TTK HEALTHCARE Notes to Accounts

Notes on Financial Statements


(1) The Company has created a Trust which has taken a Group Gratuity Policy with the Life Insurance Corporation of India for future payment of gratuity to the retired/resigned employees. Based on the actuarial valuation, provision has been made for full value of the gratuity benefits as per the requirements of Accounting Standard 15 (AS-15).


(2) The Company contributes to a Superannuation Fund covering specified employees. The contributions are by way of annual premia payable in respect of a superannuation policy issued by the Life Insurance Corporation of India, which confers benefits to retired/resigned employees based on policy norms. No other liabilities are incurred by the Company in this regard.


(3) Leave Encashment benefit has been charged to Profit and Loss Statement on the basis of actuarial valuation as at the year end in line with the Accounting Standard 15 (AS-15).


As per Accounting Standard 15 (AS -15) (Revised) for Employee Benefits, the disclosures as defined in the Accounting Standard are given below: Defined Contribution Plan:


Contributions to Defined Contribution Plan, recognized as expense for the year are as under:


Defined Benefit Plan :


The Employees’ Gratuity Fund Scheme managed by a Trust is a Defined Benefit Plan.


The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation as per para 65 of the Accounting Standard 15 (AS-15).


Reconciliation of the opening and closing balances of Defined Benefit Obligation:


(4) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961 relating to TTK Biomed Ltd., consequent to its merger with the Company.


For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income-Tax Rules, 1962.


The Company could not fulfill one of the conditions and hence an application was made to CBDT for relaxation of the condition under the said Rule 9C.


The CBDT while disposing of the application had advised the Company to refer the matter to the Specified Authority. Subsequently, the Company has filed necessary application with the Specified Authority. Upon receipt of the decision from the Specified Authority, the matter will be suitably dealt with.


(5) The Company availed certain Carry Forward benefits u/s.72A of the Income-Tax Act, 1961, relating to TTK Medical Devices Ltd., consequent to its merger with the Company.


For availing these benefits, certain conditions have to be fulfilled under Rule 9C of the Income Tax Rules,1962.


The Company could not fulfill certain conditions and hence an Application / Review Petition was filed with CBDT for relaxation of these conditions. The said Application / Review Petition for relaxation of the conditions was rejected by CBDT. Against this, the Company filed a Writ Petition in the Hon''''ble High Court of Judicature at Madras in February 2012. Upon receipt of the decision from the Hon''''ble High Court, the matter will be suitably dealt with.


(6) During the year, the Company has written off non-recoverable debts to the extent of Rs.26,58,554 (Previous Year - Rs.23,34,069).


(7) The Board of Directors at their meeting held on 30.04.2013 approved the Scheme of Amalgamation of TTK Protective Devices Ltd. (TTKPD) (formerly TTK-LIG Ltd.) and its Wholly Owned Subsidiary TSL Techno Services Ltd. (TSL) with the Company, the appointed date being 01.04.2012. Under the Scheme, the Shareholders of TTKPD would be allotted 9 Equity shares of Rs.10 each fully paid-up of the Company for every 2 Equity shares of Rs.10 each fully paid-up held by them in TTKPD. No shares would be allotted to the Shareholders of TSL as its value having been considered as part of the valuation of TTKPD.


The said Scheme has been duly approved by the Shareholders and the Company has filed necessary petition before the Hon''''ble High Court of Judicature at Madras for obtaining its sanction.


Consequent to the constitution of the National Company Law Tribunal (NCLT), petitions relating to compromises, arrangements and amalgamations, etc., would henceforth be dealt with by this Tribunal.


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


The Directors have also extended the time limit of the Scheme up to 31st March, 2018.


(8) In accordance with the provisions of Sec.135 of the Companies Act, 2013 and the Rules made there under, the Company is required to spend Rs.54.35 lakhs being 2% of the average net profit of the Company made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy. The Company has contributed a sum of Rs.54.35 lakhs towards the CSR activities for the eligible projects during the year.


(9) During the year 2015-16, the Company had invested Rs.10 crores in 25 months Listed, Rated, Secured, Redeemable, Index-Linked, Non-Convertible Debentures (NCDs) (100% Principal protected) of Citi Corp Finance (India) Ltd. During the year, these Debentures have been sold to Trust Capital Services Pvt. Ltd. for a consideration of Rs.1083.70 lakhs and the gain on sale of these debentures amounting to Rs.83.70 lakhs has been included in Other Income.


