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Notes to Accounts of Poly Medicure Ltd.

Mar 31, 2023

The levels have been classified based on the followings:

Level 1: Ithierarchyincludesfmancialinstrumentsmeasuredusingquotedpricesinactivemarkets.Quoteswouldincluderates/values/valuation

references published periodically by BSE, NSE etc. basis which tradestake placeina linked or unlinked active market. This includestraded bonds and mutual funds, as the case may be, that have quoted price/rate/value.

Level 2: The fair value of financial instruments that are not traded inan active market are determined using valuation techniques which maximize

the use of observablemarket data (eitherdirectlyasprices or indirectly derivedfrom prices) andrelyas little as possible onentity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for

unlisted equity securities, contingent consideration and indemnification asset included in level 3.

Valuation Techniques used to determine fair value

Valuation Techniques used to determine fair value include

- Open ended mutual funds and certain bonds and debentures at NAV’s/rates declared and/or quoted.

- Close ended mutual funds at NAV’s declared by AMFI.

- Forother bonds and debentures values with references to prevailingyields to maturity matching tenures, quoted on sites of credibleorganization such as FIMMDA (Fixed Income Money Market and Derivative Association of India).

- Derivative Instruments at values determined by counter parties/Banks using market observable data.

- Certificate of deposits, being short term maturity papers, amortized cost is assumed to be the fair value.

35. CONTINGENT LIABILITIES AND COMMITMENTS

a. Contingent liabilities not provided for:

( ? in Lacs)

Particulars

Year Ended 31-Mar-23

Year Ended 31-Mar-22

Compensation for enhanced cost of Land pending with District & Session Court Faridabad (Amount paid ? 2.33 lacs, Previous year ? 2.33 lacs)

9.34

9.34

Showcausenoticeissued byPrincipalCommissionerofCustomsforwhichsuitableresponse filed.

849.03

424.52

Showcause noticeissued byAssistant Commissioner ofCGSTforwhich suitableresponse filed.

82.20

Incometaxdemand forAY2017-18under section270A oflncomeTaxActl 961 andalsofor

A.Y. 2018-19 u/s 143(3) and 154 of Income Tax Act 1961 for which the company have filed appeal before CIT(Appeal).

152.50

93.80

Demand from National Pharmaceutical Pricing Authority (Net)

66.88

66.88

The Company has suitably replied to show cause notices and is also representing before Appellate Authority in respect of income tax demand. The management of the Company believes that its position will likely to be upheld in the appellate process. The Company does not expect any liability against these matters in accordance with the principles ofIndASI 2 "IncomeTax” read with IndAS37 "Provision,Contingent Liabilities and Contingent Assets” and hence no provision is required to be made in respect of above in the books of account of the Company.

b. Obligations and commitments outstanding:

( ? in Lacs)

Particulars

Year Ended 31-Mar-23

Year Ended 31-Mar-22

Unexpired letters of credit ? 2,173.08 lacs (Previous year ? 2,362.54 lacs) and Guarantees including for issuing stand by letter of credit issued by bankers ? 1,612.05 lacs (Previous year ? 1,871.80 lacs), (Net of margins)

3,785.13

4,234.34

Bills discounted but not matured

134.14

789.80

Custom duty against import under EPCG Scheme

1,828.18

1,305.45

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

11,319.48

11,339.78

36 Financial Risk Management

The Company’s activities expose it to price risk, credit risk, liquidity risk and market risk.

Thisnoteexplainsthesourceofriskwhichthecompanyisexposedtoandhowitmanagestheriskanditsimpactonthefinancialstatement.These risks are managed by the senior management of the company supervised by the Board of Directors to minimize potential adverse effects on the financial performance of the company.

TheBoard ofDirectorsofthe company provides guidingprinciplesfor overall risk management,aswell as policies covering specific areas i.e. foreign exchange risk, credit risk & Investment of Surplus liquidity.

The company’s risk management is carried out by finance department, accordingly, this department identifies, evaluates and hedges financial risk.

A) Price Risk

ThemainRawmaterialsformanufacturingofMedicaldevicesarevarioustypesofPlasticGranulesi.e.PRLDPE,HDPE,PC,PA,SAN,ABSandK.Resinetc. Theprices ofRaw materials are mainly dependent on the price of Crude Oil.The majorityof Raw materials arebeing importedby the Company and the fewareprocured indigenously. Incaseof imported Raw materials,the adverse forexmovements arecovered by the natural hedge. Incase ofthe drastic price riseofRaw materials duringtheyear, theCompany makes appropriatechanges in the prices of Finished Products, afterduediscussionswiththe customers.The prices of Finished Goods aregenerally reviewed every year and appropriate changes in prices are made to offset the increase in cost.

B) Credit Risk

Creditriskarisesfromcashandcashequivalents,financialassetsmeasuredatamortizedcostandfairvaluethroughprofitorlossandtradereceivables Credit Risk Management

The company has invested in fixed deposits and in liquid mutual funds and have invested only with those funds plan having good credit rating / track record. Thecompany reviewsthe creditworthinessofthese counterparties on an ongoing basis. Another credit risk atthe reporting dateis from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customer to whom credit is extended in normal course of business. The company estimates the expected credit loss onthe basis ofpast data and experience.Thecompanyalso takes proper ECGC cover based on risk based classification of trade receivables.

E) Market Risk Foreign Currency Risk

Thecompanyoperatessignificantlyininternationalmarketsthroughimportsandexportsandthereforeexposedtoforeignexchangeriskarisingfrom foreign currencytransactions primarily with respect toUSD/Euro/GBP/JPY.The risk ismeasuredthrough sensitivity analysis by natural hedging due to imports and exports. In order to minimize any adverse effect on the financial performance of the company, financial instrument such as foreign exchange forward contracts are also used exclusively to mitigate currency risk.

This dividend is subject to the approval of shareholders of the company in ensuing Annual General Meeting and upon approval would result in cash outgo of approx. ? 2,878.33 Lacs

38 The Company has adopted IndAS116 effective annual reporting period beginningApril 1,2019 and applied the Standardto its leases retrospectively with the cumulative effect of initially applying the standard, recognized on the date of initial application (April 1,2019). Accordingly, the company has not restated comparative information, instead,thecumulative effect of initially applyingthisstandard has been recognized as an adjustment to opening balance of retained earnings as on April 1,2019.

Theleasepaymentsincludinginteresthavebeendisclosedundercashflowfromfinancingactivities.Theweightedaverageincrementalborrowing rate of 9% has been applied to lease liabilities recognized in balance sheet at the date of initial application.

On application of I nd AS 116, the nature of expense has changedfrom lease rentinprevious periods to depreciation cost for right of use asset and finance cost for interest accrued on lease liability.

41 EMPLOYEE BENEFIT:

As per Ind AS - 19 "Employee Benefits”, the disclosures are as under:

I Defined Contribution Plan - Provident Fund

The company makes contribution towards Provident Fund to Regional fund commissioner. The contribution payable by the company are at the rates specified in the rules of the scheme.

II Defined Benefit Plan

The company has formed a employees gratuity trust which is administrated by Life Insurance Corporation of India (LIC). The company makes contribution towards funding the defined benefit plan pertaining to gratuity to LIC. The Leave Encashment liability is not contributed to any fund andisunfunded.Thepresentvalueofthedefinedbenefitobligation andrelatedcurrentcostaremeasuredusingprojectedunitcreditmethodwith actuarial valuation being carried out at balance sheet date. The amount recognized are as under:

(xiii) Risk exposure

The gratuity scheme is a final salary Defined Benefit Plan that provides for lump sum payment made on exit either by way of retirement, death, disability, voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The plan design means the risk commonly affecting the liabilities and the financial results are expected to be:

A) Salary Increases: Actual salary increases willincreasethePlan’s liability. Increaseinsalaryincreaserateassumptioninfuture valuations will also increase the liability.

