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Notes to Accounts of TTK Healthcare Ltd.
Mar 31, 2025
Note No.3.12B Rights, Preferences and Restrictions Attached to Shares
Equity Shares: The Company has one class of Equity Shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.
During the year ended March 31,2025, on account of the final dividend for FY 2023-24 the Company has incurred a net cash outflow of Rs.1,413.03 lakhs. The Board of Directors, at its meeting on May 23, 2025, recommended a final dividend of Rs.10/- per equity share for the financial year ended March 31, 2025. This payment is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company and if approved, would result in a net cash outflow of approximately Rs.1,413.03 lakhs.
5.1. FINANCIAL INSTRUMENTS Financial Risk Management
The Companyâs business activities expose it to a variety of financial risks, namely Liquidity Risk, Market Risk and Credit Risk. The Companyâs senior management has the overall responsibility for the establishment and oversight of the Companyâs risk management framework. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
In the ordinary course of business, the Company is exposed to Market Risk, Credit Risk and Liquidity Risk.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Interest Rate Risk, Foreign Currency Risk and Commodity Risk.
(a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short term debt obligations with floating interest rates.
If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the Companyâs profit would be impacted by Rs.9.88 lakhs in FY 2024-25 (Rs.8.89 lakhs in FY 2023-24).
(b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities which is very minimal.
The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase or continuous supply of raw materials. Therefore, the Company monitors its purchases closely to optimise the price.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks.
Financial instruments that are subject to concentrations of credit risk principally consist of investments classified as loans and receivables, trade receivables, loans and advances, cash and cash equivalents, bank deposits and other financial assets amounting to Rs.106,041.05 lakhs (Previous year Rs.99,952.97 lakhs). None of the other financial instruments of the Company result in material concentration of credit risk. The Company follows simplified approach for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.
The Company does not have significant credit exposure to any single customer. Concentration of credit risk to a single customer exceeding 10% of receivables in the FY 2024-25 is Rs. 1,102.58 lakhs. (FY 2023-24 - Rs.1,243.36 lakhs).
Bank Deposits (included under current and non-current financial assets) include an amount of Rs.83,704.75 lakhs (FY 2023-24 - Rs.79,079.88 lakhs) with three Indian Banks having high credit rating which are individually in excess of 10% of the total deposits of the entity as on March 31, 2025. None of the other financial instruments of the entity result in material concentration of credit risk.
5.1.3. Financial assets that are neither past due nor impaired
Cash and cash equivalents, financial assets carried at fair value are neither past due nor impaired. Cash and cash equivalents with banks has high credit-rating assigned by international and domestic credit-rating agencies. Financial assets carried at fair value are investments in equity shares. With respect to Trade receivables and other financial assets that are past due but not impaired, there are no indications as of March 31, 2025, that defaults in payment obligations will occur except as described in Note 3.7 on allowances for impairment of trade receivables. The Company does not hold any collateral for trade receivables and other financial assets. Trade receivables and other financial assets that are neither past due nor impaired relate to new and existing customers and counter parties with no significant defaults in past.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed assessment and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
5.1.5. Financial Instruments and Cash Deposits
Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. The cash surpluses of the Company are short term in nature and are invested in Fixed Deposit with Nationalized / Scheduled Commercial Banks. Hence, the assessed credit risk is low.
The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of its financial investments, committed funding and projected cash flows from operations. The Companyâs objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner and to manage its capital structure. A balance between continuity of funding and flexibility is maintained through continued support from lenders and trade creditors.
During the year, the Company has made repayment of principal and interest on borrowings on or before due dates. The Company did not have any defaults of principal and interest as on the reporting date.
The table below summarises the maturity profile of the Companyâs financial liability based on contractual undiscounted payment and financial assets based on contractual undiscounted receipts.
⢠Financial Assets measured at fair value amounting to Rs.1,121.82 lakhs (PY Rs.1,255.80 lakhs) and measured at amortised cost amounting to Rs.104,919.23 lakhs (PY Rs.98,697.17 lakhs) have been considered for the likelihood of increased credit risk and consequential default.
⢠The financial assets held with long term growth perspective carried at fair value by the Company are mainly investments in Equity Instruments and accordingly, no material volatility is expected.
⢠Financial assets of Rs.95,684.08 lakhs as at March 31, 2025 (PY Rs.89,863.52 lakhs) carried at amortised cost is in the form of cash and cash equivalents, bank deposits, earmarked balances with banks, interest accrued on bank deposits and other security deposits where the Company has assessed the counterparty credit risk.
⢠Trade receivables of Rs.9,052.85 lakhs as at March 31,2025 (PY Rs.8,644.02 lakhs) forms a significant part of the financial assets carried at amortised cost which is valued considering provision for allowance using expected credit loss method.
⢠The Company has specifically evaluated the potential impact with respect to certainty of collections from its customers.
⢠Since the Company closely monitors the financial strength of its customers & investments on a continuing basis and assesses actions such as changes in payment terms, no provision is deemed necessary.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consists of the following three levels:
Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
(d) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)
Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements except as per Note (a) above approximate their fair values.
The Companyâs capital comprises equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Companyâs capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does so by adjusting dividend paid to shareholders. The total Paid up Equity Share Capital as on March 31, 2025 is Rs.1413.03 lakhs (Previous Year: Rs.1413.03 lakhs).
The Companyâs overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.
The funding requirements are met through a mixture of equity, internal fund generation and short term borrowings.
On account of income tax matters in dispute-
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5.3. Provisions, Contingent Liabilities and Commitments: |
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(Rs. in lakhs) |
||||
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Particulars |
2024-25 |
2023-24 |
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(A) |
Contingent Liabilities not provided for: Claims against the Company not acknowledged as debt Income tax matters |
1,059.41 |
528.00 |
|
|
Indirect Tax Matters - (Sales tax/Service tax/Customs Duty/Excise Duty/GST) |
637.91 |
642.31 |
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Bank Guarantees / Bonds executed by the Company |
346.78 |
220.91 |
||
|
Others Matters including Claims related to Employees / Ex-Employees |
11.26 |
45.86 |
||
|
Total |
2055.36 |
1437.08 |
||
⢠The appeals mainly relate to part/full disallowances of deductions for Logo charges paid and claimed by the Company. Necessary appeals have been filed and matters are with Commissioner of Income Tax - Appeals (CIT-(A)). The Company has favourable orders at ITAT in the earlier years.
⢠The Company has received favourable orders from the CIT-(A) for five assessment years. The Company has received the giving effect to order for three years and the giving effect to order is yet to be received for two years.
⢠In the Giving Effect to order passed for the three assessment years, interest under Section 244A which was earlier granted has been rejected.
⢠The Company has filed a writ petition in the Honâble High Court of Madras. Based on the writ petition filed by the Company, the Honâble High Court has granted interim stay on the demand.
⢠Based on the facts presently known, the management believes that the outcome of the appeals will not result in any material impact on the Financial Statements.
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(B) Commitments not provided for: (Rs. in lakhs) |
|||
|
Particulars |
2024-25 |
2023-24 |
|
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Estimated amount of contracts remaining to be executed on capital account and not provided for |
23.45 |
106.20 |
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(ii) Condoms were included for the first time under Drugs (Prices Control) Order, 2013 (DPCO 2013). National Pharmaceuticals Pricing Authority (NPPA) under Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India had by way of Notification No.SO 3348 dated 5th November 2013, issued ceiling prices for sale of condoms. The Company had challenged inclusion of Condoms under DPCO 2013 and also the methodology for arriving at the Ceiling Prices for Condoms by a writ petition in the Honâble High Court of Madras. During 2015-16, Honâble High Court of Delhi and Madras have ruled that condoms are drugs but fixation of ceiling prices for condoms is impermissible under law as the strengths and dosage for condoms are not specified in the first schedule of DPCO-2013. The Government of India has filed a special leave petition (SLP) before the Honâble Supreme Court. The Company has also filed SLP before Honâble Supreme Court against some points of the order of the Honâble High Court of Madras. Financial impact, if any, based on the outcome of the pending case is not quantifiable and hence not provided for in the books.
The Employeesâ Gratuity Fund Scheme managed by a Trust is a Defined Benefit Plan.
The Company operates a defined benefit plan (the Gratuity plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
The Company pays Gratuity to employees who have completed five years of Service with the Company at the time of resignation / Superannuation. The Company has its own scheme for payment of Gratuity. The employees who are eligible for payment of Gratuity will be paid based on Company Scheme or as per Gratuity Act, which ever is beneficial to the employees. As per Gratuity Act, Gratuity is paid at the rate of 15 days of last drawn salary for the every completed year of service.
The Gratuity liability amount is contributed to Approved Gratuity fund maintained by the Life Insurance Corporation of India for Gratuity payment to the employees. The Gratuity fund has been approved by the Income Tax Authorities. The liability in respect of Gratuity and other post employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
The entire funds relating to Gratuity is being managed by Life Insurance Corporation of India.
Sensitivity Analysis Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in gratuity fund maintained by the Life Insurance Corporation of India.
Interest risk:
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salary of plan participants. As such, an increase in salary of the plan participants will increase the planâs liability.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitive analysis below 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 discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable Government bonds as on the current valuation date.
Escalation Rate is based on the Company''s past revision trends and management''s estimate of future salary increases.
Attrition Rate considered is the Management''s estimate based on the past long-term trend of employee turnover in the Company
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations 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 obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.
Implementation of the Code on Social Security 2020, which is likely to impact the contributions by the Company towards Provident Fund, Gratuity and other related areas has been deferred by the Government beyond April 01, 2021. However, the Company had made an initial assessment based on the draft rules and had provided a sum of Rs.350 lakhs in Financial Year 2020-21 towards the expected impact to its employee benefit expenses. The Company intends to do an actuarial valuation towards this liability at the appropriate time and provide for the balance, if any. Expecting the Code to be enacted in the coming Financial Year, the amount provided in the previous year is included under âProvisions - Currentâ. Refer Note 3.18.
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables .For the year ended March 31,2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2024 : Rs. Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Basic earnings per share are computed by dividing the net profit after tax attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
5.9. Corporate Social Responsibility (CSR):
In accordance with Section 135 of the Companies Act, 2013 and the Rules made thereunder, the Company is required to spend in every financial year, at least 2% of the average net profit of the Company made during the three immediately preceding financial years towards Corporate Social Responsibility activities. During the year under review, a sum of Rs.142.13 lakhs has to be spent (PY Rs.110.75 lakhs), in compliance to this requirement. A sum of Rs.145.00 lakhs has been spent during the year under review (PY Rs.115.00 lakhs) towards CSR activities as detailed below and the unspent amount is Rs. Nil. The contributions made under CSR are not made to any related parties.
Segments have been identified in line with the Indian Accounting Standard on Segment Reporting (INDAS-108) considering the organization structure and the differential risks and returns of these segments Details of products included in each of the segments are as below:
a) Animal Welfare include products for Veterinary use.
b) Consumer Products comprise marketing and distribution of Woodward''s Gripewater, EVA Range of Cosmetics, Good Home Range of Scrubbers, Air Fresheners, etc. (Own Brands).
c) Medical Devices include Artificial Heart Valves, Orthopaedic Implants, etc.
d) Foods comprise manufacturing and marketing of Food Products.
e) Protective Devices - Manufacturing and Marketing of Male Contraceptives and other allied products.
f) "Others" include Printing and Publishing of Maps and Atlases.
The information relating to the operating segment is reviewed regularly by the Companyâs Board of Directors (Chief Operating Decision Maker) to make decisions about resources to be allocated and to assess its performance. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Certain expenses like CSR expenses, are not specifically allocable to specific segment. Management believes that it is not feasible to provide segment disclosure of these expenses and, accordingly, they are separately disclosed as "unallocated expenses" and adjusted only against the total operating income of the Company.
1. Segments have been identified in line with the Accounting Standard on Segment Reporting (IndAS-108) considering the organisation structure and the differential risks and returns of these segments.
2. Details of products included in each of the Segments are as below :
(a) Animal Welfare include products for Veterinary use.
(b) Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Woodwardâs Gripe Water, Good Home range of Scrubbers, Air Fresheners, etc., (Own Brands)
(c) Medical Devices comprise manufacturing and marketing of Artificial Heart Valves, Orthopaedic Implants, etc.
(d) Protective Devices comprise manufacturing and marketing of Male Contraceptives and other allied products
(e) Foods comprise of manufacturing and marketing of Food Products.
(f) "Othersâ include Printing and Publishing of Maps and Atlases.
3. The segment-wise revenue, results, assets and liabilities figures relate to respective amounts directly identifiable to each of the segments. The unallocable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to any specific segment.
4 Unallocable Expense (Net of Unallocable Income) includes;
a. Profit on sale of leasehold land with building amounting to Rs.1,977.05 lakhs (Net) at Mahindra World City.
b. Write down of inventory amounting to Rs. 586.39 lakhs that were meant for export under USAID program.
The Lease contracts entered by the Company pertain to Motor Vehicles taken on lease for usage by its employees in top and mid-level of management. The terms of leases are usually for 5 years.
Lease Obligations
Maturity Analysis:
The minimum Lease rental outstandings as of March 31,2025 in respect of these assets.
Set out below are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term:
5.14. Cancellation of contract and consequent write down of inventory
During the current financial year, the Company has written off the entire value of Male Contraceptives pertaining to the Protective Devices Division, amounting to Rs. 586.39 lakhs that were meant for exports under USAID Programme, owing to a 90-day pause on foreign development assistance and subsequent cancellation of purchase orders as the inventory was custom-made and not marketable to alternate buyers.
