TTK Healthcare Ltd Management Discussions

(A) INDUSTRY STRUCTURE AND DEVELOPMENTS:

y India continues to be the fastest-growing major economy with positive growth outlook by International Organisations and RBI.

The IMF, in its April, 2024 World Economic Outlook (WEO) estimated Indias GDP growth for the financial year 2023-24 as 7.8% and projected the GDP for the financial year 2024-25 as 7%. y The Company operates in more than one segment viz., Consumer Products, Animal Welfare Products, Medical Devices, Protective Devices (Male Contraceptives) and Foods. y Though Deodorant as a category has reported a double-digit growth during 2023 driven by both No Gas and Roll On formats, Aerosol format has reported a meagre growth of only 3% [Source: AC Nielson MAT – Dec 2023]. y Commercial Male Contraceptives market reported a volume growth of 6.5% and value growth of 15.2% during 2023. [Source: AC Nielson MAT – Dec 2023]. y The Animal Welfare Market size is estimated to be around Rs.8,000 crores, growing at around 9 – 10%. y Medical Devices Segment is reporting a positive trend in terms of overall demand and usage.

(B) OPPORTUNITIES AND THREATS

Opportunities: Your Company has the unique advantage of an exclusive network for distribution of FMCG / OTC products. This can be leveraged for launch of new products so as to ensure improved profitability and value creation through brand building. y In view of the increasing spend by Pet parents on Pet / Companion Animals over the years, this segment of the Animal Welfare Division (AWD) offers good potential for growth. y On Medical Devices front, the market continues to be dominated by imported medical devices / implants. Since your Company manufactures world class products and these are priced competitively, this segment provides opportunity for growth. y The "Make in India" and the "Atmanirbhar Bharat Abhiyaan" (Self-reliant India) initiatives by the Government of India would further enhance the growth prospects for this Segment and provide further fillip to the indigenous manufacture of medical devices. These products also have export potential. y The Central Governments Medical Insurance Scheme - Ayushman Bharat being implemented to cover poor families is also likely to increase the number of treatment procedures which would, in turn, improve the demand for medical implants viz., Heart Valves and Ortho Implants manufactured by your Company.

y Considering the size of the market for food products, the Foods Business of your Company has potential for growth, both in the domestic / overseas markets.

Threats: y Considering the commodity nature of the current Foods Business, there is pressure on price realizations. Nevertheless, this is mitigated through enhanced focus on export markets and also launch of innovative and differentiated products.

(C) SEGMENTWISE PERFORMANCE:

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

A look at the performance of individual Business Segments:

Consumer Products Business:

The Consumer Products Division (CPD) reported a revenue from operations of Rs.232.37 crores (excluding Skore), with a negative growth of around 4%.

Woodwards Gripewater (WGW)

The year 2023-24 was quite a challenging year for WGW which suffered a significant drop in volumes as compared to the previous year.

Several initiatives such as (a) Mainstream media campaign covering the entire country; (b) Endorsement through a tie-up with Medifact; (c) Rural outreach programmes like Van with Doctors; and (d) Several digital campaigns coinciding with Mothers Day, etc., with significant reach, were undertaken to reverse the trend. Further, your Company also introduced the new packaging with original blue colour coupled with clear value proposition of Gentler, Safer and Tastier Gripe Water and this has been received well. The strategy for the year 2024-25 would be (i) to target modern mothers through new TV commercial with key communication of "New Woodwards for New Generation Mothers"; (ii) to focus on advertising across various media (TV, Print and Digital); (iii) to carryout influencer marketing with doctors and mothers; (iv) to undertake market specific in-store activations and consumer offers; and (v) to extend brand Woodwards to other digestive offerings so as to establish Woodwards as a Tummy Care Expert.

