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Notes to Accounts of Poly Medicure Ltd.

Mar 31, 2014

1 Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2014, the amount of per share dividend recognised as distribution to equity shareholders is Rs. 4 (31st March 2013 Rs. 2)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 CONTINGENT LIABILITIES AND COMMITMENTS

Particulars Year ended Year ended 31 March 2014 31 March 2013

a Contingent liabilities not provided for:

Show Cause notices from excise department 29.39 29.39 Compensation for enhanced cost of Land contested in Punjab & Haryana High Court 9.34 9.34

(Amount paid Rs. 2.33 lacs, Previous year Rs. 2.33 lacs)

Liabilities against legal case filed under Industrial Dispute Act 1947 1.85 1.85

b Obligations and commitments outstanding:

Unexpired letters of credit Rs. 336.78 lacs (Previous year Rs. 419.15 lacs) and 908.56 973.71 Guarantees issued by bankers Rs. 571.78 lacs (Previous year Rs. 554.56 lacs), (Net of margins)

Bills discounted but not matured 1,499.46 1,202.96

Custom duty against import under Advance Licence Scheme 11.17 753.60

Custom duty against import under EPCG Scheme 50.99 22.31

Estimated amount of contracts remaining to be executed on capital account and 2,644.36 2,391.76 not provided for (net of advances given)

3 Inventories, loans & advances, trade receivables / payables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

The response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management''s opinion, in the event of any disparity in the balances, any consequential adjustments required on reconciliation of the balances will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the reconciliation is completed.

4 The Company has made investments in 2 subsidiary companies which are of long term in nature. As per the latest audited/unaudited financial statements, these subsidiary companies have reported accumulated losses aggregating to Rs. 474.64 lacs (previous year Rs. 389.58 lacs). In respect of one subsidiary company namely M/s U. S. Safety Syringes Co. LLC, USA, in view of erosion of its net worth, the diminuation in the value of company''s investment in the said subsidiary company has been considered as permanent in nature, therefore provision for diminuation in the value of investment amounting to Rs. 130.33 lacs has been made. In respect of another subsidiary namely M/s Poly Medicure (Laiyang) Co. Ltd., China, in the opinion of the management, the investments in the said subsidiary company is of strategic in nature and based on the future projections, the past losses of the said subsidiary company would be recouped, hence, such diminution in value of investment has been considered as of temporary in nature and, therefore, no provision of such diminution has been made.

5 RELATED PARTY DISCLOSURES

Related party disclosures as required by Accounting Standard (AS)-18 of The Institute of Chartered Accountants of India.

A List of related parties and relationships a Subsidiaries and Associate Subsidiaries

1 US Safety Syringes Co. LLC, USA

2 Poly Medicure (Laiyang) Co. Ltd., China Associate Ultra For Medical Products (UMIC), Egypt

b Key Management Personnel

1 Mr. Himanshu Baid (Managing Director)

2 Mr. Rishi Baid (Executive Director)

3 Mr. J. K. Baid (Director- relative of Managing Director & Executive Director)

4 Mr. Vishal Baid (President- relative of Managing Director & Executive Director)

c Enterprises over which key management personnel and their relatives exercise significant influence

1 Vitromed Healthcare

2 Jai Polypan Pvt. Ltd.

3 Stilocraft

4 Polycure Martech Ltd.

5 Jaichand Lal Hulasi Devi Baid Charitable Trust

6 In view of option allowed by the Ministry of Corporate Affairs vide its notification dated 29th December 2011 on AS 11, the exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded have been accumulated in a "Foreign Currency Monetary Items Translation Difference Account" to be amortised over the balance period of such long term assets or liabilities. Pursuant to such adoption, a sum of Rs.128.06 lacs is remained to be amortised over the balance period of such assets or liabilities (including current year impact of gain amounting to Rs.20.62 lacs). Had the option not being exercised, the profits of the company would have been higher by Rs. 20.62 lacs.

