TTK HEALTHCARE LIMITED
ANNUAL REPORT 2009-2010
Ladies and Gentlemen,
It gives me great pleasure to welcome you all to this 52nd Annual General
Meeting of your Company.
Before getting Into the details of the performance during the year under
review. I thought it would be appropriate for me to recall the journey
undertaken by your Company during the first decade of the 21st century.
As you all know, the century for your Company has begun with a lot of
challenges. The Company was burdened with a number of loss making
businesses, huge investments in working capital, substantial borrowings,
In the initial few years, your Company carried out a major restructuring
programme comprising of-
(i) Formation of Strategic Business Units for Pharmaceuticals, Consumer
Products and Medical Devices so as to ensure the requisite focus;
(ii) Exiting from the non-core I loss making businesses;
(iii) Disposal of the assets attached to these businesses and settlement of
(iv) Unlocking values from assets that are not required for business
The timely implementation of these initiatives by the dedicated Management
Team coupled with stricter management of working capital enabled your
Company to come out of the difficulties and return to Dividend List In
2005-08. The decade which started with a huge debt burden ended with a free
cash surplus of around Rs.50 crores after spending significant sums in
capital expenditure and reorganization of the various businesses,
During this decade, your Company had also faced the challenge of handling
the huge loss of turnover / profitability that arose due to the
discontinuation of the distribution arrangement with M/s SaraLee. This was
also effectively handled by the Team to a great extent, by growing the
existing brands and also launch of new products under own brands.
The decade also witnessed the positive developments like-
(i) Successful launch of new products under its own brand names such as EVA
Range of Cosmetics and Good Home Range of Scrubbers, Air Freshners, ate.;
(ii) Reversal of the negative trend in Woodward's Gripawater and growing
the brand year-after-year;
(iii) Establishment of Ventura Division to focus on herbal and specialty
products and launch of several formulations under the Pharma Division;
(iv) Setting up of the State-of-the-art Manufacturing Facility for Heart
Valves at Trivandrum and for Publications / GIS Business at Mahindra World
City near Chengalpet;
(v) Acquisition of the Orthopaedic Implants Business so as to enhance the
Medical Devices basket; and
(vi) Import of Snack Pellet Manufacturing Line from Italy to augment the
production capacity at Foods Division;
These initiatives helped your Company to further consolidate its position
and established itself on a strong footing.
Undoubtedly, this decade was a most challenging one for your Company and it
withstood the turbulent times with great resilience and successfully
resurrected to continue its journey into the future more confidently.
At this juncture, it is my duty to convey my deep sense of gratitude to
each and every one of our stakeholders and my colleagues on the Board who
stood by us during this 10 year journey.
I now come to the financials for the year under review.
FINANCIAL YEAR 2009-10:
The Annual Report for the year has already been circulated. 1 would just
touch upon the salient points of the Company's performance in the financial
Your Company achieved a turnover of Rs.252.20 crores as against the
previous year sales of Rs.219.65 crores, resulting in a growth of about
* The Pre-tax Profit was Rs.15.50 crores as against Rs.13.37 crores in the
* The free Cash position continues to be healthy at around Rs.50 crores.
(1) CONSUMER PRODUCTS BUSINESS:
The performance of Woodwards' Gripewater, the key brand of your Company,
continues to be satisfactory.
The brand responded favourably to the new commercial and the enhanced
advertising and promotional initiatives during the year.
The retail display contest conducted in Tamil Nadu was a success and this
had clearly demonstrated the franchise the brand enjoys with the Trade.
Barring unforeseen circumstances, the trend should continue in the current
During the year under review, the performance of the EVA Range was
satisfactory. You will be happy to note that EVA has been ranked as No.1
Brand in Female Deospray Category. The packaging for the entire range of
EVA Deodorants was contemporized with new designs and a few more variants
were added to the range. A new advertising campaign was carried out during
the later part of the year. These initiatives yielded good trade and
Good Home Range of Scrubbers, Air Freshners, etc., had registered robust
The distribution arrangements for branded Condoms and Footcare products are
yielding desired results.
The future thrust will be on developing own branded consumer products and
insulating the company from the vagaries of depending on distribution of
third party products.
(2) ETHICAL PRODUCTS BUSINESS:
The performance of Pharmaceutical Business has been encouraging.
During the year under review, a few new products were added to the range
and these were well received by the doctors.
