(Including Management Discussion and Analysis Report)
Your Directors have pleasure in presenting the 65th Annual
Report together with the Audited Financial Statements for the financial year ended 31st
March, 2023.
Sale / Transfer of Human Pharma Division:
In terms of the consent from the Members of the Company by means of a
Special Resolution passed through Postal Ballot Process on 23rd April,
2022, the Human Pharma Division (Undertaking) of your Company stands transferred, as a
going concern, on a slump sale basis, for a consideration of Rs.805 crores (subject to
adjustment for working capital and other items that are customary in such transactions) to
M/s BSV Pharma Private Limited (BSV), with effect from 9th May, 2022.
Financial Results:
(Rs. in lakhs)
|
2022-23 |
2021-22 |
(a) Continuing Operations |
|
|
Profit before Depreciation & Tax |
7,444.20 |
3,493.04 |
Less: Depreciation |
1,280.64 |
1,258.36 |
Add: Exceptional Item Profit on |
|
|
sale of land |
|
249.05 |
Profit before Tax |
6,163.56 |
2,483.73 |
Less: Tax expense: |
|
|
Current Tax |
1,741.03 |
743.67 |
Deferred Tax |
(44.26) |
(110.96) |
|
1,696.77 |
632.71 |
Profit after tax from Continuing |
4,466.79 |
1,851.02 |
Operations |
|
|
(b) Discontinued Operations (Human |
|
|
Pharma Undertaking) |
|
|
Profit before Tax |
77,643.92 |
3,294.14 |
Less: Tax Expense |
18,139.42 |
986.33 |
Profit after tax from Discontinued |
59,504.50 |
2,307.81 |
Operations |
|
|
Profit after tax [(a)+(b)] |
63,971.29 |
4,158.83 |
Surplus Account: |
|
|
Balance as per last Balance Sheet |
20,094.41 |
16,771.09 |
Add: Profit for the year |
63,971.29 |
4,158.83 |
Other Comprehensive Income for |
|
|
the year (Net of Tax) |
24.73 |
12.31 |
|
63,996.02 |
4,171.14 |
Total |
84,090.43 |
20,942.23 |
Less: Dividend Paid |
1,413.03 |
847.82 |
Net Surplus |
82,677.40 |
20,094.41 |
Review of Performance:
During the year under review, the Revenue from Continuing Operations
amounted to Rs.725.11 crores as against the previous year's figure of Rs.599.24 crores, a
growth of around 21%. Pre-Tax Profit for the year from Continued Operations stood at
Rs.61.64 crores as against the previous year's figure of Rs.24.84 crores. The Pre-Tax
Profit on Discontinued Operations (including profit on sale of Human Pharma Undertaking)
amounted to Rs.776.44 crores.
A detailed review is presented under the Section "Segmentwise
Performance".
Dividend:
Your Directors are pleased to recommend a dividend of Rs.10/- (100%)
per Equity Share of Rs.10/- each for the year ended 31st March, 2023. [Previous
Year - Rs.10.00 (100%) per Equity Share of Rs.10/- each]. The dividend pay-out is in
accordance with the Company's Dividend Distribution Policy.
Share Capital:
The Paid-up Equity Share Capital as on 31st March, 2023 was
Rs.1,413.03 lakhs. Your Company has not issued any shares with differential voting rights
nor granted stock options nor sweat equity.
MANA MENT DISCUSSION AND ANALYSIS: GE (A) INDUSTRY STRUCTURE AND
DEVELOPMENTS: y India was one of the fastest growing economies in the world and the
GDP growth is estimated to be around 7% for 2022-23 and 6.5% for 2023-24, although
significant challenges remain in the global environment. [World Bank / Economic Survey]. y
The Company operates in more than one segment viz., Consumer Products, Animal Welfare
Products, Medical Devices, Protective Devices (Male Contraceptives) and Foods. y
FMCG categories like Deodorants and Male Contraceptives had a huge decline during CoVID-19
pandemic and these have witnessed decent recovery post-pandemic. y The Animal
Welfare Market size is estimated to be around
Rs.7,000 crores, growing at around 9 10%. y Medical
Devices Segment also reported smart recovery post-pandemic and the current trend is
positive.
(B) OPPORTUNITIES AND THREATS
Opportunities: y Your Company has the unique advantage of an
exclusive network for distribution of FMCG / OTC products. This can be leveraged for
launch of new products so as to ensure improved profitability and value creation through
brand building. y In view of the increasing spend by Pet parents on Pet /
Companion Animals over the years, this segment of the Animal Welfare
Division (AWD) offers good potential for growth. y On Medical Devices front, the
market continues to be dominated by imported medical devices / implants. Since your
Company manufactures world class products and these are priced competitively, this segment
provides opportunity for growth. y The "Make in India" and the
"Atmanirbhar Bharat Abhiyaan"
(Self-reliant India) initiatives by the Government of India would
further enhance the growth prospects for this Segment and provide further fillip to the
indigenous manufacture of medical devices. These products also have export potential. y
The Central Government's Medical Insurance Scheme - Ayushman Bharat being implemented to
cover poor families is also likely to increase the number of treatment procedures which
would, in turn, improve the demand for medical implants viz., Heart Valves and Ortho
Implants manufactured by your Company. y Considering the size of the market for
food products, the Foods Business of your Company has potential for growth, both in the
domestic / overseas markets.
Threats: y Considering the commodity nature of the current Foods
Business, there is pressure on price realizations. Nevertheless, this is mitigated through
enhanced focus on export markets and also launch of innovative and differentiated
products.