B) Investment Risk: If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan’s liability.

D) Mortality & disability: Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E) Withdrawals:Actualwithdrawalsprovinghigherorlowerthanassumedwithdrawalsandchangeofwithdrawalratesatsubsequentvaluationscan impact Plan’s liability.

b) Leave Encashment (Unfunded)

TheLeave Encashmentliability of ?157.63lacsformpart oflongterm provision ?136.66Lacs (PY ?167.05Lacs)andshort termprovision?20.97 Lacs (PY ? 18.74 Lacs) and is unfunded and does not require disclosures as mentioned in para 158 of Ind AS 19.

42 SEGMENT INFORMATION:

Description of segment and principal activity.

Thecompany is primarily inthe businessofmanufactureand sale of medicaldevices.Operatingsegmentsare reported inthemanner consistent with internal reportingto Managing director ofthe company.The company has regular review procedures in place and Managing director reviews the operations of the company as a whole, Hence there are no reportable segments as per Ind AS 108 Operating segment.

44 SHARE BASED PAYMENTS:

Thecompanyhasformulated "PolyMedicureEmployeeStockOptionScheme,2016(ESOP2016)”dulyapprovedbytheshareholdersintheannual general meeting held on 04th June 2019 in accordance of which the ESOP Committee of Board of Directors of the company held on 27th Sept 2016 has granted 42950 equity shares to eligible employees on the following terms & Conditions:

All option granted under this scheme shall, upon vesting, be exercised with in a period of three months from the date of vesting, failing which the option shall lapse, or such other date as decided by the compensation committee.

Provided, howeverthatincaseofcessationofemployement,thevestedoptionshalllapse/beexercisedinaccordancewiththeprovisionsof article 12 of this scheme.

The vesting period for the conversion of options are as follows:

On completion of 24 months from the date of grant of option: 50% vests.

On completion of 36 months from the date of grant of option: 50% vests.

The company has also formulated "Poly Medicure Employee Stock Option Scheme, 2020 (ESOP 2020)” duly approved by the share holders in the annual general meeting held on 29th Sept 2020 in accordance of which the ESOP Committee of Board of Directors of the company held on 6th November 2020 has granted 63100 equity shares to eligible employees on the following terms & Conditions:

All option granted under this scheme shall, upon vesting, be exercised with in a period of three months from the date of vesting, failing which the option shall lapse, or such other date as decided by the compensation committee.

Provided, howeverthat incase of cessation of employment,the vested option shall lapse/ be exercised in accordance withthe provisions of article 12 of this scheme.

The vesting period for the conversion of options are as follows:

On completion of 24 months from the date of grant of option: 50% vests.

On completion of 36 months from the date of grant of option: 50% vests.

The company has also formulated "Poly Medicure Employee Stock Option Scheme, 2020 (ESOP 2020)” duly approved by the share holders in the annual general meeting held on 29th September 2020 in accordance of which the ESOP Committee of Board of Directors of the company held on 4th August 2022 has granted 79900 equity shares to eligible employees on the following terms & Conditions:

All option granted under this scheme shall, upon vesting, be exercised with in a period of three months from the date of vesting, failing which the option shall lapse, or such other date as decided by the compensation committee.

Provided, howeverthat incase of cessation of employment,the vested option shall lapse/ be exercised in accordance withthe provisions of article 12 of this scheme.

The vesting period for the conversion of options are as follows:

On completion of 24 months from the date of grant of option: 50% vests.

On completion of 36 months from the date of grant of option: 50% vests.

Theentire proceedsfrom QIP have beenutilised for the purpose forwhichitwas raised and there arenounspent amount as atthe end of financialyear. 46 Events after the reporting date

Dividends declared by the company are based on the profits available for distribution. On 09th May 2023, the Board of directors have proposed a final dividend of '' 3/- per share in respect of the year ended March 31,2023 subject to approval of shareholders at the Annual General Meeting. Theproposalissubject to approvalofshareholdersatthe Annual GeneralMeting, andifapproved, wouldresult ina cash outflowofapproximately '' 2,878.33 Lacs.

IND AS 1 - Presentation of Financial Statements - The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expectedtoinfluencedecisionsofprimaryusersofgeneralpurposefinancialstatements.Thecompanydoesnotexpectthisamendmenttohave any significant impact in its financial statement.

IND AS 12 - IncomeTaxes-TTheamendments clarifyhowcompanies account fordeferredtax ontransactions such as leases and decommissioning obligations.Theamendmentsnarrowedthescopeoftherecognitionexemptioninparagraphs 15and24od IndAS12(recognitionexemption)so that it no longer applies to transaction that, on initial recognition, give raise to equal taxable and deductible temporary differences. The company is evaluating the impact, if any, in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - The amendments will help entities to distinguish between accountingpoliciesandaccountingestimates,thedefinitionofachangeinaccountingestimateshasbeenreplacedwithadefinitionofaccounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statement that are subject to measurement uncertainty”.Entitiesdevelopaccountingestimatesifaccountingpoliciesrequireiteminfinancialstatementtobemeasuredinawaythatinvolves measurement uncertainty. The company does not expect this amendment to have any significant impact in its financial statements.

49 No funds have been advanced/loaned/invested (from borrowed fund or from share premium or from any other sources/kind of fund) by the company to any other person(s) or entity(ies), including foreign entities(intermediaries), with the understanding (whether recorded in writing or otherwise) that the intermediary shall (i) directly or indirectly lend or invest in other peron or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or like to or on behalf of the Ultimate Beneficiaries.

Nofundshavebeenreceivedbythecompanyfromanyperson(s)orentity(ies),includingforeignentities (fundingParties),withtheunderstanding (whether recorded in writingor otherwise) thatthe company shall(i) directlyor indirectlylend or investin other personsor entities identifiedinany manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

50 The Indian parliament has approved the Code of Social Security, 2020 which would impact the contribution by the company toward provident fund and gratuity. The Ministry of Labour and Employment has relesed draft rules for the Code on Social Security, 2020 on November 13, 2020. Thecompanywillasses the impact and its evaluation oncethe subject rulesare notified.The company will give appropriate impact in its financial statement in the period in which, the code become effective and the related rules to determine the financial impact are published.

Additional regulatory information required by Schedule-III of Companies Act 2013

1) Relationship with struck off Companies:The Company do not have any relationship with Companies struckoff under section 248 of Companies Act 2013 or Section 560 of Companies Act 1956.

2) Details of Benami Property: No proceedings have been initiated or are pending against the Company for holding any Benami property under Benami Transaction (Prohibition) Act 1988 and the Rules made thereunder.

3) Compliance with numbersof layer of Companies:The Company has complied with the number of layers prescribed under Companies Act 2013.

4) Compliance with approved Scheme of Arrangement: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

5) Undisclosed Income: There is no income surrendered or disclosed as income during current or previous year in the tax assessment under the Income Tax Act 1961 that has not been recorded in books of accounts.

