(i) Revenue from contract with customer
Revenue from sale of goods is recognized under IGAAP when the significant risks and rewards of ownership of the goods have passed to the buyer, f.e., when the goods are delivered to the customer.
As per ind AS. An entity shall recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset.
(ii) Impact of Leases due to adoption of Ind AS 116
Under Previous GAAP, a lease is classified as a finance lease or an operating lease. Operating lease payments are recognised as an operating expense In the statement of profit or toss on a straight-line basis over the lease term. Under Ind AS 116, a lessee applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets and recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. At the date of transition to Ind AS, the Company applied the i modified retrospective approach and measured lease liabilities at the present value of the remaining lease payments, discounted using the lessee's Incremental borrowing rate at the date of transition to Ind AS. Right-of-use assets were measured at the amount equal to the lease liabilities.
(iii) Impairment allowance for expected credit losses
Under Previous GAAP, the Company has created provision for impairment of receivables based on the incurred loss model. Under Ind AS, impairment loss has been determined as per Expected Credit Loss (ECL) model. The difference between the provision amount as per previous GAAP and Ind AS - ECL is recognized in retained earnings on date of transition and subsequently in the statement of profit and loss.
(iv) Remeasurement galn/(loss) of net defined benefit plan
Under Previous GAAP the Company recognised actuarial gains and losses in the Statement of Profit and Loss. Under Ind AS, all actuarial gains and losses are recognised in the other comprehensive income. Further to the above, the deferred tax impact on above transaction has also been regrouped from Statement of Profit and Loss to other comprehensive income as per guidance under Ind AS 12 ‘Income taxes’.
(v) Share of profit/loss in subsidiaries
Earlier Company was following the practice of recognising share of profit/loss from LLP(Subsidiary) in Previous GAAP. However as per Ind AS 27 share of profit /loss from LLP(Subsidiary) will not recognised in the standalone financial of Parent company, therfore the share of profit/loss taken in Financial statements is reversed.
(vi) Adjustments to rectify errors in previous GAAP
The Company has made certain errors in the adoption on accounting policies, measurement of depreciation, allocation of overhead cost, Impairment of goodwill, employee benifit expenses. During the current year, on transition to Ind AS, the Company has rectified these errors by restating the transition date balance sheet as at April 1,2022.
(*) The Company has elected to continue with the carrying value of its Investment property recognised as of April 1, 2022 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 ‘First -time Adoption of Indian Accounting Standards’.
7.1 The Entity's investment properties consist of commercial properties in India given on lease for a period of 1-5 years.
7.2 The Entity has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
(*) The Company has elected to continue with the carrying value of its Intangible Assets recognised as of April 1, 2022 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 ‘First -time Adoption of Indian Accounting Standards’. (Refer Note 4)
(ii) Rights, preferences and restrictions attached to the equity shares:
The Company has only one class of equity shares having par value of Rs.10 per share. Each shareholder is entitled to one vote per share held. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31st March 2024, the amount of per share dividend recognized as distributions to equity shareholders was Nil (previous year: Nil).
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be In proportion to the number of equity shares held by the shareholders.
As per records of the Company, Including Its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
(iv) The Company has not issued any bonus shares or shares for consideration other than cash during the period of five years Immediately preceding the reporting date.
(v) The Company has not bought back any shares during the period of five years immediately preceding the current year end.
(II) Rights, preferences and restrictions attached to the preference shares:
Each shareholder Is eligible to vote In the ratio of their shareholding. The holders of CCPS shall be entitled to vote on all such matters which affect their rights directly or Indirectly.
• The Investor Shares shall rank senior to the preference shares and other Instruments that are outstanding and which may be Issued by the Company from time to time In all respects Including but not limited to voting rights, dividends and liquidation/ liquidity preference and bonus Issuances. The holders of Series A CCPS shall be entitled to all superior rights or other rights that may be given to any other investor, if any, in the future. The Series A CCPS shall carry a pre-determined cumulative dividend rate of 0.0001* (zero point zero zero zero one per cent) per annum. In addition to the same. If the holders of Equity Shares are paid dividend in excess of 0.0001* (zero point zero zero zero one per cent) per annum, the holders of the Scries A CCPS shall be entitled to dividend at such higher rate.