7 Borrowing cost of Rs. 72.04 Lacs (previous year Rs. 11.27 Lacs ) have been included in capital work in progress.

8 The company is primarily engaged in a business of manufacturing and sale of "Medical Devices" and, hence, there is no reportable segments as per Accounting Standard-17.

9 LEASES : OPERATING LEASES

i) The Company has taken six premises under cancellable operating lease. These lease agreements are normally renewed on expiry.

ii) Lease rental expenses in respect of operating leases: Rs. 29.74 lacs (previous year Rs. 19.05 lacs)

10 EMPLOYEE STOCK OPTION SCHEME:

The compensation committee formed by the company in terms of resolution of the Board of Directors, created in accordance with SEBI (Guidelines and any other applicable Rules,) Regulations, a ESOS Scheme called the "Poly Medicure Employee Stock Option Scheme, 2011 (ESOS 2011)" which was further amended in the shareholding meeting held on 27th September 2013. Whereby employees who were granted ESOP under original scheme of 2011 were granted options in addition to the options already granted by reducing exercise price from Rs. 50 to Rs. 25. The terms and conditions of the grant as per the amended Employee Stock Option Scheme, 2011 (ESOS 2011) are as under:

A) Vesting period

i Original scheme

On completion of 24 months from the date of grant of options 50%

On completion of 30 months from the date of grant of options for remaining 50%

ii Under amended scheme for additional shares granted to the employee to whom the options were granted under the earlier scheme.

On completion of 12 months from the date of grant of options 100%

B) Exercise period

i Original scheme

Commences from the date of vesting of the options and expires at the end of three months from the date of such vesting

ii Under amended scheme for additional shares granted to the employee to whom the options were granted under the earlier scheme.

Commences from the date of vesting of the options and expires at the end of three months from the date of such vesting.

C) Exercise Price

The exercise price was reduced to Rs. 25 for options granted earlier and for additional options granted in pursuance of amended scheme.

11 Exceptional items in statement of profit and loss represents one time income of Rs. 991.46 lacs from one of its customer towards settlement of a contract.

12 Previous year figures have been regrouped / rearranged, wherever necessary to confirm current year classifications.


Mar 31, 2013

1 Inventories, loans & advances, trade receivables / payables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

The response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management''s opinion, in the event of any disparity in the balances, any consequential adjustments required on reconciliation of the balances will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the reconciliation is completed.

2 The Company has made investments in 2 subsidiary companies which are of Long Term in nature, As per the latest audited/unaudited financial statements, these subsidiary companies have reported accumulated losses aggregating to Rs. 389.58 lacs (previous year Rs. 323.78 lacs). In the opinion of the management, the investments in these subsidiary companies are of strategic in nature and based on the future projections, the past losses of these subsidiary companies would be recouped. Hence, such diminution in value of investment has been considered as of temporary in nature and, therefore, no provision of such diminution has been made.

3 Related party disclosures

Related party disclosures as required by Accounting Standard (AS)-18 of The Institute of Chartered Accountants of India.

A List of related parties and relationships

a Subsidiaries and Associate

Subsidiaries

1 US Safety Syringes Co. LLC, USA

2 Poly Medicure (Laiyang) Co. Ltd., China

Associate

Ultra For Medical Products (UMIC), Egypt

b Key Management Personnel

1 Mr. Himanshu Baid (Managing Director)

2 Mr. Rishi Baid (Executive Director)

3 Mr. J. K. Baid (Director- relative of Managing Director & Executive Director)

4 Mr. Vishal Baid (President- relative of Managing Director & Executive Director)

c Enterprises over which key management personnel and their relatives exercise significant influence

1 Vitromed Healthcare

2 Jai Polypan Pvt. Ltd.

3 Stilocraft

4 Polycure Martech Ltd.

5 Jaichand Lal Hulasi Devi Baid Charitable Trust

4 In view of option allowed by the Ministry of Corporate Affairs vide its notification dated 29th December 2011 on AS 11, the exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded have been accumulated in a "Foreign Currency Monetary Items Translation Difference Account" to be amortised over the balance period of such long term assets or liabilities. Pursuant to such adoption, a sum of Rs. 148.68 lacs is remained to be amortised over the balance period of such assets or liabilities (including current year impact amounting to Rs. 99.13 lacs). Had the option not being exercised, the profits of the company would have been lower by Rs. 99.13 lacs.

