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Directors Report of TTK Healthcare Ltd.

Mar 31, 2022

Your Directors have pleasure in presenting the 64^th Annual Report together with the Audited Financial Statements for the financial year ended 31^st March, 2022.

Sale / Transfer of Human Pharma Division:

In terms of the consent from the Members of the Company by means of a Special Resolution passed through Postal Ballot Process on 23^rdApril, 2022, the Human Pharma Division (Undertaking) of your Company stands transferred, as a going concern, on a slump sale basis, for a consideration of Rs.805 crores (subject to adjustment for working capital and other items that are customary in such transactions) to M/s BSV Pharma Private Limited (BSV), with effect from 9^th May, 2022.

Consequently, in line with the Accounting Standard Ind AS 105, the results of your Company for the year under review were separately shown as "Profit / (Loss) from Continuing Operations" and "Profit / (Loss) from Human Pharma Operations held for sale in the subsequent year".

Financial Results:	2021-22		(Rs. in lakhs) 2020-21
(a) Continuing Operations Profit before Depreciation & Tax Less: Depreciation Add: Exceptional Item - Profit on sale of land / Interest on Tax Refund Profit before Tax Less: Tax expense: Current Tax Tax relating to earlier years Deferred Tax	743.67 (110.96)	3,493.04 1,258.36 249.05	2,754.33 1,301.96 809.79
	743.67 (110.96)	2,483.73 632.71	2,262.16 747.91 (1,964.81) (199.11) (1,416.01)
Profit after tax from Continuing
Operations		1,851.02	3,678.17
(b) Human Pharma Operations held
for sale in the subsequent year
Profit before Tax		3,294.14	1,443.03
Less: Tax Expense		986.33	477.09
Profit after tax from Human
Pharma Operations held for sale		2,307.81	965.94
in the subsequent year
Profit after tax [(a) (b)]		4,158.83	4,644.11
Surplus Account:
Balance as per last Balance Sheet		16,771.09	12,645.18
Add: Profit for the year	4,158.83		4,644.11
Other Comprehensive Income for
the year (Net of Tax)	12.31	4,171.14	(94.29) 4,549.82
Total		20,942.23	17,195.00
Less: Dividend Paid		847.82	423.91
Net Surplus		20,094.41	16,771.09

Review of Performance:

During the year under review, the Revenue from Continuing Operations amounted to Rs.599.24 crores as against the previous yearâs figure of Rs.476.06 crores, a growth of around 26%.

Pre-Tax Profit for the year stood at Rs.24.84 crores as against the previous yearâs figure of Rs.22.62 crores.

(During the year under review, the Revenue from Human Pharma Operations held for sale in the subsequent year amounted to Rs.198.04 crores as against the previous yearâs figure of Rs.160.47 crores, a growth of around 23%).

A detailed review is presented under the Section âSegmentwise Performance".

Dividend:

Your Directors are pleased to recommend a dividend of Rs.10/- (100%) per Equity Share of Rs.10/- each for the year ended 31^st March, 2022. [Previous Year - Rs.6.00 (60%) per Equity Share of Rs.10/- each].

The dividend pay-out is in accordance with the Companyâs Dividend Distribution Policy.

Share Capital:

The Paid-up Equity Share Capital as on 31^st March, 2022 was Rs.1,413.03 lakhs. Your Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Industry STRUCTURE AND Developments:

Though the performance during First Quarter was impacted due to the second wave of CoVID-19 pandemic, all the Businesses / Divisions have reported a smart recovery in the subsequent Quarters, thus closing the year with a healthy growth.

The Indian Pharmaceutical Market (IPM) currently valued at Rs.1,85,498 crores [Source: IQVIA MAT March 2022] grew by around 18%.

The growth was driven by volumes (9%), price revisions (5%) and new introductions (4%). Market growth is primarily driven by Respiratory (44%), Parenterals (39.8%), Anti-Infectives (35%) and Pain / Analgesics (21.6%).

(B) OPPORTUNITIES AND THREATS Opportunities:

â¢ Your Company has the unique advantage of an exclusive network for distribution of FMCG / OTC products. This can be leveraged for launch of new products so as to ensure improved profitability and value creation through brand building.

â¢ In view of the increasing spend by Pet parents on Pet / Companion Animals over the years, this segment of the Animal Welfare Division (AWD) offers good potential for growth.

â¢ On Medical Devices front, the market continues to be dominated by imported medical devices / implants. Since your Company manufactures world class products and these are priced competitively, this segment provides opportunity for growth.

The âMake in India" and the âAtmanirbhar Bharat Abhiyaan" (Self-reliant India) initiatives by the Government of India would further enhance the growth prospects for this Segment and

provide further fillip to the indigenous manufacture of medical devices. These products also have export potential.

â¢ The Central Governmentâs Medical Insurance Scheme -Ayushman Bharat being implemented to cover poor families is also likely to increase the number of treatment procedures which would, in turn, improve the demand for medical implants viz., Heart Valves and Ortho Implants manufactured by your Company.

â¢ Considering the size of the market for food products, the Foods Business of your Company has potential for growth including branding / retail and export opportunities.

Threats:

â¢ Considering the commodity nature of the current Foods Business, there is pressure on price realizations. Nevertheless, this is mitigated through enhanced focus on export markets and also launch of innovative and differentiated products. Further, efforts are also being made to convert part of the B2B business into branded / retail business.

Your Company is engaged in Animal Welfare Products, Consumer Products, Medical Devices, Protective Devices and Foods Businesses.

A look at the performance of individual Business Segments:

Human Pharma Division [Ethical Products Division (EPD) & Ventura Division] (since sold off)

The Human Pharma Division of your Company was dealing in Pharmaceutical formulations (Herbal and Allopathic) in various therapeutic segments and supplements, for human use.

During the year 2021-22, EPD and Ventura Divisions have registered a revenue from operations of Rs.198.04 crores, with a growth of around 23%.

Though there was some impact on the performance during First Quarter due to the second wave of CoVID-19 pandemic, the business improved gradually in the subsequent Quarters, thus resulting in a robust performance for the year as a whole.

During the year under review, two new products viz., Chirocyst DS and PCO 360 were launched under Ventura Division and the response was encouraging.

Animal Welfare Division (AWD)

The Animal Welfare Division of your Company deals in Pharmaceutical formulations in various therapeutic segments and feed supplements, for veterinary use.

During the year under review, Animal Welfare Division registered a revenue from operations of Rs.99.11 crores, with a growth of around 27%.

With top ten brands contributing significantly to the total sales, all the Sub-divisions under AWD (Bovianim, Gallus, Companim & Aquanim) have performed well.

OTO (Orcal-P - Tefroli - Ossomin) Group, the flagship brands

contributed in excess of 30% to the Divisionâs sales, with a double digit growth.

The strategy for the year 2022-23 would be to sustain the current momentum and to achieve a healthy growth from all Sub-divisions along with Institution and Export businesses.

Consumer Products Business:

The Consumer Products Division reported a revenue from operations of Rs.217.44 crores, with a growth of around 24%.

Woodwardâs Gripewater (WGW)

During the year under review, Woodwardâs Gripe Water (WGW) achieved an all-time high sales volume in excess of 4,50,000 cases, with a healthy growth.

The scaling up of key consumer-centric marketing activities such as Media, Digital Engagement and consumer activation enabled the brand to deliver a sustained volume month-on-month.

The strategy for the year 2022-23 would be (i) to sustain Southern markets by driving consumption increase; and (ii) to grow the NonSouth markets through appropriate promotional investments.

EVA

Despite the fact that the First Quarter was quite challenging for EVA as a brand due to CoVID-19 second wave, the brand demonstrated a very good resilience in the subsequent Quarters and reported a healthy growth over the previous year.

The new 360 Degree âEva Special Happensâ campaign with celebrity endorsement helped in increasing brand awareness and turnover during the said period. The brand was on constant communication across channels from Second Quarter onwards. The launch of limited edition in Fourth Quarter helped to create excitement and buzz amongst the consumers. Talc & Lip ranges too performed reasonably well.

The strategy for the year 2022-23 would be- (i) to further strengthen the brand communication âEva Special Happensâ and gain market share; (ii) to increase trials for the brand through relevant and effective marketing activations; (iii) to build stronghold in Modern Trade and e-Com channels; and (iv) to launch strategic brand extensions under fragrances and personal enhancement categories.

Skore

During the year under review, Skore brand has regained its momentum and managed to reach its pre-CoVID numbers and the overall growth was satisfactory.

Skore also saw good growth in its non-condom segment, aided by significant increase in Indiaâs digital offtake, especially post pandemic.

On brand front, focus remained on innovation and disruption with the launch of a unique offering namely âSkore Nothingâ, Indiaâs thinnest flavoured condoms and carried out a Brand Campaign, which helped in generating good buzz and momentum for the brand.

The brand also focused on strengthening its e-Commerce sales with the help of a couple of exclusive e-Com launches as well as focus on Pleasure products. In 2021-22, skoreindia.com the Direct-to-Consumer (D2C) initiative too, started contributing well to the overall brand sales.

The strategy for 2022-23 would be (i) to drive distribution expansion; (ii) to further increase in the Skore retail reach in Tier-1 towns; (iii) to improve e-commerce sales through D2C channels and digital marketing initiatives; and (iv) to capture and own pleasure space in India through digital medium for the pleasure product range.

Good Home

During the year under review, Good Home as a brand reported a healthy growth.

Aroma (Perfumed Air Freshener) has been a true standout during the year registering a significant growth. Despite intense competition, Unblox (Drain Cleaner) too delivered a healthy growth.

The launch of Sponge Wipes and Ultra-scrubbers widened the portfolio. Relaunch of Odour Remover in new packaging and positioning was another highlight for 2021-22.

The strategy for 2022-23 would be (i) to transform Good Home into a stronger brand by introducing new packaging and positioning; (ii) to build further volumes for Odour Remover, Aroma Air Fresheners, etc., (iii) to launch new products in Dish wash / Home Cleaning Agent Segments; and (iv) to focus on e-Com / Modern Trade to exploit the untapped potential.

Medical Devices Business:

Heart Valve Division

During the year under review, Heart Valve Division recorded a revenue from operations of Rs.17.18 crores, with a growth of around 30%.

There has been good improvement in the overall performance as compared to the previous year though the Division is yet to scale the pre-CoVID volumes.

The performance of Imported Cardiamed Bileaflet Valves was quite satisfactory.

Your Company signed an agreement for the manufacture and supply of cardiology products like PTCA Catheters and Coronary Stents. The product registration with the regulatory authorities is in progress.

The Single Centric Clinical Trials relating to new model TTK Chitra TC2 Titanium Valve is progressing at Sree Chitra Tirunal Institute of Medical Science and Technology (SCTIMST) with ten valves implanted as of now.

The focus for the year 2022-23 would be (i) to grow the volumes of TTK Chitra Valves; (ii) to gain further volumes through BiLeaflet Valves; (iii) to venture into the cardiology market; and (iv) to complete the Single Centric Clinical Trial of TC2 Titanium Valve.

Ortho Division

The Division recorded a turnover of Rs.33.73 crores, with a growth of around 150% over the previous year. Both the Knee and the Hip segments reported a healthy growth.

Though there was some challenge during First Quarter due to second wave of CoVID-19 pandemic, there has been significant improvement in the performance in the subsequent Quarters with the opening up of the pent-up demand.

The launch of Hip Replacement System has been expanded to more geographies and the response is encouraging.

Productivity improvements in manufacturing helped to increase production to a very significant level as compared to the previous year.

The strategy for the year 2022-23 would be (i) to expand the distribution and team footprint further in States mapped to potential; (ii) to build on relationships to improve market share; (iii) to strengthen sales performance in Revision and Hinge surgeries; (iv) to improve manufacturing productivity; and (v) to test launch the new Fixed Bearing Knee.

Protective Devices Business:

During the year under review, the Protective Devices Division delivered an impressive performance with a revenue from operations of Rs.133.26 crores (including Skore), a growth of around 41%.

Your Company has witnessed a good increase in productivity due to healthy order inflow, during the year.

In addition to supplying of Skore Brand of Condoms, your Company has also been supplying Condoms for a leading International Brand both for their India and Overseas requirements and has also won a contract for supply of Condoms to an International Agency till July 2023.

As in the past many years, your Company successfully went through the Quality Audits conducted by the British Standards Institution (BSI) for ISO Standards and CE Mark, South African Bureau of Standards for SABS Certification and SCS Global Services for Forest Stewardship Council Certification, as part of the continual assessment. Your Company is also being successfully audited for SEDEX and BSCI Standards by various agencies which are Social compliance requirements.

Your Company successfully retained all the certifications without any major or critical non-conformances and is also one of the prequalified supplier under WHO-UNFPA Pre-Qualification Scheme for Male Latex Condoms which is a requirement to supply products to reputed International Aid Agencies.

During the year under review, your Company had launched / supplied a few value added, innovative and differentiated products developed by your Companyâs Research & Development Division. Some more products both in the condoms and lubes range are in the process of development and a few of those would be launched during 2022-23.

Your Company during the year has exported branded products to various countries and with new registrations being initiated by both Third Party Contractors and International Aid Agency and they would further enhance its export footprint to a few more countries during the year 2022-23.

The focus for the year 2022-23 would be (i) to develop and strengthen relationships with third party contract manufacturing customers for increasing the volumes; (ii) to work on cost optimization to be more competitive in the domestic and international bid businesses; and (iii) to increase the production output by strengthening the existing infrastructure and through automation, where feasible.

Foods Business:

During the year under review, Foods Division registered a revenue from operations of Rs.98.03 crores (Previous Year Rs.101.62 crores).

The turnover was marginally lower as compared to the previous year due to the impact of CoVID-19 and a steep increase in edible oil prices which reduced the demand for ready to fry products. Your Company being a pioneer in developing innovative products and concepts in this category has developed products for different applications like ready to salt roasting, hot air popping and mechanical popping considering future trend of healthy snacks and increasing oil prices. All these products have been developed at the R&D facility in Hosakote, Bengaluru.

Relentless use of TPM and other measures have yielded in lowering operational cost and improving efficiency.

Focus is being given for manufacturing 2D die-cut products at Jaipur plant in order to make the lines more versatile and improve capacity utilization.

The strategy for the year 2022-23 would be (i) to further increase the capacity utilization at Jaipur facility through enhanced focus on domestic / institutional and export businesses; and (ii) also to work on developing and launching innovative and differentiated products to improve volumes / margins.

(D) OUTLOOK:

In view of the above developments and initiatives, the outlook for your Company as a whole for 2022-23, appears promising.

(E) RISKS AND CONCERNS:

The analysis presented in the Industry Scenario and Opportunities and Threats Section of this Report throws light on the important risks and concerns faced by your Company. The strategy of your Company to de-risk against these factors is also outlined in the said Sections.