(C) SEGMENTWISE PERFORMANCE:
Your Company is engaged in Consumer Products, Animal Welfare Products,
Medical Devices, Protective Devices and Foods Businesses.
A look at the performance of individual Business Segments:
Consumer Products Business:
The Consumer Products Division (CPD) reported a revenue from operations
of Rs.241.27 crores (excluding Skore), with a growth of around 11%.
Woodward's Gripewater (WGW)
Post-pandemic, WGW faced a slowdown in key markets, more intensely in
Tamil Nadu, from the second-half of the year and also witnessed enhanced competitor
activities, particularly in the West Zone. Despite these challenges, the brand managed to
more or less sustain the value sales.
As part of the initiatives to further strengthen the brand connect with
the consumers, particularly the young mothers, a high-decibel media campaign across the
country with enhanced focus on Tamil Nadu was undertaken during the second half of the
year.
Further, in order to increase trials and awareness, various initiatives
such as retailers meet, distribution expansion, on-ground and digital activations, etc.,
were undertaken during the year. The strategy for 2023-24 would be (i) to build brand
saliency and purchase intent through various promotional initiatives, expand consumer
touch points especially in rural markets through ground level activations; and (ii) to
strengthen the trust through PR and consumer outreach initiatives.
EVA
Despite category challenges especially on the aerosol segment during
the year, EVA has shown remarkable resilience and reported a healthy growth. Your Company
roped in celebrity Rashmika Mandanna as the new Brand Ambassador to further strengthen the
brand positioning.
The new "Eva Special Happens" campaign with celebrity
endorsement helped in increasing brand awareness and turnover during the year. The brand
was on constant communication across different platforms throughout the year.
As part of the Look Special Range, the Lip Range with the revamped
packaging was launched during the year and this had a positive impact for the brand.
BB Talc / Purse Perfume have also been launched during the last quarter
in South Zone and the same will be scaled up to other regions during the current year. Few
new products such as No Gas Deo, Roll on Deo, etc., are lined up for launch during the
current year.
The strategy for the year 2023-24 would be- (i) to further strengthen
the brand promise of "Special Happens" and gain market share through promotions
featuring the new celebrity; (ii) to launch new products to penetrate market and gain
share; and (iii) to increase trials for the brand through effective marketing activations.
Skore
During the year under review, Skore achieved its highest ever sales in
terms of both, volume and value, with healthy growth. The non-condom segment too reported
a healthy growth due to various digital initiatives.
A key highlight for the year was the launch of SKORE 4.0, an improved
product offering, with new packaging and positioning. The "Change the Game"
brand campaign which followed the launch, was successful in generating good momentum and
buzz for the brand.
The strategy for the 2023-24 would be (i) to drive distribution
expansion to grow the Condom Segment; (ii) to continue to drive the Non-Condom Segment in
the digital space through new launches and also make inroads into general trade; and (iii)
to build on the "Change the Game" campaign to keep up the momentum and gain
market share.
Good Home
Good Home reported a consistent performance with a healthy growth,
demonstrating a growing acceptance both at the trade and consumer levels.
The new packaging coupled with new positioning and the brand promise
across its range were well received by the market. The strategy for the year 2023-24 would
be (i) to grow the Aroma Air Freshener and Odour Remover Segments through enhanced focus
and promotional investments; (ii) to expand the range through new fragrances and formats;
(iii) to venture into new categories viz., Cleaning Agents and Cleaning Tools; and (iv) to
focus on e-Com / Modern Trade to exploit the untapped potential.
Animal Welfare Business:
During the year under review, Animal Welfare Division (AWD) reported a
sales turnover of Rs.106.26 crores, with a growth of around 7% over the previous year.
Sustaining the high growth registered during the previous year was a challenge mainly due
to huge attrition and also sluggish market conditions.
While Bovianim (Livestock) and Companim (Pet) have reported a decent
growth. Gallus (Poultry) had a setback due to various external factors resulting in a
marginal negative growth over the previous year. The recently launched Aquanim (Shrimp)
has registered a healthy growth.
The strategy for 2023-24 would be (i) to restore double digit growth by
focusing on all Sub-Divisions along with Institution and Exports businesses; and (ii) to
work upon - People (Attrition control and retention), Products (New product launches and
driving Ossomin-Tefroli-Orcal-P-Nutricell (OTON), the flagship brands of your Company) and
Processes (Streamlining the processes across Divisions and driving core projects).
Medical Devices Business:
Heart Valve Division
During the year under review, Heart Valve Division recorded a revenue
from operations of Rs.25.26 crores, with a growth of about 47%.
The imported CardiaMed Bi-Leaflet Valves reported an improved
performance during the year, despite supply constraints from the overseas partner.
The test marketing of the PTCA Catheters would commence shortly.
The implantations under the Single Centric Clinical Trial of the TC2
Titanium valves covering around 40 patients have been completed at Sree Chitra Tirunal
Institute of Medical Sciences and Technology (SCTIMST) and the report is awaited. The
focus for the year 2023-24 would be (i) to grow the volumes of TTK Chitra Valves; (ii) to
gain further volumes through Bi-Leaflet Valves; (iii) to introduce the PTCA
Catheters in selected markets; and (iv) to complete the Single Centric Clinical Trial of
TC2 Titanium Valve and work towards commencing the Multi-centric Clinical Trials.
Ortho Division
Ortho Division reported an impressive performance with a revenue from
operations of Rs.46.60 crores and a growth of around 38%. This was made possible by all
round improvement in sales across geographies, recovery of lost sales due to pandemic and
strong market relationships. The strategy of expanding team footprint and distribution in
line with market potential has yielded the desired results.
Effective regional leadership too helped to further strengthen the
market relationships and to build customer confidence resulting in improved volumes.