6) Details of Crypto Currency or Virtual Currency: The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

52 Previous year figures have been regrouped or reclassified to confirm current year classification.


Mar 31, 2022

The carrying amount of bank balances, Trade Receivable, Trade Payable, other financial assets / liabilities, loans, cash and cash equivalents,

borrowings are considered to be the same as their fair value due to their short term nature.

The levels have been classified based on the followings:

Level 1: It hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would include rates/values/ valuation references published periodically by BSE, NSE etc. basis which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be, that have quoted price/rate/value.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which

maximize the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible

on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case

for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

Valuation Techniques used to determine fair value

Valuation Techniques used to determine fair value include

- Open ended mutual funds and certain bonds and debentures at NAV''s/rates declared and/or quoted.

- Close ended mutual funds at NAV''s declared by AMFI.

- For other bonds and debentures values with references to prevailing yields to maturity matching tenures, quoted on sites of credible organization such as FIMMDA (Fixed Income Money Market and Derivative Association of India).

- Derivative Instruments at values determined by counter parties/Banks using market observable data.

- Certificate of deposits, being short term maturity papers, amortized cost is assumed to be the fair value.

35. CONTINGENT LIABILITIES AND COMMITMENTS

a. Contingent liabilities not provided for:

(^ in Lacs)

Particulars

Year Ended 31-Mar-22

Year Ended 31-Mar-21

Compensation for enhanced cost of Land pending with District & Session Court Faridabad (Amount paid 2.33 lacs, Previous year 2.33 lacs)

9.34

9.34

Show cause notice issued by Principal Commissioner of Customs for which reply already filed.

424.52

-

Income tax demand for AY 2017-18 under section 270 A of Income Tax Act 1961 under appeal with National Faceless Appeal Centre

93.80

-

Demand from National Pharmaceutical Pricing Authority (Net)

66.88

76.88

a. Obligations and commitments outstanding:

(^ in Lacs)

Particulars

Year Ended 31-Mar-22

Year Ended 31-Mar-21

Unexpired letters of credit 2362.54 lacs (Previous year 1,762.12 lacs) and Guarantees including for issuing stand by letter of credit issued by bankers 1,871.80 lacs (Previous year 1,971.84 lacs), (Net of margins)

4,234.34

3,733.96

Bills discounted but not matured

789.80

696.33

Custom duty against import under EPCG Scheme

1,305.45

1,930.94

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

11,339.78

3,472.81

36 Financial Risk Management

The Company''s activities expose it to price risk, credit risk, liquidity risk and market risk.

This note explains the source of risk which the company is exposed to and how it manages the risk and its impact on the financial statement. These risks are managed by the senior management of the company supervised by the Board of Directors to minimize potential adverse effects on the financial performance of the company.

The Board of Directors of the company provides guiding principles for overall risk management, as well as policies covering specific areas i.e. foreign exchange risk, credit risk & Investment of Surplus liquidity.

The company''s risk management is carried out by finance department, accordingly, this department identifies, evaluates and hedges financial risk.

A) Price Risk

The main Raw materials for manufacturing of Medical devices are various types of Plastic Granules i.e. PP, LDPE, HDPE, PC, PA, SAN, ABS and K. Resin etc. The prices of Raw materials are mainly dependent on the price of Crude Oil. The majority of Raw materials are being imported by the Company and the few are procured indigenously. In case of imported Raw materials, the adverse forex movements are covered by the natural hedge. In case of the drastic price rise of Raw materials during the year, the Company makes appropriate changes in the prices of Finished Products, after due discussions with the customers. The prices of Finished Goods are generally reviewed every year and appropriate changes in prices are made to offset the increase in cost.

B) Credit Risk

Credit risk arises from cash and cash equivalents, financial assets measured at amortized cost and fair value through profit or loss and trade receivables

Credit Risk Management

The company has invested in fixed deposits and in liquid mutual funds and have invested only with those funds plan having good credit rating / track record. The company reviews the creditworthiness of these counterparties on an ongoing basis. Another credit risk at the reporting date is from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customer to whom credit is extended in normal course of business. The company estimates the expected credit loss on the basis of past data and experience. The company also takes proper ECGC cover based on risk based classification of trade receivables.

C) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in interest rate. The company''s main interest rate risk arises from long term borrowings with variable rates (LIBOR plus) which exposes the company to cash flow interest rate risk.

The company''s principle source of liquidity are cash & cash equivalent and cash flows that are generated from operations. The company believes that its working capital is sufficient to meet its current requirement. Additionally, the company has sizeable surplus funds in liquid mutual fund and also in fixed deposit ensuring safety of capital and availability of liquidity as and when required hence, the company do not perceive any liquidity risk.

E) Market Risk COVID-19 related risk

The Company being engaged in manufacture of medical devices and related items (being essential item) has not witnessed any significant interruptions in the supply and production cycle due to COVID-19 and kept production and dispatches on-going during the year under review.

Foreign Currency Risk

The company operates significantly in international markets through imports and exports and therefore exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to USD/Euro/GBP/JPY. The risk is measured through sensitivity analysis. In order to minimize any adverse effect on the financial performance of the company, financial instrument such as foreign exchange forward contracts are used exclusively to mitigate currency risk.

This dividend is subject to the approval of shareholders of the company in ensuing Annual General Meeting and upon approval would result in cash outgo of approx. 2397.50 Lacs

38 The Company has adopted Ind AS 116 effective annual reporting period beginning April 1, 2019 and applied the Standard to its leases retrospectively with the cumulative effect of initially applying the standard, recognized on the date of initial application (April 1, 2019). Accordingly, the company has not restated comparative information, instead, the cumulative effect of initially applying this standard has been recognized as an adjustment to opening balance of retained earnings as on April 1, 2019. The lease payments including interest have been disclosed under cash flow from financing activities. The weighted average incremental borrowing rate of 9% has been applied to lease liabilities recognized in balance sheet at the date of initial application. On application of IndAs 116, the nature of expense has changed from lease rent in previous periods to depreciation cost for right of use asset and finance cost for interest accrued on lease liability.

Depreciation on right of use asset is Rs 86.40 lacs and Interest on lease liability for year ended 31st March 2022 is Rs 17.61 lacs Lease Contracts entered by the company majorly pertains to building taken on lease to conduct the business activities in ordinary course.

Impact of Covid 19

The leases that the company has entered with lessors towards properties used as corporate office/ offices are long term in nature and no changes in terms of those leases are expected due to Covid-19

The company do not foresee liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligation related to lease liabilities as and when they fall due.

Rental expense recorded for short term lease amounted to Rs.102.74 lacs and grouped as short term lease expense in Note No.32 “ other expense

II Defined Benefit Plan

The company has formed a employees gratuity trust which is administrated by Life Insurance Corporation of India (LIC). The company makes contribution towards funding the defined benefit plan pertaining to gratuity to LIC. The Leave Encashment liability is not contributed to any fund and is unfunded. The present value of the defined benefit obligation and related current cost are measured using projected unit credit method with actuarial valuation being carried out at balance sheet date. The amount recognized are as under:

(xiii) Risk exposure

The gratuity scheme is a final salary Defined Benefit Plan that provides for lump sum payment made on exit either by way of retirement, death, disability, voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The plan design means the risk commonly affecting the liabilities and the financial results are expected to be:

A) Salary Increases: Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Investment Risk: If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan''s liability.