(F) internal control SYSTEMS and THEIR ADEQUACY:

Your Company developed necessary Manuals / Standard Operating Procedures (SOPs) for effectively implementing the Internal Financial Control System. Accordingly, various Accounting and Reporting Policies have also been developed and implemented. Internal Audits are regularly conducted through In-house Audit

Department and also through External Audit Firms. The Reports are periodically discussed internally. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

Frauds:

During the year under review, no fraud was reported by the Internal Auditors, Statutory Auditors, Cost Auditors and Secretarial Auditors.

(G) FINANCIAL Performance:

Consequent to the sale / transfer of the Human Pharma Division (Undertaking) of the Company, effective 9^th May, 2022, the results of your Company for the year under review were separately shown as "Profit / (Loss) from Continuing Operations" and "Profit / (Loss) from Human Pharma Operations held for sale in the subsequent year, in line with the Accounting Standard Ind AS 105".

		(Rs. in lakhs)
	2021-22	2020-21
(a) Continuing Operations
Revenue from Operations (Net)	59,923.99	47,605.86
Other Income	1,633.06	993.47
Total Income	61,557.05	48,599.33
Cost of Materials Consumed	28,149.47	20,932.49
Employee Benefits Expense	10,284.24	9,369.79
Other Expenses	19,306.55	15,371.63
Profit before Finance Cost,
Depreciation & Exceptional Items	3,816.79	2,925.42
Finance Cost	323.75	171.09
Depreciation	1,258.36	1,301.96
Exceptional Item - Profit on sale of land /
Interest on Tax Refund	249.05	809.79
Profit before Tax	2,483.73	2,262.16
Less: Tax Expense
Current Tax	743.67	747.91
Tax relating to earlier years	-	(1,964.81)
Deferred Tax	(110.96)	(199.11)
Profit after tax from Continuing
Operations	1,851.02	3,678.17
(b) Human Pharma Operations held for
sale in the subsequent year
Profit before Tax	3,294.14	1,443.03
Less: Tax Expense	986.33	477.09
Profit after tax from Human Pharma
Operations held for sale in the
subsequent year	2,307.81	965.94
Profit after Tax [(a) (b)]	4,158.83	4,644.11

ANALYSIS OF PERFORMANCE:

â¢ The revenue from Continuing Operations amounted to Rs.599.24 crores, with a growth of around 26% and the revenue from Human Pharma Operations held for sale in the subsequent year amounted to Rs.198.04 crores, with a growth of around 23%.

Though there was some impact on the performance during First Quarter due to the second wave of CoVID-19 pandemic, all the businesses improved gradually in the subsequent Quarters, thus resulting in a healthy growth.

â¢ The increase in Other Income was mainly due to (i) increase in interest on Fixed Deposits (ii) interest on Tax refund and (iii) sale of scrap relating to Protective Devices Division.

â¢ The increase in Employee Benefits Expense was mainly due to (i) regular annual increments / revision in packages; and (ii) provision made for the increase in the packages of Unionized Employees covered under Long Term Wage Settlement of Pharma Division.

â¢ The increase in Power and Fuel expenses was due to higher production at Foods Divisionâs factories at Hosakote and Jaipur and also at Condoms factory at Puducherry.

â¢ The increase in Advertisement & Sales Promotion expenses was mainly on account of the higher advertising and promotional activities undertaken relating to WGW, EVA, Good Home and Skore Brand of Condoms / Pleasure products range.

â¢ The increase in Travelling & Conveyance was due to resumption of regular travel post-CoVID-19 pandemic.

â¢ As per the Provisioning Policy relating to Bad and Doubtful Debts approved by the Audit Committee and the Board, a sum of Rs.32.02 lakhs (inclusive of Human Pharma Division) was provided for Bad and Doubtful Debts for the year 2021-22.

â¢ Bad Debts written off during the year under review, amounted to Rs.18.39 lakhs, comprising-

(Rs. in lakhs)

Pharma Division (including AWD) 9.82

Ortho Division 3.72

Foods Division 3.31

Consumer Products Division 1.54

â¢ The increase in Legal and Consultancy charges was mainly on account of the CE re-certification fees relating to Ortho Division consequent to the change from Medical Devices Directives (MDD) to Medical Devices Regulations (MDR) and the retainership fees paid to various media / digital agencies with regard to the consumer brands and pleasure products.

â¢ All the Other Expenses are in line with the increased level of operations.

(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES /

INDUSTRIAL Relations Front:

â¢ Human Resources:

During the year 2021-22, your Company continued to emphasize on the safety and health of employees in view of the CoVID-19 pandemic, with a constant focus on the safety protocols, in line with the regulations announced by the various Government Agencies.

During the year, your Company completed the Leadership Advancement Program (LEAP) for the second level managers on advanced leadership and managerial skills and prepared

them to take up higher responsibilities. Also started a similar program for the third level Managers.

Through the i-learn online training platform, your Company has provided training to around 250 employees on development of soft skills.

Your Company has also continuously identified and rewarded the employees and teams that have demonstrated the pursuit of excellence in the areas of marketing, customer focus, innovation, business process transformation, etc., through R&R Programs such as Xtra Mile, Trail Blazer and Corporate Excellence Awards.

As on 31^st March, 2022, the employee strength was 2,588 (Previous Year - 2,485).

â¢ Industrial Relations:

The industrial relations during the year under review continued to be cordial.

Your Company entered into a 3-year Wage Settlement (effective 1^st January, 2021) with the Workersâ Union of the Foods Division, Hosakote.

The Directors place on record their sincere appreciation for the services rendered by employees at all levels.

(I) information TECHNOLOGY:

Your Company has upgraded the Oracle ERP Application from 12.1.3 to 12.2.10 and Oracle Database from Oracle 12C to Oracle 19C.

During the year under review, your Company has automated Key HR Processes such as the Recruitment and Performance Management System. Your Company has initiated a project titled FAST FORWARD for Ortho Division to automate the end-to-end process of invoicing / inventory management.

(J) FUTURISTIC STATEMENTS:

This analysis may contain certain statements, which are futuristic in nature. Such statements represent the intentions of the Management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by taking into account all relevant factors before taking any investment decision.

(K) KEY FINANCIAL RATIOS:

Particulars	2021-22	2020-21	Change %	Remarks
Debtors Turnover Ratio	12.34	9.28	32.97	F	Mainly because of the significantly improved performance both in terms of Revenue from Operations and profitability and effective management of Receivables / Inventories, during the year under review.
Inventory Turnover Ratio	4.25	3.55	19.72	F
Interest Coverage Ratio	16.73	15.65	6.90	F
Current Ratio	2.06	1.99	3.52	F
Operating Profit Margin (%)	7.03	5.48	28.28	F


Debt Equity Ratio (%)	7.22	6.90	4.64	A	Marginally higher due to higher availment of Working Capital Facilities from Banks.
Net Profit Margin (%)	5.22	7.30	(28.49)	A	During the previous year, the Net Profit was higher mainly due to the reversal of tax provisions relating to earlier years. Consequently, the net profit for the year under review was lower, resulting in reduction in these ratios.
Return on Net Worth (%)	14.14	18.08	(21.79)	A

F - Favourable; A - Adverse

Above figures include Human Pharma Division held for sale in the subsequent year.

DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER:

(a) Annual Return:

Annual Return (Form MGT-7) for the year 2021-22 was made available on the Companyâs website at the following link https:// ttkhealthcare.com.

(b) number of meetings of the Board:

The Board of Directors met 5 (Five) times during the year 202122. The details of the Board Meetings and the attendance of the Directors are provided in the Report on Corporate Governance.

The Corporate Social Responsibility (CSR) Committee consists of Mr T T Raghunathan as Chairman, Mr K Shankaran, Dr (Mrs) Vandana R Walvekar and Mr Girish Rao as Members. Mr S Kalyanaraman is the Secretary to the Committee.

The Corporate Social Responsibility (CSR) Policy enumerating the CSR activities to be undertaken by your Company, in accordance with Schedule VII to the Companies Act, 2013 was recommended to the Board and the Board adopted the same. The said policy was also made available on the Companyâs website at the following link https://ttkhealthcare.com/investorlist/policies/.

The Annual Report under CSR Activities is annexed to this Report as Annexure-1.

The details relating to the meeting(s) convened, etc., are furnished in the Report on Corporate Governance.

(d) Composition of Audit Committee:

The Audit Committee consists of Mr Girish Rao as Chairman, Mr K Shankaran, Mr S Balasubramanian and Mr V Ranganathan as Members. Mr S Kalyanaraman is the Secretary to the Committee. More details on the Committee are given in the Report on Corporate Governance.

(e) Related Party Transactions:

During the year under review, no transaction of material nature has been entered into by your Company with its Promoters, the Directors or the Key Managerial Personnel or their relatives, etc., that may have a potential conflict with the interests of your Company.

All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are repetitive in nature. A statement giving details of the transactions entered into with the related parties, pursuant to the omnibus approval so granted, is placed before the Audit Committee and the Board of Directors for their approval / ratification on a quarterly basis.

The Register of Contracts containing the details of the transactions, in which Directors / Key Managerial Personnel are interested, is placed before the Audit Committee / Board regularly.

The Board of Directors of your Company, on the recommendation of the Audit Committee, adopted a policy on Related Party Transactions, to regulate the transactions between your Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The Policy as approved by the Board is uploaded on the Companyâs website at the following link https://ttkhealthcare.com/ investorlist/policies/.

Form AOC-2 containing the details of Related Party Transactions is annexed as Annexure-2 to this Report.

(f) Corporate Governance:

Your Company has complied with the various requirements of the Corporate Governance Code under the provisions of the Companies Act, 2013 and as stipulated under the SEBI (LODR) Regulations, 2015.

A detailed Report on Corporate Governance forms part of this Annual Report.

(g) Business Responsibility Report:

In accordance with the provisions of SEBI (LODR) Regulations, 2015 and on the basis of market capitalization as on 31^st March, 2022, the Business Responsibility Report forms part of this Annual Report. (Page No.35)

(h) Risk management:

Your Company has developed and implemented a Risk Management Policy which includes identification of elements of risk, if any, which in the opinion of the Board, may threaten the existence of the Company.

Your Company has a Risk Identification and Management Framework appropriate to the size of your Company and the environment in which it operates.

Your Company constituted a Risk Management Group (RMG) with due representations from each of the Businesses / Functions of your Company to effectively implement the Risk Management Framework and to address the key risks.

The meetings of the RMG were convened periodically, in order to have detailed interactions / discussions with the Members / Risk Owners on the various risks identified and the status of the mitigation plans.

The Risk Management Committee was constituted on 27th May, 2021, in accordance with the SEBI (LODR) (Second Amendment) Regulations, 2021 notified on 5th May, 2021 and during the year two meetings were held on 12th July, 2021 and 20th October, 2021. The Company retained the services of a well-known consulting firm and they made a detailed presentation to the Risk Management Committee on the methodology adopted for arriving at the various risks after due interactions with the Business / Functional Heads and the Risk Owners and also the updation of the Risk Register.

The Risk Management Committee was updated on the outcome of the RMG Meetings held during the year.

The Audit Committee and the Board were also periodically updated on the outcome of the Risk Management Committee Meetings and on the key risk areas and its mitigation plans. The Risk Management Framework was also periodically reviewed by the Audit Committee and the Board.

(i) Directors and Key Managerial Personnel:

There are no changes in the composition of the Board of Directors during the year.

None of the Directors are disqualified from being appointed or holding office as Directors, as stipulated under Section 164 of the Companies Act, 2013.

Certificate of Non-disqualifications of Directors from the Practicing Company Secretary is furnished under Report on Corporate Governance. (Page No.53)

(i) Reappointment of Directors:

Mr R K Tulshan, liable to retire by rotation at the ensuing

Annual General Meeting and being eligible, offers himself for

reappointment. The Board recommends his reappointment.

(ii) Statement on Declaration by the Independent Directors of the

Company:

All the Independent Directors of your Company have given -

â¢ Declarations under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the Rules made thereunder and also Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015.

â¢ Confirmation of compliance with the Code for Independent Directors prescribed under Schedule IV to the Act and the Company''s Code of Conduct for Directors and Senior Management Personnel.

â¢y Further, they have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge the duties with an objective independent judgement and without any external influence.

â¢ The terms and conditions of appointment of the Independent Directors are posted on the Company''s website at the following link https://ttkhealthcare.com/wp-content/ uploads/2019/09/ Terms-and-Conditions-of-Appointment-of-Independent-Directors-2.pdf.

(iii) Key managerial Personnel (KMP):

The following managerial personnel are Key Managerial Personnel (KMP):

â¢ Mr T T Raghunathan, Executive Vice Chairman [Chief Executive Officer (CEO)];

â¢ Mr S Kalyanaraman, Wholetime Director & Secretary [Company Secretary]; and

â¢ Mr B V K Durga Prasad, President - Finance [Chief Financial Officer (CFO)].

(iv) Performance Evaluation of the Board, its Committees, Chairperson, Non-Independent Directors and Independent Directors:

In compliance with the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, the performance evaluation of the Board as a whole, its Committees, Chairperson and Non-Independent Directors were carried out during the year under review by the Independent Directors and the evaluation of the Independent Directors were carried out by the entire Board of Directors excluding the Director being evaluated during the year under review. More details on the same are given in the Report on Corporate Governance.

(v) Policy on Directorsâ Appointment and Remuneration:

Your Company adopted a Policy relating to selection, appointment, remuneration and evaluation of Directors and Senior Management Personnel. The said Policy is posted on the Companyâs website at the following link https://ttkhealthcare.com/investorlist/policies/.

(j) Auditors:

(i) Statutory Auditorâs and their Report:

â¢ Reappointment of Auditors:

M/s PKF Sridhar & Santhanam LLP was appointed as Statutory Auditors of the Company, for a term of 5 years, to hold office from the conclusion of the 59^th Annual General Meeting till the conclusion of 64^th Annual General Meeting. The Board of Directors at their meeting held on 23^rdMay, 2022, based on the recommendation of the Audit Committee, considered and recommended to the Members of the Company, the reappointment of M/s. PKF Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration No.003990S/S200018), as Statutory Auditors, for a further term of five consecutive years, to hold office from the conclusion of the 64^th Annual General Meeting till the conclusion of the 69^th Annual General Meeting.

A brief profile of M/s. PKF Sridhar & Santhanam LLP is provided below:

? The Firm has been in existence from 1978, initially as a Partnership Firm and presently as a Limited Liability Partnership. They are one of the leading Professional Service Providers with Global experience.

? Has 23 partners as of now and has over 700 people - Directors with global exposures, Professionals

from multifarious disciplines and Staff with international assignments.

? Has its Head Office at Chennai and has offices in four cities, viz., Mumbai, New Delhi, Bengaluru and Hyderabad.