Deeper penetration in Revision and Hinge Knee Segments enabled the segment to report
robust growth.
Hip Replacement Segment also picked up pace during the year, with a
decent revenue. The business growth was well supported by the manufacturing team with
higher production, faster production cycles and reduced turnaround time from various
vendors and suppliers.
The strategy for the year 2023-24 would be (i) to focus on improving
sales productivity in currently operating markets; (ii) to strengthen the team to
penetrate deeper in the markets; (iii) to continue the footprint and distribution
expansion in identified markets; (iv) to initiate test launch of the Fixed Bearing Knee;
and (v) to expand the Hip Replacement Portfolio with the introduction of ceramic heads,
through a technical tie-up with CeramTec, Germany.
Protective Devices Business:
During the year under review, the Protective Devices Division delivered
a robust performance with a revenue from operations of Rs.193.86 crores (including Skore),
with a growth of around 45%. Due to healthy inflow of orders, your Company has recommenced
the manufacturing operations at the Virudhunagar facility and the said facility has also
been approved by International Aid Agency for supply of products to them.
As in the past many years, your Company successfully went through the
Quality Audits conducted by the British Standards Institution (BSI) for ISO standards and
CE Mark, South African Bureau of Standards for SABS Certification and SCS Global Services
for Forest Stewardship Council Certification, as part of the continual assessment. Your
Company is also being successfully audited for SEDEX and BSCI standards by various
agencies which are social compliance requirements and retained all the certifications
without any major or critical non-conformances. Your Company is also one of the
pre-qualified suppliers under WHO-UNFPA Pre-Qualification Scheme for Male Latex Condoms
which is a requirement to supply products internationally to the reputed international aid
agencies.
During the year under review, your Company has launched the improved
Skore 4.0 version with a new packaging and also added lubricants to the range. Few more
products are under development. The focus for the year 2023-24 would be (i) to grow the
branded Condom business through differentiated and innovative products; (ii) to develop
and strengthen relationships with third party contract manufacturing customers for
increasing the volumes; (iii) to work on cost optimization to be more competitive in the
bid businesses; and (iv) to increase the output efficiently by developing new
infrastructure and by addition of high-speed machines at designated positions.
Foods Business:
During the year under review, Foods Division had a sales turnover of
Rs.111.51 crores, with a growth of 14%. In terms of the bottom line, it was a very
challenging year as there was constant escalation in the prices of input materials due to
a partial crop failure and export of wheat. Your Company's R&D Centre developed a
number of new products and product extensions, a few of them were scaled up and launched.
Your Company continues to work on developing micro pellets with different bases for thermo
mechanical popping considering the future trend of healthy snacks with lesser oil content.
Steps are also initiated for manufacturing 2D die cut products / Micro
pellets at Jaipur facility in order to make the manufacturing lines more versatile and
increase capacity utilisation.
The strategy for the year 2023-24 would be (i) to further increase the
capacity utilization at Jaipur facility through enhanced focus on domestic / institutional
and export businesses; and (ii) also to work on developing and launching innovative and
differentiated products to improve volumes / margins.
(D) OUTLOOK:
Since the Company would be making significant soft investments in
certain Consumers Brands during 2023-24, the same would result in transient pressure on
the operating margins. But for this, considering the above developments and initiatives,
the outlook for your Company as a whole for 2023-24, appears positive.
(E) RISKS AND CONCERNS:
The analysis presented in the Industry Scenario and Opportunities and
Threats Section of this Report throws light on the important risks and concerns faced by
your Company. The strategy of your Company to de-risk against these factors is also
outlined in the said Sections.
(F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company developed necessary Manuals / Standard Operating
Procedures (SOPs) for effectively implementing the Internal Financial Control System.
Accordingly, various Accounting and Reporting Policies have also been developed and
implemented. Internal Audits are regularly conducted through In-house Audit Department and
also through External Audit Firms. The Reports are periodically discussed internally. The
Internal Auditors monitor and evaluate the efficacy and adequacy of internal control
system in your Company, its compliance with operating systems, accounting procedures and
policies at all locations of your Company. Significant audit observations and corrective
actions thereon are presented to the Audit Committee.
Frauds:
During the year under review, no fraud was reported by the Internal
Auditors, Statutory Auditors, Cost Auditors and Secretarial Auditors.