EVA

Despite lower growth in Aerosol Category, Brand EVA is on a recovery path and reported a growth of around 4% during the year under review. The brand increased its media presence during the year through three major mainstream media campaigns featuring the celebrity Rashmika Mandanna as the face of the brand and this has clearly established the brand promise and proposition – Special Happens. With the launch of Purse Perfume, EVA has also forayed into the No Gas Category. EVA also entered the emerging category of Roll On by launching a range of Teen Skin Friendly offerings in October 2023. This launch of Roll On was also supported with the Celebrity-led communication with the messaging of "Rock On Roll On" and the response is encouraging.

The strategy for the year 2024-25 would be (i) to further improve the brand affinity and gain market share through brand promotions; (ii) to establish the presence in the emerging category by creating demand through new campaigns for Roll On and also launch of No Gas Sprays; and (iii) to create Brand Relevance by upgrading packs and fragrances in the base deodorant space.

Skore

During the year under review, the performance of SKORE was satisfactory with a value growth of around 12%, though there has been marginal dip in volumes, mainly due to external disturbances. The non-condom segment reported a healthy growth due to numerous activities across channels and multiple digital initiatives. Additionally, Skore range of products was launched in Nepal and South Africa and the initial response is encouraging. LoveDepot, the recently launched D-2-C portal has witnessed upward trajectory through the year with gradual increase in revenue. The initial response for the female pleasure brand MsChief is also encouraging. Appropriate investments have been committed for nurturing these initiatives further.

The strategy for the year 2024-25 would be (i) to grow the core range of condoms through regular trade and brand promotions; (ii) to continue to drive the non-condom segment in the digital space through new launches and also make inroads in general trade and modern trade chains; (iii) to identify the right partners and launch SKORE in more international markets; and (iv) to promote LoveDepot / MsChief to generate brand salience as well as transactions / revenue.

Good Home

The performance of Good Home was consistent during the year under review, with a growth of around 12%.

Aroma and Unblox were the top performing categories which achieved a healthy double-digit growth.

The year also witnessed the launch of Clean Home Range consisting of Brooms, Floor Wipes, etc. and the initial response is encouraging.

The strategy for the year 2024-25 would be (i) to further grow the Aroma and Unblox Range, through appropriate promotional spends; (ii) to expand the product basket relating to the Clean Home Range coupled with increase in both width and depth of the distribution; (iii) to expand the product offerings with new and emerging category like Camphor and Clear Gel; and (iv) to focus on e-Comm and Modern Trade to improve volumes.

Animal Welfare Business (AWD):

For the year under review, Animal Welfare Division has registered a revenue from operations Rs.115.51 crores, with a growth of around 9%. However, this modest growth as compared to previous years can be attributed to high attrition rate and challenging market conditions, particularly in the Pet Segment.

While Aquanim (Aquaculture) and Gallus (Poultry) reported a healthy growth of around 26% and 17% respectively, Bovianim (Livestock) could register a growth of only around 7% due to challenging market conditions. Companim (Pet) had a setback throughout the year due to higher attrition resulting in a flat growth over the previous year. Considering the growth potential of Companim Division, it would from now on operate as a separate vertical with a National Sales Head. Further, the field team too has been expanded to ensure wider coverage.

The strategy for the year 2024-25 would be (i) to focus on the Flagship Brands viz., Orcal-P – Tefroli – Ossomin – Nutricell (OTON) through Farm Approach Program and creating prescription support; (ii) to venture into Pet Treats Segment; (iii) to focus on e-Comm Channel; and (iv) to focus on new product launches along with an enhanced focus on the products launched during the year 2023-24.

Medical Devices Business:

Heart Valve Division

During the year under review, Heart Valve Division recorded a revenue from operations of Rs.28.66 crores, with a growth of around 13%.

The imported CardiaMed Bi-Leaflet Valves reported an improved performance during the year, despite supply constraints from the Overseas Partner.

The test marketing of the Percutaneous Transluminal Coronary Angioplasty (PTCA) Catheters is progressing well.