? Is a member of PKF - a Global Network of Independent Accounting Firms and an exclusive member of India.

? The Firm has a very impressive list of clients across multiple industry verticals.

? The firm has been peer reviewed in 2019. Also, as a part of the âForum of Firmsâ, an association of international networks of accounting firms that perform audits of financial statements that are or may be used across national borders, the firm maintains international quality control standards.

? The Firm uses technology, data analytics and audit software in conducting audits.

Their appointment, if made, will be in accordance with the provisions of the Companies Act, 2013, the Chartered Accountants Act, 1949 and the Rules and Regulations made thereunder. They also satisfy the criteria provided under Section 141 of the Companies Act, 2013 and are not disqualified under the said Acts.

Accordingly, a Resolution seeking Membersâ approval for the appointment of M/s PKF Sridhar & Santhanam LLP, as Statutory Auditors of the Company is included under Item No.4 of the Notice convening the Annual General Meeting.

Auditorsâ Report for the year ended 31^st March, 2022:

The Auditorsâ Report to the Shareholders for the year under review does not contain any qualifications.

(ii) Cost Auditors and Cost Audit Report:

â¢ Appointment for the year 2022-23:

Pursuant to Section 148 of the Companies Act, 2013 and the Rules made thereunder, the Cost Records of your Company shall be audited for the following product categories, for the financial year 2022-23:

? Under Regulated Sectors:

â¢ Drugs and Pharmaceuticals.

? Under Non-Regulated Sectors:

â¢ Male Contraceptives under Rubber and Allied Products;

â¢ Heart Valves and Orthopaedic Implants under Production, Import and Supply or Trading of Medical Devices.

The Board of Directors, on the recommendation of the Audit Committee, appointed M/s Geeyes & Co., as Cost Auditors of your Company, for the financial year 2022-23 and fixed their remuneration at Rs.5 lakhs plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit. Necessary intimation of the said appointment would be given to the Central Government vide Form CRA-2.

M/s Geeyes & Co., have confirmed that their appointment is within the limits prescribed under Section 141 of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under the said Section.

The Audit Committee also received a Certificate from the Cost Auditors certifying their independence and armâs length relationship with your Company.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder, the ratification by the Members is sought by means of an Ordinary Resolution for the remuneration of Rs.5 lakhs plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit, payable to M/s Geeyes & Co., Cost Auditors, under Item No.7 of the Notice convening the Annual General Meeting.

The Cost Audit Report for the year ended 31^st March, 2022 would be filed on or before the due date (i.e.) 27^th September, 2022 or within 30 days from the date of submission of the said Report to the Board, whichever is earlier.

â¢ Cost Audit Report for the year 2020-21:

The Cost Audit Report for the financial year ended 31^stMarch, 2021 was filed in Form CRA-4 vide SRN T38122982 dated 27^th August, 2021 with the Central Government.

(iii) Secretarial Auditor and Secretarial Audit Report:

The Board had appointed M/s A K Jain & Associates, Practising Company Secretaries, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2021-22. The Report of the Secretarial Auditor in Form MR-3 is annexed to this Report as Annexure-3. The Report does not contain any qualification or reservation or adverse remarks.

(k) Investor Education and Protection Fund (IEPF):

â¢ Transfer of Unclaimed Dividends to IEPF, during the year under review:

Your Company has transferred a sum of Rs.7,64,164 during the financial year 2021-22 to the Investor Education and Protection Fund established by the Central Government, in compliance with Sections 123 - 125 of the Companies Act, 2013. The said amount represents the unclaimed dividends for the year ended 31^st March, 2014, which were lying unclaimed with your Company for a period of seven years from the due date of payment.

â¢ Transfer of Shares to the Demat Account of the IEPF Authority:

In accordance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)

Rules, 2016, your Company transferred 12,672 Equity Shares of Rs.10/- each fully paid-up, in respect of which the dividends relating to the year 2013-14, remained unclaimed / unpaid for a period of seven consecutive years or more, to the Demat Account of the IEPF Authority held with CDSL on 29^th September, 2021.

â¢ Year wise amount of Unpaid / Unclaimed Dividends lying in the Unpaid Account as on 31^st March, 2022 and the due dates of transfer:

Financial year ended	Dividend Declared on	Due date of Transfer	Unpaid / Unclaimed Amount as on 31.03.2022 (in Rs.)
31.03.2015	07.08.2015	11.09.2022	8,23,428.50
31.03.2016	05.08.2016	08.09.2023	9,57,910.00
31.03.2017	04.08.2017	04.09.2024	9,82,250.00
31.03.2018	09.08.2018	14.09.2025	6,58,543.07
31.03.2019	09.08.2019	12.09.2026	5,77,165.52
31.03.2020	11.09.2020	14.10.2027	3,42,921.20
31.03.2021	20.08.2021	21.10.2028	6,02,126.40

Name of the Nodal Officer : Mr S Kalyanaraman

Designation : Wholetime Director & Secretary

Address : TTK Healthcare Limited

No.6, Cathedral Road Chennai 600 086

Telephone : 044 - 28116106 / 28113804

E-mail ID : [email protected]

â¢ Details of the Nodal Officer

(l) Disclosure under Schedule V(F) of the SEBI (LODR) Regulations, 2015:

Your Company does not have any Unclaimed Shares issued in physical form pursuant to Public Issue / Rights Issue.

(m) Conservation of Energy:

The prescribed particulars under Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are furnished in Annexure-4 to this Report.

(n) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 and the Rules made thereunder are annexed to this Report as Annexure-5.

(o) Subsidiary Company:

Your Company does not have any Subsidiary.

(p) Deposits:

As on 31^st March, 2022, your Company was not holding any amount under Fixed Deposit Account.

(q) Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013:

During the year under review, your Company had not given any loan, provided any guarantee and made any investment under Section 186 of the Companies Act, 2013.

(r) material Changes and Commitments affecting the financial position:

The Human Pharma Division (Undertaking) of your Company stands transferred, as a going concern, on a slump sale basis, for a consideration of Rs.805 crores (subject to adjustment for working capital and other items that are customary in such transactions) to M/s BSV Pharma Private Limited, with effect from 9^th May, 2022. In terms of the Business Transfer Agreement dated 21^st March, 2022, the Company received 74% of the consideration, subject to adjustments for working capital, in cash and the balance 26% of the consideration in the form for Equity Shares in M/s BSV Pharma Private Limited.

(s) Significant & material orders passed by the Regulators/Courts:

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

(t) Whistle Blower Policy:

In accordance with the provisions of Section 177(9) of the Companies Act, 2013 and the Rules made thereunder and also the SEBI (LODR) Regulations, 2015, your Company established a vigil mechanism termed as Whistle Blower Policy, for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or Ethics Policy, which also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Corporate Governance Officer / Chairman of the Audit Committee and the Executive Vice Chairman, in exceptional cases.

The Whistle Blower Policy was also hosted on the Companyâs website at the following link https://ttkhealthcare.com/investorlist/ policies/.

During the year under review, your Company had not received any complaint.

(u) Compliance Certificate:

Certificate from the Practising Company Secretary regarding compliance of conditions of Corporate Governance is furnished as Annexure-6 to this Report.

(v) Secretarial Standards:

Your Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

(w) Finance:

Your Company has banking arrangements with Union Bank of India (formerly Corporation Bank), Bank of Baroda and HDFC Bank Limited and availed various working capital facilities amounting to Rs.20.38 crores as on 31^st March, 2022. (Previous Year - Rs.17.60 crores).

(x) Listing of Equity Shares:

? Your Companyâs shares are listed with-

â¢ BSE Limited (BSE), Mumbai; and

â¢ National Stock Exchange of India Limited (NSE), Mumbai.

? Your Company paid the Listing Fees for the financial year 2022-23.

(y) Obligation of your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

In order to prevent sexual harassment of women at workplace, a legislation - The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 was notified on 9^th December, 2013. Under the said Act, every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at workplace of any woman employee.

Your Company has adopted a policy for prevention of Sexual Harassment of Women at Workplace and constituted an Internal Complaints Committee (ICC) with an NGO as one of its Members. During the year 2021-22, there were no complaints. Further, adequate awareness programmes were also conducted for the employees of your Company.

(z) Disclosure relating to Loans and Advances to Firms / Companies in which Directors are interested by name and amount:

During the year under review, your Company did not provide any loans / advances, to any Firms / Companies in which Directors are interested.

Directorsâ Responsibility Statement:

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors hereby confirm that-

â¢ In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

â¢ Appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31^st March, 2022 and of the Profit of the Company for that period;

â¢ Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

â¢ The Annual Accounts had been prepared on a going concern basis;

â¢ The Internal Financial Controls had been laid down, to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

â¢ In order to ensure compliance with the provisions of all applicable laws, proper systems had been devised and that such systems were adequate and operating effectively.

General:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

â¢ Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

â¢ Issue of shares (including Sweat Equity Shares and ESOs) to employees of the Company under any Scheme.

Acknowledgement:

Your Directors place on record their grateful thanks to the Bankers, Customers, Vendors and Members for their continued support and patronage.

Mar 31, 2018

Boardâs Report

(Including Management Discussion and Analysis Report)

The Directors have pleasure in presenting the 60^th Annual Report together with the Audited Financial Statements for the financial year ended 31^st March, 2018.

Financial Results:

(Rs. in lakhs)

Profit before Depreciation & Tax Less: Depreciation Profit before Tax Less: Provision for Tax Current Tax Deferred Tax

Profit after Tax

1,125.00

73.18

2017-18

4,538.93

1,524.22

3,014.71

1,198.18

1,816.53

2016-17

4,109.34

1,191.59

2,917.75

985.94 57.83 1,043.77 1,873.98

Surplus Account:

Balance as per last Balance Sheet Add: Surplus pursuant to Merger Total

Add: Profit for the year

Other Comprehensive Income for the year (Net of Tax)

8,832.64

746.18

9,578.82

1,816.53

40.09

7.633.44

7.633.44 1,873.98

(7.43)

Total Less: Dividend Paid Dividend Tax

Amount transferred to General Reserve

11,435.44

388.30

79.05

9,499.99

388.30

79.05

200.00

Total

10,968.09

8,832.64

Scheme of Amalgamation:

The Scheme of Amalgamation between TTK Protective Devices Limited and its Wholly Owned Subsidiary TSL Techno Services Limited and your Company was sanctioned by the National Company Law Tribunal (NCLT), Division Bench, Chennai vide its Order dated 15^th December, 2017 and the Appointed Date of the Scheme was 1^st April, 2012.

Consequent to the above, the erstwhile TTK Protective Devices Limited has become a Division of your Company and for operational convenience, it has been named as âProtective Devices Divisionâ.

The figures for the year under review include the operations of the erstwhile TTK Protective Devices Limited (i.e.) Protective Devices Division.

Review of Performance:

During the year under review, the Revenue from Operations amounted to Rs.577.55 crores as against the previous year''s figure of Rs.527.81 crores, a growth of around 9%. On like-to-like basis without considering the revenues of the Protective Devices Division, the Revenue from Operations of the Company was almost similar to that of the previous year.

Pre-Tax Profit for the year stood at Rs.30.15 crores as against the previous year''s figure of Rs.29.18 crores.

The performance was impacted during the First Quarter on the eve of the implementation of the Goods and Services Tax (GST) Regime by the Central Government. However, there has been a good recovery in the subsequent quarters resulting in a satisfactory performance for the year as a whole.

A detailed review is presented under the Section âSegment wise Performanceâ.

Dividend:

Your Directors are pleased to recommend a dividend of Rs.5.00 (50%) per Equity Share of Rs.10/- each for the year ended 31^st March, 2018. [Previous Year - Rs.5.00 (50%) per Equity Share].

Share Capital:

During the year under review, the Authorized Equity Share Capital of the Company has been increased from Rs.10 crores to Rs.20 crores.

Your Company allotted 63,64,350 Equity Shares of Rs.10/- each fully paid-up to the Shareholders of erstwhile TTK Protective Devices Limited, pursuant to the Scheme of Amalgamation sanctioned by the National Company Law Tribunal (NCLT), Division Bench, Chennai, vide its Order dated 15^th December, 2017, in the ratio of 9 Equity Shares of Rs.10/- each fully paid-up of your Company for every 2 Equity Shares of Rs.10/- each fully paid-up held by them in the erstwhile TTK Protective Devices Limited. These Equity Shares shall rank for dividend, voting and all other rights pari passu with the existing Equity Shares of your Company.

Consequent to the above, the Paid-up Equity Share Capital of the Company stands increased from 77,65,983 Equity Shares of Rs.10/- each aggregating to Rs.776.60 lakhs to 1,41,30,333 Equity Shares of Rs.10/- each aggregating to Rs.1,413.03 lakhs.

Your Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

MANAGEMENT DISCUSSION AND ANALYSIS:

(A) INDUSTRY STRUCTURE AND DEVELOPMENTS:

During the year 2017-18, the GDP growth was estimated at 6.6% as against the previous year''s growth of 7.1%.

The year 2017-18 witnessed a major economic policy development (i.e.) implementation of Goods and Services Tax (GST) with effect from 1^st July, 2017. Though the GST implementation had its impact during the first-half of the year, the overall domestic economic scenario towards later part of the year 2017-18 has shown signs of improvement as compared to the previous year.

The Indian Pharmaceutical Market (IPM) currently valued at Rs.1,19,386 crores [MAT March 2018], grew by 5.7%.

The growth was driven by (i) growth in volume of existing brands (3.8%) and (ii) new introductions (2.7%). However, price revisions reported a negative trend (-0.8%). Market was driven by Chronic and Sub-Chronic Segments. Therapeutic segments like Anti-diabetic (11.6%), Derma (10.4%) and Vaccines (14.4%) reported double digit growth. (Source: Pharmatrac).

(B) OPPORTUNITIES AND THREATS:

Opportunities:

- Economic growth, rising incidence of chronic diseases, increase in healthcare access and expected growth in per capita income would drive further expansion of the healthcare segment. Therefore, there is opportunity for your Company to grow the Pharma Business further.

- Your Company has the unique advantage of an exclusive network for distribution of FMCG / OTC products. This can be leveraged for launch of new products under own brands so as to ensure improved profitability and value creation through brand building.

- On Medical Devices, the market continues to be dominated by imported medical devices / implants. Since your Company manufactures world class products and these are priced competitively, this segment provides opportunity for growth. The âMake in Indiaâ initiative by the Government would further enhance the growth prospect for this Segment. These products also have export potential.

- The Government of India is extending its price control policy to cover medical devices in a phased manner. In fact, ceiling prices for Ortho Implants have already been announced and implemented with effect from 15^th August, 2017. While this may be seen as a threat, there is also an opportunity for domestic manufacturers like your Company as these products are likely to witness higher demand due to competitive pricing.