(G) FINANCIAL PERFORMANCE:
(Rs. in lakhs)
|
2022-23 |
2021-22 |
(a) Continuing Operations |
|
|
Revenue from Operations |
72,511.03 |
59,923.99 |
Other Income |
4,833.17 |
1,633.06 |
Total Income |
77,344.20 |
61,557.05 |
Cost of Materials Consumed |
34,777.50 |
28,149.47 |
Employee Benefits Expense |
12,338.20 |
10,284.24 |
Other Expenses |
22,260.41 |
19,306.55 |
|
2022-23 |
2021-22 |
Profit before Finance Cost, Depreciation |
|
|
& Exceptional Items |
7,968.09 |
3,816.79 |
Finance Cost |
523.89 |
323.75 |
Depreciation |
1,280.64 |
1,258.36 |
Exceptional Item Profit on sale of land |
|
249.05 |
Profit before Tax |
6,163.56 |
2,483.73 |
Less: Tax Expense |
|
|
Current Tax |
1,741.03 |
743.67 |
Deferred Tax |
(44.26) |
(110.96) |
Profit after tax from Continuing |
|
|
Operations |
4,466.79 |
1,851.02 |
(b) Discontinued Operations |
|
|
Profit before Tax |
77,643.92 |
3,294.14 |
Less: Tax Expense |
18,139.42 |
986.33 |
Profit after tax from Discontinued |
|
|
Operations |
59,504.50 |
2,307.81 |
Profit after Tax [(a)+(b)] |
63,971.29 |
4,158.83 |
ANA YS L IS OF PERFORMANCE: y The revenue from Continuing
Operations amounted to Rs.725.11 crores, with a growth of around 21% . y The
increase in Other Income was mainly due to increase in interest on Fixed Deposits made
from the sale proceeds of Human Pharma Division. y The increase in Employee
Benefits Expense was mainly due to regular annual increments / revision in packages and
welfare expenses. y The increase in Finance Cost was due to the interest paid on
Income Tax amounting to Rs.228.66 lakhs pertaining to earlier years. y The increase
in Power and Fuel expenses was due to higher production at Foods Division's factories at
Hosakote and Jaipur and also at Condoms factory at Puducherry and recommencement of
production at Virudhunagar facility. y The increase in Repairs and Maintenance was
mainly due to major maintenance work undertaken at PDD Virudhunagar factory prior to the
recommencement of operations and also the maintenance activities undertaken at the Foods
and Ortho factories. y The increase in Advertisement & Sales Promotion expenses
was mainly on account of the higher advertising and promotional activities undertaken
relating to WGW, EVA, Good Home and Skore Brand of Condoms / Pleasure products range and
also on the online portal LoveDepot.com. y The increase in Travelling &
Conveyance expenses was due to resumption of regular travel post-CoVID-19 pandemic. y
Bad Debts written off during the year under review, amounted to
Rs.40.99 lakhs, comprising -
(Rs. in lakhs)
Ortho Division |
20.90 |
Animal Welfare Division |
11.63 |
Consumer Products Division |
3.92 |
Heart Valve Division |
3.79 |
Foods Division |
0.75 |
All the Other Expenses are in line with the increased level of
operations.
(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
FRONT: y Human Resources:
During the year 2022-23, your Company started implementing a few key
features of Agile HR which include programmes for people and team development, employee
engagement and empowerment, etc. The leadership and managerial skill development programme
titled LEAP-3 for third-line managers was successfully completed. Top 100 high potential
talents at all levels across the organization were identified for an intense individual
development initiatives as part of the succession planning / towards building a robust
talent pipeline.
Your Company has partnered with Harappa Thriversity Learning Platform
to provide cognizant, behavioural and soft skill e-learning to all employees and promote a
continuous learning culture.
The entire HR Operational processes, right from recruitment to final
settlement have been automated through the Company's Human Capital Management Intranet
Portal.
Your Company has also continuously identified and rewarded the
employees and teams that have demonstrated the pursuit of excellence in the areas of
Marketing and Customer focus, Innovation and Quality, Business Process Transformation,
etc., through R&R Programs such as Xtra Mile, Trail Blazer and Corporate Excellence
Awards.
As on 31st March, 2023, the employee strength was 1,294
(Previous Year - 2,513). y Industrial Relations:
The industrial relations during the year under review continued to be
cordial. The Directors place on record their sincere appreciation for the services
rendered by employees at all levels.
(I) INFORMATION TECHNOLOGY:
During the year, your Company has automated several functions of
Finance and Accounts by developing custom applications using Oracle Apex and integrating
with Oracle EBS.
A project has just been initiated to automate the Distributor
Management System (DMS) and Sales Force Automation (SFA) for the Consumer Products
Division.
Your Company started the rolling out of the project titled "FAST
FORWARD" in a phased manner, covering the end-to-end management of inventory
replenishment / invoicing at Ortho Division.
Your Company launched a number of mobile applications covering order
booking / invoicing / inventory verification, etc.
(J) FUTURISTIC STATEMENTS:
This analysis may contain certain statements, which are futuristic in
nature. Such statements represent the intentions of the Management and the efforts being
put in by them to realize certain goals. The success in realizing these goals depends on
various factors, both internal and external. Therefore, the investors are requested to
make their own independent judgements by taking into account all relevant factors before
taking any investment decision.
(K) KEY FINANCIAL RATIOS:
Particulars |
2022-23 |
2021-22 |
Change % |
Remarks |
Trade Receivables Turnover Ratio |
9.09 |
12.34 |
(26.34) |
A |
Increase in receivables. |
Inventory Turnover Ratio |
4.13 |
4.25 |
(2.82) |
A |
|
Interest Coverage Ratio |
29.53 |
40.21 |
(26.56) |
A |
Increase in interest cost due to higher
utilisation of working capital limits. |
Current Ratio |
5.06 |
2.06 |
145.63 |
F |
Increase in Current Assets due to higher
Term Deposits from the sale proceeds of Human Pharma Division made during the year. |
Operating Profit Margin (%) |
4.39 |
7.03 |
(37.55) |
A |
Lower operating profit due to sale of Human
Pharma Undertaking (Interest on Term Deposits made from the sale proceeds, being
Non-operating income, not considered). |
Debt Equity Ratio |
0.03 |
0.07 |
(59.61) |
F |
Increase in Shareholders Equity was due to
higher profits made during the year (which include profit from Slump sales) |
Net Profit Margin (%) |
7.35 |
5.24 |
39.85 |
F |
Increase in Net Profit |
Return on Net Worth (%) |
8.62 |
14.14 |
(39.04) |
A |
Increase in Equity was due to higher profits
made during the year (which include profit from Slump sales) resulting in lower RoE |
F - Favourable; A - Adverse
DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE RULES MADE
THEREUNDER: (a) Annual Return:
Annual Return (Form MGT-7) for the year 2022-23 was made available on
the Company's website at the following link: https://
ttkhealthcare.com/investorlist/annual-return/
(b) Number of Meetings of the Board:
The Board of Directors met 5 (Five) times during the year 2022-23. The
details of the Board Meetings and the attendance of the Directors are provided in the
Report on Corporate Governance.