The holder of the Series A CCPS shall have the right to be first paid, in priority to the other Shareholders and alt other classes of preference shareholders, any declared but accrued and unpaid dividends.
The holders of Investor CCPS shall, at any time prior to 19 (nineteen) years from the date of issuance of the same, be entitled to call upon the Company to convert all or any of the Investor CCPS and if not converted earlier, shall automatically convert into Equity Shares at the fixed conversion rate (1:0.9147), (i) on latest permissible date prior to the issue of Shares to the public In connection with the occurrence of a Public Offer under Applicable Law, or (II) on the day following the completion of 19 (nineteen) years from the date of Issuance of the same.
22 Leases - IND AS 116
The Company has lease contracts for office premises, factories and warehouses used in its operations. Lease terms generally ranges between 1 and 5 years.
The Company assesses whether a contract contains a lease, at inception of a 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 time in exchange for consideration.
21.3 Non-current Borrowings
a. Secured Term Loans
(1) Car loan from bank as on 31 March 2024 amounting to INR 0.76 millions (31 March 2023: INR 1.01 millions) was taken Vehicle Loan from ICICI bank limited.The loan Is secured by hypothecation of the said vehicle.
(li) Car loan from bank as on 31 March 2024 amounting to INR 1.83 millions (31 March 2023: INR 3.10 millions) was taken Vehicle Loan from ICICI bank llmlted.The loan is secured by hypothecation of the said vehicle.
(Ill) Car loan from bank as on 31 March 2024 amounting to INR 0.89 millions (31 March 2023: INR 1.13 millions) was taken Vehicle Loan from ICICI bank llmlted.The loan Is secured by hypothecation of the said vehicle.
(iv) Term loan from NBFC as on 31 March 2024 amounting to INR 101.69 millions was taken from Tata capital financial services limited which Is secured against the following properties:
•Industrial gala No 202 and part of Industrial gala No 203 on second floor In the building known as Shreyas Industrial Estate situated at Off link road, Andheri(west) Mumbai-400053 owned by Mr Parth Rajesh Khakhar, Mr Kunal Kamlesh Merchant and Mrs. Bhavl Samecr Merchant.
• Part of Industrial gala No 203 on second floor In the building known as Shreyas Industrial Estate situated at Off link road, Andheri(west) Mumbai-400053 owned by Mr Parth Rajesh Khakhar, Mr Kunal Kamlesh Merchant and Mrs. Bhavi Samoer Merchant.
• Office no 103 on 1st floor. Wing C In the buildllng known as Akrutl Arcade C.H.S. limited. Andherl(west), Mumbai-400053.
(v) Term Loan from bank as on 31 March 2024 amounting to INR 7.05 millions (31 March 2023: INR 15.46 millions) was taken from ICICI bank which Is secured against the following:
•Survey No 18 , Ghodbundcr , Bhayandcr (E) . Thane .Maharashtra . India ,401107
•Current Assets of Company with the Personal Guarantee of 1) Jlgna Khakhar. 2) Rajesh Khakhar, 3) Sameer Merchant
(vi) Term Loan from bank as on 31 March 2024 amounting to INR 3.93 millions (31 March 2023: INR 6.18 millions) was taken from ICICI bank which Is secured against the following:
• Gala No 105/106/107 Shreyas Industrial Estate, off link road, Andhorl West, Mumbai - 400053 -410/411 , 4th floor, Akrutl arcade , Opp A H Wadia School, Mumbai .Maharashtra , India , 400053 -601-609,6th floor , Akrutl arcade , Opp A H Wadia School , Mumbai, Maharashtra , India ,400053 •Survey No 18 , Ghodbundcr , Bhayandcr (E), Thane .Maharashtra , India ,401107
•Current Assets of Company with the Personal Guarantee of 1) Jlgna Khakhar. 2) Rajesh Khakhar. 3) Sameer Merchant •Coorporatc Guarantee of ASY Properties LLP
(vli) Term Loan from bank as on 31 March 2024 amounting to INR 15.18 millions (31 March 2023: 15.46 millions) was taken from standard chartered bank against the security of property of Director situated at Flat No 88, Taraporc garden CHSL, Off New Link Road, Oshiwara, Andherl West Mumbai • 400053.