5.15. Disclosure in Relation to Undisclosed Income
During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transactions which are not recorded in the books of accounts.
5.16. Disclosure of Transactions with Struck off Companies
The Company has reviewed transactions to the extent of information available for the purpose of identifying transactions with struck off Companies. Based on the above, there are no transactions with Struck off Companies in the current financial year.
5.17. Disclosure requirements as notified by MCA pursuant to amended Schedule III
Nothing to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
(c) Registration of charges or satisfaction with Registrar of Companies
(d) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilisation of borrowed funds & share premium
(e) Loans to Related Parties
(f) Investments/advances through intermediaries
(g) Effect of scheme of arrangement
(h) Compliance with number of layers
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with understanding that intermediary shall -
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (Whether recorded in writing or otherwise) that the Company shall
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funded party (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
5.18. During the current financial year, the Company has sold Leasehold land with building at Mahindra World City, Chennai for a consideration of Rs.2,300 lakhs and the profit on sale amounted to Rs.1,977.05 lakhs (Net).
In the ERP, audit trail at transaction level has an embedded audit trail and has been enabled. This feature cannot be disabled. This audit trail feature has worked effectively during the year.
Post publication of ICAI implementation guide, direct database level changes was also included in audit trail scope. In respect of ERP, access to direct database level changes is available only to privileged users. However, no audit trail enabled for direct database level changes.
5.20. Events occurring after balance sheet date
On May 23, 2025, the Board of Directors of the Company have proposed a dividend of Rs.10 per share for the year ended March 31,2025, subject to the approval of Shareholders at the 67th Annual General Meeting. If approved, this would result in cash outflow of Rs.1413.03 lakhs.
5.22. Approval of Financial Statements
The Financial Statements were approved for issue by the Board of Directors on May 23, 2025.
Mar 31, 2024
5.1 FINANCIAL INSTRUMENTS Financial Risk Management
The Companyâs business activities expose it to a variety of financial risks, namely Liquidity Risk, Market Risk and Credit Risk. The Companyâs senior management has the overall responsibility for the establishment and oversight of the Companyâs risk management framework. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
In the ordinary course of business, the Company is exposed to Market Risk, Credit Risk and Liquidity Risk.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Interest Rate Risk, Foreign Currency Risk and Commodity Risk.
(a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short term debt obligations with floating interest rates.
If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the Companyâs profit would be impacted by Rs.8.89 lakhs in FY 2023-24 (Rs.8.76 lakhs in FY 2022-23).
(b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities which is very minimal.
Foreign Currency Sensitivity Analysis
The Company is principally exposed to foreign currency risk against USD, Euro, GBP & J-Yen. Sensitivity of profit or loss arising mainly from USD, Euro, GBP & J-Yen denominated receivables and payables is given below:
As per managementâs assessment of reasonable possible changes in the exchange rate of / - 5% between USD-INR, Euro-INR, GBP-INR, & J-Yen-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the period end is presented below:
The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase or continuous supply of raw materials. Therefore, the Company monitors its purchases closely to optimise the price.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk principally consist of investments classified as loans and receivables, trade receivables, loans and advances, cash and cash equivalents, bank deposits and other financial assets amounting to Rs.99,952.97 lakhs (Previous year Rs.98,016.57 lakhs). None of the other financial instruments of the Company result in material concentration of credit risk.
The Company follows simplified approach for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.
The Company does not have significant credit exposure to any single customer. Concentration of credit risk to a single customer exceeding 10% of receivables in the FY 2023-24 is Rs.1,243.36 lakhs. (FY 2022-23 - Rs.1,565.55 lakhs).
Bank Deposits (included under current and non-current financial assets) include an amount of Rs.79,079.88 lakhs (FY 2022-23 - Rs.77,318.36 lakhs) with three Indian Banks having high credit rating which are individually in excess of 10% of the total deposits of the entity as on March 31, 2024. None of the other financial instruments of the entity result in material concentration of credit risk.
5.1.3 Financial assets that are neither past due nor impaired
Cash and cash equivalents, financial assets carried at fair value are neither past due nor impaired. Cash and cash equivalents with banks has high credit-rating assigned by international and domestic credit-rating agencies. Financial assets carried at fair value are investments in equity shares. With respect to Trade receivables and other financial assets that are past due but not impaired, there are no indications as of March 31, 2024, that defaults in payment obligations will occur except as described in Note 3.7 on allowances for impairment of trade receivables. The Company does not hold any collateral for trade receivables and other financial assets. Trade receivables and other financial assets that are neither past due nor impaired relate to new and existing customers and counter parties with no significant defaults in past.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed assessment and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
5.1.5 Financial Instruments and Cash Deposits
Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. The cash surpluses of the Company are short term in nature and are invested in Fixed Deposit with Nationalized / Scheduled Commercial Banks. Hence, the assessed credit risk is low.
The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of its financial investments, committed funding and projected cash flows from operations. The Companyâs objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner and to manage its capital structure. A balance between continuity of funding and flexibility is maintained through continued support from lenders and trade creditors.
During the year, the Company has made repayment of principal and interest on borrowings on or before due dates. The Company did not have any defaults of principal and interest as on the reporting date.
The table below summarises the maturity profile of the Companyâs financial liability based on contractual undiscounted payment and financial assets based on contractual undiscounted receipts.
5.1.7 Financial Risk Management - Other Risk
⢠Financial Assets measured at fair value amounting to Rs.1,255.80 lakhs (PY Rs.1,284.80) and measured at amortised cost amounting to Rs.98,697.17 lakhs (PY Rs.96,731.77 lakhs) have been considered for the likelihood of increased credit risk and consequential default.
⢠The financial assets held with long term growth perspective carried at fair value by the Company are mainly investments in Equity Instruments and accordingly, no material volatility is expected.
⢠Financial assets of Rs.89,863.52 lakhs as at March 31,2024 carried at amortised cost is in the form of cash and cash equivalents, bank deposits, earmarked balances with banks, interest accrued on bank deposits and other security deposits where the Company has assessed the counterparty credit risk.
⢠Trade receivables of Rs.8,644.02 lakhs as at March 31,2024 forms a significant part of the financial assets carried at amortised cost which is valued considering provision for allowance using expected credit loss method.
⢠The Company has specifically evaluated the potential impact with respect to certainty of collections from its customers.
⢠Since the Company closely monitors the financial strength of its customers & investments on a continuing basis and assesses actions such as changes in payment terms, no provision is deemed necessary.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consists of the following three levels:
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The Companyâs capital comprises equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Companyâs capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does so by adjusting dividend paid to shareholders. The total Paid up Equity Share Capital as on March 31,2024 is Rs.1413.03 lakhs (Previous Year: Rs.1413.03 lakhs).
The Companyâs overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.
|
5.3 |
Provisions, Contingent Liabilities and Commitments: |
|||
|
(Rs. in lakhs) |
||||
|
Particulars |
2023-24 |
2022-23 |
||
|
A) Contingent Liabilities not provided for: |
||||
|
Claims against the Company not acknowledged as debt |
||||
|
Income tax matters |
528.00 |
1,755.64 |
||
|
Indirect Tax Matters - (Sales tax/Service tax/Customs Duty/Excise Duty/GST) |
642.31 |
561.83 |
||
|
Bank Guarantees / Bonds executed by the Company |
220.91 |
331.10 |
||
|
Others Matters including Claims related to Employees / Ex-Employees |
45.86 |
44.77 |
||
|
Total |
1437.08 |
2,693.34 |
||
On account of income tax matters in dispute-
⢠The appeals mainly relate to part/full disallowances of deductions for Logo charges paid and claimed by the Company. Necessary appeals have been filed and matters are with Commissioner of Income Tax - Appeals (CIT(A)). The Company has favourable orders at ITAT in the earlier years.
⢠Recently, the Company has received favourable orders from the CIT(A) for five assessment years. However, for these favourable orders received from CIT(A), the giving effect to order is yet to be passed by the Assessing Officer. Based on the facts presently known, the management believes that the outcome of the appeals will not result in any material impact on the Financial Statements.
|
B) Commitments not provided for: |
|||
|
(Rs. in lakhs) |
|||
|
Particulars |
2023-24 |
2022-23 |
|
|
Estimated amount of contracts remaining to be executed on capital account and not provided for |
106.20 |
158.95 |
|
|
C) Other Legal Cases: |
|
(i) There are certain pending matters / litigations including labour matters before certain forums and the likely impact of these are not |
|
ascertainable or quantifiable at this stage. |
|
(ii) Condoms were included for the first time under Drugs (Prices Control) Order, 2013 (DPCO 2013). National Pharmaceuticals Pricing Authority (NPPA) under Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India by way of Notification No.SO 3348 dated November 05, 2013, issued ceiling prices for sale of condoms. The Company had challenged inclusion of Condoms under DPCO 2013 and also the methodology for arriving at the Ceiling Prices for Condoms by a writ petition in the Honâble High Court of Madras. During 2015-16, Honâble High Court of Delhi and Madras have ruled that condoms are drugs but fixation of ceiling for condoms is impermissible under law as the strengths and dosage for condoms are not specified in the first schedule of DPCO 2013. The Government of India has filed a Special Leave Petition (SLP) before the Honâble Supreme Court. The Company has also filed SLP before Honâble Supreme Court against some points of the order of the Honâble High Court of Madras. Financial impact, if any, based on the outcome of the pending case is not quantifiable and hence not provided for in the books. |
C) Defined Benefit Plan:
The Employeesâ Gratuity Fund Scheme managed by a Trust is a Defined Benefit Plan.
The Company operates a defined benefit plan (the Gratuity plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
The Company pays Gratuity to employees who have completed five years of Service with the Company at the time of resignation / Superannuation. The Company has its own scheme for payment of Gratuity. The employees who are eligible for payment of Gratuity will be paid based on Company Scheme or as per Gratuity Act, which ever is beneficial to the employees. As per Gratuity Act, Gratuity is paid at the rate of 15 days of last drawn salary for the every completed year of service.
The Gratuity liability amount is contributed to Approved Gratuity fund maintained by the Life Insurance Corporation of India for Gratuity payment to the employees. The Gratuity fund has been approved by the Income Tax Authorities. The liability in respect of Gratuity and other post employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
The entire funds relating to Gratuity is being managed by Life Insurance Corporation of India.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in gratuity fund maintained by the Life Insurance Corporation of India.
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs investments.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salary of plan participants. As such, an increase in salary of the plan participants will increase the planâs liability.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitive analysis below 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 discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable Government bonds as on the current valuation date.
Escalation Rate is based on the Companyâs past revision trends and managementâs estimate of future salary increases.
Attrition Rate considered is the Managementâs estimate based on the past long-term trend of employee turnover in the Company.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations 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 obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
The above mentioned figures include Discontinued Operations related amounts.
Implementation of the Code on Social Security 2020 , which is likely to impact the contributions by the Company towards Provident Fund, Gratuity and other related areas has been deferred by the Government beyond April 1, 2021. However, the Company had made an initial assessment based on the draft rules and had provided a sum of Rs 350 lakhs in Financial Year 2020-21 towards the expected impact to its employee benefit expenses. The Company intends to do an actuarial valuation towards this liability at the appropriate time and provide for the balance, if any. Expecting the Code to be enacted in the coming Financial Year, the amount provided in the previous year is included under âProvisions - Currentâ. Refer Note 3.18.
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables .For the year ended March 31, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2023 : Rs. Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Basic earnings per share are computed by dividing the net profit after tax attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the
5.9 Corporate Social Responsibility (CSR):
In accordance with Section 135 of the Companies Act, 2013 and the Rules made thereunder, the Company is required to spend in every financial year, atleast 2% of the average net profit of the Company made during the three immediately preceding financial years towards Corporate Social Responsibility activities. During the year under review, a sum of Rs.110.75 lakhs has to be spent, in compliance to this requirement. A sum of Rs.115.00 lakhs has been spent during the year under review towards CSR activities as detailed below and the unspent amounts is Rs.Nil. The amount spent does not include related party transaction.
Segments have been identified in line with the Indian Accounting Standard on Segment Reporting (INDAS-108) considering the organization structure and the differential risks and returns of these segments.
Details of products included in each of the segments are as below:
(a) Animal Welfare (earlier included in Pharmaceuticals Segment) include products for Veterinary use.
(b) Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Woodwardâs Gripe Water, Good Home range of Scrubbers, Air Freshners, etc., (Own Brands)
(c) Medical Devices comprise manufacturing and marketing of Artificial Heart Valves, Orthopaedic Implants, etc.
(d) Protective Devices comprise manufacturing and marketing of Male Contraceptives and other allied products.
(e) Foods comprise of manufacturing and marketing of Food Products.
(f) âOthersâ include Printing and Publishing of Maps and Atlases.
(g) Human Pharma (earlier included in Pharmaceutical Segment) include products for Human use.
The Company monitors the operating results of its business as stipulated above for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the Financial Statements. Certain expenses like CSR expenses, are not specifically allocable to specific segment. Management believes that it is not feasible to provide segment disclosure of these expenses and, accordingly, they are separately disclosed as "unallocated expenses" and adjusted only against the total operating income of the Company.
1. Segments have been identified in line with the Accounting Standard on Segment Reporting (Ind AS 108) considering the organisation structure and the differential risks and returns of these segments.
2. Details of products included in each of the Segments are as below :
(a) Animal Welfare (earlier included in Pharmaceuticals Segment) include products for Veterinary use.