- The Central Government has also recently announced a massive Medical Insurance Scheme to cover poor families and this initiative is also likely to increase the number of treatment procedures which would, in turn, improve the demand for medical implants viz., Heart Valves and Ortho Implants manufactured by your Company.

- Considering the size of the market for food products, the Foods Business of your Company has potential for growth including branding / retail and export opportunities.

Threats:

- The Product Patent Regime has restricted the access for Indian Pharma Companies to the latest molecules which were earlier available. However, there may be opportunities to launch products that are out of patents regimentation.

- The Drugs Price Control may have an adverse impact on the sales / margins of Pharmaceutical Companies.

- Banning of Fixed Dose Combinations (FDCs) restricted launch of new combinations which is likely to impact the overall size / growth of the market.

C) SEGMENTWISE PERFORMANCE:

Your Company is engaged in Pharmaceuticals, Consumer Products, Medical Devices and Foods Businesses.

A look at the performance of individual Business Segments: Pharmaceutical Business:

The Ethical Pharma Business of your Company deals in Pharmaceutical Formulations both Herbal and Allopathic, in various therapeutic segments. Ethical Products Division (EPD) & Ventura Division

During the year 2017-18, EPD and Ventura Divisions registered a turnover of Rs.140.74 crores, a performance almost similar to that of last year.

The performance would have been better but for the introduction of GST, which resulted in stockists drastically reducing their stockholdings thereby affecting sales. Further, due to change in tax structure (on account of GST) there has been reduction in net sales value.

High attrition continues to be a cause of concern. During the year, your Company started various Employee Engagement Programmes such as loyalty bonus, etc. to increase retention, benefit of which is likely to accrue during this year.

Due to the disturbed market scenario on account of GST implementation, new product launches were specifically deferred by your Company.

However, steps have now been taken to launch 3 - 4 new products during the current year.

During 2018-19, the strategy is to introduce a few more new brands, focus on high potential existing brands to strengthen the position in Gynaecology and Infertility Segments and to improve productivity / retention through continuous training and motivation.

Animal Welfare Division (AWD)

During the year under review, the Animal Welfare Division reported a sales turnover of Rs.51.59 crores, with a growth of around 9% over the previous year.

But for Bovianim (Livestock), the other two sub-divisions Gallus (Poultry) and Company (Pet) have reported a decent growth. The performance of the Division particularly that of Bovianim was impacted due to the constraints faced by the industry during the period of GST implementation. Though the performance till August, 2017 was quite sluggish, it gathered momentum with healthy growth during the period September 2017-March 2018, resulting in an overall satisfactory performance.

The strategy for 2018-19 would be to ensure healthy growth through efficient Key Account Management, focused promotion of Ossomin-Tefroli-Orcal-P (OTO) brands, introduction of new products, venturing into aqua segment, geographical expansion, etc.

Consumer Products Business:

The Division reported a turnover of Rs.184.29 crores, with marginal decline in revenue due to GST implementation. Further, with the new tax structure under GST regime, there has also been reduction in the net sales prices.

Woodward''s registered a volume growth of 1.2% despite losing momentum during the GST implementation period.

EVA had a challenging year, with a decline of around 8% in turnover. However, the performance of base product EVA 125 ml is steady and has registered a growth of 3.4% in volumes.

Despite the impact of GST implementation, the homecare brand Good Home managed to maintain almost the same revenues as that of the previous year.

In the coming year, your Company would be restructuring the Route-to-Market strategy to give a major thrust to emerging channels like Modern Trade and E-Commerce. Your Company would be reviving the emphasis on increasing distribution, to focus on chemists & grocers'' channels to drive growth.

Medical Devices Business:

Heart Valve Division

During the year under review, the performance of Heart Valve Division has been quite satisfactory, with a turnover of Rs.18.81 crores.

The initial response to the recently-launched Bi-Leaflet Valves manufactured by CardiaMed, Netherlands has been satisfactory and steps are being taken to scale up sales.

Necessary regulatory clearances have been obtained for import and sale of Bio-Prosthetic Valves from a Brazilian Company and the test marketing would commence shortly.

Steps are also being taken for obtaining necessary regulatory clearances for the commencement of clinical trials for the Improved Heart Valves and Vascular Grafts.

The focus for 2018-19 would be to grow the volumes of existing Heart Valve and to gain further volumes through Bi-Leaflet / Tissue Valves.

Ortho Division

The Ortho Division reported an encouraging performance during the year under review, with a turnover of Rs.13.84 crores.

In line with the steady increase in off take, the production capacity at the existing facility at Ambattur has been enhanced to meet the increasing demand.

In order to spearhead the growth plans of this Division, a dedicated Senior Resource has been recruited to head the operations.

Regulatory Affairs Team has been further strengthened to meet the requirements of ISO, EU Medical Device Regulation & Indian Medical Device Rules, 2017.

CE scope extension audit for Co-Cr Mobile Bearing Uncemented version meant for overseas markets has been completed and technical review is being carried out by the Notifying Body - DNV, Norway.

Development of Cement less Hip Implant is in progress and is expected to be launched during this year.

The plan for 2018-19 would be to grow the Ortho Business through geographical expansion, launch of new products, increasing the support from the existing surgeons and adding new surgeons, both in the domestic and permitted export markets.

Protective Devices Division

The National Company Law Tribunal (NCLT), Division Bench, Chennai vide its Order dated 15^th December, 2017 sanctioned the Scheme of Amalgamation between TTK Protective Devices Limited and its Wholly Owned Subsidiary TSL Techno Services Limited and your Company.

Consequent to the above, the erstwhile TTK Protective Devices Limited has become a Division of your Company and for operational convenience, it has been named as âProtective Devices Divisionâ.

During the year under review, the Division achieved a sales turnover of Rs.100.67 crores. This Division operates in three segments of business viz.-

(i) manufacturing and selling under Company''s own Brand âSKOREâ;

(ii) supplies to Third Party Brand owners both in India and abroad as Contract Manufacturer; and

(iii) supplies under Domestic and International Public Tenders.

The Division currently manufactures and supplies Condoms out of its factory in Puducherry and has its Research & Development facility at Chennai.

Branded Condoms market has witnessed intense competition with the relaunch of competitive brands. SKORE reported a growth of around 8%. Portfolio mix with focus on SKORE Champion series has aided the brand growth.

SKORE is now the No.2 brand in value terms in All India Urban markets. Your Company has also successfully launched a range of personal lubricants under the brand name SKORE during the year under review.

Your Company is pleased to report that Quality Audits as part of the continual assessment were conducted by the British Standards Institution for ISO and CE Mark, by South African Bureau of Standards for SABS Certification and by SGS Global for Forest Stewardship Council Certification during the year and the Company has successfully retained the certifications without any major or critical non-conformances. Your Company is also one of the pre-qualified suppliers under UNFPA / WHO Prequalification Scheme for Male Latex Condoms.

Your Company''s R&D Centre is in the process of developing value added, innovative and differentiated products and these will help your Company in developing the business further.

The focus for 2018-19 would be to grow the branded Condoms business through brand differentiation / innovation; to develop relationship with Third Party Brand Contract Manufacturing customers for increasing the volumes; and to work on cost optimization to be more competitive in Bid Business.

Foods Business:

During the year under review, the Foods Division achieved a sales turnover of Rs.67.01 crores, with stagnant volumes.

Increase in the number of competitors has severely impacted the margins and the volumes of the trade business. In order to overcome this challenge, your Company has been putting a lot of thrust on other segments of business like exports and institutional business apart from launching several new products.

The R&D Centre at Hosakote, Bengaluru developed a number of new products during the year under review and is working on many other products which would be launched progressively.

During the year under review, your Company''s Jaipur factory has been accredited with ISO 22000:2005 certification. Both the Hosakote and Jaipur factories have also obtained KOSHER certification and this will enable your Company to increase its footprint in overseas markets.

Total Productive Maintenance (TPM) is being successfully implemented in both the factories.

The strategy for the current year would be to increase the capacity utilization at Jaipur facility through enhanced focus on domestic / institutional and export businesses and also to work on developing and launching innovative and differentiated products to improve volumes.

(D) OUTLOOK:

In view of the above developments and initiatives, the outlook for your Company as a whole for 2018-19, appears promising.

(E) RISKS AND CONCERNS:

The analysis presented in the Industry Scenario and Opportunities and Threats Section of this Report throws light on the important risks and concerns faced by your Company. The strategy of your Company to derisk against these factors is also outlined in the said Sections.

(F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has necessary Internal Control Systems in place which is commensurate with the size, scale and complexity of its operations. Further, your Company has retained the services of an External Consultant for further strengthening the Internal Financial Control System. The suggestions made by him in relation to various activities / areas such as Properties, Plant & Equipments, Petty Cash Management, Revenue recognition from operations, Inventories - Control & Valuation, etc., have been implemented.

Internal Audits are regularly conducted through In-house Audit Department and also through External Audit Firms. The Reports are periodically discussed internally. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

(G) FINANCIAL PERFORMANCE:		(Rs. in lakhs)
	2017-18	2016-17
Revenue from Operations	57,754.65	52,780.55
Other Income	757.47	572.75
Total Income	58,512.12	53,353.30
Cost of Materials Consumed	24,159.34	24,343.96
Employee Benefits Expense	10,898.71	8,799.47
Other Expenses	18,442.21	15,789.04
Profit before Finance Cost and Depreciation	5,011.86	4,420.83
Finance Cost	472.93	311.49
Depreciation	1,524.22	1,191.59
Profit before Tax	3,014.71	2,917.75
Less: Provision for Tax
Current Tax	1,125.00	985.94
Deferred Tax	73.18	57.83
Profit after Tax	1,816.53	1,873.98

ANALYSIS OF PERFORMANCE:

- The performance for the year under review includes the operations of TTK Protective Devices Limited which merged with your Company. The previous year''s figures represent the performance of the Company on a standalone basis. Hence these figures are not comparable.

- Revenue from Operations registered a growth of around 9%. On like-to-like basis without considering the revenues of the Protective Devices Division, the Revenue from Operations of the Company was almost similar to that of the previous year.

- During the year under review, Other Income stood at Rs.757.47 lakhs as against the previous year''s figure of Rs.572.75 lakhs. The increase mainly relates to Interest on Fixed Deposits held by the erstwhile TTK Protective Devices Limited.

- Goods Consumption as a percentage of Revenue from Operations for the year works out to 41.83% as against the previous year''s figure of 46.12%. The decrease was mainly due to SKORE brand of Condoms which was hitherto a trading line now becoming Own Branded Goods, consequent to the amalgamation of TTK Protective Devices Limited with the Company.

- The increase in employee benefits expense was mainly due to regular annual increments / revision in packages and addition of employees pursuant to Merger.

- Bad Debts Written Off during the year under review, amounted to Rs.67.37 lakhs: Pharma Division - Rs.24.99 lakhs; Consumer Products Division - Rs.2.73 lakhs; Heart Valve Division - Rs.3.74 lakhs; Ortho Division - Rs.15.51 lakhs; and Foods Division - Rs.20.40 lakhs.

- The increase in other expenses are due to amalgamation of TTK Protective Devices Limited with the Company and are in line with the level of operations.

- The additions to Fixed Assets mainly include the following:

(i) Purchase of Plant and Machinery relating to-

- Pharma Division - Rs.14.49 lakhs;

- Foods Division, Jaipur - Rs.31.73 lakhs;

- Ortho Division - Rs.63.23 lakhs; and

- Protective Devices Division - Rs.44.83 lakhs.

(ii) Purchase of Computers relating to-

- Pharma Division - Rs.26.40 lakhs; and

- Ortho Division - Rs.3.00 lakhs.

- As per the Scheme of Amalgamation, a Special Contingency Reserve of Rs.20 crores was created out of the General Reserve of the Company to meet the re-organization expenditure and crystallization of any contingent liabilities of the erstwhile TTK Protective Devices Limited. Out of this, a sum of Rs.8.99 crores (Rs.5.88 crores net of deferred tax) was utilized towards expenses incurred on Voluntary Retirement Scheme, relating to the erstwhile TTK Protective Devices Limited, which merged with the Company.

(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

Human Resources:

Your Company attaches significant importance to continuous up gradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth.

As part of the overall HR Strategy, initiatives such as Balanced Score Card (BSC), Total Productive Maintenance (TPM), Performance Management Processes, etc., have been implemented to enhance employee productivity and corporate performance. Senior Management team has been strengthened by inducting experienced professionals from the industry across businesses and corporate functions apart from implementing leadership development for internally groomed managers. Further, your Company continues to place emphasis on regular training programs to enable continuous improvement of employee capabilities.

Several attractive initiatives have been implemented to improve employee engagement and to control field staff attrition.

As on 31^st March, 2018, the employee strength was 2244. (Previous Year - 1853). The increase was due to amalgamation of TTK Protective Devices Limited with your Company.

Industrial Relations:

The industrial relations during the year under review continued to be cordial. The Directors place on record their sincere appreciation for the services rendered by employees at all levels.

Your Company entered into a long term wage settlement with the Workers'' Union of the Foods Division, Hosakote and this will be in force for a period of four years, from 1^stJanuary, 2017 to 31^st December, 2020.

(I) INFORMATION TECHNOLOGY:

Your Company successfully deployed GST Module in Oracle E-Business Suite across all Divisions of the Company Pan India. Your Company is in the process of exploring state-of-the-art Cloud hosting of Oracle E-Business Suite applications.

(J) FUTURISTIC STATEMENTS:

This analysis may contain certain statements, which are futuristic in nature. Such statements represent the intentions of the management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by taking into account all relevant factors before taking any investment decision.

DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER:

(a) Extract of Annual Return:

Extract of Annual Return (Form MGT-9) is enclosed as Annexure-1.

(b) Number of Meetings of the Board:

The Board of Directors met 4 (four) times during the year 2017-18. The details of the Board Meetings and the attendance of the Directors are provided in the Report on Corporate Governance.

The Annual Report under CSR Activities is annexed to this Report as

Annexure-2.

The details relating to the meetings convened, etc., are furnished in the Report on Corporate Governance.

(d) Composition of Audit Committee:

The Audit Committee consists of Mr Girish Rao as Chairman, Mr B N Bhagwat, Mr K Shankaran and Mr S Balasubramanian as Members. Mr S Kalyanaraman is the Secretary of the Committee. More details on the Committee are given in the Report on Corporate Governance.

(e) Related Party Transactions:

During the year under review, no transaction of material nature has been entered into by your Company with its promoters, the directors or the key managerial personnel or their relatives, etc., that may have a potential conflict with the interests of your Company.

before the Audit Committee and the Board of Directors for their approval / ratification on a quarterly basis.