(vlli) Term loan from bank as on 31 March 2023 amounting to INR 23.94 millions ( 1 April 2022: INR 31.20 millions) was taken from Induslnd bank limited which is secured against the property of the Company situated at office no
103 on 1st floor, Wing C In the building known as Akrutl Arcade C.H.S. limited, Andheri(west), Mumbai-400053.
(lx) Term loan from bank as on 31 March 2023 amounting to INR 22.59 millions ( 1 April 2022: INR 23.17 millions) was taken from Induslnd bank limited which is secured against the property of the Company situated at office no
103 on 1st floor, Wing C In the building known as Akrutl Arcade C.H.S. limited, Andheri(west). Mumbai-400053.
(x) Term loan from bank as on 31 March 2023 amounting to INR 7.11 millions ( 1 April 2022: INR 8.35 millions) was taken from Induslnd bank limited which is secured against the property of the Company situated at office no 103
cm 1st floor. Wing C In the building known as Akrutl Arcade C.H.S. limited, Andherl(west), Mumbai-400053.
(xl) On 23 October 2023. the Company has repaid the entire outstanding term loans of Induslnd Bank before maturity. Accordingly, the gain on extinguishment of financial (lability has been recorded 1n profit and loss account.
(xil) *PCFC loan from bank on 1 April 2022 amounting to INR 2.28 millions was taken from ICICI bank limited which Is secured against the following:
•Gala Nb 105/106/107 Shreyas Industrial Estate, off link road, Andheri West, Mumbai • 400053 •410/411 , 4th floor. Akrutl arcade . Opp A H Wadia School. Mumbai .Maharashtra , India , 400053 -601-609,6th floor , Akrutl arcade , Opp A H Wadia School, Mumbai, Maharashtra , India ,400053 -Survey No 18 , Ghodbundcr . Bhayander (E), Thane .Maharashtra . India .401107
ÝCurrent Assets of Company with the Personal Guarantee of 1) Jlgna Khakhar, 2) Rajesh Khakhar, 3) Sameer Merchant -Coorporatc Guarantee of ASY Properties LLP
b. Secured Emergency credit line (ECL)
(I) * ECLGS Term Loan as on 31 March 2024 amounting to INR 6.29 millions (31 March 2023: INR 21.39 millions) was taken from ICICI Bank Limited which Is secured against the existing securities created In favour of ICICI bank
C. Unsecured Term Loans
(1) Term Loan from bank as on 31 March 2023 amounting to INR 0.75 million (1 April 2022: INR 3.39 millions) taken from IDFC first Bank .
21.4 Current Borrowings
d. Working Capital demand loan (Secured)
(I) Working capital demand loan from NBFC as on 31 March 2024 amounting to INR 20 millions was taken from Capsave Finance Private limited secured against * NACH mandate and 3 * UDC for an amount equal to sanction amount, 10% cash collateral In form of non-interest bearing security deposit and personal guarantee of Mr. Rajesh Khakhar and Mr. Sameer Merchant.
(il) Working capital demand loan from bank on 31 March 2024 amounting to INR 40 millions (31 March 2023: 40 millions) was taken from ICICI bank limited which Is secured against the following.
