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Poly Medicure Ltd.

BSE: 531768 Sector: Health care
NSE: POLYMED ISIN Code: INE205C01021
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OPEN 953.95
PREVIOUS CLOSE 952.30
VOLUME 9903
52-Week high 1163.00
52-Week low 437.00
P/E 64.73
Mkt Cap.(Rs cr) 9,055
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 953.95
CLOSE 952.30
VOLUME 9903
52-Week high 1163.00
52-Week low 437.00
P/E 64.73
Mkt Cap.(Rs cr) 9,055
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Poly Medicure Ltd. (POLYMED) - Director Report

Company director report

Your Directors take immense pleasure in presenting the 25th Annual Report on thebusiness and operations of the Company along with the Audited Financial Statements for theyear ended 31st March 2020.

Financial Results

(Rs In lacs)

Parameters

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Revenue from Operations (Net) 64616.24 58669.05 68723.90 61082.53
Add: Other Income 1858.38 1583.98 1846.34 1826.71
Total Revenue 66474.62 60253.03 70570.24 62909.24
Profit before Interest Tax Depreciation and Amortization (EBITDA) 17872.27 14814.93 18456.54 14911.73
Less: Depreciation & Amortization Expenses. 3928.43 3636.39 4052.78 3729.22
Less: Financial Costs 1765.51 1129.36 1831.43 1175.06
Profit Before Tax (PBT) 12178.33 10049.18 12358.26 10007.45
Add: Share of Profit from Associates - - 214.07 139.88
Profit before tax (after Share of Profit from Associates) 12178.33 10049.18 12572.33 10147.33
Less: Tax provision 2940.05 3420.79 2984.54 3467.55
Profit after Tax 9238.28 6628.39 9587.79 6679.78
Net Profit for the Year 9238.28 6628.39 9587.79 6679.78
Add: Balance brought forward 17224.42 15303.14 16647.90 14970.51
Profit available for appropriation 26462.70 21931.53 26235.69 21650.29

Briefly during the year under report the Company's consolidated total incomeincreased to Rs 70570.24 lacs from Rs 62909.24 lacs in the previous year registering agrowth of 12.18%. EBIDTA improved to Rs 18456.54 lacs as from Rs 14911.73 lacs in theprevious year which translates into a rise of 23.77%. Profit before Tax (PBT) is Rs12572.33 lacs as against Rs 10007.45 lacs in previous year which translates into a riseof 25.63%.

Highlights of performance are discussed in detail in the Management Discussion andAnalysis Report which forms part of the Directors' Report.

Global Pandemic - COVID-19

Due to outbreak of COVID-19 pandemic globally and consequent lockdown imposed by theGovernment of India from March 23 2020 to curb its wide spread a massive economicdisruption and social distress has been witnessed in India. The Company's proactiveimplementation of Business Continuity Plan and Emergency Preparedness Plan at theenterprise level ensured not only the safety of its work force but also smoothuninterrupted and secure business and service continuity.

The Company was able to run the operations without much disruption as it implementedthe preventive safeguard measures as an abundant caution much before the Central/ StateGovernments issued SOPs to operate.

Our Corporate & Registered office and other Regional offices have also reopenedwith adequate staff strength as per applicable norms.

The manufacturing plants were working at a limited capacity in April and May 2020 butfrom June 2020 onwards we have been able to ramp-up capacity to cater domestic andinternational customer demand.

Due to the lockdown revenue was impacted both in Q4 of FY20 and Q1 of FY21. We shallreview the long term impact of the pandemic and take all steps necessary to adaptourselves to emerging challenges and changes in the demand.

On the basis of evaluation the Company has concluded that no material adjustments arerequired in the consolidated financial statements. Given the uncertainties associated withnature condition and duration of COVID-19 the impact assessment on the Group's financialstatements will be continuously made and provided for as required.

Share Capital

During the year under report no further capital was issued.