(b) Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Woodward''s Gripe Water, Good Home range of Scrubbers, Air Freshners, etc., (Own Brands)
(c) Medical Devices comprise manufacturing and marketing of Artificial Heart Valves, Orthopaedic Implants, etc.
(d) Protective Devices comprise manufacturing and marketing of Male Contraceptives and other allied products.
(e) Foods comprise of manufacturing and marketing of Food Products.
(f) âOthersâ include Printing and Publishing of Maps and Atlases.
(g) Human Pharma (earlier included in Pharmaceutical Segment) include products for Human use.
The Lease contracts entered by the Company pertain to Motor Vehicles taken on lease for usage by its employees in top and mid-level of management. The terms of leases are usually for 5 years.
Lease Obligations Maturity Analysis:
The minimum Lease rental outstandings as of March 31,2024 in respect of these assets.
Set out below are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term:
5.13 Sale / transfer of the Human Pharma Division (Undertaking) of the Company to M/s BSV Pharma Private Limited
(a) Profit from Discontinued Operations:
(i) Gain on Sale of Undertaking:
During the First Quarter of the previous financial year, the necessary formalities for transfer of the Human Pharma Division (Undertaking) of the Company were completed and the Division stood transferred as a going concern on slump sale basis for a consideration of Rs.80,500 lakhs (final consideration of Rs.80,281.54 lakhs after working capital and other customary adjustments) to M/s BSV Pharma Private Ltd (BSV) with effect from May 09, 2022.
The consideration for the transfer was 74% cash (Rs.59,442.51 lakhs) and 26% in the form of equity of the buying entity. The terms of
transfer also provided for purchase of the aforesaid 26% Equity Shares held by the Company in BSV, by M/s Bharat Serums and Vaccines Limited or its Nominees, after they obtain necessary regulatory clearances, at the issue price.
During the Third quarter of the previous financial year, the above shares were transferred to M/s Bharat Serums and Vaccines Limited and the consideration of Rs.20,839.03 lakhs for the shares was received by the Company.
Profits from Discontinued Operations including Profit from Sale of Undertaking was Rs.77,643.92 lakhs and tax thereon was Rs.18,139.42 lakhs (Current tax of Rs.17,788.23 lakhs and Deferred tax of Rs.351.91 lakhs).
During the Financial Year 2019-20, the Company had received grant in the nature of exemption of custom duty on import of Machinery, amounting to Rs.170.36 lakhs with certain conditions related to export of goods under Export Promotion Capital Goods (EPCG) Scheme of Government of India. This waiver had been treated as Government Grant in the books as per Ind-AS 20, wherein the Company had shown the amount of waiver as a Deferred Income Liability that will be taken to Statement of Profit and Loss on a systematic basis over the period within which the Company has to fulfil the export obligations. Management has fulfilled the export obligation through exports from Jaipur and Hosakote plants within the prescribed timelines and they have got the redemption letter to the effect in current year. Hence, the entire amount has been taken to the Statement of Profit and Loss during the current financial year.
5.16 Disclosure in Relation to Undisclosed Income
During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transactions which are not recorded in the books of accounts.
5.17 Disclosure of Transactions with Struck off Companies
The Company has reviewed transactions to the extent of information available for the purpose of identifying transactions with struck off Companies. Based on the above, there are no transactions with Struck off Companies in the current financial year.
5.18 Disclosure requirements as notified by MCA pursuant to amended Schedule III
Nothing to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
(c) Registration of charges or satisfaction with Registrar of Companies
(d) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilisation of borrowed funds & share premium
(e) Loans to Related Parties
(f) Investments/advances through intermediaries
(g) Effect of scheme of arrangement
(h) Compliance with number of layers
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with understanding that intermediary shall -
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (Whether recorded in writing or otherwise) that the Company shall -
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funded party (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
5.19 Delisting of Company Shares
The Companyâs Promoters made an Initial Public Announcement on April 05, 2023 in accordance with Regulation 8 of the SEBI (Delisting of Equity Shares) Regulations, 2021 ("Delisting Regulations"), to acquire all Equity Shares aggregating to 35,94,493 Equity Shares of Rs.10/-each that are held by the Public Shareholders of the Company, either individually / collectively, or together with other members of the Promoter Group, as the case may be; and consequently, voluntarily delist the Equity Shares of the Company from the Stock Exchanges where the Equity Shares are presently listed (i.e.) BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). However, as the stipulated threshold limit of 90% of the Paid-up Share Capital of the Company as per the Delisting Regulations was not met through the offer from the Public Shareholders, the delisting offer was not successful.
In the ERP, audit trail at transaction level has an embedded audit trail and has been enabled. This feature cannot be disabled. This audit trail feature has worked effectively during the year.
Post publication of ICAI implementation guide, direct database level changes was also included in audit trail scope. In respect of ERP, access to direct database level changes is available only to privileged users . However, no audit trail enabled for direct database level changes.
5.21 Events occurring after balance sheet date
On May 24, 2024, the Board of Directors of the Company have proposed a dividend of Rs.10/- per share for the year ended March 31,2024, subject to the approval of Shareholders at the 66th Annual General Meeting. If approved, this would result in cash outflow of Rs.1,413.03 lakhs.
5.22 The previous yearâs figures have been regrouped and reclassified, wherever necessary to conform to the current yearâs presentation. Particularly, this had the effect of :
|
Particulars |
March 31,2023 (Rs. in lakhs) |
|
|
Reduction in Trade payables |
(1359.18) |
|
|
Increase in Provisions |
1359.18 |
5.21 Approval of Financial Statements
The Financial Statements were approved for issue by the Board of Directors on May 24, 2024.
Mar 31, 2023
Note No.3.12B Rights, Preferences and Restrictions Attached to Shares
Equity Shares: The Company has one class of Equity Shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.
During the year ended 31st March, 2023, on account of the final dividend for FY 2021-22 the Company has incurred a net cash outflow of 1413.03 lakhs. The Board of Directors, at its meeting held on 23rd May, 2023, recommended a final dividend of Rs.10/- per equity share for the financial year ended 31st March, 2023. This payment is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company, and if approved, would result in a net cash outflow of Rs.1,413.03 lakhs.
5.1 FINANCIAL INSTRUMENTS Financial Risk Management
The Companyâs business activities expose it to a variety of financial risks, namely Liquidity Risk, Market Risk and Credit Risk. The Companyâs senior management has the overall responsibility for the establishment and oversight of the Companyâs risk management framework. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
In the ordinary course of business, the Company is exposed to Market Risk, Credit Risk and Liquidity Risk.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Interest Rate Risk, Foreign Currency Risk and Commodity Risk.
(a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short term debt obligations with floating interest rates.
If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the Companyâs profit would be impacted by Rs.8.76 lakhs in FY 2022-23 (Rs.6.10 lakhs in FY 2021-22).
(b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities which is very minimal.
Foreign Currency Sensitivity Analysis
The Company is principally exposed to foreign currency risk against USD, Euro & GBP. Sensitivity of profit or loss arising mainly from USD, Euro & GBP denominated receivables and payables is given below:
As per managementâs assessment of reasonable possible changes in the exchange rate of / - 5% between USD-INR, Euro-INR & GBP-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the period end is presented below:
The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase or continuous supply of raw materials. Therefore, the Company monitors its purchases closely to optimise the price.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to financial loss. Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks.
Financial instruments that are subject to concentrations of credit risk principally consist of investments classified as loans and receivables, trade receivables, loans and advances, cash and cash equivalents, bank deposits and other financial assets amounting to Rs.98,016.57 lakhs (Previous year Rs.35,200.27 lakhs). None of the other financial instruments of the Company result in material concentration of credit risk.
The Company follows simplified approach for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.
The Company does not have significant credit exposure to any single customer. Concentration of credit risk to a single customer exceeding 10% of receivables in the FY 2022-23 is Rs.1565.55 lakhs. (FY 2021-22 - NIL).
Bank Deposits include an amount of Rs.77,318.36 lakhs with three Indian Banks having high credit rating which are individually in excess of 10% of the total deposits of the entity as on 31st March, 2023. None of the other financial instruments of the entity result in material concentration of credit risk.
5.1.3 Financial assets that are neither past due nor impaired
Cash and cash equivalents, financial assets carried at fair value are neither past due nor impaired. Cash and cash equivalents with banks has high credit-rating assigned by international and domestic credit-rating agencies. Financial assets carried at fair value are investments in equity shares. With respect to Trade receivables and other financial assets that are past due but not impaired, there are no indications as of 31st March, 2023, that defaults in payment obligations will occur except as described in Note 3.7 on allowances for impairment of trade receivables. The Company does not hold any collateral for trade receivables and other financial assets. Trade receivables and other financial assets that are neither past due nor impaired relate to new and existing customers and counter parties with no significant defaults in past.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed assessment and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
5.1.5 Financial Instruments and Cash Deposits
Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Companyâs policy. The cash surpluses of the Company are short term in nature and are invested in Fixed Deposit with Nationalized / Scheduled Commercial Banks. Hence, the assessed credit risk is low.
The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of its financial investments, committed funding and projected cash flows from operations. The Companyâs objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner and to manage its capital structure. A balance between continuity of funding and flexibility is maintained through continued support from lenders and trade creditors.
During the year, the Company has made repayment of principal and interest on borrowings on or before due dates. The Company did not have any defaults of principal and interest as on the reporting date.
The table below summarises the maturity profile of the Companyâs financial liability based on contractual undiscounted payment and financial assets based on contractual undiscounted receipts
5.1.7 Financial Risk Management - Other Risk
⢠Financial Assets measured at fair value amounting to Rs.1,284.80 lakhs and measured at amortised cost amounting to Rs.96,731.77 lakhs have been considered for the likelihood of increased credit risk and consequential default.
⢠The financial assets carried at fair value by the Company are mainly investments in Equity Instruments and accordingly, any material volatility is not expected.
⢠Financial assets of Rs.87,342.09 lakhs as at 31st March, 2023 carried at amortised cost is in the form of cash and cash equivalents, bank deposits, earmarked balances with banks, interest accrued on bank deposits and other security deposits where the Company has assessed the counterparty credit risk.
⢠Trade receivables of Rs.9,209.91 lakhs as at 31st March, 2023 forms a significant part of the financial assets carried at amortised cost which is valued considering provision for allowance using expected credit loss method.
⢠The Company has specifically evaluated the potential impact with respect to certainty of collections from its customers.
⢠Since the Company closely monitors the financial strength of its customers & investments on a continuing basis and assesses actions such as changes in payment terms, no provision is deemed necessary.
The Company has access to committed credit facilities as described below. The Company expects to meet its other obligations from operating
cash flows and proceeds of maturing financial assets.
Inventories and Trade receivables are subject to charge with the banks as security for the loan facilities availed by the Company.
(b) Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consists of the following three levels:
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
(d) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)
Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements except as per note (a) above approximate their fair values.
The Companyâs capital comprises equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Companyâs capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does so by adjusting dividend paid to shareholders. The total Paid up Equity Share Capital as on 31st March, 2023 is Rs.1413.03 lakhs (Previous Year: Rs.1413.03 lakhs).
The Companyâs overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.
The funding requirements are met through a mixture of equity, internal fund generation and short term borrowings.
|
5.3 |
Provisions, Contingent Liabilities and Commitments: |
|||
|
(Rs. in lakhs) |
||||
|
Particulars |
2022-23 |
2021-22 |
||
|
A) Contingent Liabilities not provided for: |
||||
|
Claims against the Company not acknowledged as debt |
||||
|
Income tax matters |
1,755.64 |
1,761.77 |
||
|
Indirect Tax Matters - (Sales tax/Service tax/Customs Duty/Excise Duty) |
561.83 |
547.09 |
||
|
Bank Guarantees / Bonds executed by the Company |
331.10 |
257.78 |
||
|
Others Matters including Claims related to Employees / Ex-Employees |
44.77 |
43.68 |
||
|
Total |
2,693.34 |
2,610.32 |
||
On account of income tax matters in dispute-
The appeals relate to part / full disallowances of deductions mainly relating to Logo charges paid and claimed by the Company. Necessary appeals have been filed against these disallowances and the matters are pending with the Commissioner of Income Tax - Appeals. However, the Company has favourable orders at ITAT in the earlier years. Based on the facts presently known, the Management believes that the outcome of the appeals will not result in any material impact on the financial statements.
|
Commitments not provided for: |
|||
|
(Rs. in lakhs) |
|||
|
Particulars |
2022-23 |
2021-22 |
|
|
Estimated amount of contracts remaining to be executed on capital account and not provided for |
158.95 |
10.34 |
|
(i) There are certain pending matters / litigations including labour matters before certain forums and the likely impact of these are not ascertainable or quantifiable at this stage.
(ii) Condoms were included for the first time under Drugs (Prices Control) Order, 2013 (DPCO 2013). National Pharmaceuticals Pricing Authority (NPPA) under Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India by way of Notification No.SO 3348 dated 5th November 2013, issued ceiling prices for sale of condoms. The Company had challenged inclusion of Condoms under DPCO 2013 and also the methodology for arriving at the Ceiling Prices for Condoms by a writ petition in the Honâble High Court of Madras. During 2015-16, Honâble High Court of Delhi and Madras have ruled that condoms are drugs but fixation of ceiling for condoms is impermissible under law as the strengths and dosage for condoms are not specified in the first schedule of DPCO 2013. The Government of India has filed a Special Leave Petition (SLP) before the Honâble Supreme Court. The Company has also filed SLP before Honâble Supreme Court against some points of the order of the Honâble High Court of Madras. Financial impact, if any, based on the outcome of the pending case is not quantifiable and hence not provided for in the books.