D) Mortality & disability: Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E) Withdrawals: Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

b) Leave Encashment (Unfunded)

The Leave Encashment liability of 185.79 lacs form part of long term provision 167.05 Lacs (PY 155.42 Lacs) and short term provision 18.74 Lacs (PY 18.61 Lacs) and is unfunded and does not require disclosures as mentioned in para 158 of Ind AS 19.

42 Borrowing cost of Nil (Previous Year 4.15 lacs) have been included in capital work in progress.

43 SEGMENT INFORMATION:Description of segment and principal activity.

The company is primarily in the business of manufacture and sale of medical devices. Operating segments are reported in the manner consistent with internal reporting to Managing director of the company. The company has regular review procedures in place and Managing director reviews the operations of the company as a whole, Hence there are no reportable segments as per Ind AS 108 Operating segment.

Information about Geographical areas

The following information discloses revenue from customers based on geographical areas.

45 SHARE BASED PAYMENTS:

The company has formulated “Poly Medicure Employee Stock Option Scheme, 2016 (ESOP 2016)" duly approved by the share holders in the annual general meeting held on 04th June 2019 in accordance of which the ESOP Committee of Board of Directors of the company held on 27th Sept 2016 has granted 42950 equity shares to eligible employees on the following terms & Conditions:

All option granted under this scheme shall, upon vesting, be exercised with in a period of three months from the date of vesting, failing which the option shall lapse, or such other date as decided by the compensation committee.

Provided, however that in case of cessation of employement, the vested option shall lapse/ be exercised in accordance with the provisions of article 12 of this scheme.

The vesting period for the conversion of options are as follows:

On completion of 24 months from the date of grant of option: 50% vests.

On completion of 36 months from the date of grant of option: 50% vests.

The company has also formulated Poly Medicure Employee Stock Option Scheme, 2020 (ESOP 2020) duly approved by the share holders in the annual general meeting held on 29th Sept 2020 in accordance of which the ESOP Committee of Board of Directors of the company held on 6th November 2020 has granted 63100 equity shares to eligible employees on the following terms & Conditions:

All option granted under this scheme shall, upon vesting, be exercised with in a period of three months from the date of vesting, failing which the option shall lapse, or such other date as decided by the compensation committee.

Provided, however that in case of cessation of employment, the vested option shall lapse/ be exercised in accordance with the provisions of article 12 of this scheme.

The vesting period for the conversion of options are as follows:

On completion of 24 months from the date of grant of option: 50% vests.

On completion of 36 months from the date of grant of option: 50% vests.

47 Events after the reporting date

Dividends declared by the company are based on the profits available for distribution. On 24th May 2022, the Board of directors have proposed a final dividend of Rs.2.50/- per share in respect of the year ended March 31 2022 subject to approval of shareholders at the Annual General Meeting. The proposal is subject to approval of shareholders at the Annual General Meting, and if approved, would result in a cash outflow approximately Rs. 2397.50 Lacs.

48 Standards issued and amended but not effective

The Ministry of Corporate Affairs (MCA) notifies new Indian Accounting Standards or amendments to the existing standards under companies (Indian Accounting Standards) Rules as issued from time to time. On March 23 2022, MCA amended the companies (Indian Accounting Standards) Amendment Rules, 2022 as below.

IND AS 16 - Property Plant and equipment - The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any shall not be recognised in the profit and loss but deducted from the directly attributable costs considered as part of cost of an item of property plant and equipment. The effective date for adoption of this amendment is annual period beginning on or after April 1, 2022. the company has evaluated the amendment and there is no impact on its standalone financial statements.

IND AS 37- Provisions, Contingent Liabilities and Contingent Assets - The amendment specifies that cost of fulfilling a ''contract comprises the costs that relate directly to the contract''. Cost that relate direcly to a contract can either be incremental costs of fulfilling the contract ( example would be direct materials, labour) or an allocation of other costs that relate directly to fulfilling contracts ( example would be allocation of depreciation charge for an item of property plant and equipment used in fulfilling the contract.) The effective date for adoption of this amendment is annual periods beginning on or after April 1,2022 although early adoption is permitted the company has evaluated the amendment and there is no impact on company standalone financials.

50 Previous year figures have been regrouped or reclassified to confirm current year classification.


Mar 31, 2018

Note 1: Deemed Cost for Property, Plant and Equipment and Intangible Assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the Financial Statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all its property, plant and equipment and intangible assets at their previous GAAP carrying value. There are no decommissioning liabilities of the Company. Stores and spares which met the criteria of definition of property, plant and equipment amounting to Rs.198.02 lacs as on 31st March 2017 have been transferred to capital work in progress pending capitalisation with corresponding adjustment in inventories.

Note 2: fair valuation of investments

The Company has elected to use the previous GAAP carrying value and not to fair value its investment in subsidiaries and associate as on the date of transition.

Note 3: Proposed dividend and tax thereon

Under the previous GAAP, dividend proposed by the Board of Directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and tax thereon, included under provisions amounting to Rs.265.47 lacs as on 31st March 2016 and Rs.530.93 lacs as on 31st March 2017 has been reversed with corresponding adjustment to retained earnings.

Note 4: Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the Statement of Profit and Loss as part of expenses. Accordingly, Revenue from operations for the year ended 31st March 2017 has increased by Rs.685.47 lacs with a corresponding increase in expenses.

Note 5: Rebate and Discount directly relatable to revenue

Under previous GAAP, the Rebate and discount on sales were shown as other expenses. Under Ind AS, these are required to be netted off against revenue. Accordingly, Revenue from operations for the year ended 31st March 2017 has reduced by Rs.28.34 lacs with a corresponding decrease in other expenses.

Note 6: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the Statement of Profit and Loss for the year Accordingly, employees benefit expenses have been reduced by Rs.20.37 lacs and recognised in other comprehensive income gross of tax for the year ended 31st March 2017.

Note 7: Other comprehensive income

Under Ind AS, all items of income and expense recognised in a year should be included in the Statement of Profit and Loss for the year, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the Statement of Profit and Loss as “other comprehensive income” includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

Note 8: Borrowing cost

Ind AS 109 requires processing fees incurred towards origination of borrowings to be deducted from carrying amout of borrowing on initial recognition. These costs are to be recognised in the statement of profit and loss over the tenure of the borrowings as part of interest expenses by applying effective interest rate method. Accordingly retained earnings as on the transition date has increased by Rs.10.01 lacs (including deferred tax of Rs.3.46 lacs) with corresponding reduction in borrowing. Processing charges of Rs.3.63 lacs have been added to the finanace cost in 2016-17 with corresponding adjustment in borrowings.

Note 9: Security Deposit Paid

Under previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly the company has fair valued these security deposits under Ind AS. Difference between the fair value and the transaction value of the security deposit has been recognised as prepaid rent. Accordingly, a sum of Rs.22.47 lacs have been reduced from security deposit receivable as on transition date and Rs.20.24 lacs as on 31st March 2017 and recognised as prepaid rent. A sum of Rs.2.23 lacs has been recognised as interest income grouped in other income and Rs.2.99 lacs have been taken as rent expenses in other expenses during 2016-17.

Note 10: Forward Contracts

Under previous GAAP, the difference between the spot rate and forward rate were amortised over the tenure of the forward contract and mark to market gain or losses on un-expired forward contracts entered into to hedge the risk of change in foreign currency exchange rate were being accounted on settlement. Under Ind AS, the mark to market gain or losses are to be accounted at the end of the reporting period. Accordingly, retained earnings on transition date and on 31st March 2017 have been increased by (Rs.35.72) lacs and Rs.160.06 lacs respectively. The Mark to Market (MTM) gain of Rs.195.76 lacs for the year ended 31st March 2017 have been taken in other income.

