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Makers Laboratories Ltd.

BSE: 506919 Sector: Health care
NSE: N.A. ISIN Code: INE987A01010
BSE 00:00 | 27 Jan 39.80 0
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39.50

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NSE 05:30 | 01 Jan Makers Laboratories Ltd
OPEN 39.50
PREVIOUS CLOSE 39.80
VOLUME 2159
52-Week high 67.75
52-Week low 32.05
P/E 76.54
Mkt Cap.(Rs cr) 20
Buy Price 38.70
Buy Qty 100.00
Sell Price 40.50
Sell Qty 50.00
OPEN 39.50
CLOSE 39.80
VOLUME 2159
52-Week high 67.75
52-Week low 32.05
P/E 76.54
Mkt Cap.(Rs cr) 20
Buy Price 38.70
Buy Qty 100.00
Sell Price 40.50
Sell Qty 50.00

Makers Laboratories Ltd. (MAKERSLABS) - Auditors Report

Company auditors report

To the Members of Makers Laboratories Limited Report on the Audit of the FinancialStatements Opinion

We have audited the Financial Statements of Makers Laboratories Limited ("theCompany") which comprise the Balance Sheet as at March 31 2019 and the Statementof Profit and Loss (including Other Comprehensive Income) Statement of Changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of Significant Accounting Policies and other explanatoryinformation. (hereinafter referred to as "the Financial Statements"). In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid Financial Statements give the information required by the Companies Act2013 ("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 the profit (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theFinancial Statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Response to Key Audit Matter
1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Principal Audit Procedures We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Selected a sample of continuing and new agreements and the supporting circulars of the super stockists and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
Selected a sample of continuing and new agreements and circulars and performed the following procedures:
Read analysed and identified the distinct performance obligations in these agreements and circulars.
Compared these performance obligations with that identified and recorded by the Company.
Considered the terms of the agreements and circulars to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration if any.

Other Information

The Company's Board of Directors is responsible for the Other Information. The otherinformation comprises the information included in the Board's report including theDirectors Report Chairman's Statement Management Discussions and Analysis SummarizedFinancial Information Corporate Governance and Shareholder's Information but does notinclude the Financial Statements and our Independent Auditors' Report thereon. Our opinionon the Financial Statements does not cover the Other Information and we do not and willnot express any form of assurance or conclusion thereon.

In connection with our audit of the Financial Statements our responsibility is to readthe Other Information identified above and in doing so consider whether the OtherInformation is materially inconsistent with the Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed on the other information that we obtained prior to the date of thisauditor's report we conclude that there is a material misstatement of this OtherInformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error. In preparing thefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

1. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

5. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate make it probable that the economic decisions of a reasonablyknowledgeable user of the financial statements may be influenced. We consider quantitativemateriality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the KeyAudit Matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the attached Annexure "A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c. The Balance Sheet the Statement of Profit and Loss andthe Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount. d. In our opinion the aforesaid Financial Statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. e. On the basis of the written representations received from thedirectors as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164 (2) of the Act. f. With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting. g. With respect to the other matters to beincluded in the Auditor's Report in accordance with the requirements of section 197(16) ofthe Act as amended: In our opinion and to the best of our information and according tothe explanations given to us the remuneration paid by the Company to its directors duringthe year is in accordance with the provisions of section 197 of the Act. h. With respectto the other matters to be included in the Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company has disclosedthe impact of pending litigations on its financial position in its financial statements– Refer Note 33 to the financial statements; ii. The Company did not have anylong-term contracts including derivative contracts for which there were materialforeseeable losses; iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No.106971W
N Jayendran
Mumbai Partner
Dated: May 22 2019 Membership No. 40441

ANNEXURE - A TO THE AUDITOR'S REPORT

(i) a. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of its fixed assets. b. Fixed assets havebeen physically verified by the management during the year and no material discrepancieswere identified on such verification. c. We have verified the title deeds of immovableproperties forming part of Fixed Assets produced before us by the management and based onsuch verification we confirm that the same are held in the name of the company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year. The discrepancies noticed between the book stock and thephysical stocks were not material and they have been properly dealt with in the books ofaccounts. (iii) The Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained u/s 189 of the Companies Act2013 and hence the sub clauses (a) and (b) of clause 3(iii) of the Companies (Auditor'sReport) Order2016 is not applicable.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to loans investments guarantees and security given.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to76 or any other relevant provisions of the Companies Act 2013 and rules framedthereunder. As informed to us there is no order that has been passed by Company Law Boardor National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal in respect of the said sections.