C) Defined Benefit Plan:
The Employees Gratuity Fund Scheme managed by a Trust is a Defined Benefit Plan.
The Company operates a defined benefit plan (the Gratuity plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment.
The Company pays Gratuity to employees who have completed five years of Service with the Company at the time of resignation / Superannuation. The Company has its own scheme for payment of Gratuity. The employees who are eligible for payment of Gratuity will be paid based on Company Scheme or as per Gratuity Act, which ever is beneficial to the employees. As per Gratuity Act, Gratuity is paid at the rate of 15 days of last drawn salary for the every completed year of service.
The Gratuity liability amount is contributed to Approved Gratuity fund maintained by the Life Insurance Corporation of India for Gratuity payment to the employees. The Gratuity fund has been approved by the Income Tax Authorities. The liability in respect of Gratuity and other post employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
The entire funds relating to Gratuity is being managed by Life Insurance Corporation of India.
Sensitivity Analysis Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in gratuity fund maintained by the Life Insurance Corporation of India.
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
The present value of the defined benefit plan liability is calculated by reference to the future salary of plan participants. As such, an increase in salary of the plan participants will increase the planâs liability.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitive analysis below 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 discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable Government bonds as on the current valuation date.
Escalation Rate is based on the Companyâs past revision trends and managementâs estimate of future salary increases.
Attrition Rate considered is the Managementâs estimate based on the past long-term trend of employee turnover in the Company.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations 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 obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
The above mentioned figures include Discontinued Operations related amounts.
Implementation of the Code on Social Security 2020, which is likely to impact the contributions by the Company towards Provident Fund, Gratuity and other related areas has been deferred by the Government beyond 1st April, 2021. However, the Company had made an initial assessment based on the draft rules and had provided a sum of Rs.350 lakhs in Financial Year 2020-21 towards the expected impact to its employee benefit expenses. The Company intends to do an actuarial valuation towards this liability at the appropriate time and provide for the balance, if any. Expecting the Code to be enacted in the coming Financial Year, the amount provided in the previous year is included under âProvisions - Currentâ. Refer Note 3.18.
(i) Exceptional Items relating to FY 2022-23: NIL
(ii) Exceptional Items relating to FY 2021-22: In September, 2021, the Company sold land admeasuring 4.595 acres held by it at Perungudi Village, Tirunelveli District, Tamil Nadu on which the Company has earned a profit of Rs.249.05 lakhs.
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March, 2022 : Rs.Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
5.9 Corporate Social Responsibility (CSR):
In accordance with Section 135 of the Companies Act, 2013, and the Rules made thereunder, the Company is required to spend in every financial year, atleast 2% of the average net profit of the Company made during the 3 immediately preceding financial years towards Corporate Social Responsibility activities. During the year under review, a sum of Rs.74.51 lakhs has to be spent, in compliance to this requirement.
For Management purpose, the Company is organized into the following major business segments:
(a) Animal Welfare
(b) Consumer Products
(c) Medical Devices
(d) Protective Devices
(e) Foods
(f) Others
(g) Human Pharma
The Company monitors the operating results of its business as stipulated above for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Certain expenses like CSR expenses, are not specifically allocable to specific segment. Management believes that it is not feasible to provide segment disclosure of these expenses and, accordingly, they are separately disclosed as "unallocated expenses" and adjusted only against the total operating income of the Company.
Major Segment Assets and Liabilities of Animal Welfare as at 31st March, 2022 include that of Human Pharma Operations.
1. Segments have been identified in line with the Accounting Standard on Segment Reporting (Ind AS 108) considering the organisation structure and the differential risks and returns of these segments.
2. Details of products included in each of the Segments are as below :
Details of products included in each of the Segments are as below :
(a) Animal Welfare (earlier included in Pharmaceuticals Segment) include products for Veterinary use.
(b) Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Woodward''s Gripe Water, Good Home range of Scrubbers, Air Freshners, etc., (Own Brands)
(c) Medical Devices comprise manufacturing and marketing of Artificial Heart Valves, Orthopaedic Implants, etc.
(d) Protective Devices comprise manufacturing and marketing of Male Contraceptives and other allied products.
(e) Foods comprise of manufacturing and marketing of Food Products.
(f) âOthersâ include Printing and Publishing of Maps and Atlases.
(g) Human Pharma (earlier included in Pharmaceutical Segment) include products for Human use.
3. The segment-wise revenue, results, assets and liabilities figures relate to respective amounts directly identifiable to each of the segments. The unallocable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to any specific segment.
5.13 Sale / transfer of the Human Pharma Division (Undertaking) of the Company to M/s BSV Pharma Private Limited
(a) Profit from Discontinued Operations:
(i) Gain on Sale of Undertaking:
During the First Quarter, the necessary formalities for transfer of the Human Pharma Division (Undertaking) of the Company were completed and the Division stood transferred as a going concern on slump sale basis for a consideration of Rs.80,500 lakhs (final consideration of Rs.80,281.54 lakhs after working capital and other customary adjustments) to M/s.BSV Pharma Private Ltd (BSV) with effect from 9th May, 2022.
The consideration for the transfer was 74% cash (Rs.59,442.51 lakhs) and 26% in the form of equity of the buying entity. The terms of transfer also provided for purchase of the aforesaid 26% Equity Shares held by the Company in BSV, by M/s Bharat Serums and Vaccines Limited or its Nominees, after they obtain necessary regulatory clearances, at the issue price.
During the Third quarter, the above shares were transferred to M/s Bharat Serums and Vaccines Limited and the consideration of Rs.20,839.03 lakhs for the shares was received by the Company.
During the Financial Year 2019-20, the Company had received grant in the nature of exemption of custom duty on import of Machinery, amounting to Rs.170.36 lakhs with certain conditions related to export of goods under Export Promotion Capital Goods (EPCG) Scheme of Government of India. This waiver had been treated as Government Grant in the books as per Ind AS 20, wherein the Company had shown the amount of waiver as a Deferred Income Liability that will be taken to Statement of Profit and Loss on a systematic basis over the period within which the Company has to fulfil the export obligations. Management is confident of fulfilling the export obligation through exports from Jaipur and Hosakote within the prescribed time lines.
Grant-In-Aid: The Company has entered into a Grant-in-aid Letter of Agreement (GLA) with Biotechnology Industry Research Assistance Council (BIRAC) for the project titled âPilot Clinical Investigation of Rigid Tilting Disc TTK Chitra - Titanium Heart Valve Model TC2 - the next version of the highly successful TTK - Chitra Heart Valve, Model TC1â. The main objectives of this project are (i) to manufacture 100 nos. of valves for Clinical Trial; & (ii) to complete the clinical trial involving 40 patients and follow-up of the valve performance, as per the study plan and submission of the final Pilot Study Clinical Investigation Report to BIRAC. The duration of the project initially was for 24 months (subsequently extended by 12 more months till September 2023) from date of acceptance of GLA and the total project cost is Rs.291.08 lakhs.
The Company had purchased Fixed Assets amounting to Rs.32.81 lakhs using funds received from BIRAC which was accounted as Deferred Revenue Income. Depreciation on the above assets for the year amounting to Rs.10.92 lakhs (FY 2021-22: Rs.21.89 lakhs) and Revenue Expenditure amounting to Rs.90.48 lakhs have been recognised as Subsidy received and included in Other Operating Income. Deferred Revenue Income - Nil (after depreciation) is shown as on 31st March, 2023. (FY 2021-22: Rs.18.42 lakhs).
5.16 Disclosure in Relation to Undisclosed Income
During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transactions which are not recorded in the books of accounts.
5.17 Disclosure of Transactions with Struck off Companies
The Company has reviewed transactions to the extent of information available for the purpose of identifying transactions with struck off Companies. Based on the above, there are no transactions with Struck off Companies in the current financial year.
5.18 Disclosure requirements as notified by MCA pursuant to amended Schedule III
Nothing to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
(c) Registration of charges or satisfaction with Registrar of Companies
(d) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilisation of borrowed funds & share premium
(e) Loans to Related Parties
(f) Investments/advances through intermediaries
(g) Effect of scheme of arrangement
(h) Compliance with number of layers
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with understanding that intermediary shall -
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (Whether recorded in writing or otherwise) that the Company shall -
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funded party (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
5.19 Events occurring after balance sheet date
The Company received the Initial Public Announcement dated 5th April, 2023 issued by Inga Ventures Private Limited (âManager to the Delisting Offerâ), on behalf of members of the Promoters of TTK Healthcare Limited (âthe Companyâ), in accordance with Regulation 8 of the SEBI (Delisting of Equity Shares) Regulations, 2021 (âInitial Public Announcementâ) inter alia, expressing their intention to initiate the process to- (a) acquire all Equity Shares aggregating to 35,94,493 Equity Shares of Rs.10/- each that are held by Public Shareholders of the Company, either individually / collectively, or together with other members of the Promoter Group, as the case may be; and (b) consequently, voluntarily delist the Equity Shares of theCompany fromtheStockExchangeswheretheEquity Sharesare presently listed (i.e.)BSE Limited (""BSE"") and NationalStockExchange of India Limited (âNSEâ), by making a delisting offer, in accordance with the SEBI Delisting Regulations (""Delisting Proposal""/ âDelisting Offerâ). Consequent upon the receipt of the Initial Public Announcement, the Board of Directors in their meeting held on 20th April, 2023 approved the said proposal of the voluntary delisting by the Acquirers and initiated the process for obtaining the approval of the Shareholders by means of a Special Resolution through Postal Ballot Process by way of remote e-Voting.
On 23rd May, 2023, the Board of Directors of the Company have proposed a dividend of Rs.10/- per share for the year ended 31st March, 2023, subject to the approval of Shareholders at the 65th Annual General Meeting. If approved, this would result in cash outflow of Rs.1,413.03 lakhs.
5.20 The previous yearâs figures have been regrouped and reclassified, wherever necessary to conform to the current yearâs presentation.
5.21 Approval of Financial Statements
The Financial Statements were approved for issue by the Board of Directors on 23rd May, 2023.
Mar 31, 2022
5.1 FINANCIAL INSTRUMENTS Financial Risk Management
The Companyâs business activities expose it to a variety of financial risks, namely liquidity risk, market risk and credit risk. The Companyâs senior management has the overall responsibility for the establishment and oversight of the Companyâs risk management framework. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
In the ordinary course of business, the Company is exposed to Market risk, Credit risk and Liquidity risk.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and commodity risk.
(a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short term debt obligations with floating interest rates.
If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the Companyâs profit would be impacted by Rs. 6.10 lakhs in FY 2021-22 (Rs.3.77 lakhs in FY 2020-21).
(b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities which is very minimal.
The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase or continuous supply of raw materials. Therefore, the Company monitors its purchases closely to optimise the price.
Credit Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks.
Financial instruments that are subject to concentrations of credit risk principally consist of investments classified as loans and receivables, trade receivables, loans and advances, cash and cash equivalents, bank deposits and other financial assets amounting to Rs.35,200.27 lakhs (Previous year Rs.30,936.90 lakhs). None of the other financial instruments of the Company result in material concentration of credit risk.
The Company follows simplified approach for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.
The Company does not have significant credit exposure to any single customer. Concentration of credit risk to a single customer exceeding 10% of receivables in the FY 2021-22 is NIL. (FY 2020-21 - Rs.957.24 Lakhs ).
Bank Deposits include an amount of Rs.247.70 crores with two Indian Banks having high credit rating which are individually in excess of 10% of the total deposits of the entity as on March 31,2022. And None of the other financial instruments of the entity result in material concentration of credit risk.
5.1.3 Financial assets that are neither past due nor impaired
Cash and cash equivalents, financial assets carried at fair value are neither past due nor impaired. Cash and cash equivalents with banks has high credit-rating assigned by international and domestic credit-rating agencies. Financial assets carried at fair value are investments in Equity Shares. With respect to Trade receivables and other financial assets that are past due but not impaired, there are no indications as of March 31, 2022, that defaults in payment obligations will occur except as described in Note 3.7 on allowances for impairment of trade receivables. The Company does not hold any collateral for trade receivables and other financial assets. Trade receivables and other financial assets that are neither past due nor impaired relate to new and existing customers and counter parties with no significant defaults in past.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed assessment and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
5.1.5 Financial Instruments and Cash Deposits
Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Companyâs policy. The cash surpluses of the Company are short term in nature and are invested in Fixed Deposit with Nationalized / Scheduled Commercial Banks. Hence, the assessed credit risk is low.
The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of its financial investments, committed funding and projected cash flows from operations. The Companyâs objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner and to manage its capital structure. A balance between continuity of funding and flexibility is maintained through continued support from lenders and trade creditors.
During the year, the Company has made repayment of principal and interest on borrowings on or before due dates. The Company did not have any defaults of principal and interest as on the reporting date.
The table below summarises the maturity profile of the Companyâs financial liability based on contractual undiscounted payment and financial assets based on contractual undiscounted receipts.
5.1.7 Financial Risk Management - Other Risk - Impact of CoVID-19
⢠Financial Assets measured at fair value amounting to Rs.1,513.47 lakhs and measured at amortised cost amounting to Rs.33,686.80 lakhs have been considered for the likelihood of increased credit risk and consequential default considering emerging situations due to CoVID-19.
