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Poly Medicure Ltd.

BSE: 531768 Sector: Health care
NSE: POLYMED ISIN Code: INE205C01021
BSE 00:00 | 07 Apr 243.25 8.40
(3.58%)
OPEN

242.00

HIGH

254.85

LOW

238.20

NSE 00:00 | 07 Apr 242.35 5.35
(2.26%)
OPEN

244.95

HIGH

254.20

LOW

237.65

OPEN 242.00
PREVIOUS CLOSE 234.85
VOLUME 3256
52-Week high 349.40
52-Week low 166.50
P/E 23.01
Mkt Cap.(Rs cr) 2,146
Buy Price 237.55
Buy Qty 50.00
Sell Price 243.25
Sell Qty 25.00
OPEN 242.00
CLOSE 234.85
VOLUME 3256
52-Week high 349.40
52-Week low 166.50
P/E 23.01
Mkt Cap.(Rs cr) 2,146
Buy Price 237.55
Buy Qty 50.00
Sell Price 243.25
Sell Qty 25.00

Poly Medicure Ltd. (POLYMED) - Director Report

Company director report

Your Directors take immense pleasure in presenting the 24th Annual Report onthe business and operations of the Company along with the Audited Financial Statements forthe year ended 31st March 2019.

Financial Results

Parameters

Standalone

Consolidated

2018-19 2017-18 2018-19 2017-18
Revenue from Operations (Net) 58669.05 50969.93 61082.53 52167.79
Add: Other Income 1583.98 1436.95 1826.71 1437.58
Total Revenue 60253.03 52406.88 62909.24 53605.37
Profit before Interest Tax Depreciation and Amortization (EBITDA) 14814.93 13425.76 14911.73 13596.03
Less: Depreciation & Amortization Expenses. 3636.39 2840.66 3729.22 2924.40
Less: Financial Costs 1129.36 949.51 1175.06 996.48
Profit Before Tax (PBT) 10049.18 9635.59 10007.45 9675.15
Less: Tax provision 3420.79 2615.76 3467.55 2615.76
Profit after Tax 6628.39 7019.83 6539.90 7059.39
Add: Balance brought forward 15303.14 11314.24 14970.51 11361.73
Profit available for appropriation 21931.53 18334.07 21510.41 18421.12

Briefly during the year under report the Company's consolidated total incomeincreased to ' 62909.24 lacs from ' 53605.37 lacs in the previous year registering agrowth of 17.36%. EBIDTA improved to ' 14911.73 lacs as from ' 13596.03 lacs in theprevious year which translates into a rise of 9.68 %. Profit before Tax (PBT) is '10007.45 lacs as against ' 9675.15 lacs in previous year which translates into a rise of3.43 %.

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

Share Capital During the year under report the paid-up share capital of your Companyhas been increased by ' 100500 due to the allotment of 20100 equity shares of ' 5 eachon exercise of stock options by the eligible employees under the Employee Stock OptionsScheme 2015.

ESOP issuance

The Company has framed an ESOP Scheme 2015 for the benefit of its employees under whichit has issued 20100 equity shares. The Nomination and Remuneration Committee of the Boardof Directors of the Company inter alia administers and monitors the Employees' StockOption Scheme of the Company in accordance with the SEBI (Share Based Employee Benefits)Regulations 2014. Details of the shares issued under Employee Stock Option Scheme (ESOS).The disclosures in compliance with Section 62 of the Act read with Rule 12 of theCompanies (Share Capital and Debentures) Rules 2014 and the regulation 14 of SEBI (SharBased Employee Benefits) Regulations 2014 as amended is available on our website:www.polymedicure.com

Dividend

In keeping with the Company's tradition of rewarding the Shareholders your directorsare happy to recommend a dividend of ' 2/- per equity share of the face value of ' 5/-each for the financial year ended on 31st March 2019. The proposal is subjectto the approval of the shareholders at the forthcoming Annual General Meeting. The finaldividend on equity shares if approved by the members would involve a cash outflow of '2127.57 lacs including dividend tax. The dividend would be payable to all Shareholderswhose names appear in the Register of Members and in respect of shares held indematerialized form to the members whose names are furnished by the National SecuritiesDepository Limited and Central Depository Services (India) Limited on book closure date.

