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Makers Laboratories Ltd.

BSE: 506919 Sector: Health care
NSE: N.A. ISIN Code: INE987A01010
BSE 00:00 | 23 May 161.90 1.85






NSE 05:30 | 01 Jan Makers Laboratories Ltd
OPEN 162.95
52-Week high 241.79
52-Week low 156.05
P/E 93.05
Mkt Cap.(Rs cr) 96
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 162.95
CLOSE 160.05
52-Week high 241.79
52-Week low 156.05
P/E 93.05
Mkt Cap.(Rs cr) 96
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Makers Laboratories Ltd. (MAKERSLABS) - Director Report

Company director report


Your Directors have pleasure in presenting the 36th Annual Report andFinancial Statements for the year ended 31st March 2021.


For the year ended 31.3.2021 For the year ended 31.3.2020 For the year ended 31.3.2021
(Rs Lacs) (Rs Lacs) (Rs Lacs)
Total Income 4482.54 5162.21 6959.73
Profit before finance cost 371.07 293.96 906.64
depreciation and taxation
Less : Finance Cost 158.90 70.31 175.10
Depreciation & Amortisation 419.58 198.75 461.07
Profit before tax (207.41) 24.90 270.47
Provision for taxation (45.75) 37.28 135.61
Net Profit / (Loss) after Tax (161.66) (12.38) 134.86


The Company does not propose to transfer any amount to the general reserve.


The financial statements are prepared in accordance with the Indian AccountingStandards (Ind-AS) as prescribed under Section 133 of the Companies Act 2013 read withRule 3 of the Companies (Indian Accounting Standards) Rules 2015 and Companies (IndianAccounting Standards) Amendment Rules 2016. During the year under report on 30thSeptember_2020 the Company acquired 5250000 Equity shares of Rs 10/- each ofResonance Specialties Limited (Resonance)firepresenting 45.48% of its voting rights. Theopen offer process under SEBI (SAST) Regulations was completed on 10thDecember 2020. Your Company now has de-facto control over Resonance in accordance withInd AS 110 - Consolidated Financial Statements under the Companies (Indian AccountingStandards) Rules 2015. Accordingly the Company has consolidated the financials ofResonance with itself from 11th December_2020_as a_subsidiary._


During the year under report. Your Company acquired 5250000 equity shares of Rs 10/-each representing 45.48% of the paid-up equity share capital of M/s. Resonance SpecialtiesLtd. (Resonance) a listed entity. Post completion of the open offer formalities asrequired under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011your Company now is a major promoter shareholder with defacto control over the affairs ofthe said company. Resonance is engaged in the manufacturing and marketing of ActivePharmaceutical Ingredients (APIs) and Specialty Chemicals used in the agro-chemicals andpharmaceuticals industry. The acquisition of controlling shareholding in the said companywill enable your Company to enter into lucrative specialty chemicals and APIs businesswhich will complement your Company's existing generic formulations business.


CARE Ratings has assigned the following ratings to the Company's long term bankfacilities of Rs 12.00 crores - CARE BBB+; Stable (Triple B Plus; Outlook: Stable).


During the financial year 2020-21 the covid-19 continued as a global pandemicresulting in many governments declaring repetitive lockdowns forcing citizens to stayindoors and disruption of economic activities globally. Being manufacturers and marketersof generic pharmaceuticals and hence provider of essential services and exempted fromlockdown the manufacturing and marketing activities of your Company continued withinitial challenges such as shortage of manpower availability of raw materials packingmaterials and disruptions in the logistics and supply chain. Your Company is continuouslymonitoring the situation closely and has taken/continue to take all the measures to complywith the guidelines issued by the local authorities from time to time to ensure thesafety of its workforce at manufacturing plants and offices. However the extent to whichthe Covid-19 pandemic may impact the Company its operations and financials will depend onfuture developments in this regard which as on date are uncertain.


(a) Financial Performance and Operations Review

Sales and other income for the financial year under report amounted to Rs 4482.54 lacsas compared with Rs 5162.21 lacs for the previous year a de-growth of 13.17%.