⢠The financial assets carried at fair value by the Company are mainly investments in Equity Instruments and accordingly, any material volatility is not expected.
⢠Financial assets of Rs.28,328.78 lakhs as at March 31,2022 carried at amortised cost is in the form of cash and cash equivalents, bank deposits, earmarked balances with banks, interest accrued on bank deposits and others security deposits where the Company has assessed the counterparty credit risk.
⢠Trade receivables of Rs.5,358.02 lakhs as at March 31,2022 forms a significant part of the financial assets carried at amortised cost which is valued considering provision for allowance using expected credit loss method.
⢠The Company has specifically evaluated the potential impact with respect to certainty of collections from its customers.
⢠Since the Company closely monitors the financial strength of its customers & investments on a continuing basis and assesses actions such as changes in payment terms, no provision is deemed necessary.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consists of the following three levels:
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The Companyâs capital comprises Equity Share Capital, retained earnings and other equity attributable to equity holders. The primary objective of Companyâs capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does so by adjusting dividend paid to shareholders. The total Paid up Equity Share Capital as on March 31, 2022 is Rs.1413.03 lakhs (Previous Year: Rs.1413.03 lakhs).
The Companyâs overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.
The funding requirements are met through a mixture of equity, internal fund generation and short term borrowings.
The Companyâs policy is to use short-term and long-term borrowings to meet anticipated funding requirements. The Company monitors capital on the basis of debt to equity ratio and its gearing ratio is as below:
|
(Rs. in lakhs) |
||
|
B) Contingent Liabilities not provided for: Claims against the Company not acknowledged as debt |
||
|
Income tax matters |
1,761.77 |
468.69 |
|
Indirect Tax Matters - (Sales tax/Service tax/Customs Duty/Excise Duty) |
547.09 |
542.92 |
|
Bank Guarantees / Bonds executed by the Company |
257.78 |
393.94 |
|
Others Matters including Claims related to Employees / Ex-Employees |
43.68 |
42.59 |
|
2,610.32 |
1,448.14 |
|
|
C) Commitments not provided for: |
||
|
Estimated amount of contracts remaining to be executed on capital account and not provided for |
10.34 |
138.92 |
(i) There are certain pending matters / litigations including labour matters before certain forums and the likely impact of these are not ascertainable or quantifiable at this stage.
(ii) Condoms were included for the first time under Drugs (Prices Control) Order, 2013 (DPCO 2013). National Pharmaceuticals Pricing Authority (NPPA) under Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India, by way of Notification No.SO 3348 dated 5th November 2013, fixed ceiling prices for sale of condoms. The Company challenged inclusion of Condoms under DPCO 2013 and also the methodology for arriving at the Ceiling Prices for Condoms by a writ petition in the Honâble High Court of Madras. During 2015-16, the Honâble High Court of Delhi and Madras ruled that Condoms are drugs but fixation of ceiling for condoms is impermissible under law as the strengths and dosage for condoms are not specified in the first schedule of DPCO 2013. The Government of India filed a Special Leave Petition (SLP) before the Honâble Supreme Court. The Company also filed SLP before Honâble Supreme Court against some points of the order of the Honâble High Court of Madras. Financial impact, if any, based on the outcome of the pending case is not quantifiable and hence not provided for in the books.
The Employeesâ Gratuity Fund Scheme managed by a Trust is a Defined Benefit Plan.
The Company operates a defined benefit plan (the Gratuity plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
The Company pays Gratuity to employees who have completed five years of Service with the Company at the time of resignation / Superannuation. The Company has its own scheme for payment of Gratuity. The employees who are eligible for payment of Gratuity will be paid based on Company Scheme or as per Gratuity Act, which ever is beneficial to the employees. As per Gratuity Act, Gratuity is paid at the rate of 15 days of last drawn salary for every completed year of service.
The Gratuity liability amount is contributed to approved Gratuity Fund maintained by the Life Insurance Corporation of India for Gratuity payment to the employees. The Gratuity fund has been approved by the Income Tax Authorities. The liability in respect of Gratuity and other post employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
The entire funds relating to Gratuity is being managed by Life Insurance Corporation of India.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in gratuity fund maintained by the Life Insurance Corporation of India. Interest risk:
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salary of plan participants. As such, an increase in salary of the plan participants will increase the planâs liability.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitive analysis below 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 discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable Government bonds as on the current valuation date.
Escalation Rate is based on the Company''s past revision trends and management''s estimate of future salary increases.
Attrition Rate considered is the Management''s estimate based on the past long-term trend of employee turnover in the Company.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations 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 obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
The above mentioned figures include Human Pharma Division related amounts.
Implementation of the Code on Social Security 2020 , which is likely to impact the contributions by the Company towards Provident Fund, Gratuity and other related areas has been deferred by the Government beyond April 1, 2021. However, the Company had made an initial assessment based on the draft rules and had provided a sum of Rs 350 lakhs in the previous year towards the expected impact to its employee benefit expenses. The Company intends to do an actuarial valuation towards this liability at the appropriate time and provide for the balance, if any. Expecting the Code to be enacted in the coming Financial Year, the amount provided in the previous year is included under âProvisions - Currentâ. Refer Note 3.18.
(i) Exceptional Items relating to FY 2021-22: In September, 2021, the Company sold land admeasuring 4.595 acres held by it at Perungudi Village, Tirunelveli District, Tamilnadu on which the Company earned a profit of Rs.249.05 lakhs.
(ii) Exceptional Items relating to FY 2020-21: The Companyâs claim in respect of tax benefits due to adjustment of unabsorbed losses and depreciation of the erstwhile TTK Protective Devices Limited and TSL Techno Services Limited which merged with the Company w.e.f. 1st April, 2012, (shown as Contingent Asset in earlier years), was allowed. The Company received the revised assessment orders in the previous FY 2020-21 and the refund received was accounted as follows:
a) Rs.809.79 lakhs towards Interest on Tax Refund received was treated as Exceptional Income; and
b) Balance Refund received (net of provisions of Rs 999.74 lakhs considered necessary) of Rs.1,964.81 lakhs was accounted as Tax Refund relating to earlier years.
1. Segments have been identified in line with the Accounting Standard on Segment Reporting (IndAS-108) considering the organisation structure and the differential risks and returns of these segments.
2. Details of products included in each of the Segments are as below :
(a) Animal Welfare (earlier included in Pharmaceuticals Segment) include products for Veterinary use.
(b) Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Woodwardâs Gripe Water, Good Home range of Scrubbers, Air Freshners, etc., (Own Brands)
(c) Medical Devices comprise manufacturing and marketing of Artificial Heart Valves, Orthopaedic Implants, etc.
(d) Protective Devices comprise manufacturing and marketing of Male Contraceptives and other allied products.
(e) Foods comprise of manufacturing and marketing of Food Products.
(f) âOthersâ include Printing and Publishing of Maps and Atlases.
(g) Human Pharma (earlier included in Pharmaceutical Segment) include products for Human use.
3. The segment-wise revenue, results, assets and liabilities figures relate to respective amounts directly identifiable to each of the segments. The unallocable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to any specific segment.
During the financial year 2019-20, the Company had received grant in the nature of exemption of custom duty on import of Machineries amounting to Rs.170.36 lakhs with certain conditions related to export of goods under Export Promotion Capital Goods (EPCG) Scheme of Government of India. This waiver had been treated as Government Grant in the books as per Ind-AS 20, wherein the Company had shown the amount of waiver as a Deferred Income Liability that will be taken to Statement of Profit and Loss on a systematic basis over the period within which the Company has to fulfil the export obligations. Management is confident of fulfilling the export obligation, through exports from Jaipur and Hosakote within the prescribed time lines.
Grant-In-Aid: The Company has entered into a Grant-in-aid Letter Agreement (GLA) with Biotechnology Industry Research Assistance Council (BIRAC) for the project titled âPilot Clinical Investigation of Rigid Tilting Disc TTK Chitra - Titanium Heart Valve Model TC2 - the next version of the highly successful TTK - Chitra Heart Valve, Model TC1â. The main objectives of this project are (i) to manufacture 100 Nos. of valves for the clinical trial; and (ii) to complete the clinical trial involving 40 patients and the follow-up of valve performance, as per the study plan and submission of the final Pilot Study Clinical Investigation Report to BIRAC. The duration of the project is 24 months from date of acceptance of GLA and the total project cost is Rs.291.08 lakhs.
The Company had purchased Fixed Assets amounting to Rs.40.31 lakhs using funds received from BIRAC which was accounted as Deferred Revenue Income. Depreciation on the above assets for the year amounting to Rs.21.89 lakhs and Revenue Expenditure amounting to Rs.31.86 lakhs have been recognized as Subsidy Received and included in Other Operating Income. Deferred Revenue Income of Rs.18.42 lakhs (after depreciation) is shown, as on 31st March, 2022. (P.Y. Rs.10.35 lakhs).
5.16 The second wave of CoVID-19 and the extended lockdown during the First Quarter of the financial year 2021-22 impacted the business of the Company. However, considering the ongoing vaccination drive and other sustainable actions taken by the Management, both with reference to the environment and its employeesâ health, the impact has been minimal.
5.17 Disclosure in Relation to Undisclosed Income
During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transactions which are not recorded in the books of accounts.
5.18 Disclosure of Transactions with Struck off Companies
The Company has reviewed transactions to the extent of information available for the purpose of identifying transactions with struck off Companies. Based on the above, there are no transaction with Struck off Companies in the current financial year.
5.19 Disclosure requirements as notified by MCA pursuant to amended Schedule III
Nothing to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
(c) Registration of charges or satisfaction with Registrar of Companies
(d) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilisation of borrowed funds & share premium
(e) Loans to Related Parties
(f) Investments/advances through intermediaries
(g) Effect of scheme of arrangement
(h) Compliance with number of layers
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with understanding that intermediary shall -
(i) Directly to indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (Whether recorded in writing or otherwise) that the Company shall -
(i) Directly to indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funded party (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
5.20 Events occurring after balance sheet date
On 23rd May, 2022, the Board of Directors of the Company have proposed a dividend of Rs.10/- per share for the year ended 31st March, 2022, subject to the approval of Shareholders at the 64th Annual General Meeting. If approved, this would result in cash outflow of Rs.1,413.03 lakhs.
5.21 Approval of Financial Statements
The Financial Statements were approved for issue by the Board of Directors on May 23, 2022.
Mar 31, 2018
1 (i) The Company availed Carry Forward benefits u/s.72A of the Income-Tax Act, 1961, relating to TTK Biomed Limited, consequent to its merger with the Company in the year 2000. For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income-Tax Rules, 1962. The Company could not fulfil one of the conditions and hence an application was made to CBDT for relaxation of the condition under the said Rule 9C. The CBDT while disposing off the application had advised the Company to refer the matter to the Specified Authority. Subsequently, the Company has filed necessary application with the Specified Authority. Upon receipt of the decision from the Specified Authority, the matter will be suitably dealt with.
(ii) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961, relating to TTK Medical Devices Limited, consequent to its merger with the Company. For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income Tax Rules,1962. The Company could not fulfil certain conditions and hence an Application/ Review Petition was filed with CBDT for relaxation of these conditions. The said Application/ Review Petition for relaxation of the conditions was rejected by CBDT. Against this, the Company has already filed a Writ Petition in the Hon''ble High Court of Judicature at Madras in February 2012. Upon receipt of the decision from the Hon''ble High Court, the matter will be suitably dealt with.
2 Contingent Assets - Tax Benefits to be recognized later:
The Company is entitled to adjust the unabsorbed losses and depreciation of TTKPDL / TSL against Company''s profits in accordance with the Scheme of Amalgamation sanctioned by the Hon''ble NCLT. The benefit that can accrue to the Company is estimated at Rs.30 crores. This benefit will be accounted for in the books based on filing of returns / appropriate orders in consultation with the tax advisors.
Sensitivity Analysis Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in gratuity fund maintained by the Life Insurance Corporation of India.
Interest risk:
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salary of plan participants. As such, an increase in salary of the plan participants will increase the plan''s liability.
related parties (31st March, 2017 : Rs. Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
3 Segment Reporting:
For management purpose, the Company is organized into the following major business segments:
(a) Pharmaceuticals
(b) Consumer Products
(c) Medical Devices
(d) Protective Devices
(e) Foods Division
(f) Others
The Company monitors the operating results of its business as stipulated above for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Certain expenses like CSR expenses, are not specifically allocable to specific segment. Management believes that it is not feasible to provide segment disclosure of these expenses and accordingly, these are separately disclosed as âUnallocated Expensesâ and adjusted only against the total operating income of the Company.
Notes:
1. Segments have been identified in line with the Accounting Standard on Segment Reporting (Ind AS 108) considering the organization structure and the differential risks and returns of these segments.
2. Sales is inclusive of excise duty related to sale of own manufactured goods for the current year as well as for the previous periods.
3. Details of products included in each of the Segments are as below:
(a) Pharmaceuticals include products for both Human and Veterinary use.
(b) Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Woodwards''s Gripewater, Good Home range of Scrubbers, Air Freshners, etc., (Own Brands).
(c) Medical Devices include Artificial Heart Valves, Orthopaedic Implants, etc.
(d) Protective Devices comprise of Condoms and related products (New segment consequent to merger. SKORE brand of Condoms included under Consumer Products Segment in the previous year).
(e) Foods comprise of manufacturing and marketing of Food Products.
(f) âOthersâ include Printing and Publishing of Maps and Atlases.