5 The company is primarily engaged in a business of manufacturing and sale of "Medical Devices" and, hence, there is no reportable segment as per Accounting Standard-17.

6 Leases Operating leases

i) The Company has taken four premises under cancellable operating lease. These lease agreements are normally renewed on expiry. ii) Lease rental expenses in respect of operating leases: Rs. 19.05 lacs (previous year Rs. 8.98 lacs)

7 Employee Stock Option Scheme

The compensation committee formed by the company in terms of resolution of the Board of Directors, created in accordance with SEBI (Guidelines and any other applicable Rules,) Regulations, a ESOS Scheme called the "Poly Medicure Employee Stock Option Scheme, 2011 (ESOS 2011)". According to the scheme, selected employees shall be entitled for options subject to satisfaction of vesting conditions. The scheme is effective from 8th September 2011. The terms and conditions of the grant are as under:

i Vesting Period

On completion of 24 months from the date of grant of options for 50%

On completion of 30 months from the date of grant of options for remaining 50%

ii Exercise period - commences from the date of vesting of the options and expires at the end of three months from the date of such vesting

iii Exercise Price – Rs. 50 which shall be paid on or before the exercise of the option for allotment of shares

8. Previous year figures have been regrouped/rearranged, wherever necessary to confirm current year classification


Mar 31, 2012

1.1 Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recognised as distribution to equity share holders is Rs. 3 (31st March 2011 Rs. 3)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.2 Details of security:

a Term Loans from State Bank of India are secured by way of first charge over entire fixed assets both present & future including equitable mortgage of factory land & buildings and are further secured by way of extension of charge on entire current assets of the company both present & future and are guaranteed by Managing Director & Executive Director of the company.

b Vehicle Loans are secured by hypothecation/lien of the respective vehicles.

c Deferred payment liabilities relates to capital assets acquired from overseas suppliers under letter of credit.

2 DEFERRED TAX LIABILITY (NET)

In accordance with Accounting Standard 22 "Accounting for taxes on Income" (AS-22), the company has accounted for deferred taxes during the year as under:

Following are the major components of Deferred Tax Liabilities and Deferred Tax Assets:

Cash/Export credit limits from State Bank of India and C itibank N.A. are secured by way of first pari-passu charge both present & future on the company's entire stock of Raw materials, stores spares, Stock in process, Finished goods etc. lying in factory, godowns, elsewhere and including goods in transit, trade receivables and are further secured by way of extension of second pari-passu charge on entire fixed assets of the company both present & future and are guaranteed by Managing Director & Executive Director of the company.

The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the company, on the basis of information and records available with them. This information has been relied upon by the auditors.

3 CONTINGENT LIABILITIES AND COMMITMENTS

a Contin gent liabilities not provided for:

Rs.in Lacs Year ended

Particulars 31-Mar-12 31-Mar-11

Show Cause notices from custom department regarding Advance Licences - 121.48

Show Cause notices from excise department 28.52 -

Compensation for enhanced cost of Land contested in Punjab & Haryana 9.34 9.34

High Court (Amount paid Rs. 2.33 lacs, Previous year Rs. 2.33 lacs)

Liabilities against legal suits filed 7.21 4.15

Income tax matters under appeal 7.10 7.10

4 Inventories, loans & advances, trade receivables / payables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

The response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management's opinion, in the event of any disparity in the balances, any consequential adjustments required on reconciliation of the balances will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the reconciliation is completed.