Note 11: Deferred Tax

Indian GAAP requires accounting of deferred tax using income statement approach, which focusses on the difference between taxable profit and accounting profit for the year. Ind AS - 12 requires entities to account for deferred taxes by using balance sheet approach, which focusses on temporary differences between carrying amount of assets or liabilities in balance sheet and its tax base. The application of Ind AS - 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. This has resulted in increase in deferred tax liability by Rs.3.46 lacs on the date of transition and Rs.5.08 lacs on 31st March 2017.

Note 12: Foreign Currency Monetary Translation Account

Under Indian GAAP, exchange difference arising in respect of long term foreign currency monetary item used for the purposes other than acquisition of depreciable assets were accumulated in “Foreign Currency Monetary Translation Account” to be amortised over balance period of such assets or liability. Under Ind AS, these exchange differences are accounted in the same year, accordingly, a sum of Rs.3.69 lacs being outstanding amount in Foreign Currency Monetary Translation Account as on 1st April 2016 have been adjusted against opening retained earning as on 1st April 2016 and gain on this account for Rs.54.79 lacs for the year ended 31st March 2017 have been reduced from finance cost.

Note 13: Investment Property

Under previous GAAP, Investment properties were not shown separately and was part of Fixed assets. Under Ind AS, Investment properties are required to be separately presented on face of balance sheet. There is no impact on the total equity or profit as a result of this adjustment. The Property Plant and Equipment as on 1st April 2016 have reduced by Rs.65.24 lacs with corresponding new addition in Investment Property.

Note 14: Government Grants

Under Indian GAAP, Company was using deferred income approach for accounting of government grant and was shown as part of Reserve and Surplus. Under Ind AS, Government grant relating to acquisition of property, plant and equipment is presented in the balance sheet by setting up grant as deferred income and credited to profit and loss on straight line basis over expected life of related assets and presented within Other Income. Consequently Reserves decreased by Rs.5.07 lacs as on 1st April 2016 and non current liabilities increased by Rs.5.07 lacs. Depreciation charge for the year ended 31st March 2017 has increased by Rs.3.59 lacs with corresponding increase in other income. Under Ind AS, In respect of property Plant and equipment (PPE) purchased under export promotion capital goods scheme (EPCG), exemption of custom duty under the scheme is treated as Government Grant and recognised in Statement of Profits and loss over the period of fulfillment of associated export obligation. As on transition date 1st April 2016 and 31st March 2017, the amount of Government Grant recognised on account of PPE purchased under EPCG scheme amounted to Rs.22.05 lacs and Rs.53.85 lacs respectively with corresponding adjustments in PPE. The Govt. Grants recognised as other income during the year ended 31st March 2017 amounted to Rs.22.74 lacs.

CORPORATE AND GENERAL INFORMATION

Poly Medicure Limited (“the Company’’) is domiciled and incorporated in India and its equity shares are listed at Bombay Stock Exchange(BSE) and National Stock Exchange (NSE). The registered office of the company is situated at 232-B, 3rd Floor, Okhla Industrial Estate, Phase III, New Delhi, India.

The Company is a manufacturer/producer of Medical Devices.

The standalone Ind AS financial statements of the company for the year ended 31st March 2018 were approved and authorized for issue by board of directors in their meeting held on 10th May 2018

STATEMENT OF COMPLIANCE

The financial statements are a general purpose financial statement which have been prepared in accordance with the Companies Act 2013, Indian Accounting Standards and complies with other requirements of the law as also requirements under Para 3 of Ind AS 101.

BASIS OF PREPARATION

Pursuant to MCA notification for applicability of IND AS, The Companies (Indian Accounting Standards) Rules, 2015 (as amended), the Company has adopted IND AS for the financial year beginning from 01st April 2017 with 01st April 2016 as the date of transition.

These are the Company’s first annual financial statements prepared complying in all material respects with the accounting standards noticed under Section 133 of the Companies Act 2013, read with the Companies (Indian Accounting Standards) Rules 2015. The financial statements comply with IND AS noticed by Ministry of Corporate Affairs (“MCA”). The Company has consistently applied the accounting policies used in the preparation of its opening IND AS Balance Sheet as at 01st April 2016 and comparative period presented.

The company prepared financial statements for all periods upto 31st March 2017 in accordance with The Accounting Standards noticed under section 133 of The Companies Act 2013 (as amended) (read with Companies (Accounts) Rules 2014 (“Indian GAAP’’). Indian GAAP is considered as the previous GAAP, under IND AS 101.

The reconciliation of effects of the transition from Indian GAAP to IND AS is disclosed in these financial statements.

The financial statement has been prepared considering all IND AS as noticed by MCA till reporting date i.e. 31st March 2018.

The financial statements provide comparative information in respect to the previous year (including Balance Sheet at the beginning on the transition date to IND AS).

The preparation of the financial statements requires management to make estimates and assumptions. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years.

Classification of Assets and Liabilities into Current and NonCurrent.

The Company presents its assets and liabilities in the Balance Sheet based on current/non-current classification.

An asset is treated as current when it is:

a) expected to be realised or intended to be sold or consumed in normal operating cycle;

b) held primarily for the purpose of trading;

c) expected to be realised within twelve months after the reporting period; or

d) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when :

a) it is expected to be settled in normal operating cycle;

b) it is held primarily for the purpose of trading;

c) it is due to be settled within twelve months after the reporting period; or

d) there is no unconditional right to defer the settlement of the liabilty for at least twelve months after the reporting period

All other liabilities are classified as non-current.

Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the company has ascertained its operating cycle being a period within twelve months for the purpose of current and non-current classification of assets and liabilities.

1.1 On transition date, the company has opted to continue with carrying value of Investment Property as deemed cost and Net carrying value under previous Indian GAAP as on 31st March 2016 is recognised as Gross carrying amount in Ind AS as on 1st April 2016.

1.2 The investment properties consist of residential properties in india and have been categorised as investment properties based on nature of its uses. There has been no change in the valuation method adopted.

1.3 The fair value of Investment properties has been determined on the basis of available circle rates of the property of the concerned registration authority and has been categorised in level 3 fair value.

1.4 The conveyance deed of three Investment properties valued at Rs.289.13 lacs are yet to be executed in favor of the company.

2.1 Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.5 (PY Rs.5) (PY Rs.5). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final 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 2017, the company has declared and paid interim dividend two times and the amount of per share interim dividend declared and paid to equity share holders is Rs.2 per equity share of Rs.5 each (PY interim dividend Rs.2.5)

During the year ended 31st March 2017, the amount of per share final dividend recognised as distribution to equity share holders is Rs.0.50 per equity share of Rs.5 each (PY Rs.0.50 per equity share of Rs.5 each)

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.

The aforesaid disclosure is based upon percentages computed separately for class of shares outstanding, as at the balance sheet date. As per records of the company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

2.2 The Board of Directors of the company in their meeting held on 10th May 2018 have proposed a final dividend of Rs.2 per equity share for the financial year ended 31st March 2018. The proposed dividend is subject to the approval of shareholders at the ensuing Annual General Meeting and upon approval would result in cash outflow of Rs.2127.24 lacs (including dividend distribution tax of Rs.362.70 lacs)

2.3 Shares allotted for consideration other than cash during the period of five years immediately preceding financial year ended 31st March 2018

The Company had alloted 11012500 fully paid-up equity shares of face value Rs.10 each during the financial year ended 31st March 2014, pursuant to bonus issue approved by the shareholders through postal ballot.