4. The Company has reclassified distribution of Woodward''s Gripewater as a part of Consumer Products Segment which was previously reported under Pharmaceuticals. The changes have been made retrospectively to the segment information of prior periods.
5. The segment-wise revenue, results, assets and liabilities figures relate to respective amounts directly identifiable to each of the segments. The unallocable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to any specific segment.
Notes:
(a) Valuation of Equity instruments at fair value resulted in gain of Rs.230.47 lakhs as on 31st March 2017 (Rs.638.70 lakhs as at 1st April 2016) and has been recognized through Other Comprehensive Income pursuant to the option chosen to designate the Equity Instruments at FVTOCI as on transaction date. Also includes, debt instrument sold during the year Rs.23.30 lakhs, and routed through Statement of Profit and Loss (Valuation of debt instruments at fair value resulting in gain Rs.23.30 lakhs as on 1s1 April 2016)
(c) Deferred Tax impact on expected credit loss provision, sales returns and fair value of debt instruments.
(d) Provision for proposed dividend (including tax) amounting to Rs.467.35 lakhs reversed since it is accounted only on approval by the Shareholders under Ind AS.
4 Events occurring after Balance Sheet Date:
The Board of Directors of the Company in their meeting held on 29th May, 2018, proposed a final dividend of Rs.5/- (50%) per share for the year ended 31st March, 2018, subject to the approval of Shareholders at the ensuing 60th Annual General Meeting. If approved, the final dividend would result in cash flow of Rs.851.74 lakhs, including dividend distribution tax of Rs.145.23 lakhs.
5. Approval of Financial Statements:
The Financial Statements were approved for issue by the Board of Directors on 29th May, 2018.
Mar 31, 2017
Notes on Financial Statements
(1) The Company has created a Trust which has taken a Group Gratuity Policy with the Life Insurance Corporation of India for future payment of gratuity to the retired/resigned employees. Based on the actuarial valuation, provision has been made for full value of the gratuity benefits as per the requirements of Accounting Standard 15 (AS-15).
(2) The Company contributes to a Superannuation Fund covering specified employees. The contributions are by way of annual premia payable in respect of a superannuation policy issued by the Life Insurance Corporation of India, which confers benefits to retired/resigned employees based on policy norms. No other liabilities are incurred by the Company in this regard.
(3) Leave Encashment benefit has been charged to Profit and Loss Statement on the basis of actuarial valuation as at the year end in line with the Accounting Standard 15 (AS-15).
As per Accounting Standard 15 (AS -15) (Revised) for Employee Benefits, the disclosures as defined in the Accounting Standard are given below: Defined Contribution Plan:
Contributions to Defined Contribution Plan, recognized as expense for the year are as under:
Defined Benefit Plan :
The Employeesâ Gratuity Fund Scheme managed by a Trust is a Defined Benefit Plan.
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation as per para 65 of the Accounting Standard 15 (AS-15).
Reconciliation of the opening and closing balances of Defined Benefit Obligation:
(4) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961 relating to TTK Biomed Ltd., consequent to its merger with the Company.
For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income-Tax Rules, 1962.
The Company could not fulfill one of the conditions and hence an application was made to CBDT for relaxation of the condition under the said Rule 9C.
The CBDT while disposing of the application had advised the Company to refer the matter to the Specified Authority. Subsequently, the Company has filed necessary application with the Specified Authority. Upon receipt of the decision from the Specified Authority, the matter will be suitably dealt with.
(5) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961, relating to TTK Medical Devices Ltd., consequent to its merger with the Company.
For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income Tax Rules,1962.
The Company could not fulfill certain conditions and hence an Application / Review Petition was filed with CBDT for relaxation of these conditions. The said Application / Review Petition for relaxation of the conditions was rejected by CBDT. Against this, the Company filed a Writ Petition in the Hon''ble High Court of Judicature at Madras in February 2012. Upon receipt of the decision from the Hon''ble High Court, the matter will be suitably dealt with.
(6) During the year, the Company has written off non-recoverable debts to the extent of Rs.26,58,554 (Previous Year - Rs.23,34,069).
(7) The Board of Directors at their meeting held on 30.04.2013 approved the Scheme of Amalgamation of TTK Protective Devices Ltd. (TTKPD) (formerly TTK-LIG Ltd.) and its Wholly Owned Subsidiary TSL Techno Services Ltd. (TSL) with the Company, the appointed date being 01.04.2012. Under the Scheme, the Shareholders of TTKPD would be allotted 9 Equity shares of Rs.10 each fully paid-up of the Company for every 2 Equity shares of Rs.10 each fully paid-up held by them in TTKPD. No shares would be allotted to the Shareholders of TSL as its value having been considered as part of the valuation of TTKPD.
The said Scheme has been duly approved by the Shareholders and the Company has filed necessary petition before the Hon''ble High Court of Judicature at Madras for obtaining its sanction.
Consequent to the constitution of the National Company Law Tribunal (NCLT), petitions relating to compromises, arrangements and amalgamations, etc., would henceforth be dealt with by this Tribunal.
Accordingly, the Company''s petition relating to Scheme of Amalgamation stands transferred to NCLT and its sanction is awaited.
The Directors have also extended the time limit of the Scheme up to 31st March, 2018.
(8) In accordance with the provisions of Sec.135 of the Companies Act, 2013 and the Rules made there under, the Company is required to spend Rs.54.35 lakhs being 2% of the average net profit of the Company made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy. The Company has contributed a sum of Rs.54.35 lakhs towards the CSR activities for the eligible projects during the year.
(9) During the year 2015-16, the Company had invested Rs.10 crores in 25 months Listed, Rated, Secured, Redeemable, Index-Linked, Non-Convertible Debentures (NCDs) (100% Principal protected) of Citi Corp Finance (India) Ltd. During the year, these Debentures have been sold to Trust Capital Services Pvt. Ltd. for a consideration of Rs.1083.70 lakhs and the gain on sale of these debentures amounting to Rs.83.70 lakhs has been included in Other Income.
(10) The Public Works Department increased the Water Charges for the water drawn by the Paper Division from the river Bhavani from Rs.60 per 1000 Cu. Mtr. to Rs.500 per 1000 Cu. Mtr. on the contracted quantity of water, with effect from 09.05.1991. The Company filed a writ petition in the Hon''ble High Court of Judicature at Madras and as per the interim order dated 09.07.1991, passed by the Hon''ble Court, the Company was paying water charges @ Rs.200 per 1000 Cu. Mtr. of water on the actual quantity of water drawn and with effect from 01.04.1993 on the contracted quantity. The Writ was disposed off by the Hon''ble Court by remanding the matter to the Public Works Department.
After series of litigations, the Public Works Department confirmed the water charges at the rate of Rs.500 per 1000 Cu. Mtr. on the contracted quantity. The Company moved the Hon''ble High Court challenging the validity of payment on the contracted quantity instead of actual quantity of water drawn and this matter is pending before the Hon''ble High Court of Judicature at Madras.
As against the demand of Rs.175.39 lakhs consisting of Rs.49.66 lakhs towards the arrear water charges and Rs.125.73 lakhs towards interest upto the period 31.12.2008, the Company had fully paid the principal amount of Rs.49.66 lakhs.
Further, the Company has also made a request for waiver of the interest charges to PWD and the request is pending before them.
Since the Paper Division has been disposed off, the liability, if any, on this account up to the date of sale (i.e. 14.11.1999), will have to be borne by the Company. As a matter of prudence, the Company has made a provision of Rs.12 lakhs during the year and the cumulative provision available on this account as on 31.03.2017 is Rs.115.85 lakhs (Previous Year - Rs.103.85 lakhs).
(11) Related Party disclosures as per Accounting Standard 18 (AS-18):
(a) The Company had transactions with the following related parties:
Associates/ Others:
T T Krishnamachari & Co., Pharma Research & Analytical Laboratories, TTK Prestige Ltd., TTK Protective Devices Ltd., Packwell Packaging Products Ltd.
Key Management Personnel:
Mr T T Raghunathan
Relatives of Key Management Personnel:
Mr T T Lakshman - General Manager-Projects (Foods Division) [upto 15lh April, 2016]
Notes:
The disputed Income Tax/ Fringe Benefit Tax liabilities amounting to Rs.958.29 lakhs have not been acknowledged as debts and have been classified under Contingent Liabilities.
Similarly, Rs.577.57 lakhs being the disputed Central Excise/Customs/Sales Tax liabilities have not been acknowledged as debts and have been classified under contingent liabilities.
Other Contingent Liabilities include disputed liability towards water charges amounting to Rs.9.88 lakhs as per the details given in Note No.18 to the Financial Statements.
Necessary Appeals have been filed with the authorities concerned against the disputed liabilities.
(12) The Company has In-House Research and Development facilities at Pharma and Foods Divisions, recognized by the Ministry of Science & Technology, Government of India, under Section 35(2AB) of the Income Tax Act, involved in developmental activities for new products, improvement in existing products and processes. Details of Capital and Revenue Expenditure incurred are as below:
(13) As required by the Notification dated 30th March, 2017, issued by Ministry of Corporate Affairs and amendment to Schedule III to the Companies Act, 2013, the details of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th December, 2016 is furnished as below:
(14) Previous yearâs figures have been regrouped and reclassified wherever necessary to conform to the current yearâs presentation. Figures have been rounded off to the nearest rupee.
Notes:
15. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) considering the organization structure and the differential risks and returns of these segments.
16. Details of products included in each of the segments are as below:
- Pharmaceuticals include products for both Human and Veterinary use. It also includes OTC Brands like Woodward''s Gripewater distributed by the Consumer Products Division.
- Medical Devices include Artificial Heart Valves, Orthopaedic Implants, etc.
- Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Good Home Range of Scrubbers, Air Freshners, etc. (Own Brands) and also trading of Branded Condoms.
- Foods comprise of manufacturing and marketing of Food Products.
- "Others" include Printing and Publishing of Maps and Atlases.
17. The segment-wise revenue, results and capital employed figures relate to respective amounts directly identifiable to each of the segments. The unallocable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to any specific segment.
18. The previous period''s / year''s figures have been regrouped and reclassified, wherever necessary to conform to the current period''s / year''s presentation.
Mar 31, 2016
(8) The Company has created a Trust which has taken a Group Gratuity Policy with the Life Insurance Corporation of India for future payment of gratuity to the retired/resigned employees. Based on the actuarial valuation, provision has been made for full value of the gratuity benefits per the requirements of Accounting Standard 15 (AS-15).
(9) The Company contributes to a Superannuation Fund covering specified employees. The contributions are by way of annual premier pa able in respect of a superannuation policy issued by the Life Insurance Corporation of India, which confers benefits to retired/resigned employees based on policy norms. No other liabilities are incurred by the Company in this regard.
(10) Leave Encashment benefit has been charged to Profit and Loss Statement on the basis of actuarial valuation as at the yearend i line with the Accounting Standard 15 (AS-15).
Defined Benefit Plan :
The Employees'' Gratuity Fund Scheme managed by a Trust is a Defined Benefit Pla
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligator as per para 65 of the Accounting Standard 15 (AS-15).
The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promot on and other relevant factors including supply and demand in the employment market.
(11) During the year, the Company has accounted for Deferred Tax in accordance with the Accounting Standard 22 (AS-22) "Accounting for Tax on Income". As a result of the adoption of this Standard, the Profit is less by Rs.284.22 Lakhs for the year 2015-16 as detailed below:
Deferred Tax Asset on account of unabsorbed depreciation and others have been recognized, as the Company is of the opinion that there is virtual certainty of realization of the same in view of the future profits of the Company
(12) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961 relating to TTK Biomed Ltd., consequent to its merger with the Company.
For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income-Tax Rules, 1962.
The Company could not fulfill one of the conditions and hence an apply teen was made to CBDT for relaxation of the condition under the said Rule 9C.
The CBDT while disposing of the application had advised the Company to refer the matter to the Specified Authority. Subsequently, the Company has filed necessary application with the Specified Authority. Upon receipt of the decision from the Specified Authority, the matter will be suitably dealt with
(13) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961, relating to TTK Medical Devices Ltd., consequent to its merger with the Company.
For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income Tax Rules,1962.
The Company could not fulfill certain conditions and hence an Application / Review Petition was filed with CBDT for relaxation f these conditions. The said Application / Review Petition for relaxation of the conditions was rejected by CBDT. Against this, the Company already file Write Petition in the Hon''ble High Court of Judicature at Madras in February 2012. Upon receipt of the decision from the Hon''ble High Court, the matter will be suitably dealt with.
(14) During the year, the Company has written off non-recoverable debts to the extent of Rs.23,34,069/- (Previous Year - Rs.28,30,77/-).
(15) The Board of Directors at their meeting held on 30.04.2013 approved the Scheme of Amalgamation of TTK Protective Devices LtdT(TKPD) (formerly TTK-LIG Ltd.) and its Wholly Owned Subsidiary TSL Techno Services Ltd. (TSL) with the Company, the appointed date being 01.04.2012. Under the Scheme, the Shareholders of TTKPD would be allotted 9 Equity shares of Rs.10/- each fully paid-up of the Company for every 2 Equity shares of Rs.10/- each fully paid-up held by them in TTKPD. No shares would be allotted to the Shareholders of TSL as its value having been considered as part of the valuation of TTKPD.
The said Scheme has been duly approved by the Shareholders and the Company has filed necessary petition before the Hon''ble High Court of Judicature at Madras for obtaining its approval and the same is pending.
The Directors have also extended the time limit of the Scheme up to 31st March, 2017.