Though the Profit before Interest Depreciation and Taxation increased by 26.23% to Rs371.07 lacs as compared to Rs 293.96 lacs in the previous year the operations of theCompany have resulted in a net loss of Rs 161.66 lacs as compared to a net loss of Rs12.38 lacs in the previous financial year due to higher depreciation and finance costrelating to new ophthalmic / eye drops manufacturing facility at GIDC Naroda Ahmedabadin the State of Gujarat which was commercialised in the financial year under report. On aconsolidated basis sales and other income for the financial year under report amounted toRs 6959.73 lacs and Profit after tax amounted to Rs 134.86 lacs.

Your Company markets generic formulations which are mainly used by the dispensingdoctors nursing homes and hospitals. Due to repetitive lockdowns and other restrictionson movement of people imposed by several states as well as due to fear of getting infectedwith virus and conversion of several hospitals as dedicated covid-19 hospitals thenon-covid patient footfall reduced considerably at dispensaries nursing homes andhospitals. Since medicines dispensed at these places is the main source of business forthe Company's generics formulations the reduced non-covid patient footfall at theseplaces impacted the business of the Company throughout the financial year. Apart fromthis there was also a substantial increase in the prices of several key activepharmaceutical ingredients used in the Company's major selling generic formulations suchas Paracetamol. Due to the price control regime the increased raw material cost could notbe passed on by the Company to its customers for several of its formulations. This alsocontributed in the reduction of margins in several products during the financial yearunder report. During the year the Company added few generic formulations in the marketplace as well as increased its geographical coverage through appointment of newdistributors.

The Company's new ophthalmic / eye drops manufacturing facility at GIDC NarodaAhmedabad in the State of Gujarat set up at a capital outlay of about `15 croresdispatched its first commercial consignment in the month of February 2021 after completingall the necessary qualifications and validations of the manufacturing facility and theproduct(s). The commercialisation of this new manufacturing facility during year alsosubstantially increased the Company's depreciation charges as well as finance cost on theborrowings made to finance this manufacturing facility.

During the year under report the Company has started commercially manufacturing onlyfew ophthalmic eye drops from this new manufacturing facility and that few otherophthalmic formulations are currently in the development stage.

Key Financial Ratios
31st March 2021 31st March 2020
1. Debtors Turnover Ratio 6.16 6.80
2. Inventory Turnover Ratio 4.16 4.74
3. Interest Coverage Ratio 2.34 4.18
4. Current Ratio 1.09 1.23
5. Debt Equity Ratio 0.16 0.18
6. Operating Profit Margin (%) -2.26% 1.32%
7. Net Profit Margin (%) -3.61% -0.24%
8. Return on Net Worth -3.26% -0.28%

However for the reasons stated hereinabove during the financial year there wasimpact on the overall business volume and sales as well as margins which resulted into netloss and deterioration in the most of the above key financial ratios.

(b) Opportunities Threats Risk and Concerns

The Indian generic formulations market is currently in the growth phase. It is expectedthat use of generic formulations will gradually increase in India. However cut throatcompetition quality issues of generics manufactured in the country and non existence oforganised generic formulations distribution and retailing system are the few causes ofconcern that is hampering the growth of generic formulations market in the country.

During the year under report there was no change in the nature of Company's business.

(c) Internal Control Systems

The Company has an adequate internal control system including suitable monitoringprocedures commensurate with its size and the nature of the business. The internal controlsystems provide for all documented policies guidelines authorisation and approvalprocedures. The statutory auditors while conducting the statutory audit review andevaluate the internal controls and their observations are discussed with the AuditCommittee of the Board.

(d) Human Resources

Your Company continued to have cordial and harmonious relations with its employees atall levels. Your Company has adopted quality culture across the organisation in all lineand staff functions at all the locations. The quality culture has helped your Company inachieving productivity improvement cost reduction and waste elimination through employeeinvolvement at all levels.

Your Company had 134 permanent employees as at 31st March 2021.

(e) Cautionary Statement

Certain statements in the Management Discussion and Analysis may be forward lookingwithin the meaning of applicable securities laws and regulations and actual results maydiffer materially from those expressed or implied. Factors that would make differences toCompany's operations include competition price realisation changes in governmentpolicies and regulations tax regimes and economic development within India.


No material changes or commitments affecting the financial position of the Company haveoccurred between the end of the financial year to which financial statements in thisreport relate and the date of this report.