(vi) As informed to us the maintenance of the cost records under the sub-section (1)of section 148 of the Companies Act 2013 has been prescribed and we are of the opinionthat prima facie the prescribed accounts and records have been maintained. We have nothowever carried out a detailed examination of the records to ascertain whether they areaccurate or complete.

(vii) a. The Company has been regular in depositing undisputed statutory dues includingProvident fund Employees State Insurance Income Tax Sales Tax Service Tax CustomDuty Excise Duty Cess Goods & Services Tax and other statutory dues with theappropriate authorities during the year. According to the information and explanationsgiven to us no undisputed amount payable in respect of the aforesaid dues wereoutstanding as at March 31 2019 for a period of more than six months from the date ofbecoming payable. b. According to the information and explanations given to us there areno dues of Sales Tax Income Tax Service Tax Duty of Customs or Duty of Excise or ValueAdded Tax which have not been deposited on account of any dispute except as given below:

Name of statute Nature of dues Amount (in Lacs) Period to which the amount relates Forum where dispute is pending
Income Tax Order under section 143(3) r/w section 147 11.26 April 2011 to March 2012 CIT (Appeals)
Income Tax Order under section 143(3) r/w section 147 61.56 April 2010 to March 2011 CIT (Appeals)
Income Tax Order under section 143(3) r/w section 147 14.54 April 2009 to March 2010 CIT (Appeals)

(viii) According to the information and explanations given to us and based on thedocuments and records produced to us the Company has not defaulted in repayment of duesto the financial institution or banks. Further the company has not obtained anyborrowings by way of debentures. (ix) The company has not raised any money by way ofpublic issue / follow-on offer (including debt instruments). On the basis of the documentssubmitted to the bankers and the other records perused by us we have to state that theterm loan for purchase of fixed assets taken during the year have been applied for thepurpose for which the loan was obtained.

(x) According to the information and explanations given to us and to the best of ourknowledge and belief no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theCompanies Act 2013.

(xii) The Company is not a Nidhi Company. Hence clause 3(xii) of Companies (AuditorsReport) Order 2016 is not applicable to the Company. (xiii) All transactions with therelated parties are in compliance with sections 177 and 188 of the Companies Act 2013 inso far as our examination of the proceedings of the meetings of the Audit Committee andBoard of Directors are concerned. The details of related party transactions have beendisclosed in the Financial Statements as required by the applicable Accounting Standard.

(xiv) The company has not made any preferential allotment / private placement of sharesor fully or partly convertible debentures during the year under review and hence theclause 3(xiv) of the Companies (Auditors Report) Order 2016 is not applicable to theCompany.

(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him and hence the clause 3(xv) of the Companies (Auditors Report)Order 2016 is not applicable to the Company.

(xvi) The nature of business and the activities of the Company are such that theCompany is not required to obtain registration under section 45-IA of the Reserve Bank ofIndia Act1934.

For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No.106971W
N Jayendran
Mumbai Partner
Dated: May 22 2019 Membership No. 40441

ANNEXURE - B TO THE AUDITOR'S REPORT

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to Financial Statementsof Makers Laboratories Limited ("the Company") as of March 31 2019 inconjunction with our audit of the Financial Statement of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Financial Statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Financial Statements wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system with reference to Financial Statementsand their operating effectiveness. Our audit of internal financial controls with referenceto Financial Statements included obtaining an understanding of internal financial controlswith reference to Financial Statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to Financial Statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to Financial Statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to Financial Statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements.

Because of the inherent limitations of Financial controls with reference to FinancialStatements including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls with reference toFinancial Statements to future periods are subject to the risk that the internal financialcontrol with reference to Financial Statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to Financial Statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2019 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No.106971W
N Jayendran
Mumbai Partner
Dated: May 22 2019 Membership No. 40441