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TTK Healthcare Ltd.

BSE: 507747 Sector: Health care
NSE: TTKHLTCARE ISIN Code: INE910C01018
BSE 00:00 | 17 Jun 625.30 -11.15
(-1.75%)
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635.00

HIGH

635.55

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618.95

NSE 00:00 | 17 Jun 626.00 -12.15
(-1.90%)
OPEN

642.95

HIGH

642.95

LOW

624.05

OPEN 635.00
PREVIOUS CLOSE 636.45
VOLUME 1575
52-Week high 735.00
52-Week low 401.00
P/E 23.04
Mkt Cap.(Rs cr) 884
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 635.00
CLOSE 636.45
VOLUME 1575
52-Week high 735.00
52-Week low 401.00
P/E 23.04
Mkt Cap.(Rs cr) 884
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TTK Healthcare Ltd. (TTKHLTCARE) - Auditors Report

Company auditors report

To the Members of TTK Healthcare Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of TTK Healthcare Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2020 and the Statementof Profit and Loss including other comprehensive income statement of changes in equityand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 (‘the Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Revenue Recognition under Ind AS 115 Audit Response
"Revenue from Contracts entered with Customers" Our audit included but was not limited to the following procedures:
Refer Note 2 A.5.(c) and Note 2 B.(g) of Financial Statements Our procedures included among others obtaining an understanding of the pro- cesses and relevant controls relating to the accounting for customer contracts.
Revenue is recognized upon transfer of control of promised goods to customers in an amount that reflects the consideration expected to be received in exchange for those goods. Accounting Policies – Assessing the appropriateness of the Company's Revenue Recognition Policy and the significant accounting judgements estimates and assumptions relating to Promotional Ex- penditure.
Revenue is measured net of expected defective stock returns volume based discounts turnover based discounts and other pricing incentives.
The cost of these activities (which are reduced from revenue) are generally rec- ognized at the time the related revenue is recorded which normally precedes their actual discharge. Control Testing – Testing the effec- tiveness of Company's Controls over the calculation of returns discounts and incentives.
The estimate of returns discounts and in- centives recognized based on sales made during the year is material and considered to involve judgements. Test of Details – Obtaining supporting documentation for credit notes issued in connection with achievement of sales targets by dealers for sample promo- tional schemes. Critically assessing manual journals posted to revenue to identify unusual or irregular items
Therefore there is a risk of estimation errors or errors in stating revenues arising on account of returns discounts and incen- tives. Analytical Procedures - Comparing current year accruals to the prior year and evaluating the reasonableness of techniques of estimation including his- torical data on performance of similar promotional programs and trends of actual returns.

Emphasis of matter

We draw attention to:

Note 5.14 to the financial statements regarding the management's impairment assessmentof property plant and equipment right of use assets intangible assets investmentstrade receivables and inventory as at 31st March 2020 being considered as unimpaired /recoverable based on its internal and external sources of information and estimates andits judgments on implication expected to arise from CoVID-19 pandemic. This being anunprecedented event which is difficult to estimate the actual implications could vary.Our opinion is not modified in respect of the above matter.

Information Other than the Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theDirectors report but does not include the financial statements and our auditors' reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of the Management and those charged with Governance for FinancialStatements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance profit andtotal comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the Indianaccounting Standards (Ind AS) prescribed under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Board of Directors are alsoresponsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to thefinancial statements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors' report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors' report. However future events or conditions may cause the Companyto cease to continue as a going concern; and

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourAuditor's Report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matters

Due to CoVID-19 related lockdowns we were unable to participate in the physicalverification of inventory that was carried out by the management subsequent to the yearend. Consequently we have performed alternate procedures to audit the existence ofinventory as per the guidance provided in SA 501 "Audit Evidence - SpecificConsiderations for selected Items" and have obtained sufficient appropriate auditevidence to issue our unmodified opinion on these financial statements. Our opinion is notmodified in respect of this matter.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

(2) As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Statement of Changes in Equity and the statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

(d) At this juncture we are unable to say if the matter described in the Emphasis ofMatter paragraph above will have an adverse effect on the functioning of the Company;

(e) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards (Ind AS) prescribed under Section 133 of the Act.

(f) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls with reference tothe financial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations as at 31st March 2020on its financial position in its financial statements – Refer Note 5.3 to thefinancial statements;

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2020.

(i) With respect to the matter to be included in the Auditors' Report under section197(16): In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

M/s. PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Regn. No.003990S/S200018
S Rajeshwari
Partner
Place : Chennai Membership No.024105
Date : July 22 2020 UDIN No.20024105AAAABH8981

Annexure A

Referred to in paragraph 1 on ‘Report on Other Legal and Regulatory Requirements'of our report of even date to the members of TTK Healthcare Limited ("theCompany") on the financial statements as of and for the year ended 31st March 2020.

(I) In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified over a period of one year. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme all fixed assets werephysically verified by the management during the year. In our opinion and according tothe information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of the land and buildings whichare freehold are held in the name of the Company/merged companies as at Balance Sheetdate. In respect of immovable properties of land and building that have been taken onlease and disclosed as leasehold lands/buildings under property plant &equipment/right of use assets in the financial statements the lease agreements are in thename of the Company.

(II) The inventory except goods in transit has been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. In respect of goods-in-transit subsequent receipts have beenverified. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been appropriately dealt with in the books ofaccount.