(16) The Company has successfully commissioned the Pellet (Papad) Manufacturing Plant imported from Fen s.r.l. Italy at Jaipur and commenced the commercial production from 15th January, 2016. The expenditure incurred for this Project amounting to Rs.56 Crores (including interest of Rs.1.38 Crores) has been capitalized during the year.
(17) During the year, your Company has successfully commissioned the R & D Pilot Plant imported from Fen s.r.l. Italy at Foods Division, Hosakote and commenced product development trials on this Plant. The expenditure incurred on this project amounting to Rs.2.37 Crores has been capitalized.
(18) The Company conducted trials and developed new products for a third party and an income of Rs.3.93 Crores earned from the product development trials is included under "Other Operating Revenues".
(19) In accordance with the provisions of Sec.135 of the Companies Act, 2013 and the Rules made there under, the Company is required to spend Rs.45.08 Lakhs being 2% of the average net profit of the Company made during the three immediately preceding financial years in pursuant of its Corporate Social Responsibility Policy. The Company has contributed a sum of Rs.45.08 Lakhs towards the CSR activities for the eligible projects during the year.
(20) During the year, the Company has invested Rs.10 Crores in 25 month Listed, Nifty-Linked, Secured, Redeemable, Non-Convertible Debentures (NCDs) (100% Principal protected) of Citicorp Finance (India) Ltd. The investment is for a period of 25 months with an average yield 8.15% p.a. and it is linked to the Nifty performance. The income on these debentures will be accounted at the time of redemption of debentures as the interest has not accrued as per the terms of the contract.
(21) The Public Works Department increased the Water Charges for the water drawn by the Paper Division from the river Bhavani fronRs.60/- per 1000 Cu. Mtr to Rs.500/- per 1000 Cu. Mtr on the contracted quantity of water, with effect from 9.5.1991. The Company filed a writ petition in the Hon''ble High Court of Judicature at Madras and as per the interim order dated 9.7.1991, passed by the Hon''ble Court, the Company was paying water charges @ Rs.200/- per 1000 Cu. Mtr of water on the actual quantity of water drawn and with effect from 01.04.1993 on the contracted quantity. The Wr it was disposed off by the Hon''ble Court by remanding the matter to the Public Works Department.
After series of litigations, the Public Works Department confirmed the water charges at the rate of Rs.500/- per 1000 Cu. Mtn the contracted quantity. The Company has moved the Hon''ble High Court challenging the validity of payment on the contracted quantity instead of actual quantity of water drawn and this matter is pending before the Hon''ble High Court of Judicature at Madras.
As against the demand of Rs.175.39 Lakhs consisting of Rs.49.66 Lakhs towards the arrear water charges and Rs.125.73 Lakhs towards interest up to the period 31.12.2008, the Company had fully paid the principal amount of Rs.49.66 lakhs.
Further, the Company has also made a request for waiver of the interest charges to PWD and the request is pending before them.
Since the Paper Division has been disposed off, the liability, if any, on this account up to the date of sale (i.e. 14.1 1.1999), will have to be borne by the Company. As a matter of prudence, the Company has made a provision of Rs.12 Lakhs during the year and the cumulative provision n available on this account as on 31.3.2016 is Rs.103.85 Lakhs (Previous Year Rs.91.85 Lakhs).
(24) Related Party disclosures as per Accounting Standard 18 (AS-18):
(a) The Company had transactions with the following related parties:
Associates/ Others:
T T Krishnamachari & Co., Pharma Research & Analytical Laboratories, TTK Prestige Ltd., TTK Protective Devices Ltd., Packwell Packaging Products Ltd.
Key Management Personnel:
Mr T T Raghunathan
Relatives of Key Management Personnel:
Mr T T Lakshman - General Manager-Projects (Foods Division).
Notes:
The disputed Income Tax/ Fringe Benefit Tax liabilities amounting to Rs.1,063 lakhs have not been acknowledged as debts and hav been classified under Contingent Liabilities.
Similarly, Rs.369.22 lakhs being the disputed Central Excise/Customs/Sales Tax liabilities have not been acknowledged as debts and have been classified under contingent liabilities
Other Contingent Liabilities include disputed liability towards water charges amounting to Rs.21.88 lakhs as per the details given in Note No.21 to the Financial Statements.
Necessary Appeals have been filed with the authorities concerned against the disputed liabilities
(26) Previous year''s figures have been regrouped and reclassified wherever necessary to conform to the current year''s presentation. gores have been rounded off to the nearest rupee.
Notes:
1. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) considering the organization structure and the differential risks and returns of these segments.
2. Segment Sales is net of Excise Duty related to the Sales of own manufactured goods for the current as well as for the previous periods.
3. Details of products included in each of the segments are as below:
- Pharmaceuticals include products for both Human and Veterinary use. It also includes OTC Brands like Woodward''s Gripe water distributed by the Consumer Products Division.
- Medical Devices include Artificial Heart Valves, Orthopedics Implants, etc
- Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Good Home Range of Scrubbers, Air Fresheners, etc. (Own Brands) and also trading of Branded Condoms.
- Foods comprise of manufacturing and marketing of Food Products.
- "Others" include Printing and Publishing of Maps and Atlases.
4. The segment-wise revenue, results and capital employed figures relate to respective amounts directly identifiable to each of the segments. The unallowable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to an specific segment
5. The previous period''s / year''s figures have been regrouped and reclassified, wherever necessary to conform to the current period s / year''s presentation.
Mar 31, 2013
(1) Contingent Liabilities And Commitments Not Provided For:
2012-13 2011-12
(Rs. in Lakhs) (Rs. in Lakhs)
A) Contingent Liabilities:
Guarantees against letters
of credit opened 85.29 134.71
Other Guarantees 199.86 183.20
Disputed Taxes/Claims,
not acknowledged as debts 1,373.75 1,505.58
1,658.90 1,823.49
B) Commitments:
Estimated amount of contracts remaining to be executed on capital
account and not provided for 1,881.25
(2) The Company has created a Trust which has taken a Group Gratuity
Policy with the Life Insurance Corporation of India for future payment
of gratuity to the retired/ resigned employees. Based on the actuarial
valuation, provision has been made for full value of the gratuity
benefits as per the requirements of Accounting Standard 15 (AS-15).
(3) The Company contributes to a Superannuation Fund covering
specified employees. The contributions are by way of annual premia
payable in respect of a superannuation policy issued by the Life
Insurance Corporation of India, which confers benefits to
retired/resigned employees based on policy norms. No other liabilities
are incurred by the Company in this regard.
(4) Leave Encashment benefit has been charged to Profit & Loss
Statement on the basis of actuarial valuation as at the year end in
line with the Accounting Standard 15 (AS-15).
Defined Benefit Plan :
The Employees'' Gratuity Fund Scheme managed by a Trust is a Defined
Benefit Plan.
The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method which recognises each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation as per para 65 of the Accounting Standard 15 (AS-15).
(5) Your Company availed certain Carry Forward benefits u/s.72A of the
Income-Tax Act, 1961 relating to TTK Biomed Ltd., consequent to its
merger with your Company. For availing these benefits, certain
conditions have to be fulfilled under Rule 9C of the Income-Tax Rules,
1962.
Your Company could not fulfill one of the conditions and hence an
application was made to CBDT for relaxation of the condition under the
said Rule 9C.
The CBDT while disposing of the application had advised your Company to
refer the matter to the Specified Authority. Subsequently, your Company
has filed neces- sary application with the Specified Authority. Upon
receipt of the decision from the Specified Authority, the matter will
be suitably dealtwith.
(6) Your Company availed certain Carry Forward benefits u/s.72A of the
Income-Tax Act, 1961, relating to TTK Medical Devices Ltd., consequent
to its merger with your Company.
For availing these benefits, certain conditions have to be fulfilled
under Rule 9C of the Income Tax Rules, 1962.
Your Company could not fulfill certain conditions and hence an
Application / Review Petition was filed with CBDT for relaxation of
these conditions. The said Ap- plication/ Review Petition for
relaxation of the condition was rejected by CBDT. Against this, your
Company already filed a Writ Petition in the Hon''ble High Court of
Judicature at Madras last year. Upon receipt of the decision from the
Hon''ble High Court, the matter will be suitably dealt with.
(7) During the year, the Company has written off non-recoverable debts
to the extent of Rs.12,57,460/-.
(8) During the year 2010-11, your Company had invested Rs.600 Lakhs in
27-Month Nifty-Linked Secured Redeemable Non-Convertible Debentures
(NCDs) (100% Prin- cipal protected) in Citi Corp Finance (India) Ltd.
During the year, these Debentures have been sold to Trust Capital
Services Pvt. Ltd. for a consideration of Rs.697.62 Lakhs and the gain
on the sale of these Debentures amounting to Rs.97.62 Lakhs has been
included in Other Income.
(9) Your Company was allotted 1.642 acres of land by Kerala Industrial
Infrastructure Development Corporation (KIIDC) at Trivandrum for
setting up the Heart Valve manufacturing facility in 2005.
During the year, there was a demand amounting to Rs. 27.47 Lakhs from
KIIDC towards the additional compensation payable on the above land
allotted to the Com- pany which has been accepted and the same has been
considered as addition under Leasehold Land.
(10) The Pre-owned Pellet (Pappad) Manufacturing Line acquired from
M/s.Mcfills Enterprises Pvt. Ltd., Ahmedabad has been commissioned and
the commercial produc- tion started from October-2012 at Foods
Division''s Factory at Hosakote, Bengaluru. The expenditure incurred on
this project amounting to Rs.726.07 Lakhs has been capitalised.
(11) The Board of Directors at their meeting held on 30.04.2013
approved the Scheme of Amalgamation of TTK Protective Devices Ltd.
(TTKPD) (formerly TTK-LIG Ltd.) and its Wholly Owned Subsidiary TSL
Techno Services Ltd. (TSL) with your Company, the appointed date being
01.04.2012. Under the Scheme, the Shareholders of TTKPD would be
allotted 9 Equity shares of Rs. 10/- each fully paid-up of the Company
for every 2 Equity shares of Rs.10/- each fully paid-up held by them in
TTKPD. No shares would be allotted to the Shareholders of TSL as its
value having been considered as part of the valuation of TTKPD.
The Scheme would be effective after the approval of the Regulatory
Authorities, Shareholders and the Hon''ble High Court of Judicature at
Madras.
(12) The Public Works Department increased the water charges for the
water drawn by the Paper Division from the river Bhavani from Rs.60/-
per 1000 Cu. Mtr. to Rs.500/- per 1000 Cu. Mtr. on the contracted
quantity of water, with effect from 09.05.1991. The Company filed a
writ petition in the Hon''ble High Court of Judicature at Madras and as
per the interim order dated 09.07.1991, passed by the Hon''ble Court,
the Company was paying water charges @ Rs.200/- per 1000 Cu. Mtr. of
water on the actual quantity of water drawn and with effect from
01.04.1993 on the contracted quantity. The Writ was disposed off by the
Hon''ble High Court by remanding the matter to the Public Works
Department.
After series of litigations, the Public Works Department confirmed the
water charges @ Rs.500/- per 1000 Cu. Mtr. on the contracted quantity.
The Company has moved the Hon''ble High Court challenging the validity
of payment on the contracted quantity instead of actual quantity of
water drawn and this matter is pending before the Hon''ble High Court.
As against the demand of Rs.175.39 Lakhs consisting of Rs.49.66 Lakhs
towards the arrear water charges and Rs.125.73 Lakhs towards interest
upto the period 31.12.2008, the Company has fully paid the principal
amount of Rs.49.66 Lakhs.
Further, the Company has also made a request for waiver of the interest
charges to PWD and the request is pending before them. J
Since the Paper Division has been disposed off, the liability, if any,
on this account upto the date of sale (i.e. 14.11.1999), will have to
be borne by the Company. As a matter of prudence, the Company has made
a provision of Rs.12 Lakhs during the year and the cumulative provision
available on this account as on 31.03.2013 was Rs.67.85 Lakhs.
(13) Related Party disclosures as per Accounting Standard 18 (AS-18):
(a) The Company had transactions with the following related parties:
Associates/ Others:
T T Krishnamachari & Co., Pharma Research & Analytical Laboratories,
TTK Prestige Ltd., TTK Protective Devices Ltd. (formerly TTK-LIG Ltd.),
Packwell Packaging Products Ltd., SSL-TTK Ltd.
Key Management Personnel:
Mr T T Raghunathan and Mr K Vaidyanathan
Relatives of Key Management Personnel:
Mr T T Lakshman
(14) Previous year''s figures have been regrouped and reclassified
wherever necessary to conform to the current year''s presentation.
Figures have been rounded off to the nearest rupee.
Mar 31, 2012
(1) Contingent Liabilities not provided for: 2011-12 201011
(Rs.in Lakhs) (Rs.in Lakhs)
Guarantees against letters
of credit opened 134.71 59.77
Other Guarantees 183.20 126.25
Disputed Taxes/Claims, not acknowledged
as debts 1,505.58 1,803.28
1,823.49 1,989.30
(2) The Company has created a Trust which has taken a Group Gratuity
Policy with the Life Insurance Corporation of India for future payment
of gratuity to the retired/resigned employees. Based on the actuarial
valuation, provision has been made for full value of the gratuity
benefits as per the requirements of Accounting Standard 15 (AS-15)
(Revised) issued by The Institute of Chartered Accountants of India.