5 The Company has made investments in 2 subsidiary companies which are of non-current in nature. As per the latest audited/unaudited financial statements, these subsidiary companies have reported accumulated losses aggregating to Rs. 323.78 lacs (previous year Rs. 271.87 lacs). In the opinion of the management, the investments in these subsidiary companies are of strategic in nature and based on the future projections, the past losses of these subsidiary companies would be recouped. Hence, such diminution in value of investment has been considered as of temporary in nature and , therefore, no provision of such diminution has been made.

6 Relate d party disclosures

Related party disclosures as required by Accounting Standard (AS )-18 of The Inst itute of Chartered Accountants of India.

A List of related parties and relationships

a Subsidiaries and Associate Subsidiaries

1 US Safety Syrin ges Co. LLC, USA

2 Poly Medicure (Laiyang) Co. Ltd., China Associate

Ultra For Medical Products (UMIC) , Egypt

b Key Management Personnel

1 Mr. Himanshu Baid (Managing Director)

2 Mr. Rishi Baid (Executive Director)

3 Mr. J. K. Baid (Director- relative of Managing Director & Executive Dire ctor)

4 Mr. Vishal Baid (President- relative of Managing Director & Executive Director)

c Enterprises over which key management personnel and their relatives exercise significant influence

1 Vitromed Healthcare

2 Jai Polypan Pvt. Ltd.

3 Stilocraft

4 Polycure Martech Ltd.

5 Jaichand Lal Hulasi Devi Baid Charitable Trust

7 Financial and Derivate Instruments:

The Mark to Market losses or gains on unexpired Derivative Contracts entered into to hedge the risk of changes in Foreign Currency Exchange Rate on Future Export Sales against the existing long term contracts, are accounted for on maturity of the contracts so as to safe guard against considerable volatility in foreign exchange rates during the intervening period. The company has not adopted AS - 30 "Financial Instruments, Recognition and Measurement" nor accounted for mark to market losses for unexpired Derivative Contracts outstanding as at 31st March 2012. The Mark to Market notional losses as on March 31, 2012 are of Rs. 964.66 lacs (previous year Rs. 1176.57 lacs) and with the considerable volatility in foreign exchange rates, the impact may increase or decrease .The company has been accounting for the losses or gains on maturity of the contracts.

8 In view of option allowed by the Ministry of Corporate Affairs vide its notification dated 29th December 2011 on AS 11, the exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded have been accumulated in a "Foreign Currency Monetary Items Translation Difference Account" to be amortised over the balance period of such long term assets or liabilities. Pursuant to such adoption, a sum of Rs. 49.55 lacs is remained to be amortised over the balance period of such assets or liabilities. Had the option not being exercised, the profits of the company would have been lower by Rs. 49.55 lacs.

9 The company is primarily engaged in a business of manufacturing and sale of "Medical Devices" and, hence, there is no reportable segment as per Accounting Standard-17.

10 Leases: Operating leases

i) The Company has taken two office premises under cancellable operating lease. These lease agreements are normally renewed on expiry.

ii) Lease rental expenses in respect of operating leases: Rs. 8.98 lacs (previous year Rs. 11.48 lacs) Loans and advance to Poly Medicure (Laiyang) Co. Ltd., China is repayable within three years from the date of advance and is interest bearing.

11 Employee Stock Option Scheme

The compensation committee formed by the company in terms of resolution of the Board of Directors, created in accordance with SEBI (Guidelines and any other applicable Rules,) Regulations, a ESOS Scheme called the "Poly Medicure Employee Stock Option Scheme, 2011 (ESOS 2011)". According to the scheme, selected employees shall be entitled for options subject to satisfaction of vesting conditions. The scheme is effective from 8th September 2011. The terms and conditions of the grant are as under:

i Vesting Period

On completion of 24 months from the date of grant of options for 50%

On completion of 30 months from the date of grant of options for remaining 50%

ii Exercise period - commences from the date of vesting of the options and expires at the end of three months from the date of such vesting

iii Exercise Price - Rs. 50 which shall be paid on or before the excecise of the option for allotment of shares.

