TO THE MEMBERS
Your Directors have pleasure in presenting the 38th Annual Report and
Financial Statements for the year ended 31st March, 2023.
STANDALONE AND CONSOLIDATED FINANCIAL RESULTS
|
STANDALONE |
CONSOLIDATED |
|
For the year ended 31.3.2023 |
For the year ended 31.3.2022 |
For the year ended 31.3.2023 |
For the year ended 31.3.2022 |
|
(Lacs) |
(Lacs) |
(Lacs) |
(Lacs) |
Total Income |
4368.40 |
5322.37 |
10355.38 |
12980.60 |
Profit / (Loss) before finance cost, depreciation and taxation |
(299.64) |
389.56 |
552.42 |
2139.03 |
| Less : Finance Cost |
138.05 |
167.54 |
212.10 |
167.85 |
| Depreciation & Amortisation |
239.88 |
190.70 |
424.17 |
402.35 |
Profit / (Loss) before tax |
(677.57) |
31.32 |
(83.85) |
1568.83 |
| Provision for taxation |
(41.48) |
14.14 |
135.30 |
397.10 |
Net Profit / (Loss) after Tax |
(636.09) |
17.18 |
(219.15) |
1171.73 |
Less: Share of non-controlling interest |
- |
- |
(255.93) |
(673.89) |
Net Profit / (Loss) after share of non-controlling interest |
(636.09) |
17.18 |
(475.08) |
497.84 |
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to the general reserve.
FINANCIAL STATEMENTS
The financial statements are prepared in accordance with the Indian Accounting
Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with
Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Accounting Standards) Amendment Rules, 2016. In accordance with Indian Accounting Standard
(Ind AS-110), the audited consolidated financial statements are also provided in the
Annual Report.
CREDIT RATING
CARE Ratings has assigned the following ratings to the Companys long term bank
facilities of Rs. 8.40 crores (Reduced from Rs. 12.00 crores) : CARE BBB+; Stable
(Re-affirmed).
MANAGEMENT DISCUSSION AND ANALYSIS (a) Financial Performance and Operations Review
On a standalone basis, the sales and other income for the financial year under report
amounted to Rs. 4368.40 lacs as compared with Rs. 5322.37 lacs for the previous
year, a de-growth of 17.92%. On a standalone basis, the operations have resulted in a loss
of Rs. 299.64 lacs before interest, depreciation and taxation as compared to a profit of
Rs. 389.56 lacs in the previous year. After providing for depreciation, finance cost and
provision for taxation, the standalone operations of the Company have resulted in a net
loss of Rs. 636.09 lacs as compared to a net profit of Rs. 17.18 lacs in the previous
financial year.
On a consolidated basis, sales and other income for the financial year under report
amounted to Rs. 10355.38 lacs as compared to 12980.60 lacs in the previous year.
The consolidated operations have resulted in a net loss (after share of non-controlling
interest) of Rs. 475.08 lacs as compared to a net profit (after share of non-controlling
interest) of Rs. 497.84 lacs in the previous financial year.
Your Company markets generic formulations only in Indian market, which is highly
competitive. The generic formulations are mainly used by the dispensing doctors, nursing
homes and hospitals. The depreciation charges, finance cost and other overheads relating
to new ophthalmic / eye drops manufacturing facility of your Company situated at Plot No.
30/4, GIDC, Naroda, Ahmedabad, Gujarat, which was commercialised in the later part of the
financial year 2020-21, impacted the profitability of the Company in the financial year
under report. This manufacturing unit, apart from presently manufacturing few products
commercially for Indian market, is also currently engaged in the developing of ophthalmic/
eye drops for rest of the world (ROW) markets. Product development, dossier registration,
plant inspection and approval by regulatory authorities is a lengthy and time consuming
procedure. As the commercial production from this manufacturing unit gradually increases,
post commercialisation of Companys products for the ROW markets, the same shall result in
improved financials of this manufacturing unit. During the financial year under report,
your Company completed the upgradation/ modernization/capacity enhancement project of its
old liquid injectable manufacturing facility situated at Plot No. 29/3, Phase III, GIDC
Industrial Estate, Naroda, Ahmedabad – 382330, Gujarat, with a capital outlay of Rs.