(10) The Public Works Department increased the Water Charges for the water drawn by the Paper Division from the river Bhavani from Rs.60 per 1000 Cu. Mtr. to Rs.500 per 1000 Cu. Mtr. on the contracted quantity of water, with effect from 09.05.1991. The Company filed a writ petition in the Hon''''ble High Court of Judicature at Madras and as per the interim order dated 09.07.1991, passed by the Hon''''ble Court, the Company was paying water charges @ Rs.200 per 1000 Cu. Mtr. of water on the actual quantity of water drawn and with effect from 01.04.1993 on the contracted quantity. The Writ was disposed off by the Hon''''ble Court by remanding the matter to the Public Works Department.


After series of litigations, the Public Works Department confirmed the water charges at the rate of Rs.500 per 1000 Cu. Mtr. on the contracted quantity. The Company moved the Hon''''ble High Court challenging the validity of payment on the contracted quantity instead of actual quantity of water drawn and this matter is pending before the Hon''''ble High Court of Judicature at Madras.


As against the demand of Rs.175.39 lakhs consisting of Rs.49.66 lakhs towards the arrear water charges and Rs.125.73 lakhs towards interest upto the period 31.12.2008, the Company had fully paid the principal amount of Rs.49.66 lakhs.


Further, the Company has also made a request for waiver of the interest charges to PWD and the request is pending before them.


Since the Paper Division has been disposed off, the liability, if any, on this account up to the date of sale (i.e. 14.11.1999), will have to be borne by the Company. As a matter of prudence, the Company has made a provision of Rs.12 lakhs during the year and the cumulative provision available on this account as on 31.03.2017 is Rs.115.85 lakhs (Previous Year - Rs.103.85 lakhs).


(11) Related Party disclosures as per Accounting Standard 18 (AS-18):


(a) The Company had transactions with the following related parties:


Associates/ Others:


T T Krishnamachari & Co., Pharma Research & Analytical Laboratories, TTK Prestige Ltd., TTK Protective Devices Ltd., Packwell Packaging Products Ltd.


Key Management Personnel:


Mr T T Raghunathan


Relatives of Key Management Personnel:


Mr T T Lakshman - General Manager-Projects (Foods Division) [upto 15lh April, 2016]


Notes:


The disputed Income Tax/ Fringe Benefit Tax liabilities amounting to Rs.958.29 lakhs have not been acknowledged as debts and have been classified under Contingent Liabilities.


Similarly, Rs.577.57 lakhs being the disputed Central Excise/Customs/Sales Tax liabilities have not been acknowledged as debts and have been classified under contingent liabilities.


Other Contingent Liabilities include disputed liability towards water charges amounting to Rs.9.88 lakhs as per the details given in Note No.18 to the Financial Statements.


Necessary Appeals have been filed with the authorities concerned against the disputed liabilities.


(12) The Company has In-House Research and Development facilities at Pharma and Foods Divisions, recognized by the Ministry of Science & Technology, Government of India, under Section 35(2AB) of the Income Tax Act, involved in developmental activities for new products, improvement in existing products and processes. Details of Capital and Revenue Expenditure incurred are as below:


(13) As required by the Notification dated 30th March, 2017, issued by Ministry of Corporate Affairs and amendment to Schedule III to the Companies Act, 2013, the details of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th December, 2016 is furnished as below:


(14) Previous year’s figures have been regrouped and reclassified wherever necessary to conform to the current year’s presentation. Figures have been rounded off to the nearest rupee.


Notes:


15. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) considering the organization structure and the differential risks and returns of these segments.


16. Details of products included in each of the segments are as below:


- Pharmaceuticals include products for both Human and Veterinary use. It also includes OTC Brands like Woodward''''s Gripewater distributed by the Consumer Products Division.


- Medical Devices include Artificial Heart Valves, Orthopaedic Implants, etc.


- Consumer Products comprise of marketing and distribution of EVA Range of Cosmetics, Good Home Range of Scrubbers, Air Freshners, etc. (Own Brands) and also trading of Branded Condoms.


- Foods comprise of manufacturing and marketing of Food Products.


- "Others" include Printing and Publishing of Maps and Atlases.


17. The segment-wise revenue, results and capital employed figures relate to respective amounts directly identifiable to each of the segments. The unallocable expenditure includes expenses incurred on common services at the corporate level and also those expenses not identifiable to any specific segment.


18. The previous period''''s / year''''s figures have been regrouped and reclassified, wherever necessary to conform to the current period''''s / year''''s presentation.

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