No option has yet been exercised as the vesting period has not commenced.

12 Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1 Contingent liabilities not provided for:

Year ended Particulars 31-Mar-11 31-Mar-10 Rs. in Lacs Rs. in Lacs

Unexpired letters of credit (Net of margins) 158.12 271.77

Guarantees issued by bankers 110.51 36.78

Bills discounted but not matured 1,008.12 929.35

Demand from sales tax disputed (Amount paid Rs. 0.79 lacs, previous year Rs. 0.79 lacs) 0.79 0.79

Custom duty against import under Advance Licence Scheme 60.74 38.25

Custom duty against import under EPCG Scheme 38.18 93.73

Show Cause notices from custom department regarding Advance Licences 121.48 -

Compensation for enhanced cost of Land contested in Punjab & Haryana High Court 9.34 9.34 (Amount paid Rs. 2.33 lacs, Previous year Rs. 2.33 lacs)

Liabilities against legal suits filed 4.15 6.38

Demand from ESI department disputed by the company - 2.51

Income tax matters contested in appeal and decided in favour of the Company by the 7.10 7.10 Tribunal, but Revenue challenged the Appeal Orders in the High Court.

2 Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 358 .38 lacs (Previous year Rs. 150.91 lacs). Advances paid there against Rs. 354.88 lacs (Previous year Rs. 73.66 lacs).

3 In the opinion of the Board, Current Assets, and Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made. The company has sent letters for balance confirmation as on the last day of financial year to debtors and creditors but confirmations have been received from few parties only, therefore, the balances of debtors & creditors are subject to confirmation from respective parties.

4 The Company has made investments in 2 subsidiary companies which are of long term in nature. As per the latest audited/unaudited financial statements, these subsidiary companies have reported accumulated losses aggregating to Rs. 271.87 lacs. In the opinion of the management, the investments in these subsidiary companies are of strategic in nature and based on the future projections, the past losses of these subsidiary companies would be recouped. Hence, such diminution in value of investment has been considered as of temporary in nature and , therefore, no provision of such diminution has been made.

5 The company has not received any intimation from majority of the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, hence disclosure required under Schedule VI vide notification no. GSR 719(E) dated 16.11.2007, relating to amount unpaid as at the year end together with interest paid /payable has not been given.

6 Related party disclosures

Related party disclosures as required by Accounting Standard (AS )-18 of The Institute of Chartered Accountants of India.

A List of related parties and relationships

a Subsidiaries and Associate

Subsidiaries

1 US Safety Syringes Co. LLC , USA

2 Poly Medicure (Laiyang) Co. Ltd., China

Associate

Ultra For Medical Products (UMIC ), Egypt

b Key Management Personnel

1 Mr. Himanshu Baid (Managing Director)

2 Mr. Rishi Baid (Executive Director)

3 Mr. J.K.Baid (Director- relative of Managing Director & Executive Director )

c Enterprises over which key management personnel and their relatives exercise significant influence

1 Vitromed Healthcare

2 Jai Polypan Pvt. Ltd.

3 Stilocraft

4 Polycure Martech Ltd.

5 Jaichand Lal Hulasi Devi Baid Charitable Trust

7 Financial and Derivate Instruments:

The Mark to Market losses or gains on unexpired Derivative Contracts entered into to hedge the risk of changes in Foreign Currency Exchange Rate on Future Export Sales against the existing long term contracts, are accounted for on maturity of the contracts so as to safe guard against considerable volatility in foreign exchange rates during the intervening period. The company has not adopted AS - 30 "Financial Instruments, Recognition and Measurement" nor accounted for mark to market losses for unexpired Derivative Contracts outstanding as at 31st March 2011 because ICAI vide its announcement dated 11th February 2011 has stated, interalia, that AS 30 is not presently mandatory and that it is not expected to continue in its present form. The Mark to Market notional losses as on March 31, 2011 are of Rs. 1176.57 lacs (previous year Rs. 1542.85 lacs) and with the considerable volatility in foreign exchange rates, the impact may increase or decrease .The company has been accounting for the losses or gains on maturity of the contracts.