Dividend

The Board has not recommended any Final Dividend for the Year 2019-20. The interimdividend of Rs 2 per share declared by the Board in its meeting held on 18th February2020 shall be considered as the final dividend for financial year 2019-20. Thus the totaldividend for the financial year 2019-20 remains Rs 2/- per equity share.

The total dividend on equity shares including dividend tax for the F.Y. 2019-20 was Rs2127.73 lacs.

The aforesaid dividend paid for year under review is in accordance with the Company'spolicy on Dividend Distribution which is linked to long term growth objectives of yourCompany to be met by internal cash accruals. The Dividend Distribution Policy of theCompany can be viewed on the Company's website at www.polymedicure.com

Transfer to Reserves

The Board of Directors has proposed to transfer Rs 2500.00 lacs to General Reservesout of the profit available for appropriation.

Subsidiaries and Associate

The subsidiary companies performed as follows:

• Poly Medicure (Laiyang) Co. Ltd China - The wholly owned subsidiary Company hasachieved a turnover of Rs 1381.66 lacs for the year ending 31st March 2020 against Rs1098.90 lacs in the previous year. The Performance during the year was impacted due toCoVID-19 pandemic in China.

• Poly Medicure B.V. Amsterdam Netherlands - During the year under review theCompany has not done any business operations.

• Planl Health s.r.l. Italy a step-down Subsidiary -

The wholly owned subsidiary Company has achieved a turnover of Rs 2845.79 lacs for theyear ending 31st December 2019 against Rs 1350 lacs in the previous year.

• Planl Health India Pvt. Ltd. India - During the year under review the Companyhas incorporated a 100% subsidiary company in India in the name of Plan1 Health IndiaPvt. Ltd. for further expansion in Indian market.

The Company has one Associate in Egypt viz.

Ultra for Medical Products Company (ULTRA MED) Egypt-

The Associate has achieved sales of Rs 8816.79 lacs during the year ending 31stDecember 2019 against Rs 7225.69 lacs in the previous year.

Transfer of Unpaid/Unclaimed Dividend Amounts to Investor Education and Protection Fund

During the Year under review the Company has transferred Rs 82125 lying in theunpaid/unclaimed dividend account to the Investor Education and Protection fund (IEPF) incompliance with Section 205C of the Companies Act 1956 read with Investor Education& Protection Fund (Awareness and Protection of Investors) Rules 2001. The said amountrepresents the dividend for the financial year 2011-12 which remained unclaimed by theshareholders of the Company for a period of seven years from due date of payment.

Directors and Key Managerial Personnel

In view of the provisions of the Companies Act 2013 ShriRishi Baid is liable toretire by rotation at the ensuing Annual General Meeting and he offers himself forreappointment. The information as required to be disclosed under Regulation 36(3) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 in case of re-appointment of directors is provided in the Notice of theensuing Annual General Meeting of the Company.

Pursuant to Section 149(4) of the Companies Act 2013 every Listed Company is requiredto appoint one third of its Directors as Independent Directors. The Board has fourIndependent Directors in terms of the provisions of Regulation 17(b) of the SEBI (LODR)Regulations 2015. Necessary details in respect of the directors are given in theCorporate Governance Report.

The Independent Directors have submitted their respective declarations of Independenceas required pursuant to Section 149(7) of the Companies Act 2013 confirming that theymeet the criteria of Independence specified in the Act and the Rules made thereunder asalso under Regulation 25 of the SEBI (LODR) Regulations 2015.

Pursuant to the provisions of Section 203 of the Companies Act 2013 the keymanagerial personnel of the Company are Shri Himanshu Baid Managing Director Shri RishiBaid Joint Managing Director Shri J.K. Oswal Chief Financial Officer and Shri AvinashChandra Company Secretary.

Board Evaluation

Pursuant to the applicable provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carriedout anannual evaluation of its own performance performance of the Directors as well as theevaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria for theBoard its Committees and Directors.

The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board structure composition establishment anddelineation of responsibilities to various Committees effectiveness of Board processesinformation and functioning.