The Single Centric Clinical Trial of the TC2 Titanium valves covering around 40 patients stands completed at Sree Chitra Tirunal Institute of Medical Sciences and Technology (SCTIMST). All the patients have completed one year follow-up. The Report will be submitted to the Regulatory Authorities for grant of approval for the Multi-centric clinical trial.

The strategy for the year 2024-25 would be (i) to grow the volumes of TTK Chitra Valves and to gain further volumes through Bi-Leaflet Valves; (ii) to expand the promotion of PTCA Catheters in selected markets; and (iii) to start the Multi-centric clinical trial of TC2 Titanium Valve.

Ortho Division

The Division reported a revenue from operations of Rs.51.83 crores, with a growth of around 11%, driven by Knee Replacement Segment; Hip replacement too reported a decent growth.

Regional growth was stronger in North – primarily due to better penetration of Punjab market as well as adoption by new customers in Rajasthan. Strong relationships with customers helped to sustain and grow the customer base.

Expansion of distribution footprint supported the coverage of new markets.

Cost of production was optimized to support better margins for knee implants.

The strategy for the year 2024–25 would be (i) to continue to focus on footprint expansion in existing markets, with deeper penetration; (ii) to expand into new markets; (iii) to launch the new Fixed Bearing implants to target the larger market segments, after obtaining regulatory approvals; and (iv) to continue the optimization of production costs for implants through improvement in processes and also through Vendor development initiatives.

Protective Devices Business:

The Division reported a revenue from operations of Rs.199.86 crores (including Skore), with a growth of around 3%.

With the recommencement of manufacturing operations at Virudhunagar facility, the overall production capacity stands enhanced. Further, approval of the International Aid Agency was also received for supply of condoms from this facility.

Your Company continues to hold the certificates issued by (i) British Standards Institution (BSI) for ISO Standards and CE Mark; (ii) South African Bureau of Standards for SABS; (iii) International Aid Agency and SCS Global Services for Forest Stewardship Council; and (iv) SEDEX and BSCI Standards for social compliance requirements.

Your Company is also one of the pre-qualified suppliers under WHO-UNFPA Pre-Qualification Scheme for Male Latex Condoms which is a requirement to supply products internationally to the reputed International Aid Agencies.

Your Company has been exporting products to various countries through International Aid agency and Third-Party contractors and with new registrations in Sri Lanka, Indonesia, etc., enhanced business is expected.

During the year under review, your Company launched a few innovative and differentiated products under the brand MsChief. Some more products, both in Condoms and Lubes categories are in the process of development and this would be launched in phases.

The strategy for the year 2024-25 would be (i) to grow the branded Condom business through differentiated and innovative products; (ii) to develop and strengthen relationships with third party contract manufacturing customers for increasing the volumes; (iii) to develop and establish new customer base: (iv) to work on cost optimization; and (v) to increase the production output efficiently by developing new infrastructure and by addition of high-speed machines.

Foods Business:

During the year under review, the Divisions revenue from operation was Rs.124.14 crores, with a growth of 11%.

Your Company continues to use TPM as a tool to improve overall efficiency and enhance profitability.

Jaipur plant capacity utilisation has gone upto around 90% by increasing the existing business and adding new customers. Three new products were developed at R&D Centre at Hosakote and commercially launched. More innovations are in the pipeline and are expected to be rolled out in phases.

Your Company has now started sourcing a few products which are in demand in the market and cannot be produced at Companys factories. Going forward, this would be one of the strategies to increase the overall volumes.

The strategy for the year 2024-25 would be (i) to further increase the capacity utilization at Jaipur facility through enhanced focus on domestic / institutional and export businesses; and (ii) 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 2024-25, 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:

Necessary Manuals / Standard Operating Procedures (SOPs) are in place for effectively implementing the Internal Financial Control System.

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. During the year under review, no suspected fraud or irregularity or a failure of internal control systems of a material nature was reported by the Internal Auditors / Statutory Auditors.