The paid-up equity share capital of the Company as at 31st March 2021 is Rs491.70 lacs. The Company currently has no outstanding shares issued with differentialrights sweat equity or ESOS.


During the year under report your Company acquired 5250000 equity shares of Rs 10/-each representing 45.48% of the paid-up equity share capital of M/s. Resonance SpecialtiesLtd. (Resonance) a listed entity. Post completion of the open offer formalities asrequired under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011your Company has become a major promoter shareholder having defacto control over theaffairs of the said company.


During the year under report the Company has spent an amount of Rs 34.02 lacs asR&D expenditure ( 0.75% of the turnover) as against Rs 43.78 lacs spent in theprevious financial year (0.85% of the turnover).


In view of the losses incurred the Board of Directors do not recommend dividend forthe financial year under report.


During the year under report the Company has transferred to the Investors Educationand Protection Fund (IEPF) all the unpaid dividend amount required to be so transferred onor before the due date for such transfer. The Company has also transferred to IEPF suchof the Company's equity shares in respect of which the dividend declared has not been paidor claimed for seven consecutive years. The details of the unpaid / unclaimed dividend forthe last seven financial years are available on the website of the Company( The Company has appointed the Company Secretary as its nodal officerunder the provisions of IEPF.


Mr. Saahil Parikh retires as a director by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.

Mr. P. M. Kathariya Independent Director has resigned from the Board of Directors ofthe Company with effect from 24th September 2020 due to his professionalpre-occupation as well as personal reasons. The Board places on record its appreciationfor the services rendered by Mr. Kathariya during his tenure as an Independent Director ofthe Company.

At the meeting of the Board of Directors of the Company held on 4thNovember 2020 Mr. Vishal Jain was appointed as an Additional / Independent Director ofthe Company. He holds the office of directorship till the conclusion of the ensuing AnnualGeneral Meeting. Being eligible he has offered himself for appointment as a Director /Independent Director of the Company for a period of consecutive 5 years with effect from 4thNovember 2020. Necessary approval of the shareholders for his appointment as anIndependent Director is being sought at the ensuing Annual General Meeting of the Company.At the meeting of the Board of Directors of the Company held on 4th November2020 Mr. Prashant Godha was appointed as an Additional Non-Executive Non-IndependentDirector of the Company liable to retire by rotation. He holds the office of directorshiptill the conclusion of the ensuing Annual General Meeting. Necessary approval of theshareholders for his appointment as a Director is being sought at the ensuing AnnualGeneral Meeting of the Company. Mr. R. K. P. Verma Ms. Dipti Shah and Mr. Vishal Jain whoare independent directors have submitted declaration that each of them meets the criteriaof independence as provided in Section 149(6) of the Companies Act 2013 and SEBI (LODR)Regulations and there has been no change in the circumstances which may affect theirstatus as independent directors during the year. None of the directors of the Company aredebarred from holding the office of Director by virtue of any SEBI order or order by anyother competent authority.

In the opinion of the Board the independent directors possess appropriate balance ofskills experience and knowledge as required.

A brief note on Directors retiring by rotation and eligible for re-appointment as wellas being appointed is furnished in the Report on Corporate Governance annexed herewith.


During the financial year under report the following persons are the Key ManagerialPersonnel: Mr. Saahil Parikh - Wholetime Director / CEO

Mr. Nilesh Jain - Wholetime Director

Mr. Sandeep Kadam - Sr. Manager – Accounts / CFO Ms. Khyati Danani - CompanySecretary

There was no change in the KMP during the financial year under report.


The Nomination and Remuneration Committee has laid down the criteria for Directors'appointment and remuneration including criteria for determining qualifications positiveattributes and independence of a Director. The following attributes/criteria for selectionhave been laid by the Board on the recommendation of the Committee: the candidate shouldposses the positive attributes such as leadership entrepreneurship industrialistbusiness advisor or such other attributes which in the opinion of the Committee thecandidate possess and are in the interest of the Company; the candidate should be freefrom any disqualifications as provided under Sections 164 and 167 of the Companies Act2013; the candidate should meet the conditions of being independent as stipulated underthe Companies Act 2013 and SEBI (LODR) Regulations 2015 in case of appointment as anindependent director; and the candidate should posses appropriate educationalqualification skills experience and knowledge in one or more fields of finance lawmanagement sales marketing administration research corporate governance technicaloperations infrastructure medical social service professional teaching or such otherareas or disciplines which are relevant for the Company's business.