Directors were evaluated on aspects such as attendance and contribution atBoard/Committee Meetings and guidance/ support to the management outside Board/CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members.

Areas on which the Committees of the Board were assessed included degree of fulfillmentof key responsibilities adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The Nomination and RemunerationCommittee also reviewed the performance of the Board its Committees and of the Directors.

Secretarial Standards

The Company has complied with the provisions of Secretarial Standards on Meetings ofthe Board of Directors (SS-1) and on General Meetings (SS-2).

Directors' Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act 2013 the Board of Directors tothe best of their knowledge hereby state and confirm that:

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures.

b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period.

c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

d) the directors have prepared the annual accounts on a going concern basis.

e) the directors have laid down internal financial controls to be followed by thecompany and such internal financial controls are adequate and are operating effectively.

f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS

As required under the regulation 34 (2)(c) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a cash flow statement is part of the AnnualReport 2019 - 2020. Further the Consolidated Financial Statements of the Company for thefinancial year 2019 - 2020 are prepared in compliance with the applicable provisions ofthe Act Accounting Standards and as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

The said Financial Statements have been prepared on the basis of the audited financialstatements of the Company its subsidiaries and joint venture companies as approved bytheir respective Boards of Directors.

Policy on Directors' Appointment and Remuneration

The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under section 178(3) of the Companies Act 2013 adopted by theBoard are covered in Corporate Governance Report as Annexure - 1 which forms part of thisReport.

Further the policy also indicates the manner of performance evaluation of IndependentDirectors Board committees and other individual directors which include criteria forperformance evaluation of the non-executive and executive directors.

Extract of the Annual Return

The extract of the Annual Return in Form No. MGT-9 forms part of the Board' Report andis annexed herewith as Annexure-2.

Auditors and Auditors' Report Statutory Auditors

At the 24th Annual General Meeting held on September 23 2019 M/s. M. C. Bhandari &Company Chartered Accountants (Firm Registration No. 303002E) were appointed asStatutory Auditors of the Company to hold office till the conclusion of the 29th AnnualGeneral Meeting of the Company to be held in the year 2024.

Your Company has received a certificate from M/s. M. C. Bhandari & CompanyChartered Accountants (Firm Registration No. 303002E) confirming their eligibility tocontinue as the Auditors of the Company in terms of the provisions of the Act and theRules framed thereunder and also a copy of the certificate issued by the Peer Review Board(ICAI) as required under Regulation 33 of the Listing Regulations.

The observations of the Auditors and the relevant notes on the accounts areself-explanatory and therefore do not call for any comments. The Auditors' Report does notcontain any qualification reservation or adverse remarks.

Further during the year in the course of the performance of their duties as auditorno frauds were reported by them.

Cost Auditor

The Board had appointed M/s. Jai Prakash & Co. Cost Accountants as Cost Auditorfor the financial year 201920. M/s. Jai Prakash & Co. Cost Accountants have beenreappointed as Cost Auditor for conducting the audit of cost records of the Company forthe financial year 2020-21 and approval of the members is being sought for ratification oftheir remuneration.

Secretarial Auditor

The Board of Directors have appointed M/s. P.K. Mishra & Associates (Certificate ofPractice No.-16222) Company Secretaries in Practice to conduct Secretarial Audit for thefinancial year 2019-20. The Secretarial Audit Report for the financial year ended 31stMarch 2020 is annexed this Report as Annexure - 3.

The Board of Director has appointed M/s. P.K. Mishra &Associates CompanySecretaries in Practice to conduct Secretarial Audit for the financial year 2020-21.

Business Responsibility Report

A detailed Business Responsibility (BRR) is prepared. As a green initiative the BRR isplaced on website of your Company and can be accessed at the website of the Company www.polymedicure.com

Particulars of Loans Guarantees or Investments under Section 186

The Particulars of Loans Investments and guarantees made/ given by the Company underSection 186 of the Companies Act 2013 are furnished in Annexure - 4 and forms part ofthe Report.