(3) The Company contributes to a Superannuation Fund covering
specified employees. The contributions are by way of annual premia
payable in respect of a superannuation policy issued by the Life
Insurance Corporation of India, which confers benefits to
retired/resigned employees based on policy norms. No other liabilities
are incurred by the Company in this regard.
(4) Leave Encashment benefit has been charged to Profit & Loss
Statement on the basis of actuarial valuation as at the yearend in
line with the Accounting Standard 15 (AS-15) (Revised) issued by The
Institute of Chartered Accountants of India.
As per Accounting Standard 15 (AS-15) (Revised) for Employee Benefits,
the disclosures as defined in the Accounting Standard are given below:
Defined Contribution Plan:
Contributions to Defined Contribution Plan, recognized as expense for
the year are as under:
Defined Benefit Plan :
The Employees Gratuity Fund Scheme managed by a Trust is a Defined
Benefit Plan.
The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method which recognises each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation as per para 65 of the Accounting Standard 15 (AS 15)
(Revised) issued by The Institute of Chartered Accountants of India.
The estimate of rate of escalation in salary considered in actuarial
valuation, takes into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
(5) During the year, the Company has accounted for Deferred Tax in
accordance with the Accounting Standard 22 (AS-22) 'Accounting for
Taxes on Income" issued by The Institute of Chartered Accountants of
India. As a result of the adoption of this Standard, the Profit is less
by Rs.21.91 Lakhs for the year 2011-12 as detailed below:-
Deferred Tax Asset on account of unabsorbed depreciation and others
have been recognized, as the Company is of the opinion that there is
virtual certainty of realization of the same in view of the future
profits of the Company.
(6) Your Company availed certain Carry Forward benefits u/s.72A of the
Income-Tax Act, 1961, relating to TTK Biomed Ltd., consequent to its
merger with your Company.
For availing these benefits, certain conditions have to be fulfilled
under Rule 9C of the Income-Tax Rules, 1962.
Your Company could not fulfill one of the conditions and hence an
Application was made to CBDT for relaxation of the condition under the
said Rule 9C.
The CBDT while disposing of the Application had advised your Company to
refer the matter to the Specified Authority. Subsequently, your Company
has filed necessary Application with the Specified Authority. Upon
receipt of the decision from the Specified Authority, the matter will
be suitably dealt with.
(7) Your Company availed certain Carry Forward benefits u/s.72A of the
Income-Tax Act, 1961, relating to TTK Medical Devices Ltd., consequent
to its merger with your Company.
For availing these benefits, certain conditions have to be fulfilled
under Rule 9C of the Income Tax Rules, 1962.
Your Company could not fulfill certain conditions and hence an
Application / Review Petition was filed with CBDT for relaxation of
these conditions. The said Application / Review Petition for relaxation
of the condition was rejected by CBDT. Against this, your Company has
already filed a Writ Petition in the Hon'ble High Court of Judicature
at Madras during the year. Upon receipt of the decision from the
Hon'ble High Court, the matter will be suitably dealt with.
(8) During the year, the Company has written off non-recoverable debts
to the extent of Rs. 15,37,231.
(9) During the year 2010-11, your Company had invested Rs.6 Crores in
27-Month Nifty-Linked Secured Redeemable Non-Convertible Debentures
(NCDs) (100% Principal protected) in Citi Corp Finance (India) Ltd. The
investment is for a period of 27 months with an average yield of 7.44%
p.a. and is linked to Nifty performance. The interest on these
debentures will be accounted at the time of redemption of these
debentures, as the interest thereon has not accrued as per the terms of
the Contract.
(10) Your Company was holding an Investment of Rs.70.23 Lakhs in Kotak
Indo World Infrastructure Fund at the beginning of the year.
During the year, this Fund was closed and the redemption amount was
determined at Rs.63.44 Lakhs. The loss on redemption amounting to
Rs.6.79 Lakhs has been duly accounted.
The Company invested the aforesaid amount of Rs.63.44 Lakhs in Kotak
Select Focus Fund.
(11) The Capital Work-in-progress amounting to Rs.593.57 Lakhs
represents the cost of Pre-owned Pellet (Pappad) Manufacturing Line
bought from M/s.Mc fills Enterprises Pvt. Ltd. Ahmadabad and the Civil
and Electrical works carried out for the Project in progress at the
Foods Division. This will be capitalized after completion of the
Project.
(12) The Public Works Department increased the Water Charges for the
water drawn by the Paper Division from the river Bhavani from Rs.60/-
per 1000 Cu. Mtr to Rs.500/- per 1000 Cu. Mtr on the contracted
quantity of water, with effect from 09.05.1991. The Company filed a
writ petition in the Hon'ble High Court of Judicature at Madras and as
per the interim order dated 09.07.1991, passed by the Hon'ble High
Court, the Company was paying water charges @ Rs.200/- per 1000 Cu. Mtr
of water on the actual quantity of water drawn and with effect from
01.04.1993 on the contracted quantity. The Writ was disposed off by the
Hon'ble Court by remanding the matter to the Public Works Department.
After series of litigations, the Public Works Department confirmed the
water charges @ Rs.500/- per 1000 Cu. Mtr on the contracted quantity.
The Company has moved the Hon'ble High Court challenging the validity
of payment on the contracted quantity instead of actual quantity of
water drawn and this matter is pending before the Hon'ble High Court.
As against the demand of Rs.175.39 Lakhs consisting of Rs.49.66 Lakhs
towards the arrear water charges and Rs.125.73 Lakhs towards interest
up to the period 31.12.2008, the Company has fully paid the principal
amount of Rs.49.66 Lakhs.
Further, the Company has also made a request for waiver of the interest
charges to PWD and the request is pending before them.
Since the Paper Division has been disposed off, the liability, if any,
on this account up to the date of sale (i.e. 14.11.1999), will have to
be borne by the Company. As a matter of prudence, the Company has made
a provision of Rs.12 Lakhs during the year and the cumulative provision
available on this account as on date is Rs.55.85 Lakhs.
Notes:
The disputed Income Tax/ Fringe Benefit Tax liabilities amounting to
Rs.802.53 Lakhs have not been acknowledged as debts and have been
classified under Contingent Liabilities.
Similarly, Rs.603.13 Lakhs being the disputed Central
Excise/Customs/Sales Tax liabilities have not been acknowledged as
debts and have been classified under Contingent Liabilities.
Other Contingent Liabilities mainly include disputed liability towards
water charges amounting to Rs.69.88 Lakhs as per the details given in
Point No.19 of the Notes on Accounts.
Necessary Appeals have been filed with the authorities concerned
against the disputed liabilities.
(13) Previous year's figures have been regrouped and reclassified
wherever necessary to conform to the current year's presentation and
also to be in conformity with Revised Schedule VI. Figures have been
rounded off to the nearest rupee.
Mar 31, 2010
I. CONTINGENT LIABILITIES NOT PROVIDED FOR:
2009-10 2008-09
(Rs. in lakhs) (Rs. in lakhs)
Guarantees against letters
of credit opened 122.78 -
Other Guarantees 107.00 14.23
Disputed Taxes/Claims, not
acknowledged as debts 1,448.89 508.76
1,678.67 522.99
II. The Company has created a Trust which has taken a group Gratuity
Policy with the Life Insurance Corporation of India for future payment
of gratuity to the retired/resigned employees. Based on the actuarial
valuation, provision has been made for full value of the gratuity
benefits as per the requirements of Accounting Standard 15 (AS-15)
(Revised) issued by The Institute of Chartered Accountants of India.
III. The Company contributes to a Superannuation Fund covering
specified employees. The contributions are by way of annual premia
payable in respect of a superannuation policy issued by the Life
Insurance Corporation of India, which confers benefits to
retired/resigned employees based on policy norms. No other liabilities
are incurred by the Company in this regard.
IV. Leave Encashment benefit has been charged to Profit & Loss
Account on the basis of actuarial valuation as at the year end in line
with the Accounting Standard 15 (AS-15) (Revised) issued by The
Institute of Chartered Accountants of India.
DEFINED BENEFIT PLAN :
The Employees Gratuity Fund Scheme managed by a Trust is a Defined
Benefit plan.
The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method which recognises each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation as per para 65 of the Accounting Standard 15 (AS-15)
(Revised) issued by The Institute of Chartered Accountants of India.
V Your Company availed Carry Forward benefits u/s.72A of the
Income-Tax Act 1961, relating to TTK Biomed Ltd, consequent to its
merger with your Company. For availing these benefits, certain
conditions have to be fulfilled under Rule 9C of the Income-Tax Rules,
1962. Your Company could not fulfil one of the conditions and hence an
application was made to CBDT for relaxation of the condition under the
said Rule 9C. The CBDT while disposing of the application had advised
your Company to refer the matter to the Specified Authority.
Subsequently, your Company has filed necessary application with the
Specified Authority. Upon receipt of the decision from the Specified
Authority, the matter will be suitably dealt with.
VI Your Company availed certain Carry Forward benefits u/s.72A of the
Income-Tax Act, 1961 relating to TTK Medical Devices Ltd., consequent
to its merger with your Company. For availing these benefits, certain
conditions have to be fulfilled under Rule 9C of the Income Tax
Rules,1962. Your Company could not fulfil certain conditions and hence
an Application/ Review Petition has been made to CBDT for relaxation of
these conditions. Upon receipt of the decision from CBDT, the matter
will be suitably dealt with.
VII During the year, the Company has written off non-recoverable debts
to the extent of Rs.29,94,720/-.
VIII During the year under review, your Company has acquired the
Orthopaedic Implants Manufacturing Undertaking from M/s. Invicta
Meditek Ltd. at a consideration of Rs.4.16 crores (including taxes).
IX During the year under review, 3,21,514 shares were extinguished
which were bought under the Buy-back Scheme and reduced the same from
the Share Capital (Out of this, 4,577 shares were bought back during
the previous year and extinguished during the current year).
X For the previous year 2008-09, the Company made a provision of
Rs.242.62 lakhs towards Dividend @ Rs.3/- (30%) per share on 80,87,497
Equity Shares at Rs.10/- each as on 31.3.2009. Subsequently, the
Company bought back 3,21,514 Equity Shares during the period 1.4.2009
till 27.8.2009 (the record date for the payment of Dividend).
Consequently, the Dividend was actually paid only in respect of
77,65,983 Equity Shares of Rs.10/- each which formed the Paid-up Share
Capital as on that date. The excess provision amounting to
Rs.9,64,542/- has been reduced from provision for Dividend and added to
the General Reserve.
XI The Capital Work-in-Progress amounting to Rs.631.98 lakhs represents
the cost of the Pre-owned Pellet Manufacturing Line imported from Italy
which is under erection and the cost of Civil and Electrical Works,
carried out for the Foods Project during the year. This will be
capitalised after the completion of the Project.
XII During the year 2008-09, your Company had invested Rs.5 Crores in
24 Month Nifty-linked Non Convertible Debentures (NCDs) (100% Principal
protected) of Citi Financial Consumer Finance India Ltd. The investment
is for a period of 24 months with an average yield of 9.5% p.a. and is
linked to the Nifty performance. The interest on these debentures will
be accounted at the time of redemption of debentures as the interest
has not accrued as per the terms of the contract.
XIII The Public Works Department increased the Water Charges for the
water drawn by the Paper Division from the river Bhavani from Rs.60/-
per 1000 Cu. Mtrto Rs.500/-per 1000 Cu. Mtron the contracted quantity
of water, with effect from 9.5.1991. The Company filed a writ petition
in the Madras High Court and as per the interim order dated 9.7.1991,
passed by the Court, the Company was paying water charges @ Rs.200/-
per 1000 Cu. Mtr of water on the actual quantity of water drawn and
with effect from 1.4.1993 on the contracted quantity. The Writ was
disposed off by the Court by remanding the matter to the Public Works
Department.
After series of litigations, the Public Works Department confirmed the
water charges @ of Rs.500/- per 1000 Cu. Mtr on the contracted
quantity. The Company has moved the High Court challenging the
validity of payment on the contracted quantity instead of actual
quantity of water drawn and this matter is pending before the Honble
High Court of Judicature at Madras.
As against the demand of Rs.175.39 lakhs consisting of Rs.49.66 lakhs
towards the arrear water charges and Rs.125.73 lakhs towards interest
upto the period 31.12.2008, the Company started paying the principal
amount of Rs.49.66 lakhs in 12 equated monthly instalments without
prejudice to its rights and contentions. Out of this, two instalments
amounting to Rs.8.27 lakhs have already been paid during the year
2009-10.
Further, the Company has also made a request for waiver of the interest
charges to PWD and the request is pending before them.
Since the Paper Division has been disposed off, the liability, if any,
on this account upto the date of sale (i.e. 14.11.1999), will have to
be borne by the Company. As a matter of prudence, the Company has made
a provision of Rs.12 lakhs during the year and the cumulative provision
available on this account as on date after adjusting the two
instalments already paid is Rs.73.24 lakhs.
XIV Related Party disclosures as per Accounting Standard 18 (AS-18):
List of Related Parties with whom transactions have taken place during
the year:
Related Parties/ Firms
T.T.Krishnamachari & Co
Pharma Research & Analytical Laboratories
TTK Prestige Limited
TTK LIG Limited
Packwell Packaging Products Limited
SSL TTK Limited
Key Management Personnel
Mr. T T Raghunathan, Executive Vice Chairman
Mr. K Vaidyanathan, Executive Director
XV Previous years figures have been regrouped and reclassified
wherever necessary to conform to the current years presentation.
Figures have been rounded off to the nearest rupee.
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