(c) Corporate Social Responsibility (CSR) Committee:
The Corporate Social Responsibility (CSR) Committee consists of Mr
T T Raghunathan as Chairman, Mr K Shankaran, Dr (Mrs) Vandana R Walvekar and Mr
Girish Rao as Members. Mr S Kalyanaraman is the Secretary to the Committee. The
Corporate Social Responsibility (CSR) Policy enumerating the CSR activities to be
undertaken by your Company, in accordance with Schedule VII to the Companies Act, 2013 was
recommended to the Board and the Board adopted the same. The said policy was also made
available on the Company's website at the following link
https://ttkhealthcare.com/investorlist/policies/.
The Annual Report under CSR Activities is annexed to this Report as Annexure-1.
The details relating to the meeting(s) convened, etc., are furnished in
the Report on Corporate Governance.
(d) Composition of Audit Committee:
The Audit Committee consists of Mr Girish Rao as Chairman, Mr K
Shankaran, Mr S Balasubramanian and Mr V Ranganathan as Members. Mr S Kalyanaraman is the
Secretary to the Committee. More details on the Committee are given in the Report
on Corporate Governance.
(e) Related Party Transactions:
During the year under review, no transaction of material nature has
been entered into by your Company with its Promoters, the Directors or the Key Managerial
Personnel or their relatives, etc., that may have a potential conflict with the interests
of your Company. All related party transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on
a yearly basis for the transactions which are repetitive in nature. A statement giving
details of the transactions entered into with the related parties, pursuant to the omnibus
approval so granted, is placed before the Audit Committee and the Board of Directors for
their approval / ratification on a quarterly basis.
During the year under review, your Company renewed the contract entered
into with M/s T T Krishnamachari & Co., a Partnership Firm, for using the ttk
monogram. The relevant details are provided below:
(a) Nature of the Contract |
License Agreement |
Duration of the Contract |
Renewal for a further period
of five years from 1st November, 2022 to 31st October, 2027. |
Particulars of the Contract or Arrangement |
For using the ttk monogram
in relation to the goods manufactured, outsourced from third parties, marketed, traded,
distributed, etc., and for other business activities of the Company. |
(b) Material Terms of the Contract or
Arrangement including the value, if any. |
Half-a-percent ( %) of the
Net Sales Value of the Company, plus applicable taxes and levies. |
(c) |
Any advance paid or received for the Contract
or Arrangement, if any. |
NIL |
(d) |
Manner of determining the pricing and other
commercial terms, both included as part of Contract and not considered as part of the
Contract |
M/s T T Krishnamachari &
Co., popularly known as TTK, have been in business of various consumer and pharmaceutical
products and has been marketing and distributing such products for several decades and
earned a wide reputation and created a strong image and awareness in the minds of the
public. |
|
|
They are the owner of the
copyright in the artistic work ttk monogram, having secured the registration of the said
copyright vide Registration No.A-39006/83 under the Copyright Act, 1957. |
|
|
Use of the ttk monogram on
the products of the Company is of immense help to establish these products all these
years. Considering the reputation enjoyed by the ttk monogram and the advantages available
to the Company by the use thereof, the charges proposed to be paid are quite reasonable
and fully justified. |
(e) |
Whether all factors relevant to the Contract
have been considered, if not, the details of factors not considered with the rationale for
not considering those factors |
Yes |
(f) |
Any other information relevant or important
for the Board to take a decision on the proposed transaction |
NIL |
(g) |
Interested Directors (as on the date of the Board Meeting
i.e. 23 rd May, 2022) |
Mr T T Jagannathan, Chairman and |
|
|
Mr T T Raghunathan, Executive Vice |
|
|
Chairman are interested as
Partners of M/s T T Krishnamachari & Co. |
The Register of Contracts containing the details of the transactions,
in which Directors / Key Managerial Personnel are interested, is placed before the Audit
Committee / Board regularly.
The Board of Directors of your Company, on the recommendation of the
Audit Committee, adopted a policy on Related Party Transactions, to regulate the
transactions between your Company and its Related Parties, in compliance with the
applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.
The Policy as approved by the Board is uploaded on the Company's website at the following
link https://ttkhealthcare.com/ investorlist/policies/.
Form AOC-2 containing the details of Related Party Transactions is
annexed as Annexure-2 to this Report.
(f) Corporate Governance:
Your Company has complied with the various requirements of the
Corporate Governance Code under the provisions of the Companies Act, 2013 and as
stipulated under the SEBI (LODR) Regulations, 2015.
A detailed Report on Corporate Governance forms part of this Annual
Report.
(g) Business Responsibility and Sustainability Reporting:
In accordance with the provisions of Regulations 34(2)(f) of the SEBI
(LODR) Regulations, 2015 and on the basis of market capitalization (one amongst the Top
1,000 Companies) as on 31st March of every financial year, the Business
Responsibility and Sustainability Report forms part of this Annual Report. [Page No.33]
(h) Risk Management:
Your Company has developed and implemented a Risk Management Policy
which includes identification of elements of risk, if any, which in the opinion of the
Board, may threaten the existence of the Company. Your Company has a Risk Identification
and Management Framework appropriate to the size of your Company and the environment in
which it operates. The Risk Management Group (RMG) with due representations from each of
the Businesses / Functions of the Company has been meeting periodically and have detailed
interactions / discussions with the Members / Risk Owners on the various risks identified
and the status of the mitigation plans.