Particulars of Contracts or Arrangements with Related Parties

The particulars of every contract and arrangement entered into by the Company withrelated parties referred to in sub-section (1) of Section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto are disclosed inForm No. AOC - 2 in Annexure - 5 and form part of this Report.

Fixed Deposits

Your Company has not accepted/or invited any Fixed Deposits within the meaning ofSection 58A of the Companies Act 1956 and Section 73 or 76 of the Companies Act 2013.

Corporate Social Responsibility

As per the Companies Act 2013 all companies having a net worth of Rs 500 Crore ormore or a turnover of Rs 1000 Crore or more or a net profit of Rs 5 Crore or more duringany financial year are required to constitute a CSR Committee of the Board of Directorscomprising three or more directors at least one of whom should be an independentdirector. All such Companies are required to spend at least 2% of the average net profitsof their immediately preceding three financial years on CSR related activities.Accordingly the Company was required to spend Rs 214.74 lacs (includes unspent amount ofRs 46.28 lacs for previous year) towards CSR activities. The Company overall spends Rs237.72 lacs (Includes extra amount of Rs 22.98 lacs) for activities specified in scheduleVII of the Companies Act 2013. Also the Company donated a sum of Rs 51 lacs towards PMCARES Fund for COVID-19 on 6th April 2020. Details of CSR policy and the initiativesadopted by the Company on CSR during the year are available on the website of the Companyat http://www.polymedicure.com/ wp-content/uploads/2015/03/CSR_Policy_2015.pdf. The

Annual Report on CSR as per Companies (Corporate Social Responsibility Policy) Rules2014 is annexed herewith as Annexure - 6 to this Report in the prescribed format.

Vigil Mechanism/ Whistle Blower Policy:

The Company has a "Policy on Whistle Blower and Vigil Mechanism" to deal withinstance of fraud and mismanagement if any. In staying true to our values of StrengthPerformance and Passion the Company is committed to the high standards of CorporateGovernance and stakeholder responsibility

Prevention of Sexual Harassment at Workplace

The Company is committed to provide a protective environment at workplace for all itswomen employees. The Company has in place the "Policy on Prevention of SexualHarassment at the Workplace" in line with the requirements of The Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. The Company hasconstituted Internal Complaints Committee (ICC) to redress the complaints receivedregarding sexual harassment. During the year under review no complaints were received bythe Committee for Redressal.

Details in respect of Adequacy of Internal Financial Controls with reference to thefinancial statements

The Company has an internal financial control system commensurate with the size andscale of its operations and the same has been operating effectively. The Internal Auditorevaluates the efficacy and adequacy of internal control system accounting procedures andpolicies adopted by the Company for efficient conduct of its business adherence

to Company's policies safeguarding of Company's assets prevention and detection offrauds and errors and timely preparation of reliable financial information etc.AuditCommittee of the Board reviews reports submitted by the independent internal auditors andmonitors follow-up and corrective actions.

Particulars of Employees pursuant to Section 197(12)

Details pursuant to Section 197(12) of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 form part of thisReport and are annexed herewith as Annexure-7.

Quality

The Company delivers products confirming to strict global quality standards.Theproducts comply with international regulatory requirements. The Company is committed tocontinuous improvements and implementation of world class processes. All products aremanufactured in accordance with current Good Manufacturing Practices (GMP). Routineinternal and external quality audits for GMP compliance assure that our quality systemsare consistent with current international standards.

The Company's manufacturing facilities continue to remain certified by independent andreputed external agencies. The company's manufacturing facilities followingcertifications: Quality Management SystemISO 9001: 2015 by DNV GL Business Assurance BVEN ISO 13485:2016 and CE mark (Product Certification) as per European Medical DeviceDirective MDD 93/42/EEC as amended by 2007/47/EC by TUV SUD Product Service GmbH Germanythus making the entire product range compliant with International Quality Standards.

Human Resources

Your Company's human capitalhas been at the helm of its success through all itsendeavours. The employees are well trained and carry adequate knowledge and skills toperform relevant functions in the organization.