8 The company is primarily engaged in a business of manufacturing and sale of "Medical Devices" and, hence, there are no reportable segments as per Accounting Standard-17.

9 a) Finance Leases :

i) Assets acquired on finance lease comprises of vehicles. The leases have a primary period, which are fixed and non- cancelable.

b) Operating leases

i) The Company has taken two office premises under cancellable operating lease. These lease agreements are normally renewed on expiry.

ii) Lease rental expenses in respect of operating leases: Rs. 11.48 lacs (previous year Rs. 6.33 lacs)

10 Figures in bracket represents of previous year and have been regrouped or rearranged wherever found necessary.

11 Schedules 1 to 21 form an integral part of the accounts and have duly been authenticated.


Mar 31, 2010

1. Contingent liabilities not provided for:

Year ended

Particulars March 31, 2010 March 31, 2009

Rupees in lacs Rupees in lacs

Unexpired letters of credit (Net of margins) 768.99 347.45

Counter Guarantees given to bankers for guarantees issued by them 36.78 166.52

Bills discounted but not matured 929.35 772.61

Demand from Sales Tax disputed (Amount paid 0.79 0.79

Rs. 0.79 lacs, previous year Rs. 0.79 lacs)

Custom duty payable against import under Advance Licence Scheme 38.25 422.51

Custom duty payable against import under EPCG Scheme 93.73 46.22

Compensation for enhanced cost of Land contested in Pubjab & Haryana 9.34 9.34 High Court (Amount paid Rs. 2.33 lacs, Previous year Rs. 2.33 lacs)

Liabilities against legal suits filed 6.38 6.38

Demand from ESI department disputed by the company 2.51 2.51

Income tax matters contested in appeal (Amount paid Rs. NIL, 7.10* 9.15* previous year 3.66 lacs)

* Appeal decided in favour of the Company by the Tribunal but Revenue has challenged the Appeal Order in the High Court.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.150.91 lacs (previous year Rs.353.32 lacs). Advances paid there against Rs. 73.66 lacs(Previous year Rs. 115.41 lacs). During the year, the Company had issued Bonus shares in the proportion of 1:1 aggregating to 5506250 equity shares of Rs. 10/-each to the existing shareholders of the company as on the record date i.e. 29.03.2010 and allotted 5400000 equity shares on 30.03.2010 as per approval received from Bombay Stock Exchange. The Company is yet to get approval from Bombay Stock Exchange for allotment of 106250 shares and pending approval, 106250 equity shares of Rs. 10/- each aggregating to Rs. 10.62 lacs have been shown as "Shares Pending Allotment in Schedule 1.

3. In the opinion of the Board, Current Assets and Loans & Advances have a value on realization in the ordinary course of business atleast equal to the amount at which they are stated and provision for all known liabilities have been made. The company has sent letters for balance confirmation as on the last day of financial year to debtors and creditors but confirmations have been received from few parties only, therefore, the balances of debtors & creditors are subject to confirmation from respective parties.

4. The Company has made investments in 2 subsidiary companies which are of long term in nature. As per the latest audited/unaudited financial statements, these subsidiary companies have reported losses aggregating to Rs. 122.73 lacs.ln the opinion of the management, the investments in these subsidiary companies are of strategic in nature and based on the future projections, the past losses of these subsidiary companies would be recouped. Hence, such diminution in value of investment has been considered as of temporary in nature and therefore, no provision of such diminution has been made.

5. The company has not received any intimation from majority of the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, hence disclosure required under Schedule VI vide notification no. GSR 719(E) dated 16.11.2007, relating to amount unpaid as at the year end together with interest paid /payable has not been given.