(G) FINANCIAL PERFORMANCE:

		(Rs. in lakhs)
	2023-24	2022-23
(a) Continuing Operations
Revenue from Operations	75,279.38	72,511.03
Other Income	6,260.71	4,833.17
Total Income	81,540.09	77,344.20
Cost of Materials Consumed	33,825.15	34,777.50
Employee Benefits Expense	13,284.00	12,338.20
Other Expenses	24,437.49	22,260.41

 

Profit before Finance Cost, Depreciation &
Exceptional Items	9,993.45	7,968.09
Finance Cost	275.55	523.89
Depreciation	1,305.87	1,280.64
Profit before Tax	8,412.03	6,163.56
Less: Tax Expense
Current Tax	2,210.00	1,741.03
Deferred Tax	(82.16)	(44.26)
Profit after Tax from Continuing Operations	6,284.19	4,466.79
(b) Discontinued Operations
Profit before Tax	–	77,643.92
Less: Tax Expense	–	18,139.42
Profit after Tax from Discontinued	–	59,504.50
Operations
Profit after Tax [(a)+(b)]	6,284.19	63,971.29

ANALYSIS OF PERFORMANCE: y The Revenue from Continuing Operations amounted to Rs.752.79 crores, with a growth of around 4% . y The increase in Other Income was mainly due to increase in interest on Fixed Deposits made from the sale proceeds of Human Pharma Division. y The increase in Employee Benefits Expense was mainly due to regular annual increments / revision in packages and the impact of the Wage Settlement relating to Puducherry factory of Protective Devices Division. y The decrease in Finance Cost was due to the interest paid on Income Tax amounting to Rs.228.66 lakhs in the previous year. y The increase in Power and Fuel expenses was due to higher production at Foods Divisions factories at Hosakote and Jaipur and also at the Condoms factory at Puducherry and recommencement of production at Virudhunagar facility. y The increase in Repairs and Maintenance was mainly due to major maintenance work undertaken at Foods Division. y The increase in Advertisement & Sales Promotion expenses was mainly on account of the higher advertising and promotional activities undertaken relating to WGW, EVA, Good Home and Skore Brand of Condoms / Pleasure Products Range and also on the online portal LoveDepot.com / Brand MsChief. y The increase in Travelling & Conveyance expenses was due to increase in fares and hotel tariffs. y Bad Debts written off during the year under review, amounted to Rs.56.73 lakhs, comprising-

	(Rs. in lakhs)
Ortho Division	27.74
Animal Welfare Division	11.83
Consumer Products Division	8.48
Foods Division	8.68
All the Other Expenses are in line with the level of operations.

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

During the year 2023-24, your Company focused more on individual and team development training programs across all Divisions as part of the succession planning / towards building a robust talent pipeline. Your Company also commenced "Mentorship Program" to introduce the concept of coaching and mentoring within the organization.

By orchestrating a spectrum of employee engagement activities, including targeted leadership development programs across the organization, your Company successfully fostered a high-trust and high-performance culture. This dedication to the workforce garnered your Company the esteemed "Great Place to Work" certification from the GPTW Institute, affirming our steadfast commitment to employee satisfaction and well-being. During the year, your Company has launched an employee portal "Planet TTK", a centralized communication hub, dedicated to enhancing employee connectivity and engagement. In the pursuit of minimizing attrition and boost field employee productivity, your Company focused on fostering inclusivity, delivered engaging content, implemented surveys, instituted structured on-boarding and introduced robust online Induction, Rising Star and ‘Step Up training programs.

During the year, your Company also signed a 18(1) Long Term Wage Settlement with the workmen of Protective Devices Divisions factory at Puducherry.

Your Company has also continuously encouraged, identified and rewarded the employees and teams that have demonstrated excellence in the areas of Marketing and Customer focus, Innovation and Quality, Business Process Transformation, etc., through Reward and Recognition (R&R) Programs such as Xtra Mile, Trail Blazer and Corporate Excellence Awards.