-Gala No 105/106/107 Shreyas Industrial Estate, off link road, Andheri West, Mumbai • 400053 -410/411 , 4th floor , Akrutl arcade , Opp A H Wadia School , Mumbai ,Maharashtra , India , 400053 -601-609 , 6th floor , Akruti arcade , Opp A H Wadia School, Mumbai, Maharashtra , India ,400053 -Survey No 18 , Ghodbunder , Bhayander (E) , Thane .Maharashtra , India ,401107
•Current Assets of Company with the Personal Guarantee of 1) Jigna Khakhar, 2) Rajesh Khakhar, 3) Samecr Merchant -Coorporate Guarantee of ASY Properties LLP
e. Cash Credit facility (Secured)
(1) Cash Credit from bank as on 31 March 2024 amounting to INR 137.16 millions ( 31 March 2023: INR 112.89 millions and 1 April 2022 : INR 144.69 Millions) was taken from ICICI bank limited which is secured against the following:
•Gala No 105/106/107 Shreyas Industrial Estate, off link road, Andheri West, Mumbai • 400053 •410/411 . 4th floor, Akrutl arcade , Opp A H Wadia School , Mumbai .Maharashtra , India , 400053 -601-609,6th floor , Akrutl arcade , Opp A H Wadia School , Mumbai, Maharashtra . India ,400053 -Survey No 18 , Ghodbundcr , Bhayander (E) , Thane .Maharashtra , India ,401107
-Current Assets of Company with the Personal Guarantee of 1) Jigna Khakhar, 2) Rajesh Khakhar, 3) Sameer Merchant
•Corporate Guarantee of ASY Properties LLP J
f. Overdraft facility (Unsecured) /
(l) Overdraft from NBFC as on 1 April 2022 amounting to INR 1.55 millions taken from tata capital finance service limited. _—
1 Weighted average number of equity shares includes 2,90,597 Compulsorily Convertible Preference Shares (CCPS) coveritible in the ratio of 1:0.915 .i.e 2,65,805 equity shares. Each CCPS is a compulsorily and fully convertible preference share, convertible into Equity Shares, as per the terms and conditions as laid out in agreement with CCPS holder. Therefore, CCPS were classified in accordance with Ind AS 32 as equity.
2 Further, the Board of Directors have also approved the issue of bonus equity shares in its meeting held on 4 June 2024 in the ratio of 1 equity shares of I NR 2 each for every 17 equity share of INR 2 each by capitalization of such sum standing to the credit of free reserves of the Company
3 Subsequent to 31 March 2024, the Board of Directors at their meeting held on 4 June 2024 approved the sub-division of each equity share of face value of INR 10 each fully paid up into face value of INR 2 each fully paid up.
40 Employee Benefits Obligations
(I) Defined contributions plans -Provident fund and others
The Company makes contribution towards employees’ Provident Fund and other defined contribution plans. Under the schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined contribution schemes.
(II) Defined Benefit plans (A) Gratuity
The Company provides for gratuity benefit under a defined benefit retirement scheme (the "Gratuity Scheme") as laid out by the Payment of Gratuity (Amendment) Act, 2018 of India covering eligible employees i.e. an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the member’s length of service and salary at retirement age.
Liabilities with regard to the Gratuity Scheme are determined by actuarial valuation carried out using the Projected Unit Credit Method by an independent actuary.
The scheme is partially funded with an insurance Company in the form of qualifying insurance policy
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the Defined Benefit Obligation as recognised in the balance sheeThe sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
(iii) Compensated absences
The obligation for compensated absences as at year end 31 March 2024 amounts to INR 3.56 million ( 31 March 2023: INR 4.88 million )
<11.2 Tax litigation
On 7 April 2023, the Group received a notice under Section 1-18A of the Income Tax Act, 1961, from the Deputy Commissioner of Income Tax, Mumbai, regarding transactions by Illusion Dental Laboratory Private Limited, which merged with the Group on 1 April 2017. The notice highlighted that the Transferor Group continued transactions in its own name post-merger, raising concerns about the taxability of these transactions for the assessment year 2019-20. As a result, the tax authorities are reopening the assessment proceedings, but no demand notice has yet been Issued to the Company.
44 Financial risk management
In the course of its business, the Company is exposed primarily to liquidity risk, interest rate fluctuation risk, credit risk and foreign exchange fluctuation risk.
A Liquidity Risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company's objective it to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its position and maintains adequate source of financing.
C Credit Risk
Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. Trade receivables are typically unsecured and are derived from revenue earned from customers located in Inida. Credit risk is managed through periodic assessment of the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of trade receivables. Other financial instruments that are subject to credit risk includes cash and cash equivalents, bank deposits, loans and security deposits.
The maximum exposure to credit risk at the reporting date is primarily from trade receivables which amounted to Rs 335.19, Rs 291.18 and Rs 222.78 millions as at 31 March 2024, 31 March 2023 and 1 April 2022 respectively. The Company provides toss allowance using the ECL model on trade receivables by following simplified approach. An impairment analysis is performed at each reporting date on an individual customer basis.
The credit risk on cash and cash equivalents and bank deposits is limited because the counterparties are banks with high credit ratings.