(III) Based on our audit procedures & according to the information and explanationgiven to us the Company has not granted any loans secured or unsecured to partiescovered in the register maintained under section 189 of the Act and hence 3(iii) of theOrder is not applicable to the Company.

(IV) Based on our audit procedures & according to the information and explanationgiven to us the Company has neither given any loan guarantees or security nor made anyinvestment during the year covered under section 185 and 186 of the Act. Therefore clause3(iv) of the Order is not applicable to the Company.

(V) Based on our audit procedures & according to the information and explanationgiven to us the Company has not accepted any deposits from the public within the meaningof the Act and the rules made there under and hence clause 3(v) of the Order is notapplicable.

(VI) We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofthe products manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not madea detailed examination of cost records with a view to determine whether they are accurateor complete.

(VII) (a) According to the information and explanations given to us and the records ofthe Company examined by us except for few delays the Company has generally been regularin depositing undisputed statutory dues including provident fund employees' stateinsurance duty of customs duty of excise Goods and Services Tax (GST) cess and anyother statutory dues as applicable with the appropriate authorities. There have beendelays in remitting TDS in the month of March 2020 mainly on account of delay in receiptof invoice copies from the vendors due to operational difficulties on account of CoVID-19pandemic. According to the information and explanation given to us and the records of theCompany examined by us no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax duty of customs duty of excise Goods andServices Tax (GST) cess and any other statutory dues were in arrears as at 31st March2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and based on ourexamination of the records of the Company there are no dues of Income-tax Sales TaxService tax Goods and Services Tax (GST) Duty of customs Excise duty and Value addedtax as at 31st March 2020 which have not been deposited with the appropriate authoritieson account of any dispute except as stated below:

Nature of statute Nature of dues Amount (Rs.in lakhs) Period to which amounts relate Forum where dispute is pending
The Central Excise Act 1944 Excise Duty with interest and penalty as applicable 115.95 1988-1989 to 2000-01 and 1995-1996 to 2007-2008 CESTAT Chennai.
The Central Excise Act 1944 Excise Duty with interest and penalty as applicable 0.74 1994 to 1996 The Dy.Commissioner of Central Excise Aurangabad.
The Central Excise Act 1944 Excise Duty with interest and penalty as applicable 0.42 2002-03 The Commissioner of Central Excise (Appeals) Chennai.
The Customs Tariff Act 1975 Customs Duty with interest and penalty 288.07 2010-11 & 2011-12 CESTAT Chennai.
The Customs Tariff Act 1975 Customs Duty with interest and penalty 20.30 1992-93 to 2005-06 Settlement Commission Hyderabad.
The Customs Tariff Act 1975 Customs Duty with interest and penalty 9.45 2019-20 Assistant Commissioner (AIR) Chennai
Finance Act Service Tax 3.45 2005-06 to 2007-08 CESTAT Bangalore.
State VAT Acts of various States. Sales Tax 51.22 Various Years between 1986-87 to 2019-20 Before various Sales Tax Authorities of various regions.
Income Tax Act 1961 Income-Tax 259.21* Various years between 2001-02 to 2012-13 High Court of Madras Chennai ITAT Chennai
Income Tax Act 1961 Income-Tax 330.13 2015 – 16 and 2016 – 17 Commissioner of Income Tax (Appeals) Chennai.

* There are refunds due to the Company against which the Department may adjust thisliability.

(VIII) Based on our audit procedures and as per the information and explanations givenby the management the Company has not defaulted in repayment of loans or borrowings tofinancial institutions banks Government or dues to debenture holders.

(IX) According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly reporting under the clause 3(ix)of the Order is not applicable to the Company.

(X) To the best of our knowledge and belief and according to the information andexplanations given to us we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year nor have we beeninformed of such case by the management.

(XI) According to the information and explanations given to us the managerialremuneration has been paid/provided in accordance with the requisite approvals mandated bythe provisions of section 197 read with Schedule V to the Act.

(XII) The Company is not a Nidhi company in accordance with Nidhi Rules 2014.Accordingly the provisions of clause (xii) of the Order are not applicable.

(XIII) Based on our audit procedures and according to the information and explanationsgiven to us all the transactions entered into with the related parties during the yearare in compliance with Section 177 and Section 188 of the Act where applicable and thedetails have been disclosed in the financial statements as required by the applicableIndian Accounting Standards.

(XIV) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not made any preferential allotment of shares or allotment orprivate placement of shares or fully or partly paid convertible debentures during the yearunder review. Accordingly the provisions of clause (XIV) of the Order are not applicable.

(XV) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with them.

(XVI) Based on our audit procedures and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of ReserveBank of India Act 1934.

M/s. PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Regn. No.003990S/S200018
S Rajeshwari
Partner
Place : Chennai Membership No.024105
Date : July 22 2020 UDIN No.20024105AAAABH8981

Annexure B

Referred to in paragraph 2(g) on ‘Report on Other Legal and RegulatoryRequirements' of our report of even date

Report on the Internal Financial Controls with reference to the aforesaid financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013

We have audited the internal financial controls with reference to financial statementsof TTK Healthcare Limited ("the Company") as of 31st March 2020 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal control with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls with referenceto financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31st March 2020 based on the internal control with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (the "Guidance Note").

M/s. PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Regn. No.003990S/S200018
S Rajeshwari - Partner
Place : Chennai Membership No.024105
Date : July 22 2020 UDIN No.20024105AAAABH8981