This was primarily due to proceeds from current borrowings of 44.91 million and proceeds from non-current borrowings of 97.81 million, offset by finance cost paid from continuing operations of (49.55) million, repayment of current borrowings of (54.15) million and principal payment of lease liabilities of (37.68) million.
Net cash flows used in financing activities was (14.51) million for the Financial Year 2023. This was primarily due to proceeds from current borrowings of 50.52 million and proceeds from non-current borrowings of 35.45 million, offset by repayment of non-current borrowings of (34.60) million, finance cost paid from continuing operations of (40.94) million and principal payment of lease liabilities of (29.45) million.
Net cash flows used in financing activities was (40.27) million for the Financial Year 2022. This was primarily due to contribution from, proceeds from issue of shares of subsidiary of 15.00 million, proceeds of borrowings of 102.15 million, offset by principal payment of lease liabilities of (22.54) million and finance cost paid from continuing operations of (35.66) million.
Capital expenditures
Our historical capital expenditures have primarily related to property, plant and equipment and other intangible assets. For the six month period ended September 30, 2024 and Financial Years 2024, 2023, and 2022, our capital expenditure amounted to 82.81 million, 147.57 million, 99.83 million, and 96.11 million, respectively.
We intend to increase our capacity by purchasing additional equipment from the Net Proceeds. For further details, see "Objects of the Offer Funding the capital expenditure requirements for purchase of new machinery for our Company" and "Objects of the Offer Investment in our Subsidiary, Bizdent Devices Private Limited, for the capital expenditure requirements for the purchase of new machinery." on pages 182 and 189, respectively.
Financial indebtedness
As December 20, 2024, we had outstanding borrowings (current and non-current) amounting to 515.54 million, which primarily consisted of borrowings on account of term loan from banks, term loans, working capital demand loans. For further details related to our indebtedness, see "Financial Indebtedness" on page 494.
Contractual Obligations
The following table sets forth certain information relating contractual maturities of financial liabilities as of September 30, 2024. The amounts are gross and undiscounted contractual cash flows and include contractual interest payments and exclude the impact of netting agreements.
| On demand | Up to 1 year | 1 to 5 years | More than 5 years | Total | |
| Non-current | |||||
| Borrowings | 14.11 | - | 134.44 | 71.28 | 219.83 |
| Lease liabilities | - | - | 20.59 | - | 20.59 |
| Other financial liabilities | - | - | 7.08 | - | 7.08 |
| Current | |||||
| Borrowings | 25.00 | 164.23 | - | - | 189.23 |
| Lease Liabilities | - | 39.92 | - | - | 39.92 |
| Trade payables | - | 135.84 | - | - | 135.84 |
| Other financial liabilities | - | 85.46 | - | - | 85.46 |
| Total | 39.11 | 425.45 | 162.11 | 71.28 | 697.95 |
Contingent Liabilities, capital and Other Commitments
The contingent liabilities as at September 30, 2024 was 7.07 million, March 31, 2024 was 7.07 million, March
31, 2023 was 1.07 million and March 31, 2022 was 1.07 million.
As at September 30, 2024, and financial year ended March 31, 2024, March 31, 2023 and March 31, 2022, estimated amounts of commitments amounted to nil in each year, respectively.
Off-Balance Sheet Commitments and Arrangements
We do not have any off-balance sheet arrangements, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Quantitative and Qualitative Analysis of Market Risks
In the course of our business, we are exposed to certain financial risks such as credit risk, liquidity and market risk.
Credit risk
Credit risk is the risk of financial loss if a customer or a counterparty to any financial instrument fails to meet its contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. We are exposed to credit risk from our operating activities (primarily trade receivables) and from our investing activities, including deposits with banks, derivative financial instruments and security deposits.
Liquidity risk
Liquidity risk is the risk that we will encounter difficulty in meeting the obligations associated with our financial liabilities. Our approach to managing liquidity is to ensure that we have sufficient liquidity to meet our liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation.
Market risk
Market risk is the risk that changes in market prices (including foreign exchange rates) affect our income or the value of our holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Unusual or Infrequent Events or Transactions
Except as disclosed in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
Known Trends or Uncertainties
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in " Significant Factors Affecting our Results of Operations" and the uncertainties described in "Risk Factors", on pages 466 and 37, respectively. Except as disclosed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.
Future Relationship between Cost and Revenue
Other than as described in "Risk Factors", "Our Business" and above in " Significant Factors Affecting our Results of Operations" on pages 37, 292 and 466, respectively, to our knowledge, there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
New Products or Business Segments
Except as disclosed in this Red Herring Prospectus, there are no new products or business segments that have or are expected to have a material impact on our business prospects, results of operations or financial condition.
Competitive Conditions
We expect competition in our industry from existing and potential competitors to intensify. For details, please refer to the discussions of our competition in the sections "Risk Factors" and "Our Business" on pages 37 and 292, respectively, of this Red Herring Prospectus.
Seasonality
Our business is not subject to any seasonality.
Significant Developments Occurring after September 30, 2024
Except as disclosed otherwise in this Red Herring Prospectus, to our knowledge, there is no subsequent development after September 30, 2024, which materially and adversely affects, or is likely to affect, our trading or profitability, or the value of our assets, or our ability to pay our liabilities within the next twelve months.
Invest wise with Expert advice
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2025, IIFL Capital Services Ltd. All Rights Reserved
IIFL Securities Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