As on March 31, 2024, the employee strength was 1,432 (Previous Year – 1,294). y Industrial Relations:

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

(I) INFORMATION TECHNOLOGY:

During the year under review, your Company has completed the automation of several functions of the Finance and Accounts Department through Oracle ERP.

Further, a number of new applications viz., Invoicing with Inventory Validations, Primary Sales Order Booking, Surgery Tracking, Replenishment and Credit Controls, Physical Stock Verification and User Access Management, Stock Transfers, Creation of Group Calendars / Events with mails / message notifications, etc., were developed and implemented at the various Divisions of the Company.

As part of further strengthening the IT Security, a robust Device Management Solution has been implemented.

As part of your Companys Cyber Security Policy, vulnerability assessments are regularly carried out and preventive actions are initiated, where necessary.

(J) FUTURISTIC STATEMENTS:

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

(K) KEY FINANCIAL RATIOS:

Particulars	2023-24	2022-23	Change	Remarks
			%
Trade Receivables	8.38	9.09	(7.81)	A
Turnover Ratio
Inventory Turnover Ratio	3.73	4.13	(9.69)	A
Interest Coverage Ratio	29.83	29.53	1.02	F
Current Ratio	5.50	5.06	8.70	F
Operating Profit Margin (%)	4.96	4.39	12.98	F Improvement in
				Operating Profit.
Debt Equity Ratio	0.0232	0.0292	(20.55)	F Borrowings reduced
				compared to
				previous year and
				Shareholders Equity
				has increased due to
				current years profit.
Net Profit Margin (%)	8.41	7.35	14.42	F Increase in Net Profit
Return on Net Worth (%)	6.54	8.62	(24.13)	A Increase in Equity
				due to profit made
				on sale of Human
				Pharma Division.

F - Favourable; A – Adverse

DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER: (1) Annual Return:

Annual Return (Form MGT-7) for the year 2023-24 was made available on the Companys website at the following link: https:// ttkhealthcare.com/investorlist/annual-return/

(2) Number of Meetings of the Board:-

The Board of Directors met 5 (Five) times during the year 2023-24. The details of the Board Meetings and the attendance of the Directors are provided in the Report on Corporate Governance.

(3) Corporate Social Responsibility (CSR) Committee:

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

Mr S Kalyanaraman is the Secretary to the Committee.

The Corporate Social Responsibility (CSR) Policy enumerating the CSR activities to be undertaken by your Company, in accordance with Schedule VII to the Companies Act, 2013 was recommended to the Board and the Board adopted the same. The said policy was also made available on the Companys 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.

(4) 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.

(5) 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 Companys 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.

(6) 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. [Page No.63]

(7) Business Responsibility and Sustainability Report:

In accordance with the provisions of Regulations 34(2)(f) of the SEBI (LODR) Regulations, 2015 and on the basis of market capitalization (one amongst the Top 1,000 Companies) as on March 31 of every financial year, the Business Responsibility and Sustainability Report forms part of this Annual Report. [Page No.35]

(8) Risk Management:

Your Company developed and implemented a Risk Management Policy which includes identification of elements of risk, if any, which in the opinion of the Board, may threaten the existence of the Company. Your Company has a Risk Identification and Management Framework appropriate to the size of your Company and the environment in which it operates. The Risk Management Group (RMG) with due representations from each of the Businesses / Functions of the Company has been meeting periodically and have detailed interactions / discussions with the Members / Risk Owners on the various risks identified and the status of the mitigation plans.

During the year, the RMG met four times on June 26, 2023, September 26, 2023, December 26, 2023 and March 24, 2024 and reviewed / discussed the various key risks and the status of the mitigation plans.

The Risk Management Committee (RMC), during the year, met two times on September 08, 2023 and February 01, 2024. The Risk Management Committee was updated on the outcome of the RMG Meetings held during the year. During the year, the services of M/s Deloitte were engaged for updating the Risk Register by deleting the risks that are not relevant and to include new relevant risks; classification of risks in terms of High, Moderate and Low; and to define the probability of occurrence of various risks and its impact. Accordingly, M/s Deloitte made detailed formal presentation to the Risk Management Committee with their scope of the work, approach, risk summary and the identified key risks.