The performance of the Ventura Division which handles the Herbal and
Speciality products of your Company had been Impressive with healthy
growth. In addition to the infertility Segment, your Company has also
forayed into the Dermatology Segment with the test marketing of a few
products under the Ventura Division. Based on the initial response to these
offerings, your Company would add more products to this range in the coming
The Animal Welfare Division registered a healthy growth driven by the good
performance from the flagship brands.
The focus for the current year is to grow the, key brands by making
appropriate Investments, launching new products in relevant therapeutic
segments and to constantly improve the productivity of the Field Team.
(3) MEDICAL DEVICES BUSINESS:
(i) Heart Valve Business:
You will be happy to note that the Heart Valve Division has crossed the
coveted milestone sales of 10,000 valves during the year under review
through the support from the Cardiac Surgeons and the Welfare Programmes of
The developmental initiatives relating to the Improved Heart Valves,
Vascular Graft, Coronary Start and Stent for Aneurysm Repair, are
The Heart Valve Division has been awarded ISO 90012008 Certification and is
now ready to go through the audit for CE Marking by the British Standards
(ii) Orthopaedic Implants Business:
The recent acquisition of the Orthopaedic Implants business is expected to
further consolidate the position of your Company in the Medical Devices
The commercial production of Knee Implants commenced in August 2009.
The initial response from Surgeons Is quite encouraging and till date 250
implantation$ were done.
In April 2010, your Company had invited the collaborators from the US for
the Ortho Business, Dr F F Buechel. a World Renowned Orthopaedic Surgoen
and Dr M J Pappas, an internationally recognized expert in advanced design,
to India. They conducted live surgeries for the benefit of Surgeons and
presented papers at the All India Ortho Conference at Ahmedabad. Their
visit gave a fillip to the marketing and promotional initiatives of your
Company and enhanced the credibility of the product.
The existing facility at Ambattur has been refurbished and action is being
initiated to increase the capacity to the extent possible, with balancing
equipments. Further, steps are being taken to obtain CE Marking for
Orthopaedic Implants too.
Your Company is also planning to scale up the capacity to 20.000 implants
per annum over a period of next three years taking into account the
anticipated demand. For this purpose, your Company proposes to set up a new
manufacturing facility at Mahindra World City near Chengalpet within the
next 18-24 months, at an estimated outlay of Rs.20 crores.
(4) FOODS BUSINESS:
The performance of the Foods Division was adversely impacted due to the
frequent breakdown of both the manufacturing lines.
The proposal to have these lines refurbished by the original manufacturers
from Italy was not found to be technically feasible.
Therefore, your Company recently imported a Snack Pellet Manufacturing Line
from MIS Fen. Italy. This Line is under erection and commissioning. This
line would have a production capacity of 2.200 tonnes of both extruded and
Your Company is also considering further augmentation of capacity by
acquiring a Pre-owned Snack Pellet Manufacturing Line available within
India. Upon acquisition of this line, your Company may consider
discontinuing the production from the existing manufacturing lines which
are beyond repair.
(5) PUBLICATIONS/GIS BUSINESS:
The performance of the Publications Division is satisfactory. A major
exercise has been initiated for revamping / upgrading the various existing
titles and the same is underway.
As regards the GIS Business, your Company has proposed to initially work as
a preferred vendor for the major GIS companies and has already received an
order. This being a low margin segment, efforts are also made to procure
value added businesses from other customers.
In view of the improved performance, your Directors have recommended a
higher dividend of 35% for the year under review as against the previous
year's dividend of 30%.
BUY-BACK OF SHARES:
Under the Buy-back Scheme, your Company had bought back 3,44,431 Equity
Shares of Rs.10/- each and the Scheme was closed on 18th September, 2009.
FINANCIAL YEAR 2010-11:
During the First Quarter, the performance of your Company was as per plans.
Your Company achieved sales of around Rs.78 crores during the First Quarter
as against the previous year's First Quarter sales of Rs.66.64 crores; a
growth of about 18%.
Your Company would continue its strategy for growing the businesses that
included consolidating and growing the existing brands, launch of new
products in the relevant categories, investment in select businesses, etc.
Barring unforeseen circumstances, the outlook for the year 2010-11 is
I acknowledge the valuable contributions of Banks, Business Associates,
Employees and the Shareholders at all levels who have supported the Company
in all its endeavours.