Transfer to Reserves

The Board of Directors has proposed to transfer ' 2500.00 lacs to General Reserves outof 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 ' 1098.90 lacs for the year ending 31st March 2019against ' 1421.71 lacs in the previous year. The Performance during the year was impactedby low order book.

• US Safety Syringes Co. LLC USA - The Company has been shut down and dissolvedon 10th June 2019.

• Poly Medicure B.V. Amsterdam Netherlands - During the year under review theCompany has incorporated a 100% subsidiary company in Amsterdam Netherlands in the nameof Poly Medicure B.V. for global operations further it will be used for expandingbusiness organically and inorganically.

• Planl Health s.r.l. Italy a step-down Subsidiary - During the year underreview the Company has acquired a 100% step-down subsidiary i.e. Plan 1 Health s.r.l.Italy.

The Company has one Associate in Egypt viz.

Ultra for Medical Products Company (ULTRA MED)

Egypt - The Associate has achieved sales of ' 7532.73 lacs during the year endDecember 2018 against ' 6183.26 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 ' 75951 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 2010-11 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 Smt. Mukulika Baid is liable toretire by rotation at the ensuing Annual General Meeting and she offers herself 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 there under 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 J.K.Oswal Chief Financial Officer and Shri Avinash Chandra Company Secretary.

Board Evaluation

Pursuant to the applicable provisions of the Companies

Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board has carried out an annual evaluation of its own performance performance of theDirectors as well as the evaluation 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 judgements 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.

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 19th Annual General Meeting held on September 23 2014 M/s. Doogar& Associates Chartered Accountants (Firm Registration No.- 000561N) were appointedas Statutory Auditors of the Company to hold office till the conclusion of the 24thAnnual General Meeting of the Company. The term of Statutory Auditors is going to expireat ensuing Annual General Meeting of the Company.

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.

In terms of the provisions of Section 139 of the Companies Act 2013 and as per therecommendation of the Audit Committee M/s. M. C. Bhandari & Company CharteredAccountants (Firm Registration No. 303002E) be appointed as Statutory Auditors of theCompany in place of retiring Auditors M/s Doogar & Associates Chartered Accountants(Firm Registration No. 000561N) to hold office from the conclusion of this 24thAnnual General Meeting till the conclusion of the 29th Annual General Meetingof the Company.

The Company has received a letter from the appointing Auditors to the effect that theirappointment if made would be within the prescribed limits under Section 141(3)(g) of theCompanies Act 2013 and that they are not disqualified for re-appointment.

Cost Auditor

The Board had appointed M/s. Jai Prakash & Co. Cost Accountants as Cost Auditorfor the financial year 2018

19. M/s. Jai Prakash & Co. Cost Accountants have been reappointed as Cost Auditorfor conducting the audit of cost records of the Company for the financial year 2019-20 andapproval of the members is being sought for ratification of their remuneration.

Secretarial Auditor

The Board of Directors have appointed M/s. B.K. Sethi & Company (Certificate ofPractice No.- 913) Company Secretaries in Practice to conduct Secretarial Audit for thefinancial year 2018-19. The Secretarial Audit Report for the financial year ended 31stMarch 2019 is annexed this Report as Annexure - 3.

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 ' 500 Crore ormore or a turnover of ' 1000 Crore or more or a net profit of ' 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 ' 200.11 lacs (includes unspent amount of '46.28 lacs for previous year) towards CSR activities out of which ' 153.83 lacs wereutilized for activities specified in schedule VII of the Companies Act 2013. Details ofCSR policy and the initiatives adopted by the Company on CSR during the year are availableon the website of the Company at 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) Rules 2014 is annexed herewith as Annexure - 6to this Report in the prescribed format.