During the year, the RMG met four times on 6th May, 2022,
20th September, 2022, 27th December, 2022 and 20th
March, 2023 and reviewed / discussed the various key risks and the status of the
mitigation plans.
The Risk Management Committee (RMC), during the year, met three times
on 11th April, 2022, 7th October, 2022 and 20th March,
2023. The Risk Management Committee was updated on the outcome of the RMG Meetings held
during the year. Further, the duly updated Risk Register highlighting the various key
risks and the status of their mitigation plans was placed before the Committee in their
meetings and the Committee reviewed the same. Based on the recommendations of the RMC, the
services of M/s Deloitte have been engaged for updating the Risk Register and also
to clearly identify the risks in terms of its probability of occurrence and its impact as
in case of some risks though the probability of occurrence would be very low but the
impact could be significant. They would also classify the various risks into High, Medium
and Low.
The assignment is in progress and M/s Deloite would be presenting their
observations / suggestions in due course.
The Audit Committee and the Board of Directors periodically review the
outcome of the Risk Management Committee meetings.
(i) Directors and Key Managerial Personnel:
During the year under review the following changes occurred: (1) Mr T T
Jagannathan, Chairman resigned from the Board, with effect from 9th September,
2022.
(2) Dr T T Mukund was appointed as an Additional Director by the Board
of Directors, with effect from 9th September, 2022 and subsequently appointed
as a Director by the Shareholders of the Company, with effect from 9th
September, 2022 through Postal Ballot process. (3) Mr T T Raghunathan was elected as the
Executive Chairman, with effect from 9th September, 2022.
None of the Directors are disqualified from being appointed or holding
office as Directors, as stipulated under Section 164 of the Companies Act, 2013.
Certificate of Non-disqualifications of Directors from the Practising
Company Secretary is furnished under Report on Corporate Governance. [Page No.69]
(i) Reappointment of Directors:
Mr K Shankaran, liable to retire by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for reappointment. The Board recommends
his reappointment.
(ii) Statement on Declaration by the Independent Directors of the
Company:
All the Independent Directors of your Company have given yyDeclarations
under Section 149(7) of the Companies Act, 2013 that they meet the criteria of
independence as laid down under Section 149(6) of the Companies Act, 2013 and the Rules
made thereunder and also Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015. yyConfirmation
of compliance with the Code for Independent Directors prescribed under Schedule IV to the
Act and the Company's Code of Conduct for Directors and Senior Management Personnel. yyFurther,
they have also confirmed that they are not aware of any circumstance or situation, which
exist or may be reasonably anticipated, that could impair or impact their ability to
discharge the duties with an objective independent judgement and without any external
influence. yyThe terms and conditions of appointment of the Independent Directors
are posted on the Company's website at the following link
https://ttkhealthcare.com/wp-content/ uploads/2019/09/ID-Terms-and-Conditions.pdf.
(iii) Key Managerial Personnel (KMP):
The following managerial personnel are Key Managerial Personnel (KMP): yyMr
T T Raghunathan, Executive Chairman [Chief Executive Officer (CEO)]; yyMr S
Kalyanaraman, Wholetime Director & Secretary [Company Secretary]; and yyMr B V
K Durga Prasad, President Finance [Chief Financial Officer (CFO)].
(iv) Performance Evaluation of the Board, its Committees, Chairperson,
Non-Independent Directors and Independent Directors:
In compliance with the provisions of the Companies Act, 2013 and the
SEBI (LODR) Regulations, 2015, the performance evaluation of the Board as a whole, its
Committees, Chairperson and Non-Independent Directors were carried out during the year
under review by the Independent Directors and the evaluation of the Independent Directors
were carried out by the entire Board of Directors excluding the Director being evaluated
during the year under review. More details on the same are given in the Report on
Corporate Governance. [Page No.56]
(v) Policy on Directors' Appointment and Remuneration:
Your Company adopted a Policy relating to selection, appointment,
remuneration and evaluation of Directors and Senior Management Personnel. The said Policy
is posted on the Company's website at the following link https://ttkhealthcare.
com/investorlist/policies/.
(j) Auditors:
(i) Statutory Auditors and their Report:
M/s PKF Sridhar & Santhanam LLP was appointed as Statutory Auditors
of the Company, for a further term of 5 years, to hold office from the conclusion of the
64th Annual General Meeting till the conclusion of 69th Annual
General Meeting.
M/s PKF Sridhar & Santhanam LLP, the Statutory Auditors of your
Company have carried out the Audit for the year ended 31st March, 2023. yyAuditor's
Report for the year ended 31st March, 2023:
The Auditor's Report to the Shareholders for the year under review does
not contain any qualifications.
(ii) Cost Auditors and Cost Audit Report: yyAppointment for the
year 2023-24:
Pursuant to Section 148 of the Companies Act, 2013 and the Rules made
thereunder, the Cost Records of your Company shall be audited for the following product
categories, for the financial year 2023-24:
Under Regulated Sectors:
y Drugs and Pharmaceuticals.
Under Non-Regulated Sectors:
y Male Contraceptives under Rubber and Allied Products;
y Heart Valves and Orthopaedic Implants under Production, Import and
Supply or Trading of Medical Devices.
The Board of Directors, on the recommendation of the Audit Committee,
appointed M/s Geeyes & Co., as Cost Auditors of your Company, for the financial year
2023-24 and fixed their remuneration at Rs.5 lakhs plus applicable taxes and levies and
reimbursement of travel and out-of-pocket expenses incurred in connection with the audit.
Necessary intimation of the said appointment has already been given to the Central
Government vide Form CRA-2.