During the year under review, your Company renewed the contracts entered into with M/s T T Krishnamachari & Co., in respect of the following:

Nature of the Contract	Licence Agreement	C&FA Agreement
Duration of the Contract	Renewed for a further period of five years from 1^st November, 2017 to 31^st October, 2022.	Renewed for a further period of five years from 9^th August, 2018 to 8^th August, 2023.
Particulars of the Contract or Arrangement	For using the ttk monogram in relation to the goods manufactured, outsourced from third parties, marketed, traded, distributed, etc., and for other business activities of the Company.	For availing the Clearing and Forwarding Agent services of M/s T T Krishnamachari & Co.
Material Terms of the Contract or Arrangement including the value, if any.	Half-a-percent (%%) of the Net Sales Value of the Company, plus applicable taxes and levies	3% of the Net Sales Value of the Company, plus applicable taxes and levies
Manner of determining the pricing and other commercial terms, both included as part of Contract and not considered as part of the Contract.	M/s T T Krishnamachari & Co., popularly known as TTK, have been in business of various consumer and pharmaceutical products and has been marketing and distributing such products for several decades and earned a wide reputation and created a strong image and awareness in the minds of the public. They are the owners of the copyright in the artistic work ttk monogram, having secured the registration of the said copyright vide Registration No.A-39006/83 under the Copyright Act, 1957. Use of the ttk monogram on the products of the Company is of immense help to establish these products all these years. Considering the reputation enjoyed by the ttk monogram and the advantages available to the Company by the use thereof, the consideration proposed to be paid are quite reasonable and fully justified.	M/s T T Krishnamachari & Co., popularly known as TTK, have been in marketing and distribution services for nearly 90 years and have established reputation all over India. They have warehousing and modern infrastructural facilities with Computers in various locations ideal for providing C&F services. Considering the products handled, the services rendered, the quantum of goods handled and the employment of qualified personnel in the operation and also the responsibilities cast upon them, the C&FA charges @ 3% of net sales is quite reasonable and fully justified.
Interested Directors	Mr T T Jagannathan, Chairman and Mr T T Raghunathan, Executive Vice Chairman are interested as Partners of M/s T T Krishnamachari & Co.	Mr T T Jagannathan, Chairman and Mr T T Raghunathan, Executive Vice Chairman are interested as Partners of M/s T T Krishnamachari & Co.

The Register of Contracts containing the details of the transactions, in which directors / key managerial personnel are interested, is placed before the Audit Committee / Board regularly.

The Board of Directors of your Company, on the recommendation of the Audit Committee, adopted a policy on Related Party Transactions, to regulate the transactions between your Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The Policy as approved by the Board is uploaded on the Company''s website www.ttkhealthcare.com. Form AOC-2 containing the details of Related Party Transactions is annexed as Annexure-3 to this Report.

(f) Corporate Governance:

Your Company has complied with the various requirements of the Corporate Governance Code under the provisions of the Companies Act, 2013 and as stipulated under the SEBI (LODR) Regulations, 2015.

A detailed Report on Corporate Governance forms part of this Annual Report.

(g) Risk Management:

Your Company has a risk identification and management framework appropriate to the size of your Company and the environment in which it operates.

The detailed Report of the RMG incorporating the update on the various risks identified and the mitigation plans in respect thereof are periodically placed before the Audit Committee and the Board, for their discussions and record.

(h) Directors and Key Managerial Personnel:

None of the Directors are disqualified from being appointed or holding office as Directors, as stipulated under Section 164 of the Companies Act, 2013.

(i) Appointment / Re-appointment of Directors:

Mr T T Jagannathan and Mr K Shankaran, liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their reappointment.

The Board seeks the approval of the Members for Mr B N Bhagwat, Dr (Mrs) Vandana R Walvekar and Mr S Balasubramanian, who have attained the age of 75 years, to continue to hold office as Independent Directors of the Company, till the current tenure of their respective appointments, in line with Regulation 17(1A) of the SEBI (LODR) (Amendment) Regulations, 2018.

(ii) Statement on Declaration by the Independent Directors of the Company:

All the Independent Directors of your Company have given declarations under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The terms and conditions of appointment of the Independent Directors are posted on the Company''s website www.ttkhealthcare.com.

(iii) Key Managerial Personnel (KMP):

The following managerial personnel are Key Managerial Personnel (KMP):

- Mr T T Raghunathan, Executive Vice Chairman [Chief Executive Officer (CEO)];

- Mr S Kalyanaraman, Director & Wholetime Secretary [Company Secretary]; and

- Mr B V K Durga Prasad, Senior Vice President - Finance [Chief Financial Officer (CFO)].

(iv) Performance Evaluation of the Board, its Committees and the Directors:

In compliance with the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Report on Corporate Governance.

(v) Remuneration Policy:

Your Company adopted a Policy relating to selection, remuneration and evaluation of Directors and Senior Management. The said Policy is posted on the Company''s website www.ttkhealthcare.com.

(i) Auditors:

(i) Statutory Auditor and their Report:

- The Shareholders at the 59^th Annual General Meeting held on 4^th August, 2017 appointed M/s PKF Sridhar & Santhanam LLP as Statutory Auditors of the Company, for a term of five years, to hold office from the conclusion of the 59^th Annual General Meeting till the conclusion of the 64^th Annual General Meeting, subject to ratification at every Annual General Meeting, in accordance with the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made there under. Pursuant to notification of the Companies (Amendment) Act, 2017, the first proviso to Section 139 relating to the ratification of appointment of Statutory Auditors by the Members at every general meeting was omitted, vide notification dated 7^th May, 2018. Consequently, the ratification of appointment of M/s PKF Sridhar & Santhanam LLP as Statutory Auditors is not required.

- Auditorâs Report for the year ended 31^st March, 2018:

The Auditor''s Report to the Shareholders for the year under review does not contain any qualifications.

(ii) Cost Auditor and Cost Audit Report:

- Enhancement of Scope of Cost Audit for the year 2017-18: Your Company appointed M/s Geeyes & Co., for conducting audit of the Cost Records of the Company for the financial year 2017-18

relating to âDrugs and Pharmaceuticalsâ under Regulated Sectors, as the overall annual turnover of the Company from all its products during the immediately preceding financial year exceeded the threshold limit Rs.50 crores and also the aggregate turnover of the individual product or products for which cost records are required to be maintained exceeded the threshold limit of Rs.25 crores.

Consequent upon the amalgamation of TTK Protective Devices Limited with the Company, the Male Contraceptives manufactured by the Protective Devices Division of the Company come under the purview of Cost Audit under the Non-Regulated Sector under the Product category âRubber and Allied Products; including products regulated by the Rubber Board constituted under the Rubber Act, 1947 (XXIV of 1947)â under CTA Heading 4014, as the overall annual turnover of the Company from all its products during the immediately preceding financial year exceeded Rs.100 crores and also the aggregate turnover of the individual product or products for which cost records are required to be maintained exceeded the threshold limit of Rs.35 crores.

Further, the Heart Valves and the Orthopaedic Implants manufactured by your Company too would come under the purview of Cost Audit under the Non-Regulated Sector under the product category âProduction, Import and Supply or Trading of Medical Devicesâ under CTA Heading 9021, since the aggregate turnover of the individual product or products for which cost records are required to be maintained exceeded the threshold limit of Rs.35 crores.

The existing Cost Auditors of the Company, M/s Geeyes & Co., had expressed their willingness for conducting the cost audit in addition to Drugs and Pharmaceuticals under Regulated Sectors, also for the product categories (i) Rubber and its Allied Products viz., Male Contraceptives; and (ii) Medical Devices viz., Heart Valves and Orthopedic Implants under the Non-Regulated Sectors, for the financial year 2017-18.

Accordingly, your Company included the above two product categories within the scope of the audit of the existing Cost Auditors, M/s Geeyes & Co., for the financial year 2017-18 and also sent necessary intimation to the Central Government. The remuneration of Rs.3.50 lakhs per annum plus applicable taxes and levies and out-of-pocket expenses incurred in connection with the audit, payable to the Cost Auditors was already ratified by the Shareholders in their meeting held on 4^th August, 2017.

-Appointment for the year 2018-19:

(a) Under Regulated Sectors:

- Drugs and Pharmaceuticals.

(b) Under Non-Regulated Sectors:

- Male Contraceptives under Rubber and Allied Products;

- Heart Valves and Orthopaedic Implants under Production, Import and Supply or Trading of Medical Devices.

The Board of Directors, on the recommendation of the Audit Committee, appointed M/s Geeyes & Co. as Cost Auditors of your Company, for the financial year 2018-19 and fixed their remuneration at Rs.5 lakhs plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit. Necessary intimation has also been given to the Central Government.

The Audit Committee also received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with your Company.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder, the ratification of the Members is sought by means of an Ordinary Resolution for the remuneration of Rs.5 lakhs plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit, payable to M/s Geeyes & Co., Cost Auditors, under Item No.8 of the Notice convening the Annual General Meeting.

The Cost Audit Report for the year ended 31^st March, 2018 would be filed on or before the due date (i.e.) 27^th September, 2018 or within 30 days from the date of submission of the said Report to the Board, whichever is earlier.

-Cost Audit Report for the year 2016-17:

The Cost Audit Report for the financial year ended 31^st March,

2017 was filed on 2^nd September, 2017 vide SRN G51927648 on the website of the Ministry of Corporate Affairs.

(iii) Secretarial Auditor and Secretarial Audit Report:

The Board had appointed Mr R Balasubramaniam, Company Secretary in Whole time Practice, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2017-18. The Report of the Secretarial Auditor in Form MR-3 is annexed to this Report as Annexure-4. The Report does not contain any qualification or reservation or adverse remarks.

(j) Transfer to Investor Education and Protection Fund:

- Unclaimed Dividends for the year ended 31^st March, 2010:

Your Company has transferred a sum of Rs.6.04 lakhs during the financial year 2017-18 to the Investor Education and Protection Fund established by the Central Government, in compliance with Sections 123 - 125 of the Companies Act, 2013. The said amount represents the unclaimed dividends for the year ended 31^st March, 2010, which were lying unclaimed with your Company for a period of seven years from the due date of payment.

- Transfer of Shares to the Demat Account of the IEPF Authority:

In accordance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and as amended from time to time, your Company transferred 72,067 Equity Shares of Rs.10/- each fully paid-up, in respect of which the dividends relating to the year 2008-09, remained unclaimed / unpaid for a period of seven consecutive years, to the Demat Account of the IEPF Authority held with CDSL on 27^th November, 2017 and 29^th November, 2017.

Since there were no underlying shares in respect of which dividends relating to the year 2009-10, remained unclaimed / unpaid for a period of seven consecutive years, no shares were due for transfer to the Demat Account of the IEPF Authority.

(k) Disclosure under Schedule V(F) of the SEBI (LODR) Regulations, 2015:

Your Company does not have any Unclaimed Shares issued in physical form pursuant to Public Issue / Rights Issue.

(l) Conservation of Energy:

(m) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 and the Rules made thereunder are annexed to this Report as Annexure-6.

(n) Subsidiary Company:

Your Company does not have any Subsidiary.

(o) Deposits:

As on 31^st March, 2018, your Company was not holding any amount under Fixed Deposit Account.

(p) Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013:

During the year under review, your Company had not given any loan and provided any guarantee under Section 186 of the Companies Act, 2013.

During the year under review, your Company made an investment of Rs.2.50 lakhs in M/s Renew Wind Power (AP) Private Limited, in connection with purchase of wind power, by way of transfer from Renew Wind Power (Karnataka Three) Private Limited, 2,500 Equity Shares of face value of Rs.10/- each at a price of Rs.100 per Equity Share, thus totally holding 3,400 Equity Shares of Rs.10/- each (Rs.3.40 lakhs) as on 31^st March, 2018 and the same has been classified as Deposits in the Financial Statements, in line with Ind AS.

(q) Significant and Material Orders passed by the Regulators or Courts:

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

(r) Whistle Blower Policy:

In accordance with the provisions of Section 177(9) of the Companies Act, 2013 and the Rules made there under and also the SEBI (LODR) Regulations, 2015, your Company established a vigil mechanism termed as Whistle Blower Policy, for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy, which also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Corporate Governance Officer / Chairman of the Audit Committee and the Executive Vice Chairman, in exceptional cases.

The Whistle Blower Policy was also hosted on the Company''s website www.ttkhealthcare.com.

During the year under review, your Company had not received any complaint.

(s) Listing of Equity Shares:

- Your Company''s shares are listed with-

- BSE Limited (BSE), Mumbai; and

- National Stock Exchange of India Limited (NSE), Mumbai.

- Your Company obtained listing and trading approval from-

- BSE Limited (BSE), Mumbai vide their communication No.DCS/ AMAL/TP/ST/6625/ 2018-19 dated 13^th April, 2018; and

- National Stock Exchange of India Limited (NSE), Mumbai vide their communication No.NSE/LIST/2016/16073 dated 12^th April, 2018;

for 63,64,350 Equity Shares of Rs.10/- each fully paid-up allotted on 2^nd March, 2018 to the Shareholders of the erstwhile TTK Protective Devices Limited, pursuant to the sanctioned Scheme of Amalgamation.

- Your Company paid the Listing Fees for the financial year 2018-19.

(t) Obligation of your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Your Company has adopted a policy for prevention of Sexual Harassment of Women at Workplace and has constituted an Internal Complaints Committee (ICC) with an NGO as one of its Members. During the year 2017-18, there were no complaints. Further, adequate awareness programmes were also conducted for the employees of your Company.

(u) Directorsâ Responsibility Statement:

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors hereby confirm that-

- In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- Appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31^st March, 2018 and of the Profit of the Company for that period;

- Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Annual Accounts had been prepared on a going concern basis;

- The Internal Financial Controls had been laid down, to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

- In order to ensure compliance with the provisions of all applicable laws, proper systems had been devised and that such systems were adequate and operating effectively.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares (including Sweat Equity Shares and ESOS) to employees of the Company under any scheme.

Acknowledgement:

Your Directors place on record their grateful thanks to the Bankers, Customers, Vendors and Members for their continued support and patronage.

General:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

For and on behalf of the Board

Place : Chennai T T JAGANNATHAN

Date : May 29, 2018 CHAIRMAN

Registered Office:

No.6, Cathedral Road Chennai 600 086

Mar 31, 2017

(Including Management Discussion and Analysis Report)

The Directors have pleasure in presenting the 59^th Annual Report together with the Audited Financial Statements for the financial year ended 31^st March, 2017.