The Company had alloted 44113440 fully paid-up equity shares of face value Rs.5 each during the financial year ended 31st March 2017, pursuant to bonus issue approved by the shareholders through postal ballot.

3.1 Details of security:

a Term Loans from State Bank of India are secured by first charge on entire fixed assets / plant & machinery of the company (present & future) and equitable mortgage of factory land & buildings (except fixed assets including land and building located at plot no. 80 & 81, Sector 59, Faridabad and plot no. 34, Sector 68, IMT, Faridabad (Haryana) and second pari passu charge on entire current assets of the company. b Term loan from Citi Bank N.A. is secured by first charge on immovable property and movable fixed assets located at plot No. 80 and 81, Sector 59, Faridabad (Haryana) and second pari passu charge on entire current assets of the company. c Term loan from The Hongkong and Shanghai Banking Corporation Limited is secured by first charge on entire fixed assets including plant & machinery and equitable mortgage of land and building located at plot no. 34, Sector 68, IMT Faridabad (Haryana) and second pari passu charge on entire current assets of the company. d Vehicle Loans are secured by hypothecation / lien of the respective vehicles. e Deferred payment liabilities represents assets acquired on deferred credit terms.

Working Capital limits from State Bank of India, Citi Bank N.A., The Hongkong & Shanghai Banking Corporation Limited and HDFC Bank Limited are secured by way of first pari- passu charge on entire current assets of the Company (present & future), including stocks of raw materials, stock in process, finished goods, stores & spares lying at factories , godowns or elsewhere (including goods in transit) and book debts / receivables and further secured by second pari-passu charge on entire residual fixed assets 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.

4 FAIR VALUE MEASUREMENT

i Financial instruments: Accounting classification and fair value measurements

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Accounting Standard. An explanation of each level follows underneath the table.

The carrying amount of bank balances, Trade Receivable, Trade Payable, other financial assets / liabilities, loans, cash and cash equivalents, borrowings are considered to be the same as their fair value due to their short term nature.

The levels have been classified based on the followings:

Level 1: It hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would include rates/values/valuation references published periodically by BSE, NSE etc. basis which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be, that have quoted price/ rate/value.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

Valuation Techniques used to determine fair value

Valuation Techniques used to determine fair value include

- Open ended mutual funds and certain bonds and debentures at NAV’s/rates declared and/or quoted.

- Close ended mutual funds at NAV’s declared by AMFI.

- For other bonds and debentures values with references to prevailing yields to maturity matching tenures, quoted on sites of credible organisation such as FIMMDA (Fixed Income Money Market and Derivative Association of India).

- Derivative Instruments at values determined by counter parties/Banks using market observable data.

- Certificate of deposits, being short term maturity papers, amortised cost is assumed to be the fair value.

5 FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to price risk, credit risk, liquidity risk and market risk.

This note explains the source of risk which the company is exposed to and how it manages the risk and its impact on the financial statement. These risks are managed by the senior management of the company supervised by the Board of Directors to minimise potential adverse effects on the financial performance of the company.

The Board of Directors of the company provides guiding principles for overall risk management, as well as policies covering specific areas i.e. foreign exchange risk, credit risk & Investment of Surplus liquidity.

The company’s risk management is carried out by finance department, accordingly, this department identifies, evaluates and hedges financial risk.

A) Price Risk

The main Raw materials for manufacturing of Medical devices are various types of Plastic Granules i.e. PP, LDPE, HDPE, PC, PA, SAN, ABS and K. Resin etc. The prices of Raw materials are mainly dependent on the price of Crude Oil. The majority of Raw materials are being imported by the Company and the few are procured indigenously. In case of imported Raw materials, the adverse forex movements are covered by the natural hedge. In case of the drastic price rise of Raw materials during the year, the Company makes corresponding rise in the prices of Finished Products, after due discussions with the customers. Otherwise also, the prices of Finished Goods are generally reviewed every year and matching increase in prices are made to offset the increase in cost.

B) Credit Risk

Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost and fair value through profit or loss and trade receivables

Credit Risk Management

The company has invested in fixed maturity plan and also in liquid mutual funds and have invested only with those funds plan having good credit rating / track record. The company reviews the creditworthiness of these counterparties on an ongoing basis. Another credit risk at the reporting date is from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customer to whom credit is extended in normal course of business. The company estimates the expected credit loss on the basis of past data and experience.

Review of outstanding trade receivables and financial assets is carried out by the management each quarter. The Company has a practice to provide for provision for doubtful debts on the basis of duly board approved policy on provision for bad & doubtful debts.

C) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in interest rate. The company’s main interest rate risk arises from long term borrowings with variable rates (LIBOR plus) which exposes the company to cash flow interest rate risk.

i) Interest rate risk exposure - The exposure of the company’s borrowing to interest rate changes at the end of reporting period is as follows:

ii) Sensitivity analysis: For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for whole year:-

D) Liquidity Risk

The company’s principle source of liquidity are cash & cash equivalent and cash flows that are generated from operations. The company believes that its working capital is sufficient to meet its current requirement. Additionally, the company has sizeable surplus funds in fixed maturity plan, liquid mutual fund and also in fixed deposit ensuring safety of capital and availability of liquidity as and when required hence, the company do not perceive any liquidity risk.

E) Market Risk

Foreign Currency Risk

The company operates significantly in international markets through imports and exports and therefore exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to USD/Euro/GBP/JPY. The risk is measured through sensitivity analysis. In order to minimize any adverse effect on the financial performance of the company, derivative financial instrument such as foreign exchange forward contracts are used exclusively to mitigate currency risk and not as trading or speculative instrument.

(i) The company uses foreign exchange forward contracts to mitigate exposure in foreign currency risk. The foreign exchange forward contract outstanding at reporting date are as under: -

6 CAPITAL MANAGEMENT

a) Risk Management : The company is cash surplus and has no capital other than equity. The Cash surplus are currently invested in fixed maturity plan, Liquid mutual funds and also in fixed deposit with banks. Safety of capital is of prime importance to ensure availability of capital for company’s business requirement. Investment objective is to provide safety and adequate return on surplus funds. The company’s adjusted net debt to equity ratio at the end of reporting period is as follows:

The company’s total owned funds of Rs.33,451.24 lacs with Rs.12,368.05 lacs as net debts is considered adequate by the management to meet its business interest and any capital risk it may face in the future.

b) Loan Covenants : Under the terms of borrowing facilities, the company is required to comply with certain financing covenants and the company has complied with those covenants through out the reporting period.

This proposed dividend is subject to the approval of shareholder of the company in ensuing Annual General Meeting and upon approval would result in cash outgo of Rs.2,127.24 lacs (including dividend distribution tax of Rs.362.70 lacs).

7 RELATED PARTY DISCLOSURES

Related party disclosures as required by Ind AS - 24 “Related Party Disclosures” are as under:

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. Oswal (CFO)

4 Mr. Avinash Chandra (Company Secretary)

5 Mr. Devendra Raj Mehta (Independent Director)

6 Mr. Prakash Chand Surana (Independent Director)

7 Mr. Y. S. Choudhary (Independent Director), ceased on 23.12.2017

8 Mr. Shailendra Raj Mehta (Independent Director)

9 Dr. Sandeep Bhargava (Independent Director)

10 Mr. Alessandro Balboni (Additional Director), wef 10.05.2018

c Relatives of Key Management Personnel

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

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

3 Mrs. Mukulika Baid (Director- relative of MD and ED)

d 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.