M/s Geeyes & Co., have confirmed that their appointment is within
the limits prescribed under Section 141 of the Companies Act, 2013 and have also certified
that they are free from any disqualifications specified under the said Section.
The Audit Committee also received a Certificate from the
Cost Auditors certifying their independence and arm's length
relationship with your Company. Pursuant to the provisions of Section 148 of the Companies
Act, 2013 and the Rules made thereunder, the ratification by the Members is sought by
means of an Ordinary Resolution for the remuneration of Rs.5 lakhs plus applicable taxes
and levies and reimbursement of travel and out-of-pocket expenses incurred in connection
with the audit, payable to M/s Geeyes & Co., Cost Auditors, under Item No.4 of the
Notice convening the Annual General Meeting.
The Cost Audit Report for the year ended 31st March, 2023
would be filed on or before the due date (i.e.) 27th September, 2023 or within
30 days from the date of submission of the said Report to the Board, whichever is earlier.
yyCost Audit Report for the year 2021-22:
The Cost Audit Report for the financial year ended 31st
March, 2022 was filed in Form CRA-4 vide SRN F22266126 dated 19th August, 2022
with the Central Government.
(iii) Secretarial Auditor and Secretarial Audit Report:
The Board had appointed M/s A K Jain & Associates, Practising
Company Secretaries, to carry out Secretarial Audit under the provisions of Section 204 of
the Companies Act, 2013 for the financial year 2022-23. The Report of the Secretarial
Auditor in Form MR-3 is annexed to this Report as Annexure-3. The Report does not
contain any qualification or reservation or adverse remarks. However, it contains an
observation relating to Regulation 19(1) of the SEBI (LODR) Regulations, 2015 reproduced
below: During the period under review, the Company has complied with the provisions of the
Act, Rules, Regulations, Guidelines, Standards, etc., except it was observed that the
Nomination
& Remuneration Committee (NRC) was required to be reconstituted
w.e.f. 01.01.2022 in terms of Regulation 19(1) of the SEBI (LODR) Regulations, 2015,
amended vide SEBI (LODR) (Third Amendment) Regulations, 2021 dated 03.08.2021. Though the
NRC was reconstituted w.e.f. 01.01.2022, due to rounding off interpretation, it was
considered to be not in compliance with Regulation 19(1) of SEBI (LODR) Regulations, 2015.
Upon receipt of SOP Notice from BSE & NSE, the Company has promptly reconstituted the
NRC w.e.f. 24.05.2022 and paid the fine to the Stock Exchanges. Further, the Company has
also submitted an application for waiver of the fine levied by the Stock Exchanges, as it
was purely due to an interpretation issue and is awaiting its order.
(k) Investor Education and Protection Fund (IEPF): y Transfer of
Unclaimed Dividends to IEPF, during the year under review:
Your Company transferred a sum of Rs.8,19,279.50 during the financial
year 2022-23 to the Investor Education and Protection Fund established by the Central
Government, in compliance with Sections 123 to 125 of the Companies Act, 2013. The said
amount represents the unclaimed dividends for the year ended 31st March, 2015,
which were lying unclaimed with your Company for a period of seven years from the due date
of payment. y Transfer of Shares to the Demat Account of the IEPF
Authority:
In accordance with the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, your Company transferred 7,199
Equity Shares of Rs.10/- each fully paid-up, in respect of which the dividends relating to
the year 2014-15, remained unclaimed / unpaid for a period of seven consecutive years or
more, to the Demat Account of the IEPF Authority held with CDSL on 28th
September, 2022 and 3rd October, 2022. y Year wise amount of Unpaid /
Unclaimed Dividends lying in the Unpaid Account as on 31st Ma rch, 2023 and the
due dates of transfer:
Financial Year ended |
Dividend Declared on |
Due date of Transfer |
Unpaid / Unclaimed Amount
as on 31.03.2023 (in Rs.) |
31.03.2016 |
05.08.2016 |
08.09.2023 |
9,48,900.00 |
31.03.2017 |
04.08.2017 |
04.09.2024 |
9,74,570.00 |
31.03.2018 |
09.08.2018 |
14.09.2025 |
6,51,803.07 |
31.03.2019 |
09.08.2019 |
12.09.2026 |
5,69,815.52 |
31.03.2020 |
11.09.2020 |
14.10.2027 |
3,38,991.20 |
31.03.2021 |
20.08.2021 |
21.10.2028 |
5,93,799.55 |
31.03.2022 |
03.08.2022 |
03.09.2029 |
8,35,277.59 |
y D etails of theNodal Officer
Name of the Nodal Officer : |
Mr S Kalyanaraman |
Designation : |
Wholetime Director & Secretary |
Address : |
TTK Healthcare Limited No.6, Cathedral Road
Chennai 600 086 |
Telephone : |
044 28116106 / 28113804 |
E-mail ID : |
skr@ttkhealthcare.com |
(l) Disclosure under Schedule V(F) of the SEBI (LODR) Regulations,
2015:
Your Company does not have any Unclaimed Shares issued in physical form
pursuant to Public Issue / Rights Issue.
(m) Conservation of Energy:
The prescribed particulars under Rule 8(3) of the Companies (Accounts)
Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange
earnings and outgo, are furnished in Annexure-4 to this Report.
(n) Particulars of Employees:
The information required under Section 197 of the Companies Act, 2013
and the Rules made thereunder are annexed to this Report as Annexure-5.
(o) Subsidiary Company:
Your Company does not have any Subsidiary.
(p) Deposits:
As on 31st March, 2023, your Company was not holding any
amount under Fixed Deposit Account.