Further, the duly updated Risk Register highlighting the various key risks and the status of their mitigation plans was placed before the Risk Management Committee in their meetings and the Committee reviewed the same. The Audit Committee and the Board of Directors too periodically review the proceedings / outcome of the Risk Management Committee meetings.

(9) Directors and Key Managerial Personnel: y There are no changes in the composition of Board of Directors during the year. y None of the Directors are disqualified from being appointed or holding office as Directors, as stipulated under Section 164 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Certificate of Non-disqualification of Directors from the Practising Company Secretary is furnished under Report on Corporate Governance. [Page No.77]. y Mr V Ranganathan (DIN: 00550121) was reappointed as an Independent Director of the Company, for a further term of five years, with effect from June 01, 2024 to May 31, 2029. y Mr T T Raghunathan (DIN: 00043455), Executive Chairman and Chief Executive Officer of the Company, would relinquish his office of Chief Executive Officer, with effect from June 01, 2024.

He would continue to hold the position of Executive Chairman. y Mr S Kalyanaraman (DIN: 00119541), Wholetime Director & Secretary was reappointed as Wholetime Director of the Company, for a further term of five years, with effect from June 01, 2024.

He would hold the position of Chief Executive Officer (CEO) with effect from June 01, 2024 and would be designated as Wholetime Director & Chief Executive Officer.

He would relinquish his office of Company Secretary, with effect from June 01, 2024. y Ms Gowry A Jaishankar would assume the position of Company Secretary & Compliance Officer, with effect from June 01, 2024.

(i) Reappointment of Directors:

Mr R K Tulshan, Director 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 – yyDeclaration 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. Further, in accordance with Regulations 25(8) of the SEBI (LODR) Regulations, 2015, 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. yyConfirmation of compliance with the Code for Independent Directors prescribed under Schedule IV to the Act and the Companys Code of Conduct for Directors and Senior Management Personnel.

The terms and conditions of appointment of the Independent Directors are posted on the Companys website at the following link https://ttkhealthcare.com/wp-content/uploads/2019/09/ID-Terms-and-Conditions.pdf.

(iii) Key Managerial Personnel (KMP):

The following managerial personnel are Key Managerial Personnel (KMP) as on March 31, 2024: yyMr T T Raghunathan, Executive Chairman [Chief Executive Officer (CEO)]; yyMr S Kalyanaraman, Wholetime Director & Secretary [Company Secretary]; and yyMr B V K Durga Prasad, President – Finance [Chief Financial Officer (CFO)].

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

In compliance with the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, the performance evaluation of the Board as a whole, its Committees, Chairperson and Non-Independent Directors were carried out during the year under review by the Independent Directors and the evaluation of the Independent Directors were carried out by the entire Board of Directors excluding the Director being evaluated during the year under review. More details on the same are given in the Report on Corporate Governance. [Page No.63]

(v) Policy on Directors Appointment and Remuneration:

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

(10) Auditors:

(i) Statutory Auditors and their Report:

M/s PKF Sridhar & Santhanam LLP was appointed as Statutory Auditors of the Company, for a further term of 5 years, to hold office from the conclusion of the 64^th Annual General Meeting till the conclusion of 69^th Annual General Meeting.

M/s PKF Sridhar & Santhanam LLP, the Statutory Auditors of your Company have carried out the Audit for the year ended March 31, 2024. yyAuditors Report for the year ended March 31, 2024:

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

(ii) Cost Auditors and Cost Audit Report: yyAppointment for the year 2024-25:

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 2024-25:

Under Regulated Sectors:

y Drugs and Pharmaceuticals.