11.22 crores, so as to enable this manufacturing facility to be offered for WHO-GMP
certification. This certification shall enable your Company to offer injectables
manufactured at this manufacturing facility for marketing in various ROW countries, thus
providing scope for exports. This facility upgradation/modernisation/ capacity enhancement
project commenced in January, 2022 and was completed by July, 2022. During this period,
there was no manufacturing activities for nearly six months at this manufacturing
facility. This also impacted the business and margins/profitability of the Company during
the financial year under report. Apart from this, during the financial year under report,
there was also substantial increase in the prices of several key active pharmaceutical
ingredients used in the manufacturing of Companys major selling generic formulations. Due
to the price control regime, the increased raw material cost could not be passed on by the
Company to its customers for several of its formulations. This coupled with inflationary
trend in the economy resulting in increased operating cost also contributed in the
reduction of margins in several products as well as lower overall business and
profitability during the financial year under report. During the year, the Company added
few generic formulations in the market place as well as increased its geographical
coverage through appointment of new distributors.
Key Financial Ratios
|
|
31st March, 2023 |
31st March, 2022 |
| 1. |
Debtors Turnover Ratio |
6.60 |
8.35 |
| 2. |
Inventory Turnover Ratio |
2.74 |
2.42 |
| 3. |
Interest Coverage Ratio |
(2.17) |
2.33 |
| 4. |
Current Ratio |
0.92 |
0.72 |
| 5. |
Debt Equity Ratio |
0.16 |
0.39 |
| 6. |
Operating Profit Margin (%) |
(15.38%) |
2.05% |
| 7. |
Net Profit Margin (%) |
(14.74%) |
0.33% |
| 8. |
Return on Net Worth |
(11.06%) |
0.34% |
Due to lower business volume, idle capacity of eye drops manufacturing facility as well
as closure of liquid injectable manufacturing facility for nearly 6 months for
upgradation/modernization and increased overhead and materials cost and resultant losses,
many of the above key financial ratios including profitability ratios have deteriorated
significantly in the financial year under report as compared to the previous financial
year.
(b) Opportunities, Threats, Risk and Concerns
The Indian generic formulations market is currently in the growth phase. It is expected
that use of generic formulations will gradually increase in India. However, cut throat
competition, quality issues of generics manufactured in the country and non existence of
organised generic formulations distribution and retailing system are the few causes of
concern 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 Companys business.
(c) Internal Control Systems
The Company has an adequate internal control system including suitable monitoring
procedures commensurate with its size and the nature of the business. The internal control
systems provide for all documented policies, guidelines, authorisation and approval
procedures. The statutory auditors while conducting the statutory audit, review and
evaluate the internal controls and their observations are discussed with the Audit
Committee of the Board.
(d) Human Resources
Your Company continued to have cordial and harmonious relations with its employees at
all levels. Your Company has adopted quality culture across the organisation in all line
and staff functions at all the locations. The quality culture has helped your Company in
achieving productivity improvement, cost reduction and waste elimination through employee
involvement at all levels.
Your Company has 121 permanent employees as at 31st March, 2023.
(e) Cautionary Statement
Certain statements in the Management Discussion and Analysis may be forward looking
within the meaning of applicable securities laws and regulations and actual results may
differ materially from those expressed or implied. Factors that would make differences to
Companys operations include competition, price realisation, changes in government
policies and regulations, tax regimes and economic development within India.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR
No material changes or commitments affecting the financial position of the Company have
occurred between the end of the financial year to which financial statements in this
report relate and the date of this report.
SHARE CAPITAL
The paid-up equity share capital of the Company as at 31st March, 2023 is
Rs. 590.04 lacs. The Company currently has no outstanding shares issued with differential
rights, sweat equity or ESOS.
To finance capital expenditure requirements for upgradation / modernization / capacity
enhancement of Companys injectable manufacturing facility situated at Plot No. 29/3,
Phase III, GIDC Industrial Estate, Naroda, Ahmedabad – 382330, Gujarat, as well as to
meet the general corporate purposes, your Company made a rights equity issue of 9,83,396
equity shares of Rs. 10/- each @ Rs. 150/- per equity share, including a premium of Rs.
140/- per equity share, aggregating to Rs. 14.75 crores on a rights basis to the existing
equity shareholders of the Company in the ratio of 1 equity share for every 5 equity
shares held as on record date being 1st April 2022. This rights equity issue
was oversubscribed and closed for subscription on 27th April, 2022. The
rights equity shares have since been allotted and listed on the BSE Ltd.