Financial Results:

(Rs. in lakhs)

		2016-17	2015-16
Profit before Depreciation & Tax		4,192.48	4,273.45
Less : Depreciation		1,186.57	720.71
Profit before Tax		3,005.91	3,552.74
Less : Provision for Tax
Current Tax	982.00		1,002.00
Deferred Tax	90.54	1,072.54	284.22 1,286.22
Profit after Tax		1,933.37	2,266.52
Surplus Account:
Balance as per last Balance Sheet		7,777.00	6,377.83
Add: Profit for the year		1,933.37	2,266.52
Total		9,710.37	8,644.35
Less: Proposed Dividend		388.30	388.30
Provision for tax on Dividend		79.05	79.05
Amount transferred to
General Reserve		200.00	400.00
Net Surplus		9,043.02	7,777.00

Review of Performance:

During the year under review, the Revenue from Operations amounted to Rs.532.73 crores as against the previous year''s figure of Rs.518.86 crores, a growth of around 3%.

Pre-Tax Profit for the year stood at Rs.30.06 crores as against the previous year''s figure of Rs.35.53 crores.

The overall performance was impacted due to external factors such as sluggish / negative growth in FMCG categories handled by your Company, regulatory / licensing issues in pharmaceutical business, demonetization, etc. and also internal issues like field force attrition.

A detailed review is presented under the Section âSegmentwise Performanceâ. Dividend:

Your Directors are pleased to recommend a dividend of Rs.5.00 (50%) per Equity Share of Rs.10 each for the year ended 31^st March, 2017 [Previous Year - Rs.5.00 (50%) per Equity Share].

Share Capital:

The Paid-up Equity Share Capital as on 31^st March, 2017 was Rs.776.60 lakhs. Your Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

MANAGEMENT DISCUSSION AND ANALYSIS:

(A) INDUSTRY STRUCTURE AND DEVELOPMENTS

During the year 2016-17, the GDP growth was estimated at 7.1% as against the previous year''s growth of 7.9%.

The year 2016-17 witnessed two major economic policy developments-

(i) constitutional amendment making way for the implementation of Goods and Services Tax (GST); and (ii) demonetization of high value currency notes (Rs.1,000 & Rs.500) which was initiated to curb black money. Despite a slow start, the economic momentum picked up in the middle of the year. Though the demonetization impacted the momentum to some extent during the second-half of the year, the economy appears to be on the recovery path.

The Indian Pharmaceutical Market (IPM) currently valued at Rs.1,11,135 crores [MAT March 2017], grew by 10.3%.

The growth was driven by (i) growth in volume of existing brands (4.8%);

(ii) new introductions (3.3%); and (iii) price revisions (2.3%). Chronic Segment continues to grow faster than Acute Segment (11.9% vis-a-vis 8.6%). Therapeutic segments like anti-diabetic and derma reported healthy growth. (Source: Pharmatrac).

(B) OPPORTUNITIES AND THREATS:

Opportunities:

- Your Company has the unique advantage of an exclusive network for distribution of OTC products. This can be leveraged for launch of new products under own brands so as to ensure improved profitability and value creation through brand building.

- Considering the size of the market for food products, the Foods Business of your Company has potential for growth including branding / retail and export opportunities.

Threats:

- The Drugs Price Control may have an adverse impact on the sales / margins of Pharmaceutical Companies.

- The action by the Government for banning the Fixed Dose Combinations (FDCs) may also have its impact on the overall size / growth of the market.

(C) SEGMENTWISE PERFORMANCE:

Your Company is engaged in Pharmaceuticals, Consumer Products, Medical Devices and Foods Businesses.

A look at the performance of individual Business Segments: Pharmaceutical Business:

The Ethical Pharma Business of your Company deals in Pharmaceutical Formulations both Herbal and Allopathic, in various therapeutic segments. Pharmaceuticals also include Woodward''s Gripewater. Since this product is distributed through the Consumer Products Division of your Company, it is covered under the head Consumer Products Business.

Ethical Products Division (EPD) & Ventura Division

During the year 2016-17, EPD and Ventura Divisions registered a turnover of Rs.143.83 crores, with a marginal negative growth.

The performance was partly impacted due to regulatory constraints, political disturbances in Jammu & Kashmir and banning of Fixed Dose Combinations (FCDs) by the Central Government. Demonetization also had its impact on the performance of the business during the latter part of the year.

High attrition continues to be a cause of concern. Employee Engagement Programmes are being conducted to increase retention.

Your Company has introduced a couple of line extensions under Ossopan brand so as to strengthen the Calcium Segment. Similarly, a couple of new products were added to further strengthen the Infertility Segment under the Ventura Division.

The strategy for 2017-18 is to focus on high potential brands to consolidate the position in Gynaecology and Infertility Segments and concurrently, work towards reducing attrition and improving the field force productivity through training and motivation.

Animal Welfare Division (AWD)

During the year under review, the Animal Welfare Division reported a sales turnover of Rs.47.68 crores, with a growth of 7% over the previous year.

All the three sub-divisions viz., Bovianim (Cattle), Gallus (Poultry) & Companim (Pet Animals) reported decent growth. However, the growth was subdued partly on account of the adverse impact of demonetization in the second-half of the year.

Although drought like situation in a few key States also decelerated the momentum, the Division continues to harp on optimizing customer coverage, focused product promotion and improved field operational effectiveness.

The strategy for 2017-18 would be to ensure a healthy growth through focused promotion of core brands, introduction of new products, significant improvement in customer coverage, optimum efficiency in field operations, geographical expansion, etc.

Consumer Products Business:

The Division reported a turnover of Rs.242.95 crores, with a growth of about 3% during the year under review, in a challenging economic environment, especially during the second-half of the year.

Woodward''s continued its growth across all territories especially with the Northern markets registering a strong growth during the summer season. Deodorants, as a category, declined this year in volumes by about 7%. Consequently, EVA too had a very challenging year and declined by 9.6% in turnover. However, the base product EVA Deospray 125ml is fairly steady and maintained its volumes.

Condoms market grew by a marginal 1.6% and Skore increased its turnover by about 17%, propped up by a price increase and the launch of its premium variants - âSKORE CHAMPIONâ.

This brand signed off with Dwayne Bravo and Chris Gayle as Brand Ambassadors and maintained its market share of about 9.5%.

The Homecare brand Good Home grew by 11% during the year.

Medical Devices Business:

Heart Valve Division

Your Company''s Heart Valve Division reported a sales turnover of Rs.15.83 crores during the year under review, with a growth of around 16%.

Though there was growth in off take in select geographies, the Division continues to be impacted due to stiff competition from imported valves. Nevertheless, efforts are made to further increase the volumes.

The initial response to the test marketing initiative of the Bi-Leaflet Valves manufactured by CardiaMed, Netherlands is encouraging and the distribution would be scaled up during the current year.

Under an arrangement with a Brazilian Company, the distribution of Bio-Prosthetic Valves would commence during the second-half of 2017-18. The Vascular Graft and the Improved Heart Valve devices are ready for clinical trials, awaiting appropriate regulatory approvals, which are expected to be received during the financial year 2017-18.

Ortho Division

Ortho Division reported a sales turnover of Rs.9.78 crores, during the year under review, with a growth of around 10%.

The sales team has been further strengthened to cover Non-South markets with addition of Managers / Product Specialists.

The Division received the renewal of ISO 9001:2008 / ISO 13485:2003 and CE Certification from DNV, Norway.

With the renewal of CE marking, efforts on exports front would be recommenced.

Considering the dominant market share enjoyed by Fixed Bearing Knee in the overall knee market, efforts are also directed towards developing a Posterior Stabilized Fixed Bearing Knee, in collaboration with appropriate technology partners.

Considering the capacity constraints at the existing facility at Ambattur, it is also proposed to set up a state-of-the-art manufacturing facility for Orthopaedic Implants at Chennai.

Foods Business:

During the year under review, the Foods Division achieved a sales turnover of Rs.69.56 crores, with a growth of 15%.

The capacity utilization at the new manufacturing facility at Jaipur has been gradually improving.

Your Company''s sales and distribution network has been further strengthened so as to handle the additional volumes available from the Jaipur facility.

Apart from this, fair amount of business development activities were initiated in order to tap export and institutional businesses which are expected to yield results in the coming years.

The state-of-the-art R&D Centre of the Foods Division at Hosakote is engaged in developing value-added / innovative and differentiated products like Lentil, Dal, Quinoa, Vegetable based Pappads (Pellets), so as to gain volumes and also to improve the overall profitability.

Your Company is implementing Total Productive Maintenance (TPM) at both the Hosakote and Jaipur factories, in order to improve its operational efficiencies.

(D) OUTLOOK:

In view of the above developments and initiatives, the outlook for your Company as a whole for 2017-18 appears promising.

(E) RISKS AND CONCERNS:

The analysis presented in the Industry Scenario and Opportunities and Threats Section of this Report throws light on the important risks and concerns faced by your Company. The strategy of your Company to derisk against these factors is also outlined in the said Sections.

(F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has necessary Internal Control Systems in place which is commensurate with the size, scale and complexity of its operations. Further, your Company has retained the services of an External Consultant for developing the necessary manuals / SOPs for effectively implementing the Internal Financial Control System and this would be finalized and implemented shortly. Internal Audits are regularly conducted through In-house Audit Department and also through External Audit Firms. The Reports are periodically discussed internally. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

(G) FINANCIAL PERFORMANCE:

(Rs. in lakhs)

	2016-17	2015-16
Revenue from Operations (Gross)	53,292.43	51,909.51
Less : Excise Duty relating to Sales	19.33	22.96
Revenue from Operations (Net)	53,273.10	51,886.55
Other Income	572.75	559.21
Total Income	53,845.85	52,445.76
Cost of Materials Consumed	24,324.63	22,927.14
Employee Benefits Expense	8,810.85	8,141.85
Other Expenses	16,206.40	16,770.59
Profit before Finance Cost and Depreciation	4,503.97	4,606.18
Finance Cost	311.49	332.73
Depreciation	1,186.57	720.71
Profit before Tax	3,005.91	3,552.74
Less: Provision for Tax
Current Tax	982.00	1,002.00
Deferred Tax	90.54	284.22
Profit after Tax	1,933.37	2,266.52

ANALYSIS OF PERFORMANCE:

- Revenue from Operations registered a growth of around 3% as against the previous year''s figure of around 7%, with a Profit before tax of Rs.30.06 crores. (Previous year''s Pre-Tax Profit - Rs.35.53 crores).

- During the year under review, Other Income stood at Rs.572.75 lakhs as against the previous year''s figure of Rs.559.21 lakhs. The increase was mainly on account of profit of Rs.83.70 lakhs made on sale of 1,000 Listed, Rated, Secured, Redeemable, Index-Linked, Non-Convertible Debentures of face value of Rs.1,00,000 each.

- Goods Consumption as a percentage of Revenue from Operations for the year works out to 45.66% as against the previous year''s figure of 44.19%. The increase is due to higher proportion of Traded Goods (Condoms) vis-a-vis Own Branded Goods in the product mix and lower net realizations from Foods Division due to price reduction.

- The increase in employee benefits expense was due to regular annual increments / revision in packages.

- The increase in Power and Fuel expenses was mainly on account of the increase in production at the manufacturing facility of the Foods Division at Jaipur.

- The increase in R&D expenses represents the expenses incurred for various research and developmental activities undertaken at the Pharma / Foods Divisions of your Company for the development of new formulations / recipes / products.

- Depreciation was higher on account of the full year depreciation charged in respect of assets capitalized during the latter part of last year at the new manufacturing facility at Jaipur.

- The details of additions to Fixed Assets are as below:

(i) At Foods Division''s manufacturing facility at Jaipur:

- construction of Buildings (Rs.14.07 lakhs);

- purchase of Plant & Equipments (Rs.42.59 lakhs); and

- purchase of Furniture and Fittings (Rs.11.14 lakhs).

(ii) At Foods Division''s manufacturing facility at Hosakote:

- construction of Buildings (Rs.12.94 lakhs); and

- purchase of Plant & Equipments (Rs.89.98 lakhs).

(iii) At Foods Division''s R&D facility at Hosakote:

- construction of Buildings (Rs.18.34 lakhs);

- purchase of Plant & Equipments (Rs.13.77 lakhs); and

- purchase of Lab Equipments (Rs.30.01 lakhs);

(iv) Purchase of Vehicles and Computers (Rs.63.19 lakhs);

- During the year under review, your Company made an investment of Rs.3.40 lakhs in M/s Renew Wind Power (AP) Private Limited, in connection with purchase of wind power, by way of subscription to the issue of 3,400 Equity Shares of face value of Rs.10 each at a price of Rs.100 per Equity Share. Subsequently, 2,500 Equity Shares were transferred to M/s Renew Wind Power (Karnataka Three) Private Limited at a price of Rs.100 each, thus holding the balance 900 Equity Shares of Rs.10 each (Rs.0.90 lakhs) as on 31^st March, 2017.

Further, your Company, during the year, had sold off 1,000 Listed, Rated, Secured, Redeemable, Index-Linked, Non-Convertible Debentures of face value of Rs.1,00,000 each, at a consideration of Rs.1,083.70 lakhs.

- The decrease in Other Current Liabilities was mainly due to

(i) repayment of term loan of Rs.15 crores availed from Commonwealth Bank of Australia; and (ii) reduction in expenses payable, particularly the sales promotional expenses as there was significant reduction in promotional spend during the last quarter, post-demonetization.

- The reduction in Short Term Loans and Advances was mainly on account of adjustment of advances paid to suppliers for supply of goods and services, upon supply.

(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

Human Resources:

Your Company attaches significant importance to continuous upgradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth.

As part of the overall HR Strategy, initiatives such as Balanced Score Card (BSC), Total Productive Maintenance (TPM), etc., have been implemented to enhance employee productivity and corporate performance. Further, extensive trainings have been provided to enable continuous improvement of employee capabilities. Succession planning has also been commenced for Senior Management Staff. HR representatives met MSRs as part of the employee engagement activities and to reduce attrition.

As on 31^st March, 2017, the employee strength was 1853. (Previous Year - 1817).

Industrial Relations:

The industrial relations during the year under review continued to be cordial. The Directors place on record their sincere appreciation for the services rendered by employees at all levels.

(I) INFORMATION TECHNOLOGY:

E-Reporting System has been fully implemented in the Pharma Division of your Company. Plans are also underway to implement Oracle Apex so as to provide interface between the Oracle ERP and the Online Reporting Module in order to ensure seamless integration of information and easy access by the sales force. Online reporting for field staff in Ortho Division has just commenced.

(J) FUTURISTIC STATEMENTS:

DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER:

(a) Extract of Annual Return:

Extract of Annual Return (Form MGT-9) is enclosed as Annexure-1.

(b) Number of Meetings of the Board:

The Board of Directors met 4 (four) times during the year 2016-17. The details of the Board Meetings and the attendance of the Directors are provided in the Report on Corporate Governance.

The Corporate Social Responsibility (CSR) Policy enumerating the CSR activities to be undertaken by your Company, in accordance with Schedule VII to the Companies Act, 2013 was recommended to the Board and the Board adopted the same. The said policy was also made available on the Company''s website www.ttkhealthcare.com. The Annual Report under CSR Activities is annexed to this Report as Annexure-2.