8 EMPLOYEE BENEFIT:

As per Ind AS - 19 “Employee Benefits”, the disclosures are as under:

I Defined Contribution Plan - Provident Fund

The company makes contribution towards Provident Fund to Regional fund commissioner. The contribution payable by the company are at the rates specified in the rules of the scheme. During the period, the company has recognised the following amount in statement of profit and loss.

* incuded in “contribution to provident fund and others” under employee benefit expenses (refer note no. 27)

# excluding contribution to provident fund transferred to intangible capital work in progress Rs. Nil (PY Rs.1.77 lacs) and to Research and Development Expenses Rs.8.38 lacs (PY Rs.8.59 lacs).

II Defined Benefit Plan

The company has formed a employees gratuity trust which is administrated by Life Insurance Corporation of India (LIC). The company makes contribution towards funding the defined benefit plan pertaining to gratuity to LIC. The Leave Encashment liability is not contributed to any fund and is unfunded. The present value of the defined benefit obligation and related current cost are measured using projected unit credit method with acturial valuation being carried out at balance sheet date. The amount recognised are as under:

Note : In respect of Employees Gratuity Fund, composition of plan assets is not readily available from LIC of India. The expected rate of return on assets is determined based on the assessment made at the beginning of the year on the return expected on its existing portfolio, along with the estimated increment to the plan assets and expected yield on the respective assets in the portfolio during the year.

Note : Estimate of future increases considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

(viii) Demographic Assumptions

Attrition rates are the company’s best estimate of employee turnover in future determined considering factors such as nature of business & industry, retention policy, demand & supply in employment market, standing of the company, business plan, HR Policy etc as provided in the relevant accounting standard.

The above sensitivity analysis is based on a change in assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and change in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in balance sheet.

(xiii) Risk exposure

The gratuity scheme is a final salary Defined Benefit Plan that provides for lump sum payment made on exit either by way of retirement, death, disability, voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The plan design means the risk commonly affecting the liabilities and the financial results are expected to be:

A) Salary Increases: Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Investment Risk: If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan’s liability.

D) Mortality & disability: Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E) Withdrawals: Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan’s liability.

b Leave Encashment (Unfunded)

The Leave Encashment liability of Rs.112.08 lacs form part of long term provision Rs.99.15 lacs ( PY Rs.99.58 lacs) and short term provision Rs.12.93 lacs (PY Rs.11.95 lacs) and is unfunded and does not require disclosures as mentioned in para 158 of Ind AS 19.

9 Borrowing cost of Rs.8.79 Lacs (previous year Rs.9.20 Lacs ) (previous year Rs.7.46 Lacs ) have been included in capital work in progress.

10 SEGMENT INFORMATION

Description of segment and principal activity.

The company is primarily in the business of manufacture and sale of medical devices. Operating segments are reported in the manner consistent with internal reporting to Managing director of the company. The company has regular reviews procedures in place and Managing director reviews the operations of the company as a whole, Hence there are no reportable segments as per Ind AS 108 Operating segment.

Information about Geographical areas

The following information discloses revenue from customers based on geographical areas.

i) Revenue on product group wise (Ind AS 108, Para 32)

iii) None of the non-current assets (other than financial instruments, investment in subsidiaries/ associates) are located outside India.

iv) None of the customers of the company individually account for 10% or more sale.

11 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.134.27 lacs (previous year Rs.116.34 lacs).

iii) The Company has taken certain premises on non-cancellation operating lease. The future minimum lease payments in respect of which as at 31st March 2018 are as follows:

12 SHARE BASED PAYMENTS:

The company has formulated “Poly Medicure Employee Stock Option Scheme, 2015 (ESOS 2015)” which was approved by the shareholders in the annual general meeting held on 28th Sep 2015, in accordance of which the ESOP committee of board of directors of the company held on 2nd June 2016 has granted ESOP to the eligible employees on the following terms and conditions:

- The vesting period is as under:

- 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- 50%

- The exercise price of the option is Rs.50 each, which are to be paid by the employees to the Company on the exercise of the options.

The exercise period commences from the date of vesting of the options and expires at the end of 3 months from the date of such vesting.

The vesting period has not commenced yet.

The company has also formulated “Poly Medicure Employee Stock Option Scheme, 2016 (ESOS 2016)” duly approved by the share holders in the annual general meeting held on 27th Sep 2016. No option under the said scheme has yet been granted.

a Details of employees stock options granted upto 31st March 2016 but not vested as at 1st April 2016 : Nil

b Details of employees stock options granted from 1st April 2016 to 31st March 2018 but not vested as at 31st March 2018.

e Fair value on grant date

The fair value on grant date is determined using Black Scholes Model which takes into account exercise price, terms of option, share price at grant date and expected price voloatility of the underline shares, expected dividend yield and risk free interest rate for the term of option.

The model inputs for options granted during the year 31st March 2017 included a Exercise price - Rs.50 b Grant date - 2nd June 2016 c Vesting year - Financial Year 2018-2019 d Share price at grant date - Rs.350

e Expected price volatility of the company share - 20% to 25% f Expected dividend yield - 1.18% g Risk free interest rate - 6.50%

The expected price volatility is based on the historic volatility.

No options were granted during the year ended 31 March 2018

13 STANDARDS ISSUED BUT NOT YET EFFECTIVE

On 28th March, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 and certain amendments to existing Ind AS. These amendments shall be applicable to the company from 01st April, 2018.

a Issue of Ind AS-115 - Revenue from Contracts with Customers

Ind AS will supersede the current revenue recognition guidance. Ind AS provides a single model of accounting for revenue arising from contracts with customers based on identification and satisfaction of performance obligations.

b Amendments to existing issued Ind AS

The MCA has also issued amendments of following accounting standards :

i) Ind AS 21 - The effects of changes in foreign exchange rates

ii) Ind AS 40 - Investment properties

iii) Ind AS 12 - Income Tax

iv) Ind AS 28 - Investment in Associates and joint ventures, and

v) Ind AS 112 - Disclosure of Interest in Other Entities.

Application of above standards are not expected to have any significant impact on the company’s financial statements.

14 Previous year figures have been re-grouped and re-arranged wherever necessary to confirm to current year classification.


Mar 31, 2017

1.1 Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.5/- (previous year Rs.5/-). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final 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 2017, the company has declared and paid interim dividend two times and the amount of per share interim dividend declared and paid to equity share holders is Rs.2 per equity share of Rs.5 each (previous year interim dividend Rs.2.5)

During the year ended 31st March 2017, the amount of per share final dividend recognized as distribution to equity share holders is Rs.0.50 per equity share of Rs.5 each (Previous Year Rs.0.50 per equity share of Rs.5 each)

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.

The aforesaid disclosure is based upon percentages computed separately for class of shares outstanding, as at the balance sheet date. As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

1.2 Shares allotted for consideration other than during the period of five years immediately preceding financial year ended 31 March, 2017

The Company has allotted 110,12,500 fully paid up equity shares of face value Rs.10/- each during the financial year ended 31st March, 2014, pursuant to bonus issue approved by the shareholders through postal ballot.

The Company has allotted 441,13,440 fully paid-up equity shares of face value Rs.5/- each during the financial; year ended 31st March, 2017 pursuant to bonus issue approved by the shareholders through postal ballot.