(q) Loans, Guarantees and Investments under Section 186 of the
Companies Act, 2013:
During the year under review, your Company had not given any loan,
provided any guarantee and made any investment under Section 186 of the Companies Act,
2013.
(r) Material Changes and Commitments affecting the financial position:
The Human Pharma Division (Undertaking) of your Company was
transferred, as a going concern, on a slump sale basis, to M/s BSV Pharma Private Limited,
with effect from 9th May, 2022.
Delisting Proposal:
The Company received the Initial Public Announcement dated 5th
April, 2023 from M/s Inga Ventures Private Limited, Manager to the Delisting Offer, vide
their communication dated 5th April, 2023 under Regulation 8 of the Securities
and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (the Delisting
Regulations), for and on behalf of the Promoters of the Company viz., Mr T T Jagannathan,
Mr T T Raghunathan and M/s T T Krishnamachari & Co., represented by its Partners - Mr
T T Jagannathan, Mr T T Raghunathan, Mrs Latha Jagannathan, Mrs Bhanu Raghunathan,
Mr T T Mukund, Mr T T Lakshman, Mr T T Venkatesh and Mr T T Sriram made to the Public
Shareholders, expressing their intention to- (a) acquire all the Equity Shares that are
held by the Public Shareholders, either individually or collectively together with other
members of the Promoter Group, as the case may be; and (b) consequently, voluntarily
delist the Equity Shares from the Stock Exchanges where the Equity Shares are presently
listed (i.e.) BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), by
making a delisting offer in accordance with the Delisting Regulations.
Accordingly, the Board of Directors in their meeting held on 20th April,
2023 accorded their approval for the delisting proposal and to conduct the Postal Ballot
process for obtaining the approval of the Shareholders by means of a Special Resolution by
way of e-Voting.
(s) Significant and material orders passed by the Regulators/ Courts:
There are no significant and material orders passed by the Regulators /
Courts which would impact the going concern status of your Company and its future
operations.
(t) Whistle Blower Policy:
In accordance with the provisions of Section 177(9) of the Companies
Act, 2013 and the Rules made thereunder and also the SEBI (LODR) Regulations, 2015, your
Company established a vigil mechanism termed as Whistle Blower Policy, for Directors and
employees to report concerns about unethical behaviour, actual or suspected fraud or
violation of the Company's Code of Conduct or Ethics Policy, which also provides for
adequate safeguards against victimization of director(s) / employee(s) who avail of the
mechanism and also provide for direct access to the Corporate Governance Officer /
Chairman of the Audit Committee and the Executive Chairman, in exceptional cases.
The Whistle Blower Policy was also hosted on the Company's website at
the following link https://ttkhealthcare.com/investorlist/ policies/.
During the year under review, your Company had not received any
complaint.
(u) Compliance Certificate:
Certificate from the Practising Company Secretary regarding compliance
of conditions of Corporate Governance is furnished as Annexure-6 to this Report.
(v) Secretarial Standards:
Your Company complies with all applicable mandatory Secretarial
Standards issued by the Institute of Company Secretaries of India.
(w) Finance:
Your Company has banking arrangements with Union Bank of India
(formerly Corporation Bank), Bank of Baroda and HDFC Bank Limited and availed various
working capital facilities amounting to Rs.25.53 crores as on 31st March, 2023.
(Previous Year Rs.20.38 crores).
(x) Listing of Equity Shares:
Your Company's shares are listed with-
BSE Limited (BSE), Mumbai; and
National Stock Exchange of India Limited (NSE), Mumbai. Your
Company paid the Listing Fees for the financial year 2023-24.
(y) Obligation of your Company under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013:
In order to prevent sexual harassment of women at workplace, a
legislation The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 was notified on 9th December, 2013. Under the said
Act, every Company is required to set up an Internal Complaints Committee to look into
complaints relating to sexual harassment at workplace of any woman employee. Your Company
has adopted a policy for prevention of Sexual Harassment of Women at Workplace and
constituted an Internal Complaints Committee (ICC) with an NGO as one of its Members.
During the year 2022-23, there were no complaints. Further, adequate awareness programmes
were also conducted for the employees of your Company.
(z) Disclosure relating to Loans and Advances to Firms / Companies in
which Directors are interested by name and amount:
During the year under review, your Company did not provide any loans /
advances, to any Firms / Companies in which Directors are interested.
Directors' Responsibility Statement:
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors hereby confirm that-y In the preparation of the annual accounts, the
applicable accounting standards had been followed along with proper explanations relating
to material departures; y Appropriate accounting policies had been selected and
applied consistently and made judgements and estimates that are reasonable and prudent so
as to give a true and fair view of the state of affairs of the Company at the end of the
financial year 31st March, 2023 and of the Profit of the Company for that
period; y Proper and sufficient care had been taken for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities; y
The Annual Accounts had been prepared on a going concern basis; y The Internal
Financial Controls had been laid down, to be followed by the Company and that such
Internal Financial Controls are adequate and were operating effectively; and y In
order to ensure compliance with the provisions of all applicable laws, proper systems had
been devised and that such systems were adequate and operating effectively.
General:
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these items during the
year under review: y Issue of Equity Shares with differential rights as to
dividend, voting or otherwise. y Issue of shares (including Sweat Equity Shares and
ESOs) to employees of the Company under any Scheme.
Acknowledgement:
Your Directors place on record their grateful thanks to the Bankers,
Customers, Vendors and Members for their continued support and patronage.
For and on behalf of the Board T T RAGHUNATHAN
Registered Office: No.6,
Cathedral Road Chennai 600 086
Executive Chairman
Place: Chennai
Date : May 23, 2023
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