Under Non-Regulated Sectors:

y Male Contraceptives under Rubber and Allied Products;

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

The Board of Directors, on the recommendation of the Audit Committee, appointed M/s Geeyes & Co., as Cost Auditors of your Company, for the financial year 2024-25 and fixed their remuneration at Rs.5 lakhs plus applicable taxes and levies and reimbursement of travel and out-of-pocket expenses incurred in connection with the audit. Necessary intimation of the said appointment has already been given to the Central Government vide Form CRA-2.

M/s Geeyes & Co., have confirmed that their appointment is within the limits prescribed under Section 141 of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under the said Section. The Audit Committee also received a Certificate from the Cost Auditors certifying their independence and arms 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.5 of the Notice convening the Annual General Meeting.

The Cost Audit Report for the year ended March 31, 2024 would be filed on or before the due date (i.e.) September 27, 2024 or within 30 days from the date of submission of the said Report to the Board, whichever is earlier. yyCost Audit Report for the year 2022-23:

The Cost Audit Report for the financial year ended March 31, 2023 was filed in Form CRA-4 vide SRN F63465157 dated August 24, 2023 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 2023-24. 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.

(11) Investor Education and Protection Fund (IEPF): y Transfer of Unclaimed Dividends to IEPF, during the year under review:

Your Company transferred a sum of Rs.9,43,675 during the financial year 2023-24 to the Investor Education and Protection Fund established by the Central Government, in compliance with Sections 123 to 125 of the Companies Act, 2013. The said amount represents the unclaimed dividends for the year ended March 31, 2016, which were lying unclaimed with your Company for a period of seven years from the due date of payment. y Transfer of Shares to the Demat Account of the IEPF Authority:

In accordance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, your Company transferred 6,768 Equity Shares of Rs.10/- each fully paid-up, in respect of which the dividends relating to the year 2015-16, remained unclaimed / unpaid for a period of seven consecutive years or more, to the Demat Account of the IEPF Authority held with CDSL on September 14, 2023 and September 20, 2023. y Year wise amount of Unpaid / Unclaimed Dividends lying in the Unpaid Account as on March 31, 2024 and the due dates of transfer:

Financial Year ended	Dividend Declared on	Due date of Transfer	Unpaid / Unclaimed Amount as on 31.03.2024
			(in Rs.)
31.03.2017	04.08.2017	04.09.2024	9,65,355.00
31.03.2018	09.08.2018	14.09.2025	6,40,813.07
31.03.2019	09.08.2019	12.09.2026	5,59,145.52
31.03.2020	11.09.2020	14.10.2027	3,28,515.68
31.03.2021	20.08.2021	21.09.2028	5,71,906.51
31.03.2022	03.08.2022	03.09.2029	8,03,199.19
31.03.2023	25.07.2023	30.08.2030	6,50,870.72

y Details of the Nodal Officer

Name of the Nodal Officer	: Mr S Kalyanaraman
Designation	: Wholetime Director & Secretary
Address	: TTK Healthcare Limited
	No.6, Cathedral Road
	Chennai 600 086
Telephone	: 044 – 28116106 / 28113804
e-Mail ID	: skr@ttkhealthcare.com

(12) 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.

(13) 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.

(14) 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.

(15) Subsidiary Company:

Your Company does not have any Subsidiary Company.

(16) Deposits:

As on March 31, 2024, your Company was not holding any amount under Fixed Deposit Account.

(17) 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.

(18) Material Changes and Commitments affecting the financial position:

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the Financial Statements relate viz., March 31, 2024 and the date of this Report.

(19) Significant and material orders passed by the Regulators/ Courts:

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

(20) 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 Vigil Mechanism / Whistle Blower Policy, for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct, which also provides for adequate safeguards against victimization of Director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Corporate Governance Officer / Chairman of the Audit Committee and the Executive Chairman, in exceptional cases.

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

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

(21) Compliance Certificate:

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

(22) Secretarial Standards:

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

(23) Finance:

Your Company has banking arrangements with Union Bank of India, Bank of Baroda and HDFC Bank Limited and availed various working capital facilities amounting to Rs.21.47 crores as on March 31, 2024. (Previous Year – Rs.25.53 crores).