The Nomination and Remuneration Committee lays down the criteria for performanceevaluation of independent directors Board of Directors and Committees of the Board. Thecriteria for performance evaluation is based on the various parameters like attendance andparticipation at meetings of the Board and Committees thereof contribution to strategicdecision making review of risk assessment and risk mitigation review of financialstatements business performance and contribution to the enhancement of brand image of theCompany. The Board has carried out evaluation of its own performance as well as that ofthe Committees of the Board and all the Directors.


All the Independent Directors of the Company have registered their names in thedatabase maintained by the Indian Institute of Corporate Affairs Manesar. ThoseIndependent Directors who are not otherwise exempted shall appear for the commonproficiency test conducted by the said institute within the prescribed time.


The objective and broad framework of the Company's Remuneration Policy is to considerand determine the remuneration based on the fundamental principles of payment forperformance potential and growth. The Remuneration Policy reflects on certain guidingprinciples of the Company such as aligning remuneration with the longer term interests ofthe Company and its shareholders promoting a culture of meritocracy and creating alinkage to corporate and individual performance and emphasising on line expertise andmarket competitiveness so as to attract the talent. The Nomination and RemunerationCommittee recommends the remuneration of Directors and Key Managerial Personnel which isapproved by the Board of Directors subject to the approval of shareholders wherenecessary. The level and composition of remuneration shall be reasonable and sufficient toattract retain and motivate the directors key managerial personnel and other employeesof the quality required to run the Company successfully. The relationship of remunerationto performance should be clear and meet appropriate performance benchmarks. Theremuneration to directors key managerial personnel and senior management personnel shouldalso involve a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goals. TheRemuneration Policy is placed on the Company's website Informationabout elements of remuneration package of individual directors is provided in the AnnualReturn as provided under Section 92(3) of the Companies Act 2013 which is placed on thewebsite of the Company.


Details of the familiarisation program of independent directors are disclosed on thewebsite of the Company


This information has been furnished under Report on Corporate Governance which isannexed.


Your Directors confirm: i) that in the preparation of the annual accounts theapplicable accounting standards have been followed alongwith proper explanation relatingto material departures; ii) that your Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year March 31 2021 and of the loss of the Company for the financial year;iii) that your Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;iv) that your Directors have prepared the annual accounts on a going concern basis; v)that your Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and vi) that your Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.


As per the requirements of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has complied with the requirements of Corporate Governancein all material aspects. A report on Corporate Governance (Annexure 1) together with acertificate of its compliance from the Practising Company Secretary forms part of thisreport.


Your Company has not accepted any deposits from the public during the year under reviewand as such no amount of principal or interest on deposits from public was outstanding ason the date of the balance sheet.


Details of the Audit Committee along with its constitution and other details areprovided in the Report on Corporate Governance.


M/s. Natvarlal Vepari & Co. Chartered Accountants (Firm Registration No. 106971W)were appointed as the Statutory Auditors at the 32nd Annual General Meeting(AGM) of the Company for a term of 5 (Five) years i.e. till the conclusion of 37thAGM and this appointment was ratified by the shareholders of the Company at the 33rdAnnual General Meeting of the Company held on 2nd August 2018.

The Auditors' Report read with the notes to the accounts referred to therein areself-explanatory and therefore do not call for any further comments. There are noqualifications reservations or adverse remarks made by the Auditors.


Pursuant to the provisions of Section 148 of the Companies Act 2013 M/s. Kale &Associates Cost Accountants (Firm Registration. No. 001819) were appointed as the CostAuditors to conduct audit of cost records of the Company for the financial year 2020-21.

The Cost Audit Report for the financial year 2019-20 which was due to be filed withthe Ministry of Corporate Affairs by 23rd October 2020 was filed on the duedate.

The Company has maintained the cost accounts and cost records as specified by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013.


Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s. Parikh & Associates Practising Company Secretaries wereappointed as the Secretarial Auditors for auditing the secretarial records of the Companyfor the financial year 2020-21.

The Secretarial Auditors' Report is annexed hereto. There are no qualificationsreservations or adverse remarks made by the Secretarial Auditors.


The provisions of Section 135 of the Companies Act 2013 pertaining to Corporate SocialResponsibility (CSR) is not applicable to the Company.


The Company considers safety environment and health as the management responsibility.Regular employee training programmes are carried out in the manufacturing facility onsafety and environment.


The Company has not given any loans or guarantees or made investments in contraventionof the provisions of the Section 186 of the Companies Act 2013. The details of the loansand guarantees given and investments made by the Company are provided in the notes to thefinancial statements.


All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of Company's business.

The Board has approved a policy for related party transactions which has been uploadedon the website of the Company

All the related party transactions are placed before the Audit Committee as well as theBoard for approval on a quarterly basis. Omnibus approval was also obtained from the AuditCommittee on an annual basis for repetitive transactions. Approval of the shareholders isalso obtained wherever necessary in this regard. Related party transactions aredisclosed in the notes to the financial statements. Prescribed Form No. AOC-2 pursuant toclause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies(Accounts) Rules 2014 is furnished as Annexure 2 to this report.


The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement showingthe names and other particulars of the employees drawing remuneration and other details asset out in the said rules are provided as an Annexure 3 in this annual report. The Companyhad no employee drawing remuneration in excess of the amount as mentioned under Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Thenecessary information in respect of top 10 employees of the Company in terms ofremuneration drawn is furnished in Annexure. However having regard to the provisions ofthe first proviso to Section 136(1) of the Act and as advised the Annual Report excludingthe aforesaid information under Explanation (2) to the above Rule is being sent to themembers of the Company. The said information is available for inspection at the registeredoffice of the Company during working hours excluding Saturdays and any member interestedin obtaining such information may write to the Company Secretary and the same will befurnished on request. The full Annual Report including the aforesaid information isavailable on the Company's website


The Board has laid down a code of conduct for Board members and senior managementpersonnel of the Company. The code also incorporates the duties of independent directorsas laid down in the Companies Act 2013. The said code of conduct is posted on Company'swebsite The Board members and senior management personnel haveaffirmed compliance with the said code of conduct. A declaration signed by the WholetimeDirector / CEO is given at the end of this Report.


There is a Whistle Blower Policy in the Company and no personnel has been denied accessto the Chairman of the Audit Committee. The policy provides for adequate safeguardsagainst victimization of persons who use vigil mechanism. The Whistle Blowing Policy isposted on the website of the Company


The Board has adopted a Code of Prevention of Insider Trading based on the SEBI(Prohibition of Insider Trading) Regulations 2015. The same has been placed on thewebsite of the Company All the Directors senior management employeesand other employees who have access to the unpublished price sensitive information of theCompany are governed by this code. During the year under Report there has been duecompliance with the said code of conduct for prevention of insider trading.


The Company has adopted a policy in line with the requirements of Prevention of SexualHarassment of Women at the Workplace and a Committee has been set-up to redress sexualharassment complaints received if any.


Pursuant to the provisions of Section 134 of the Companies Act 2013 the Company hasconstituted a Risk Management Committee. The details of the Committee and its terms ofreference are provided in the Report on Corporate Governance which is annexed.


There are no significant or material orders passed by any regulator tribunal or courtthat would impact the going concern status of the Company and its future operations.


In accordance with the requirements of Section 134 of the Companies Act 2013statement showing particulars with respect to conservation of energy technologyabsorption and foreign exchange earnings and outgo is furnished as Annexure 4 to thisreport.


In accordance with the requirements of Section 92 (3) of the Companies Act 2013 andRule 12 (1) of the Companies (Management and Administration) Rules 2014 copy of AnnualReturn in Form MGT-7 is placed on the website of the Company.


The Company has complied with all the applicable Secretarial Standards.


Your Directors place on record their appreciation for the co-operation and supportextended to the Company by its bankers. Your Directors also place on record theirappreciation of the continued hard work put in by employees at all levels.

For and on behalf of the Board
Mumbai R. K. P. Verma
10th June 2021 Chairman