The proceeds of the rights equity issue were utilised for the purposes for which the
rights equity issue was made.
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
Your Company has defacto control over the affairs of M/s. Resonance Specialties Ltd., a
listed entity with 45.48% shareholding in the said company. Therefore, the Company treats
Resonance Specialties Ltd. as its subsidiary.
RESEARCH & DEVELOPMENT
During the year under report, the Company has spent an amount of Rs. 9.16 lacs as
R&D expenditure (0.21% of the turnover) as against Rs. 38.45 lacs spent in the
previous financial year (0.72% of the turnover).
DIVIDEND
In view of the losses incurred, the Board of Directors do not recommend any dividend
for the financial year under report.
INVESTORS EDUCATION AND PROTECTION FUND (IEPF)
The Company has transferred to the Investors Education and Protection Fund (IEPF) all
the unpaid dividend amount required to be so transferred on or before the due date for
such transfer. The Company has also transferred to IEPF, such of the Companys equity
shares in respect of which the dividend declared has not been paid or claimed for seven
consecutive years. The details of the unpaid / unclaimed dividend for the last seven
financial years are available on the website of the Company (www.makerslabs.com). The
Company has appointed the Company Secretary as its nodal officer under the provisions of
IEPF.
DIRECTORS
Mr. Prashant Godha retires as a director by rotation at the ensuing Annual General
Meeting and, being eligible, offers himself for re-appointment.
The Board of Directors at their meeting held on 22nd May, 2023 have
re-appointed Mr. R. K. P. Verma as the Independent Director of the Company for a further
period of 5 consecutive years (second term) with effect from 13th February,
2024 till 12th February, 2029. This re-appointment is subject to the approval
of the shareholders at the ensuing Annual General Meeting by way of a special resolution.
Mr. Saahil Parikh, Whole-time Director was re-appointed as the Whole-time Director of the
Company for a further period of 3 years w.e.f. 11th August, 2023 at the meeting
of the Board of Directors of the Company held on 22nd May, 2023. This
re-appointment is subject to the approval of the shareholders at the ensuing Annual
General Meeting. Mr. R. K. P. Verma, Ms. Dipti Shah and Mr. Vishal Jain who are
independent directors have submitted declaration that each of them meets the criteria of
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 their
status as independent directors during the year. None of the directors of the Company are
debarred from holding the office of Director by virtue of any SEBI order or order by any
other competent authority.
In the opinion of the Board, the independent directors possess appropriate balance of
skills, experience and knowledge, as required.
A brief note on Directors retiring by rotation and eligible for re-appointment as well
as being appointed is furnished in the Report on Corporate Governance, annexed herewith.
KEY MANAGERIAL PERSONNEL (KMP)
During the financial year under report, the following persons were the Key Managerial
Personnel:
| Mr. Saahil Parikh |
- Wholetime Director / CEO |
| Mr. Nilesh Jain |
- Wholetime Director |
| Mr. Sandeep Kadam |
- Sr. Manager – Accounts / CFO |
| Ms. Rinku Kholakiya |
- Company Secretary (upto 31st October, 2022) |
Ms. Rinku Kholakiya resigned as the Company Secretary during the financial year under
report. In her place, the Company has now appointed Ms. Surbhi Sharma as the Company
Secretary and Compliance Officer w.e.f 28th April, 2023.
POLICY ON DIRECTORS APPOINTMENT, REMUNERATION AND OTHER DETAILS
The Nomination and Remuneration Committee has laid down the criteria for Directors
appointment and remuneration including criteria for determining qualifications, positive
attributes and independence of a Director. The following attributes/criteria for selection
have been laid by the Board on the recommendation of the Committee: l the candidate
should posses the positive attributes such as leadership, entrepreneurship, industrialist,
business advisor or such other attributes which in the opinion of the Committee the
candidate possess and are in the interest of the Company; l the candidate should be
free from any disqualifications as provided under Sections 164 and 167 of the Companies
Act, 2013; l the candidate should meet the conditions of being independent as
stipulated under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 in case of
appointment as an independent director; and l the candidate should posses
appropriate educational qualification, skills, experience and knowledge in one or more
fields of finance, law, management, sales, marketing, administration, research, corporate
governance, technical operations, infrastructure, medical, social service, professional
teaching or such other areas or disciplines which are relevant for the Companys business.