(24) Capital Expenditure (Capex):

During the year, your Company has spent an amount of Rs.16.84 crores towards Capex. For the year 2024-25, the estimated Capex would be around Rs.10 crores towards normal Capex.

(25) Investments:

During the year, there were no additional investments.

(26) Listing of Equity Shares:

Your Companys shares are listed withyy BSE Limited (BSE), Mumbai; and yy National Stock Exchange of India Limited (NSE), Mumbai. Your Company paid the Listing Fees for the financial year 2024-25.

(27) 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 December 09, 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 2023-24, there were no complaints. Further, adequate awareness programmes were also conducted for the employees of your Company.

(28) 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.

(29) Disclosure under the Insolvency and Bankruptcy Code, 2016:

During the year under review, no application was made or any proceeding is pending under the said Code.

(30) Disclosure regarding Valuation under One Time Settlement:

Not Applicable.

(31) Delisting Proposal:

The Company received the Initial Public Announcement dated April 05, 2023 from M/s Inga Ventures Private Limited, Manager to the Delisting Offer, vide their communication dated April 05, 2023 under Regulation 8 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (the Delisting Regulations), for and on behalf of the Promoters of the Company viz., Mr T T Jagannathan, Mr T T Raghunathan and M/s T T Krishnamachari & Co., represented by its Partners - Mr T T Jagannathan, Mr T T Raghunathan, Mrs Latha Jagannathan, Mrs Bhanu Raghunathan, Mr T T Mukund, Mr T T Lakshman, Mr T T Venkatesh and Mr T T Sriram made to the Public Shareholders, expressing their intention to- (a) acquire all the Equity Shares that are held by the Public Shareholders, either individually or collectively together with other members of the Promoter Group, as the case may be; and (b) consequently, voluntarily delist the Equity Shares from the Stock Exchanges where the Equity Shares are presently listed (i.e.) BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), by making a delisting offer in accordance with the Delisting Regulations.

The Board of Directors in their meeting held on April 20, 2023 accorded their approval for the delisting proposal and to conduct the Postal Ballot process for obtaining the approval of the Shareholders by means of a Special Resolution by way of e-Voting. The Postal Ballot Notice dated April 20, 2023 issued to the Members by electronic means on April 21, 2023, seeking their approval by way of Special Resolution through remote e-Voting process and the Shareholders have accorded their approval for the Voluntary Delisting of the Shares through requisite majority on May 22, 2023. The Delisting Offer opened on Thursday, July 20, 2023 and closed on Wednesday, July 26, 2023 at the end of Market Hours on BSE and NSE, based on the reverse book-building process as prescribed in the SEBI Delisting Regulations. The total number of shares validly tendered by the Public Shareholders in the Delisting offer was 17,03,482 shares. Since the stipulated threshold limit of 90% of the Paid-up Share Capital of the Company as per the Regulation 21 of SEBI Delisting Regulations was not met through the offer from the Public Shareholders, the delisting proposal was not successful. Consequently, the Equity Shares of the Company continue to remain Listed on the Stock Exchanges.

Directors Responsibility Statement:

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors hereby confirm that-y In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures; y Appropriate accounting policies had been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2024 and of the Profit of the Company for that period; y Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; y The Annual Accounts had been prepared on a going concern basis; y The Internal Financial Controls had been laid down, to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and y In order to ensure compliance with the provisions of all applicable laws, proper systems had been devised and that such systems were adequate and operating effectively.

General:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: y Issue of Equity Shares with differential rights as to dividend, voting or otherwise. y Issue of shares (including Sweat Equity Shares and ESOs) to employees of the Company under any Scheme.

Acknowledgement:

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

Place: Chennai Date : May 24, 2024

Registered Office: No.6, Cathedral Road Chennai 600 086

For and on behalf of the Board T T RAGHUNATHAN

Executive Chairman