The details relating to the meetings convened, etc., are furnished in the Report on Corporate Governance.

(d) Composition of Audit Committee:

(e) Related Party Transactions:

All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are repetitive in nature. A Statement giving details of the transactions entered into with the related parties, pursuant to the omnibus approval so granted, is placed before the Audit Committee and the Board of Directors for their approval / ratification on a quarterly basis.

The Register of Contracts containing the details of the transactions, in which directors / key managerial personnel are interested, is placed before the Audit Committee / Board regularly.

The Board of Directors of your Company, on the recommendation of the Audit Committee, adopted a policy on Related Party Transactions, to regulate the transactions between your Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The Policy as approved by the Board is uploaded on the Company''s website www.ttkhealthcare.com. Form AOC-2 containing the details of Related Party Transactions is annexed as Annexure-3 to this Report.

(f) Corporate Governance:

Your Company has complied with the various requirements of the Corporate Governance Code under the provisions of the Companies Act, 2013 and as stipulated under the SEBI (LODR) Regulations, 2015.

A detailed Report on Corporate Governance forms part of this Annual Report.

(g) Risk Management:

Your Company has a risk identification and management framework appropriate to the size of your Company and the environment in which it operates.

(h) Directors and Key managerial Personnel:

None of the Directors are disqualified from being appointed or holding office as Directors, as stipulated under Section 164 of the Companies Act, 2013.

(i) Appointment / Re-appointment of Directors:

Mr R K Tulshan and Mr S Kalyanaraman, liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their reappointment.

(ii) Statement on Declaration by the Independent Directors of the Company:

(iii) Key managerial Personnel (KmP):

The following managerial personnel are Key Managerial Personnel (KMP):

- Mr T T Raghunathan, Executive Vice Chairman [Chief Executive Officer (CEO)];

- Mr S Kalyanaraman, Director & Wholetime Secretary [Company Secretary]; and

- Mr B V K Durga Prasad, Senior Vice President - Finance [Chief Financial Officer (CFO)].

(iv) Performance Evaluation of the Board, its Committees and the Directors:

(v) Remuneration Policy:

Your Company adopted a Policy relating to selection, remuneration and evaluation of Directors and Senior Management. The said Policy was hosted on the Company''s website www.ttkhealthcare.com.

(i) Auditors:

(i) Auditors and their Report: y Appointment of Auditors:

M/s Aiyar & Co. and M/s S Viswanathan LLP were appointed by the Shareholders at the 56^th Annual General Meeting held on 22^nd August, 2014, as Statutory Auditors of the Company, for a term of three years, to hold office from the conclusion of the 56^th Annual General Meeting till the conclusion of the 59^th Annual General Meeting, in accordance with the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made there under.

The term of office of the said Statutory Auditors expires at the conclusion of the ensuing 59^th Annual General Meeting.

The Board places on record its appreciation for the valuable services rendered by M/s Aiyar & Co. and M/s S Viswanathan LLP, during their tenure as the Statutory Auditors of your Company. The Board of Directors at their meeting held on 30^th May, 2017, based on the recommendation of the Audit Committee, at their meeting held on 29^th May, 2017, considered and recommended to the Members of the Company, the appointment of M/s. PKF Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration No.003990S / 200018), as Statutory Auditors in the place of the retiring Auditors, for a term of five years, to hold office from the conclusion of the 59^th Annual General Meeting till the conclusion of 64^th Annual General Meeting, subject to ratification by the members at every Annual General Meeting.

A brief profile of M/s. PKF Sridhar & Santhanam LLP is provided below:

- The firm has been in existence from 1978, initially as a Partnership Firm and presently as a Limited Liability Partnership.

- The firm has 20 partners as of 1st January, 2017 and has over 350 people in the firm, across its offices.

- The firm has its Head Office at Chennai and has offices in six cities in all, viz., Chennai, Mumbai, New Delhi, Bangalore, Hyderabad and Coimbatore.

- The firm has been peer reviewed in 2016. Also, as a part of the "Forum of Firmsâ, an association of international networks of accounting firms that perform audits of financial statements that are or may be used across national borders, the firm maintains international quality control standards.

Their appointment, if made, will be in accordance with the provisions of the Companies Act, 2013, the Chartered Accountants Act, 1949 and the Rules and Regulations made there under. They also satisfy the criteria provided under Section 141 of the Companies Act, 2013 and are not disqualified under the said Acts.

Accordingly, a Resolution seeking members'' approval for the appointment of M/s PKF Sridhar & Santhanam LLP, as Statutory Auditors of the Company is included under Item No.5 of the Notice convening the Annual General Meeting.

- Auditorsâ Report for the year ended 31^st march, 2017:

The Auditors'' Report to the Shareholders for the year under review does not contain any qualifications.

(ii) Cost Auditor and Cost Audit Report:

- Appointment for the year 2017-18:

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Records of your Company relating to âDrugs and Pharmaceuticalsâ are required to be audited, for the year 2017-18.

The Board of Directors, on the recommendation of the Audit Committee, appointed M/s Geeyes & Co. as Cost Auditors of your Company, for the financial year 2017-18 and fixed their remuneration at Rs.3,50,000 plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit.

The Audit Committee also received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with your Company.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder, the ratification of the Members is sought by means of an Ordinary Resolution for the remuneration of Rs.3,50,000 plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit, payable to M/s Geeyes & Co., Cost Auditors, under Item No.6 of the Notice convening the Annual General Meeting.

The Cost Audit Report for the year ended 31^st March, 2017 would be filed on or before the due date (i.e.) 27^th September, 2017.

-Cost Audit Report for the year 2015-16:

The Cost Audit Report for the financial year ended 31^st March, 2016 was filed on 29^th August, 2016 vide SrN G10152601 on the website of the Ministry of Corporate Affairs.

(iii) Secretarial Auditor and Secretarial Audit Report:

The Board had appointed Mr R Balasubramaniam, Company Secretary in Whole-time Practice, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2016-17. The Report of the Secretarial Auditor in Form MR-3 is annexed to this Report as Annexure-4. The Report does not contain any qualification or reservation or adverse remarks.

(j) Transfer to Investor Education and Protection Fund:

Your Company has transferred a sum of Rs.5.28 lakhs during the financial year 2016-17 to the Investor Education and Protection Fund established by the Central Government, in compliance with Section 205C(2) of the Companies Act, 1956. The said amount represents the unclaimed dividends for the year ended 31^st March, 2009, which were lying unclaimed with your Company for a period of seven years from the due date of payment.

(k) Disclosure under Schedule V (F) of the SEBI (LODR) Regulations, 2015: Your Company does not have any Unclaimed Shares issued in physical form pursuant to Public Issue / Rights Issue.

(l) Conservation of Energy:

(m) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 and the Rules made thereunder are annexed to this Report as Annexure-6.

(n) Subsidiary Company:

Your Company does not have any Subsidiary.

(o) Deposits:

As on 31^st March, 2017, your Company was not holding any amount under Fixed Deposit Account.

(p) Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013:

During the year under review, your Company had not given any loan and provided any guarantee under Section 186 of the Companies Act, 2013. During the year under review, your Company made an investment of Rs.3.40 lakhs in M/s Renew Wind Power (AP) Private Limited, in connection with purchase of wind power, by way of subscription to the issue of 3,400 Equity Shares of face value of Rs.10 each at a price of Rs.100 per Equity Share. Subsequently, 2,500 Equity Shares were transferred to M/s Renew Wind Power (Karnataka Three) Private Limited at a price of Rs.100 each, thus holding the balance 900 Equity Shares of Rs.10 each (Rs.0.90 lakhs) as on 31st March, 2017.

Your Company, during the year under review, had sold off 1,000 Listed, Rated, Secured, Redeemable, Index-Linked, Non-Convertible Debentures of face value of Rs.1,00,000 each, at a consideration of Rs.1,083.70 lakhs.

(q) Significant and Material Orders passed by the Regulators or Courts:

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

(r) Whistle Blower Policy:

In accordance with the provisions of Section 177(9) of the Companies Act, 2013 and the Rules made there under and also the SEBI (LODR) Regulations, 2015, your Company established a vigil mechanism termed as Whistle Blower Policy, for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy, which also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Corporate Governance Officer / Chairman of the Audit Committee / Executive Vice Chairman in exceptional cases.

The Whistle Blower Policy was also hosted on the Company''s website www.ttkhealthcare.com.

During the year under review, your Company had not received any complaint.

(s) Scheme of Amalgamation:

The Board of Directors in their meeting held on 30^th April, 2013 approved the Scheme of Amalgamation of TTK Protective Devices Limited (TTKPD) (formerly known as TTK-LIG Limited) and its Wholly Owned Subsidiary TSL Techno Services Limited (TSL) with your Company, the appointed date being 1^st April, 2012.

Under the Scheme, the Shareholders of TTKPD would be entitled for 9 Equity Shares of Rs.10 each fully paid-up of your 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.

Your Company obtained necessary No Objection from the Stock Exchanges and also the approval of the Shareholders for the Scheme of Amalgamation.

Your Company filed necessary petition with the Hon''ble High Court of Judicature at Madras for obtaining its sanction for the said Scheme of Amalgamation.

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, your Company''s petition relating to Scheme of Amalgamation stands transferred to NCLT and its sanction is awaited.

Your Directors have also extended the time limit of the Scheme upto 31^st March, 2018.

Necessary entries will be made in the books of accounts upon sanction of the Scheme.

(t) Finance:

Your Company availed a Term Loan of Rs.20 crores from Commonwealth Bank of Australia in the year 2013-14. As per the terms of sanction, the first installment of Rs.2 crores was repaid in December, 2014, the second installment of Rs.3 crores in December, 2015 and during the year under review, the last installment of Rs.15 crores was paid in July, 2016.

(u) Listing of Equity Shares:

Your Company''s shares are listed with-

- BSE Limited (BSE), Mumbai; and

- National Stock Exchange of India Limited (NSE), Mumbai.

The Listing Fees have been paid for the financial year 2017-18.

(v) Obligation of your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Your Company has adopted a policy for prevention of Sexual Harassment of Women at Workplace and has constituted an Internal Complaints Committee (ICC) with an NGO as one of its Members. During the year 2016-17, there were no complaints. Further, adequate awareness programmes were also conducted for the employees of your Company.

(w) Directorsâ Responsibility Statement:

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors hereby confirm that-

- In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- Appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the financial year ended 31^st March, 2017 and of the Profit of the Company for that period;

- The Annual Accounts had been prepared on a going concern basis;

- The Internal Financial Controls had been laid down, to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

- In order to ensure compliance with the provisions of all applicable laws, proper systems had been devised and that such systems were adequate and operating effectively.

General:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares (including Sweat Equity Shares and ESOS) to employees of the Company under any scheme.

Acknowledgement:

Your Directors place on record their grateful thanks to the Bankers, Customers, Vendors and Members for their continued support and patronage.

For and on behalf of the Board

Place : Bengaluru T T JAGANNATHAN

Date : May 30, 2017 CHAIRMAN

Registered Office:

No.6, Cathedral Road

Chennai 600 086

Mar 31, 2013

The Directors have pleasure in presenting the 55th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in lakhs) 2012-13 2011-12

Profit before Depreciation & Tax 2,434.14 2,590.59

Less: Depreciation 271.97 235.77

Profit before Tax 2,162.17 2,354.82

Less : Provision for Tax Current Tax 710.00 770.00

Deferred Tax 31.82 741.82 21.91 791.91

Profit after Tax 1,420.35 1,562.91

Surplus Account:

Balance as per last Balance Sheet 3,725.57 2,683.69

Add: Profit for the year 1,420.35 1,562.91

Total 5,145.92 4,246.60

Less: Proposed Dividend 310.64 310.64

Provision for tax on Dividend 52.79 50.39

Amount transferred to General

Reserve 145.00 160.00

Net Surplus 4,637.49 3,725.57

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.4.00 (40%) per Equity Share of Rs.107- each.

REVIEW OF PERFORMANCE

During the year under review. Revenue from Operations amounted to Rs.382.30 crores as against the previous year''s figure of Rs.353.74 crores, a growth of about 8%.

The overall performance of the Company was affected mainly due to the discontinuation of the distribution arrangement with TTK Protective Devices Limited (formerly TTK-LIG Limited) for Kohinoor / Durex brand of Condoms, consequent to the settlement reached between them and their overseas partners.

DEVELOPMENT OF STRATEGIC GROWTH PLAN

Your Company has engaged the services of M/s Bain & Co., a well known international firm of consultants for developing a Strategic Growth Plan for your Company to be implemented over the next 3-5 years. The Assignment is in progress and the final report would be ready during the Second Quarter of the current financial year.

SCHEME OF AMALGAMATION

The Board of Directors in their meeting held on 30th April, 2013 approved the Scheme of Amalgamation of TTK Protective Devices Limited (TTKPD) (formerly TTK-LIG Limited) and its Wholly Owned Subsidiary TSL Techno Services Limited (TSL) with your Company, the appointed date being 1st April, 2012.

Under the Scheme, the Shareholders of TTKPD would be entitled for 9 Equity Shares of Rs.10/- each fully paid-up of your 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.

FINANCE

During the year under review, the total Secured and Unsecured borrowings from Banks stood at Rs.21.55 crores as against the previous year''s figure of Rs.17.55 crores. The increase is on account of higher utilization of Working Capital limits in the normal course of business.

FIXED DEPOSITS

As on 31st March, 2013, your Company was not holding any amount under Fixed Deposits Account.

EMPLOYEES

Your Directors wish to place on record their appreciation for the excellent services rendered by the Employees at all levels.

The particulars as required under Section 217(2A) of the Companies Act, 1956, are furnished in the Statement annexed hereto.

DIRECTORS

Mr R Srinivasan, Dr K R Srimurthy and Mr K Shankaran, Directors of the Company, retire by rotation and being eligible, offer themselves for re- appointment.

Mr K Vaidyanathan has been re-appointed as Executive Director of the Company for a further period of 2 years, with effect from 1st July, 2013.

AUDITORS

M/s Aiyar & Co. and M/s S Viswanathan, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITOR

M/s Geeyes & Co., Cost Accountants, A-3, III Floor, 56, 7th Avenue, Ashok Nagar, Chennai 600 083 have been appointed as Cost Auditor under Section 233B of the Companies Act, 1956 for the audit of the Cost Accounts relating to Pharmaceutical Formulations and Food Products manufactured by your Company, for the year 2012-13. The Cost Audit Report for the year ended 31st March, 2013 would be filed on or before the due date (i.e.) 27th September, 2013.