The Company sees its relationship with its employees as critical to the future andbelieves that every employee needs to possess apart from competence capacity andcapabilities sustainable values current and contemporary which would make them usefulrelevant and competitive in managing the change constructively for overall growth of theorganization. The Company's efforts are directed towards creating a congenial workatmosphere for individual growth creativity and greater dedicated participation inorganizational development. In-house and external training and instructions are alsoprovided to employees at all levels which help in attaining professional and productiveculture.

Credit Rating

CRISIL continue to accord the Company the ratings on the bank facilities of theCompany as under:

Long-Term Rating CRISIL A+/ Stable
Short-Term Rating CRISIL A1

Regulatory Risk

Medical Devices is among one of the highly regulated industries across the worldrightly so as it deals with saving human lives. The regulations impact manufacturingquality marketing and distribution of products globally and bring new compliancechallenges year on year. A strong quality assurance and regulatory control mechanismensures strict compliance at every level. The company organizes regular regulatorytrainings for its employees to update them on new developments in this field.

Global Economic Volatility Risk

The Company sells its products in more than 100 countries and each of these marketspresent different economic and political risk. A widespread global presence with no overdependence on any one region or country considerably insulates the Company from anyuneventful developments in any particular market.

Foreign Exchange Risk

The Company earns a major part of its revenue in foreign exchange thus exposing it tothe volatility in the exchange rates. This can have an adverse effect on its earnings. TheCompany follows a conservative and disciplined hedging policy which ensures protecting thedesired exchange rate for sustaining the profitability.

Corporate Governance

Your Company always strives to ensure that best Corporate Governance practices areidentified adopted and consistently followed. Your Company believes that Good CorporateGovernance is the basis of sustainable growth of the business and for enhancement ofStakeholders' value. The Corporate Governance Report forms an integral Part of this Reportand is set out separately in this Annual Report.

All Board Members and Senior Management Personnel have affirmed compliance with Code ofConduct as applicable to them for the year ending on 31st March 2020 as per Regulation26(3) of SEBI (LODR) Regulations 2015. A declaration to this effect as signed by theManaging Director is annexed with this Report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report on the operations of the Company asrequired under the provision of Regulation 34 of the Listing Regulation is provided inAnnexure-8 forming part of Directors' Report.

Listing

The Shares of your Company are listed on the BSE Limited (BSE) Mumbai and NationalStock Exchange of India Limited (NSE) Mumbai. The Listing fees to the Stock Exchangesfor the year 2020-21 have been paid.

Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 are given in Annexure - 9and forming an integral part of this Report.

Green Initiatives

As part of the Green Initiative we propose to send documents such as Notices ofGeneral Meeting(s) Annual Reports and other shareholders communications for the yearended 31st March 2020 in electronic form to the email addresses provided by you and/ormade available to the Company by the Depositories. The copy of annual report shall beavailable on the website of the Company and for inspection at the registered office of theCompany during office hours. In case any member wishes to get Annual Report and othercommunication in physical form he may write to the company and the same will be providedfree of cost.

Electronic copies of the Annual Report 2019-20 and Notice of the 25th Annual GeneralMeeting would be sent to all members whose email addresses are registered with theCompany/Depository Participant(s). For members who have not registered their emailaddresses physical copies of the same would be sent in the permitted mode.

Significant and material orders passed by the Regulators or Courts

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company's operations in future.

Acknowledgements & Appreciation

Your Board of Directors would like to place on record their sincere appreciation forthe support and contributions made by all the Employees Customers Suppliers BankersInvestors Business Associates and all other Stakeholders. Our consistent growth was madepossible due to their hard work solidarity co-operation and support.

The Directors also thank the Government of India various State Governments andconcerned Government Departments/Agencies for their co-operation support and look forwardto their continued support in the future.

Your Directors acknowledge with gratitude the encouragement and support extended byall our valued shareholders

For and on behalf of Board of Directors

30th July 2020 D. R. Mehta Himanshu Baid
New Delhi Chairman Managing Director

.