BOARD EVALUATION
The Nomination and Remuneration Committee lays down the criteria for performance
evaluation of independent directors, Board of Directors and Committees of the Board. The
criteria for performance evaluation is based on the various parameters like attendance and
participation at meetings of the Board and Committees thereof, contribution to strategic
decision making, review of risk assessment and risk mitigation, review of financial
statements, business performance and contribution to the enhancement of brand image of the
Company. The Board has carried out evaluation of its own performance as well as that of
the Committees of the Board and all the Directors.
PROFICIENCY OF DIRECTORS
All the Independent Directors of the Company have registered their names in the
database maintained by the Indian Institute of Corporate Affairs, Manesar. Those
Independent Directors who are not otherwise exempted have appeared and passed the common
proficiency test conducted by the said institute within the prescribed time.
REMUNERATION POLICY
The objective and broad framework of the Companys Remuneration Policy is to consider
and determine the remuneration, based on the fundamental principles of payment for
performance, potential and growth. The Remuneration Policy reflects on certain guiding
principles of the Company such as aligning remuneration with the longer term interests of
the Company and its shareholders, promoting a culture of meritocracy and creating a
linkage to corporate and individual performance and emphasising on line expertise and
market competitiveness so as to attract the talent. The Nomination and Remuneration
Committee recommends the remuneration of Directors and Key Managerial Personnel, which is
approved by the Board of Directors, subject to the approval of shareholders, where
necessary. The level and composition of remuneration shall be reasonable and sufficient to
attract, retain and motivate the directors, key managerial personnel and other employees
of the quality required to run the Company successfully. The relationship of remuneration
to performance should be clear and meet appropriate performance benchmarks. The
remuneration to directors, key managerial personnel and senior management personnel should
also involve a balance between fixed and incentive pay reflecting short and long term
performance objectives appropriate to the working of the Company and its goals. The
Remuneration Policy is placed on the Companys website www.makerslabs.com. Information
about elements of remuneration package of individual directors is provided in the Annual
Return as provided under Section 92(3) of the Companies Act, 2013 which is placed on the
website of the Company.
FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
Details of the familiarisation program of independent directors are disclosed on the
website of the Company www.makerslabs.com.
MEETINGS OF THE BOARD AND COMMITTEES THEREOF
This information has been furnished under Report on Corporate Governance, which is
annexed.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors confirm: i) that in the preparation of the annual accounts, the
applicable accounting standards have been followed along with proper explanation relating
to material departures; ii) that your Directors have selected such accounting
policies and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year March 31, 2023 and of the loss of the Company for
the financial year; iii) that your Directors have taken proper and sufficient care
for the maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding the 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 the Company and that such internal financial controls are
adequate and were operating effectively; and vi) that your Directors have devised
proper systems to ensure compliance with the provisions of all applicable laws and that
such systems were adequate and operating effectively.
CORPORATE GOVERNANCE
As per the requirements of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has complied with the requirements of Corporate Governance
in all material aspects. A report on Corporate Governance (Annexure 1) together with a
certificate of its compliance from the Practising Company Secretary, forms part of this
report.
FIXED DEPOSITS
Your Company has not accepted any deposits from the public during the year under review
and as such no amount of principal or interest on deposits from public was outstanding as
on the date of the balance sheet.
AUDIT COMMITTEE
Details of the Audit Committee along with its constitution and other details are
provided in the Report on Corporate Governance.
AUDITORS, AUDIT REPORT AND AUDITED ACCOUNTS
M/s. Natvarlal Vepari & Co., Chartered Accountants (Firm Registration No. 106971W)
were re-appointed as the Statutory Auditors to carry out statutory audit activities of the
Company for a further period of 5 (five) years from the conclusion of the 37th
AGM of the Company and till completion of 42nd Annual General Meeting of the
Company and this appointment was approved by the shareholders of the Company at the 37th
Annual General Meeting of the Company held on 12th August, 2022.
The Auditors Report read with the notes to the accounts referred to therein are
self-explanatory and therefore, do not call for any further comments. There are no
qualifications, reservations or adverse remarks made by the Auditors.
COST AUDIT
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 Cost
Auditors to conduct audit of cost records of the Company for the financial year 2021-22.
The Cost Audit Report for the financial year 2021-22, which was due to be filed with
the Ministry of Corporate Affairs by 25th October 2022 was filed on the 18th
October, 2022.