2.1 Details of security:

a Term Loans from State Bank of India are secured by way of first charge on entire fixed assets of the Company (present & future) including equitable mortgage of factory land & buildings (except land and building located at plot no. 80 & 81, Sector 59, Faridabad and plot no. 34, Sector 68, IMT, Faridabad and Industrial plot No. PA-10-018, Mahindra SEZ, Jaipur) and second pari pasu charge on entire current assets of the company and are further secured by personal guarantee of Managing Director and Executive Director.

b Term Loan from Citi Bank N.A. is secured by way of first exclusive charge on immovable property and movable fixed assets located at plot No. 80 and 81, Sector 59, Faridabad and are further secured by way of personal guarantee of Managing Director and Executive Director.

c Term loan from the HongKong and Shanghai Banking Corporation Limited is secured by exclusive first charge on entire fixed assets including land and building and plant and machinery at plot no. 34, Sector 68, IMT Faridabad and are further secured by way of personal guarantee of Managing Director and Executive Director.

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

e Deferred payment liabilities represents assets acquired on deferred credit terms.

3 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:

Working Capital limits from State Bank of India, Citi Bank N.A. and The HongKong & Shanghai Banking Corporation Limited are secured by way of first pari-passu charge on entire stocks and book debts both present and future secured by second pari-passu charge on entire fixed assets by way of Equitable Mortgage and also by personal guarantee by Managing Director and Executive Director.

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.

4 Financial Risk Management

The Company’s activities expose it to a variety of financial risks : currency risk, interest rate risk, credit risk and liquidity risk. The Company’s overall risk management strategy seeks to minimize adverse effects from the unpredictability of financial markets on the company’s financial performance

Currency risk

The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice from market experts, hedging of exposures, etc.

The Company enter into foreign exchange forward contract, to mitigate foreign exchange related risk exposure and are entered into to hedge the payment of monetary assets or monetary liability in balance sheet.

Interest rate risk

Interest rate risk primarily arises from floating rate borrowings. The Company’s borrowing portfolio requires interest rates to be reviewed by the lending agencies on an annual basis and is influenced by industry factors as well as Company’s financial performance.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company’s receivables from customers.

i) Trade and other receivables

Credit risk is managed through credit approvals, establishing credit limits, continuous monitoring of creditworthiness of customers to which the company grants credit terms in the normal course of business. The Company also assesses the financial reliability of customers taking into account the financial condition, current economic trends and historical bad debts and ageing of accounts receivables.

ii) Investments

The Company limits its exposure to credit risk by generally investing with counterparties that have a good credit rating. The Company has funded defined-benefit gratuity plans. The funded status of these plans are influenced by movements in financial market. A negative performance of the financial markets could have a material impact on cash funding requirements.

iii) Cash and Cash equivalents

With respect to credit risk arising from financial assets which compromise of cash and cash equivalents, the Company’s risk exposure arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets at the reporting date. Since the counter party involved is a bank, Company considers the risks of non-performance by the counterparty as non-material.

Liquidity Risk

Liquidity risk is the that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. The Company’s finance department is responsible for fund management. In addition, processes and policies related to such risks are overseen by senior management.

5 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.

6 RELATED PARTY DISCLOSURES

Related party disclosures as required by Accounting Standard (AS)-18 are as under:

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 Shri Himanshu Baid, Managing Director

2 Shri Rishi Baid, Executive Director

3 Shri J. K. Oswal, C.F.O.

4 Shri Avinash Chandra, Company Secretary

c) Relatives of Key Management Personnel

1 Shri J. K. Baid, Director (relative of Managing Director & Executive Director)

2 Shri Vishal Baid, President (Corporate Sales & Marketing), (relative of Managing Director & Executive Director)

3 Smt. Mukulika Baid, Director (relative of Directors)

d) 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.

7 Additional information as required by Paragraph 6 of the General Instructions for Preparation of Balance Sheet to Schedule III to the Companies Act, 2013 with respect to details of Specified Bank Notes (SBNs) held and transacted during the period 8.11.16 to 30.12.16.

For the purpose of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8thNovember, 2016

II Defined Benefit Plan

During the year ended 31st March, 2017, the Company has formed a employees gratuity trust which is administrated by Life Insurance Corporation of India (LIC). The Company has also got approval of gratuity trust from principal commissioner of the Income Tax, New Delhi under Rule 2(1) of part C of fourth schedule of Income Tax Act 1961. The Company has started making contribution towards funding the defined benefit plan pertaining to gratuity to LIC. The Leave Encashment liability is not contributed to any fund and is unfunded. The present value of the defined benefit obligation and related current cost are measured using projected unit credit method with actuarial valuation being carried out at balance sheet date. The amount recognized are as under:

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.51.10 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 higher by Rs.54.79 lacs.

9 Borrowing cost of Rs.9.20 Lacs (previous year Rs.7.46 Lacs ) have been included in capital work in progress.

10 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. The Company’s secondary segments are the geographic distribution activities. Revenue and receivables are specified by location of customers. The geographical segments information is as under:

11 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.113.34 lacs (previous year Rs.117.35 lacs)

iii) The Company has taken certain premises on non-cancellation operating lease. The future minimum lease payments in respect of which as at 31st March 2017 are as follows:

12 EMPLOYEE STOCK OPTION SCHEME

The Company has formulated “Poly Medicure Employee Stock Option Scheme, 2015 (ESOS 2015)” which was approved by the Shareholders in the annual general meeting held on 28th Sep 2015, in accordance of which the ESOP committee of board of director the company held on 2nd june 2016 has granted ESOP to the eligible employees on the following terms and conditions:

- The vesting period is as under:

On completion of 24 months from the date of grant of Options - 50%

On completion of 30 month from the date of grant of Options - 50%

- The exercise price of the option is Rs.50 each, which are to be paid by the employees to the Company on the exercise of the options.

The exercise period commences from the date of vesting of the options and expire at the end of 3 months from the date of such vesting.

The vesting period has not commenced yet.

The Company has also formulated “Poly Medicure Employees Stock Option Scheme, 2016 (ESOS 2016)” duly approved by the shareholders in the annual general meeting held on 27th Sep 2016. No option under the said scheme has yet been granted.

13 Previous year figures have been regrouped / rearranged, wherever necessary to confirm current year classifications As per our report of even date annexed


Mar 31, 2016

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. 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 mortised over the balance period of such long term assets or liabilities. Pursuant to such adoption, a sum of Rs. 3.69 lacs is remained to be mortised over the balance period of such assets or liabilities (including current year impact of gain amounting to Rs. 46.00 lacs). Had the option not being exercised, the profits of the company would have been higher by Rs. 46.00 lacs.

3. Borrowing cost of Rs. 7.46 Lacs (previous year Rs. 56.19 Lacs ) have been included in capital work in progress.

4. The company is primarily engaged in a business of manufacturing an d s ale of "Medical Devices" and, hence, there is no reportable segments as per Accounting Standard-17.

5. LEASES : OPERATING LEASES

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

ii) Lease rental expenses in respect of operating leases: Rs. 117.35 lacs (previous year Rs. 98.32 lacs)

iii) The Company has taken certain premises on non-cancellation operating lease. The future minimum lease payments in respect of which as at 31st March 2016 are as follows:

6. Exceptional items in statement of profit and loss represents one time income of Rs. Nil (previous year Rs. 1957.80 lacs) from one of its customer towards settlement of a contract.

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


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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