The CSR Committee has decided to carry forward the unspent amount to next year CSRbudget. Some additional projects were identified in beginning of the calendar year 2019but could not be completed in time hence the total amount required to be spent as perregulatory requirements in 2018-2019 could not be achieved.

Moreover the Company is also considering various proposals for undertakinginfrastructure development like building toilets and classrooms in schools for its ongoingCSR initiatives. The above initiatives when implemented is expected to take care of theunspent amount of earlier years and also will go a long way in fulfilling the obligationsof the Company towards CSR requirements for financial year 20192020.

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 toCompany's policies safeguarding of Company's assets prevention and detection of fraudsand errors and timely preparation of reliable financial information etc. Audit Committeeof the Board reviews reports submitted by the independent internal auditors and monitorsfollow-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 strengths of POLYMED lie in its know-how and consistent quality of products. Wecreate user-friendly products by combining the new technologies with high speedautomation. Two factors are of outright importance here: patient safety and quality.Quality assurance is therefore most important component of our activities in all areas.Every product runs through a multitude of tests before it is ready for the market. In thisway we are able to offer consistent high level of quality to our worldwide customers.

The Company has adopted several significant external benchmarks and certifications. TheCompany has been accredited with the International Quality Certifications and successfullyimplemented a well documented QMS (Quality Management System) which has been certified forISO 9001: 2015 ISO-13485: 2016 EN ISO 13485:2016 and CE mark (Product Certification) asper European Medical Device Directive MDD/93/42/EEC by DNV GL NemkoPresafe AS Norway thusmaking the entire product range compliant with International Quality Standards.

Human Resources

The Company takes pride in the commitment competence and dedication different aspectsof Human Resource Management such as recruitment promotion compensation trainingselections etc. The Company ensures equal just fair and unbiased approach in hiringpromoting and developing an employee. It has clearly laid down policies for the entireEmployee Life cycle (ELC). The Company conducts trainings through external as well asin-house trainers to train the employee on various functional and behavioral aspectsrequired for business growth nurturing and retaining talent through Superior Learning& Organizational Development. This is a part of corporate HR function and is acritical pillar to support the organization's growth and its sustainability in the longrun.

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 evolving human life. These regulatory impacts manufacturingapprovals marketing and distribution of products and bring new compliance challenges yearon year. A strong quality assurance mechanism and compliance monitoring network at Companyensures strict compliance at every level. Regular training for its employees to updatethem on new developments is an integral part of this process.

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 nooverdependence 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 ManagementPersonnel have affirmed compliance with Code of Conduct as applicable to them for the yearending on 31st March 2019 as per Regulation 26(3) of SEBI (LODR) Regulations2015. A declaration to this effect as signed by the Managing Director is annexed with thisReport.

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 in"Annexure-8" forming part of Directors' Report.

Listing

The Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE)Mumbai and National Stock Exchange of India Limited (NSE) Mumbai. The Listing fees tothe Stock Exchanges for the year 2019-20 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 - 9" and forming an integral part of this Report.

Green Initiatives

To take part in Green Initiative in the Corporate Governance we propose to senddocuments such as Notices of General Meeting(s) Annual Reports and other shareholderscommunications for the year ended 31st March 2019 in electronic form to theemail addresses provided by you and/or made available to the Company by the Depositories.The copy of annual report shall be available on the website of the Company and forinspection at the registered office of the Company during office hours. In case anymember wishes to get Annual Report and other communication in physical form he may writeto the company and the same will be provided free of cost.

Electronic copies of the Annual Report 2018-19 and Notice of the 24th AnnualGeneral Meeting 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.

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
12th August 2019 D. R. Mehta Himanshu Baid
New Delhi Chairman Managing Director