6. Related party disclosures

Related party disclosure as required by Accounting Standard (AS-18) of The Institute of Chartered

Accountants of India

A List of related parties and relationships

a. Subsidiaries and Associate Subsidiaries

1. US Safety Syringes Co. LLC, USA

2. Poly Medicure (Laiyang) Co. Ltd., China

Associate

Ultra For Medical Products ( UMIC), Egypt

b. Key Management Personnel

1. Mr. Himanshu Baid ( Managing Director)

2. Mr. Rishi Baid (Executive Director)

3. Mr. J.K.Baid ( Director- relative of Managing Director & Executive Director)

c. Enterprises over which key management personnel and their relatives exercise significant influence

1. Vitromed Healthcare

2. Jai Polypan Pvt. Ltd.

3. Stilocraft

4. Polycure Martech Ltd.

10. Managerial Remuneration :

A Computation of net profit in accordance with Section 349 of the Companys Act, 1956 for the purpose of managerial remuneration :

B. Remuneration paid to Managing Director & Executive Director

Besides above remuneration, Keyman insurance policy for Managing director and Executive director amounting to Rs. 10.25 lacs and Rs. 10.25 lacs respectively have been assigned in favour of respective directors. However, the assigned value aggregating to Rs. 20.50 lacs have been considered for the purpose of determining the overall ceiling under Section 198 read with Section 349 of the Companies Act, 1956.

7. The company has got approval from Central Government under Section 297 of the Companies Act for entering in to the contract in which certain directors are interested. The aforesaid approval had specified monetary limits up to which contracts can be entered into. Due to heavy export orders in the last month of the Financial year ended 31" March,2010, sales to one of the firm namely M/s Vitromed Healthcare has exceeded the approved monetary limits by Rs. 87.85 lacs against the sanctioned limits of Rs. 700 lacs, for which necessary application is being filed with the Central Government.

8. Financial and Derivate Instruments:

i) Derivative contracts entered into by the company and outstanding as at March 31, 2010 for hedging currency related risk are aggregating to Rs. 11854 lacs ( Previous year Rs. 19773 lacs)

ii) The company intends to adopt Accounting Standard (AS-30): "Financial Instruments, Recognition and Measurement" in due course, as the same is becoming mandatory with effect from 1st April 2011. Till the adoption of AS 30, the Mark to Market losses or gains on unexpired Derivative Contracts entered into to hedge the risk of changes in Foreign Currency Exchange Rate on Future Export Sales against the existing long term contracts, are accounted for on maturity of the contracts so as to safe guard against considerable volatility in foreign exchange rates during the intervening period. The Mark to Market notional losses as on March 31, 2010 are of Rs. 1542.85 lacs (previous year Rs. 4110.47 lacs) and with the considerable volatility in foreign exchange rates, the impact may increase or decrease. The company has been accounting for the losses or gains on maturity of the contracts.

9. The company is primarily engaged in a business of manufacturing and sale of "Medical Devices" and, hence, there is no reportable segments as per Accounting Standard-17.

10. a) Finance Leases :

(i) Assets acquired on finance lease comprises of vehicles. The leases have a primary period, which are fixed and non-cancelable.

(ii) The minimum lease rentals as at March 31, 2010 and the present value as at March 31, 2010 of Minimum Lease Payments in respect of assets acquired under finance leases are as follows:

b) Operating leases

(i) The Company has taken two office premises under cancellable operating lease. These lease agreements are normally renewed on expiry.

(ii) Lease rental expenses in respect of operating leases: Rs.6.33 lacs (previous year Rs. 607 lacs).

11. Particulars in respect of Loans and advances in the nature of loans as required by the Listing Agreements :

This requirement is not applicable to the Company as there were no such transactions.

12. Additional information pursuant to the provisions of paragraph 3,4C and 4D of Part-ll of Schedule VI to the Companies Act, 1956:

13. Figures of previous year have been regrouped or rearranged wherever found necessary.

14. Schedules 1 to 22 form an integral part of the accounts and have duly been authenticated.

 
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