The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
The Company does a credibility check on the landlords before taking any property on lease and hasn’t had a single instance of non-refund of security deposit on vacating the leased property. The Group also in some cases ensure that the notice period rentals are adjusted against the security deposits and only differential, if any, is paid out thereby further mitigating the non-realization risk.
0 Foreign currency risk
The Company has limited international transactions and thus its exposure to foreign exchange risk arising from its operating activities is low. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company's functional currency. To mitigate the Company’s exposure to foreign currency risk, non-INR Cash Flows are monitored in accordance with the Company’s risk management policies.
Foreign currency risk exposure:
45 Capital management policies and procedures
For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maintain a strong capital base to ensure sustained growth in business and to maximize the shareholders value and to ensure the Company's ability to continue as a going concern. The capital management focuses to maintain an optimal structure that balances growth and maximizes shareholder value.
The Company has not distributed any dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing which represents liability component of Convertible Preference Shares and current borrowing from ultimate holding company of the Company. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
The amount managed as capital by the Company are summarized as follows:
Hi. Utilisation of Borrowed funds
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or cntity(les), Including foreign entities (•'Intermediaries’') with the understanding, whether recorded In writing or otherwise, that the Intermediary shall lend or invest In party identified by or on behalf of the Company (Ultimate Beneficiaries).
The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
iv. Revaluation of property, plant and equipment (Including right-of-usc assets) and intangible assets
The Company has not revalued its property. Plant and Equipment (including Right of use Assets), thus valuation by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017 Is not applicable.
The Company does not have any Intangible Assets, thus, disclosures relating to revaluation of Intangible Assets is not applicable.
v. Details of benami property held
The Company docs not have any Benami property, where any proceeding has been Initiated or pending against the company for holding any Benami property.
vi. Wilful Defaulter
The Company has not defaulted nor been declared wilful defaulter by any bank or financial institution or other lender.
vii. Quarterly Returns
The Company has availed loans from banks on the basis of security of current assets. The Company files statement of current assets with the bank on periodical basis. Reconciliation of quarterly returns or statements of current assets filed with banks or financial institutions.
Refer Note
The reason for reconciliation between quarterly returns or statements of current assets filed with banks are as follows:
1) Inventories:
a. Adjustments arising from the application of sales cut-off procedures.
b. Provision for slow moving, non-moving
2. ) Trade Receivables:
a Loss allowance made for trade receivables
b. Adjustments to trade receivables due to period-end cut-off procedures c Remeasurement of balances due to foreign exchange rate fluctuations, d. Offsetting advance from customers against trade receivables
3. ) Trade Payables:
a. Offsetting advance to suppliers against trade payable vill. Relationship with struck off companies
The Company does not have any transactions with the Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
ix. Registration of charges or satisfaction with Registrar of Companies (ROC)
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
x. Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017. xi Compliance with approved Scheme(s) of Arrangements
The Company has not entered into any scheme of arrangements as approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013, thus, the disclosures relating to compliance with approved scheme of arrangements is not applicable to the Company.
"" Company has no, traded or tested m crypto currency or virtual currency during the current or previous year, xlv Corporate social responsibility
The Company does not meet the criteria specified under section 135 for CSR applicability As , result the Com <
« as at 31 March 2024 the Com h d hlllty. As a result, the Company Is not obligated to establish a CSR committee or engage In CSR activities as defined under the Act.
49 "" C"*"* Software for the purpose of maintaining boohs of accents for the financial year March 31, 202< software did not have f , f
50 Subsequent Event ' ° rKOrdi"S ,Ud'' ‘r‘U («"' “>*>
I Conversion of the Company from Private Limited to Public Limited
Company was changed to 'l,xml Dental 18> 2°“’ t,W COmp*^ h« b«" averted from Private Limited Company into a Public Limited Company and the name of the
II Sale of business division
dated August, 202 “ ^(fbusln'es's dlris^'8' SUPP'y " P™ari'y 'n8aSed ta bU’‘"«S 0f b>»ora,orles, DenUI Consumables and Dental Machinery. The Group entered Into a Contract for Sale of Business
III ESOP scheme 2024
52 0.00' denotes amount less than INR Ten thousand.
53 These financial statement have been approved for Issue by the board of directors a, Its meeting held on September 03. 202a ll 5!Ml /flairs / )
|