The Company has maintained the cost accounts and cost records as specified by the
Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 and other applicable provisions, if any, of
the Companies Act, 2013, M/s. Parikh & Associates, Practising Company Secretaries were
appointed as the Secretarial Auditors for auditing the secretarial records of the Company
for the financial year 2022-23.
The Secretarial Auditors Report is annexed hereto. There are no qualifications,
reservations or adverse remarks made by the Secretarial Auditors.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions of Section 135 of the Companies Act, 2013 pertaining to Corporate Social
Responsibility (CSR) is not applicable to the Company.
SAFETY, ENVIRONMENT AND HEALTH
The Company considers safety, environment and health as the management responsibility.
Regular employee training programmes are carried out in the manufacturing facility on
safety and environment.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The Company has not given any loans or guarantees or made investments in contravention
of the provisions of the Section 186 of the Companies Act, 2013. The details of the loans
and guarantees given and investments made by the Company are provided in the notes to the
financial statements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on
arms length basis and were in the ordinary course of Companys business. The Board has
approved a policy for related party transactions which has been uploaded on the website of
the Company http://www.makerslabs.com/pdf/Corporate_Policy/Related_Party_Transactions.pdf.
All the related party transactions are placed before the Audit Committee as well as the
Board for approval on a quarterly basis. Omnibus approval was also obtained from the Audit
Committee on an annual basis for repetitive transactions. Approval of the shareholders is
also obtained, wherever necessary, in this regard. Related party transactions are
disclosed in the notes to the financial statements. Prescribed Form No. AOC-2 pursuant to
clause (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.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing
the names and other particulars of the employees drawing remuneration and other details as
set out in the said rules are provided as an Annexure 3 in this annual report. The Company
had no employee drawing remuneration in excess of the amount as mentioned under Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The
necessary information in respect of top 10 employees of the Company in terms of
remuneration drawn is furnished in Annexure. However, having regard to the provisions of
the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding
the aforesaid information under Explanation (2) to the above Rule is being sent to the
members of the Company. The said information is available for inspection at the registered
office of the Company during working hours excluding Saturdays and any member interested
in obtaining such information may write to the Company Secretary and the same will be
furnished on request.
CODE OF CONDUCT
The Board has laid down a code of conduct for Board members and senior management
personnel of the Company. The code also incorporates the duties of independent directors
as laid down in the Companies Act, 2013. The said code of conduct is posted on Companys
website www.makerslabs.com. The Board members and senior management personnel have
affirmed compliance with the said code of conduct. A declaration signed by the Wholetime
Director / CEO is given at the end of this Report.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
There is a Whistle Blower Policy in the Company and no personnel has been denied access
to the Chairman of the Audit Committee. The policy provides for adequate safeguards
against victimization of persons who use vigil mechanism. The Whistle Blowing Policy is
posted on the website of the Company www.makerslabs.com.
PREVENTION OF INSIDER TRADING
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 the
website of the Company www.makerslabs. com.
All the Directors, senior management employees and other employees who have access to
the unpublished price sensitive information of the Company are governed by this code.
During the year under Report, there has been due compliance with the said code of conduct
for prevention of insider trading.
CONSTITUTION OF COMMITTEE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company has adopted a policy in line with the requirements of Prevention of Sexual
Harassment of Women at the Workplace and a Committee has been set-up to redress sexual
harassment complaints received, if any.
BUSINESS RISK MANAGEMENT
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Company has
constituted a Risk Management Committee. The details of the Committee and its terms of
reference are provided in the Report on Corporate Governance, which is annexed.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant or material orders passed by any regulator, tribunal or
court that would impact the going concern status of the Company and its future operations.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the requirements of Section 134 of the Companies Act, 2013,
statement showing particulars with respect to conservation of energy, technology
absorption and foreign exchange earnings and outgo is furnished as Annexure 4 to this
report.
ANNUAL RETURN
In accordance with the requirements of Section 92 (3) of the Companies Act, 2013 and
Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, a copy of Annual
Return in Form MGT-7 is placed on the website of the Company as part of Companys Annual
Report 2022-23.
SECRETARIAL STANDARDS
The Company has complied with all the applicable Secretarial Standards.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for the co-operation and support
extended to the Company by its bankers. Your Directors also place on record their
appreciation of the continued hard work put in by employees at all levels.
|
For and on behalf of the Board |
| Mumbai |
R. K. P. Verma |
| 22nd May, 2023 |
Chairman |
+91-9892691696