LISTING

Your Company''s shares are listed with -

- Madras Stock Exchange Limited, Chennai / (Regional Stock Exchange)

- BSE Limited, Mumbai

The Listing Fees have been paid for the financial year 2013-14.

CORPORATE GOVERNANCE

As per the provisions of the Listing Agreement, your Company has complied with the various requirements of the Corporate Governance Code.

A detailed Compliance Note on Corporate Governance is attached to this Report.

CONSERVATION OF ENERGY

The prescribed particulars under Section 217(1)(e) of the Companies Act, 1956, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are furnished in the Annexure to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm thatÂ

- In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

- The accounting policies are consistently applied and reasonable, prudent judgements and estimates are made, so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that year.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- These Annual Accounts have been prepared on a "going concern" basis. ACKNOWLEDGEMENT

Your Directors place on record their grateful thanks to the Bankers and Financial Institutions for their continued support and patronage.

For and on behalf of the Board

Place : Chennai T T JAGANNATHAN

Date : 27th May, 2013 Chairman

Registered Office:

No.6, Cathedral Road

Chennai 600 086

Mar 31, 2012

The Directors have pleasure in presenting the 54th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. in lakhs)

2011-12 2010-11

Profit before Depreciation & Tax 2,590.59 2,411.57

Less: Depreciation 235.77 197.13

Profit before tax 2,354.82 2,214.44

Less: Provision for tax

Current Tax 770.00 730.00

Deferred Tax 21.91 791.91

12.25 742.25

Profit after tax 1,562.91 1,472.19

Surplus Account:

Balance as per last Balance Sheet 2,683.69 1,722.53

Add: Profit for the year 1,562.91 1,472.19

Total 4,246.60 3,194.72

Less: Proposed Dividend 310.64 310.64 Provision for tax on Dividend 50.39 50.39 Amount transferred to General

Reserve 160.00 150.00

Net Surplus 3,725.57 2,683.69

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.4.00 (40%) per Equity Share of Rs.10/- each.

REVIEW OF PERFORMANCE

During the year under review, Revenue from Operations amounted to Rs.353.74 crores as against the previous year's figure of Rs.310.95 crores, a growth of about 14%.

FINANCE

During the year under review, the total Secured and Unsecured borrowings from Banks stood at Rs.17.55 crores as against the previous year's figure of Rs.12.41 crores. The increase is mainly on account of Working Capital borrowings availed to take care of the increased level of operations.

FIXED DEPOSITS

As on 31st March, 2012, your Company was not holding any amount under Fixed Deposits Account.

EMPLOYEES

Your Directors wish to place on record their appreciation for the excellent services rendered by the Employees at all levels.

The particulars as required under Section 217(2A) of the Companies Act, 1956, are furnished in the Statement annexed hereto.

DIRECTORS

Mr T T Jagannathan, Mr R K Tulshan and Mr J Srinivasan, Directors of the Company, retire by rotation and being eligible, offer themselves for re- appointment.

AUDITORS

M/s Aiyar & Co. and M/s S Viswanathan, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

LISTING

Your Company's shares are listed with -

- Madras Stock Exchange Limited, Chennai (Regional Stock Exchange)

- Bombay Stock Exchange Limited, Mumbai

The Listing Fees have been paid for the financial year 2012-13.

CORPORATE GOVERNANCE

As per the provisions of the Listing Agreement, your Company has complied with the various requirements of the Corporate Governance Code.

A detailed Compliance Note on Corporate Governance is attached to this Report.

CONSERVATION OF ENERGY

The prescribed particulars under Section 217(1)(e) of the Companies Act, 1956, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are furnished in the Annexure to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that

- In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

- The accounting policies are consistently applied and reasonable, prudent judgments and estimates are made, so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that year.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- These Annual Accounts have been prepared on a "going concern" basis.

ACKNOWLEDGEMENT

Your Directors place on record their grateful thanks to the Bankers and Financial Institutions for their continued support and patronage.

For and on behalf of the Board

Place: Chennai T T JAGANNATHAN

Date : May 22,2012 Chairman

Registered Office:

No.6, Cathedral Road Chennai 600 086

Mar 31, 2011

The Directors have pleasure in presenting the 53rd Annual Report together with the Audited Accounts for the financial year ended 31st March, 2011.

FINANCIAL RESULTS

(Rs. in lakhs)

2010-11 2009-10

Profit before Depreciation & Tax 2,411.57 1,732.03 Less: Depreciation 197.13 181.80

Profit before Tax 2,214.44 1,550.23

Less: Provision for tax

Current Tax 730.00 535.00

Deferred Tax 12.25 742.25 102.49 637.49

Profit after Tax 1,472.19 912.74

Balance brought forward from 1,722.53 1,227.79

previous year

Total 3,194.72 2,140,53

Appropriations:

Proposed Dividend 310.64 271.81

Provision for Tax on Dividend 50.39 46.19

Amount transferred to General 150.00 100.00

Reserve

Balance transferred to Balance 2683.69 1.722.53 Sheet

3,194.72 2,140.53

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.4.00 (40%) per Equity Share of Rs.10/- each.

REVIEW OF PERFORMANCE

During the year under review, your Company registered a sales turnover of Rs.310.30 crores as against the previous years turnover of Rs.252.43 crores, a growth of about 23%.

(E) FINANCIAL PERFORMANCE:

(Rs. in lakhs)

2010-11 2009-10

Sales 31,030.19 25,242.91

Less : Excise Duty relating to Sales 2.49 22.98

31,027.70 25,219.93

Other Income 505.59 376.90

Total Income 31,533.29 25,596.83

Goods Consumption 16,256.76 13,438.06

Expenses 12,692.74 10,252.34

Profit before Interest and 2,583.79 1,906.43

Depreciation

Interest 172.22 174.40

Depreciation 197.13 181.80

Profit before Tax 2,214.44 1,550.23

Less: Provision for Tax

Current Tax 730.00 535.00

Deferred Tax 12.25 102.49

Profit After Tax 1,472.19 912.74

Income:

Sales Turnover:

During the year under review, your Company registered a sales turnover of Rs.310.30 crores as against the previous years turnover of Rs.252.43 crores, a growth of about 23%.

Other Income:

The Other Income for the year under review was Rs.5.06 crores as compared to Rs.3.77 crores in the previous year. The increase is due to profit of Rs.92.65 lakhs made on the sale of privately placed Debentures with Citi Financial Consumer Finance India Ltd.

Expenditure:

Goods Consumption:

The goods consumption as a percentage of sales for the year works out to 52.39% as compared to 53.28% in the previous year. The reduction in goods consumption was mainly due to higher proportion of own branded products in the sales mix where the material cost as a percentage of sales is lower as compared to the traded lines.

Expenses:

- The increase in Salaries, Wages & Bonus, Contribution to PF & Other Funds and Gratuity & Superannuation was mainly on account of the annual increments and addition of factory / field manpower.

- The increase in Power and Fuel expenses was due to the commissioning of the new Fen Line at Foods Divisions factory at Hosakote.

- The increase in Repairs and Maintenance expenses was mainly on account of the repairs and maintenance activities undertaken at Ernakulam, Hyderabad and Delhi Offices and at Ortho and Foods Factories.

- The increase in Advertisements and Sales Promotion expenses represents higher sales promotional expenses incurred on various product categories of the Company and incentives paid to field staff.

- The increase in Travelling expenses was due to general increase in the fares, hotel tariffs and the increase provided in the daily allowances of the field staff and due to the increase in field staff strength.

- Donation represents the contribution made to Sri Venkateshwara Trust for extending educational and medical assistance to deserving people (Rs.25 lakhs) and to Bhuvana Foundation engaged in providing financial assistance for education and medical treatment to the under developed sections of the Society (Rs.10 lakhs).

- The Diminution in the value of Investment amounting to Rs.29.77 lakhs represents the reduction in the market value of Rs.100 lakhs invested in Kotak Indo World Infrastructure Mutual Fund (Kotak Mutual Fund).

The increase in the other heads of expenses was in line with the operations of the Company and the general inflation.

Fixed Assets:

The Net Fixed Assets stood at Rs.32.61 crores during the year under review as against the previous years Rs.24.00 crores.

The addition to Fixed Assets amounting to Rs.10.78 crores mainly represents the-

(i) Cost of the Project at Foods Division for commissioning the Snack Pellet (Pappad) Manufacturing Line from Italy including the cost of the civil and electrical infrastructure (Rs.885.13 lakhs);

(ii) Cost of the imported 4th Axis Machine for Ortho Division (Rs.37.04 lakhs); and

(iii) Amounts incurred for acquisition of Plant and Machinery, Vehicles, Computers, etc.

The Capital work-in-progress (Rs.4.78 crores) represents the cost of Pellet (Pappad) Manufacturing Line bought from M/s McFills Enterprises Pvt. Ltd., Ahmedabad which is under erection and the Civil and Electrical works carried out for the Project at the Foods Division during the year. This will be capitalized after completion of the Project.

Investments:

During the year under review, Investments stood at Rs.6.84 crores as compared to Rs.8.15 crores in the previous year. During the year under review -

(i) 500 Nos. Secured Redeemable Non-Convertible Debentures of Rs.1,00,000/- each, privately placed with Citi Financial Consumer

Finance (India) Ltd. were sold to Trust Capital Services (India) Pvt. Ltd. for a consideration of Rs.592.65 lakhs.

(ii) A sum of Rs.6 crores has been invested in 600 Nos. Secured Redeemable Non-Convertible Debentures of Rs.1,00,000/- each, issued by Citi Corp Finance (India) Ltd., on private placement basis.

(iii) A sum of Rs.2.02 crores invested in 20 Nos. Unsecured Redeemable Optionally Convertible Debentures of Rs.10,00,000/- each, privately placed with Kotak Securities Limited has been redeemed.

(iv) Provision of Rs.29.77 lakhs has been made in the books towards the diminution in the market value of Rs.1 crore invested in Kotak Indo World Infrastructure Fund (Kotak Mutual Fund) and subsequently, the said investment stands at Rs.70.23 lakhs.

Inventories:

During the year under review, there had been increase in Inventories from Rs.22.83 crores to Rs.26.83 crores, due to higher build-up of inventories as a pro-active measure in Gripewater, Condoms, EVA and Good Home range of Home care products, anticipating demands.

Sundry Debtors:

There had been an increase in Sundry Debtors from Rs.22.50 crores to Rs.32.48 crores. The increase is in line with the growth in sales particularly in the last quarter of the year under review and that there were no major overdue outstandings.

Cash and Bank Balances:

During the year under review, there had been an increase in cash and bank balances from Rs.49.34 crores to Rs.60.81 crores representing mainly the increase in the fixed deposits with banks.

Loans and Advances:

During the year under review, there had been an increase in Loans and Advances from Rs.21.27 crores to Rs.28.54 crores, which mainly represents the payment of advance income-tax of Rs.7.92 crores.

The reduction in Electricity and Other Deposits was due to (i) refund of the pre-deposit from the Commercial Tax Department in connection with the classification dispute relating to Foods Division (Rs.90.14 lakhs); and (ii) the refund of rental deposits (Rs.20 lakhs). The increase in Advance for Others represents the increase in accrued interest on Fixed Deposits.

Current Liabilities:

During the year under review, there had been increase in the Current Liabilities from Rs.53.74 crores to Rs.75.17 crores. The increase in Creditors for Others includes the amounts payable to M/s Fen, Italy and M/s McFills Enterprises Pvt. Ltd., Ahmedabad for capital purchases amounting to Rs.201.11 lakhs and the increase in Security Deposits from stockists by Rs.87.13 lakhs. The increase in creditors for goods and expenses is in line with increased level of activities.

(F) INTERNAL CONTROL SYSTEMS:

Your Company has necessary Internal Control Systems in place. Internal Audits are regularly conducted through In-house Audit Department and through External Auditors. The reports are periodically discussed and corrective measures are taken.

The scope of audit covered the operations at various Branches / Depots / C&FA locations and also the functional areas at Factory / Head Office.

(G) INFORMATION TECHNOLOGY:

The Oracle ERP System is functioning satisfactorily. To improve the speed / efficiency of the system, it was decided to switch over from single-node processing to multi-node processing. This concept had been successfully tested using hired servers and subsequently, orders were placed for multi-node servers. The new servers would be commissioned during the First Quarter of the current year.

(H) HUMAN RESOURCES:

Your Company attaches significant importance to continuous upgradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth.

As part of the overall HR Strategy, training programmes were organized for employees at all levels through both internal and external faculties.

As on 31st March, 2011, the employee strength was 1478.

(I) FUTURISTIC STATEMENTS:

This analysis may contain certain statements, which are futuristic in nature. Such statements represent the intentions of the management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by taking into account all relevant factors before taking any investment decision.

FINANCE

During the year under review, the total Secured and Unsecured borrowings stood at Rs.12.41 crores as against the previous years figure of Rs.14.28 crores. During the year under review, your Company repaid the Short Term Loan of Rs.8 crores availed from Corporation Bank.

FIXED DEPOSITS

As on 31st March, 2011, your Company was not holding any amount under Fixed Deposits Account.

EMPLOYEES

Your Directors wish to place on record their appreciation for the excellent services rendered by the Employees at all levels.

The particulars as required under Section 217(2A) of the Companies Act, 1956, are furnished in the Statement annexed hereto.

DIRECTORS

Dr K R Srimurthy, Mr B N Bhagwat and Mr K Shankaran, Directors of the Company, retire by rotation and being eligible, offer themselves for re- appointment.

Mr K Vaidyanathan has been re-appointed as Excutive Director of the Company for a further period of 2 years, with effect from 1st July, 2011.

Mr T T Ragunathan has been re-appointed as Excutive Vice Chairman of the Company for a further period of 5 years, with effect from 1st November, 2011.

AUDITORS

M/s Aiyar & Co. and M/s S Viswanathan, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

LISTING

Your Companys shares are listed with -

- Madras Stock Exchange Limited, Chennai (Regional Stock Exchange)

- Bombay Stock Exchange Limited, Mumbai

The Listing Fees have been paid for the financial year 2011-12.

CORPORATE GOVERNANCE

As per the provisions of the Listing Agreement, your Company has complied with the various requirements of the Corporate Governance Code.

A detailed Compliance Note on Corporate Governance is attached to this Report.

CONSERVATION OF ENERGY

The prescribed particulars under Section 217(1)(e) of the Companies Act, 1956, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are furnished in the Annexure to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm thatÃ

- In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

- The accounting policies are consistently applied and reasonable, prudent judgements and estimates are made, so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that year.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- These Annual Accounts have been prepared on a "going concern" basis.

ACKNOWLEDGEMENT

Your Directors place on record their grateful thanks to the Bankers and Financial Institutions for their continued support and patronage.

For and on behalf of the Board

T T JAGANNATHAN Chairman

Place: Chennai Date : 24th May, 2011

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