Makers Laboratories Ltd Directors Report.


Your Directors have pleasure in presenting the 35th Annual Report and Financial Statements for the year ended 31st March, 2020.


For the year ended 31.3.2020 For the year ended 31.3.2019
(Rs. Lacs) (Rs. Lacs)
Total Income 5162.21 4919.67
Profit before finance cost, depreciation and taxation 293.96 477.31
Less : Finance Cost 70.31 25.41
Depreciation & Amortisation 198.75 150.28
Profit before tax 24.90 301.62
Provision for taxation
Current tax 3.82 76.70
Deferred tax liability / (asset) 33.46 (19.96)
Net Profit/(Loss) after Tax (12.38) 244.88


The Company does not propose to transfer any amount to the general reserve out of the amount available for appropriation.


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.


CARE Ratings has assigned the following ratings to the Companys long term bank facilities of Rs. 12.50 crores - CARE BBB+; Stable (Triple B Plus; Outlook: Stable)


In the last quarter of the financial year 2019-20, the coronavirus disease emerged as a global pandemic resulting in many governments declaring lockdowns forcing citizens to stay indoors and disruption of economic activities globally. Being manufacturers and marketers of generic pharmaceuticals and hence provider of essential services and exempted from lockdown, the manufacturing facility and marketing activities of your Company continued with the manufacturing and marketing operations with initial challenges such as shortage of manpower, availability of raw materials, packing materials and disruptions in the logistics and supply chain. Your Company is continuously monitoring the situation closely and has taken/continue to take all the measures to comply with the guidelines issued by the local authorities, from time to time, to ensure the safety of its workforce at manufacturing plants and offices. However, the extent to which the Covid-19 pandemic may impact the Company, its operations and financials will depend on future 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. 5162.21 lacs as compared with Rs. 4919.67 lacs for the previous year, a growth of 5%.

The operations of the Company have resulted in a net loss of Rs. 12.38 lacs as compared to a net profit of Rs. 244.88 lacs in the previous financial year.

Your Company markets generic formulations which are mainly used by the dispensing doctors, nursing homes and hospitals. The Companys business volume, margins and profitability were impacted during the financial year under report due to severe competition in the market place as well as increase in the input costs mainly of Active Pharmaceutical Ingredients, which could not be entirely passed on due to competition and price control regime. The lock down announced in the month of March, 2020 due to Covid-19 pandemic resulted in the disruption of economic activities including that of healthcare system and impacted the Companys business.

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.

The Company is in the process of commercializing its ophthalmic / eye drops manufacturing unit at GIDC, Naroda, Ahmedabad set-up with a capital outlay of about Rs. 15.23 crores within the next few months. The manufacturing facility is ready and the validation batches of the ophthalmic eye drops are currently being manufactured. The manufacturing of ophthalmic eye drops for commercial sale is expected to take place in the next couple of months.

Key Financial Ratios

31st March, 2020 31st March, 2019
1. Debtors Turnover Ratio 6.80 9.28
2. Inventory Turnover Ratio 4.74 3.94
3. Interest Coverage Ratio 4.18 18.78
4. Current Ratio 1.23 2.02
5. Debt Equity Ratio 0.18 0.14
6. Operating Profit Margin (%) 1.32% 1.38%
7. Net Profit Margin (%) -0.24% 4.98%
8. Return on Net Worth -0.28% 5.87%

However, for the reasons stated hereinabove, there was impact on the business volume and sales which resulted into reduced operating margins and net loss in the financial year 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 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 had 135 permanent employees as at 31st March, 2020.

(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.


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.


The paid-up equity share capital of the Company as at 31st March, 2020 is Rs. 491.70 lacs. The Company currently has no outstanding shares issued with differential rights, sweat equity or ESOS.


The Company has no subsidiary or joint venture companies. During the financial year under report, no company has become / ceased to be subsidiary or joint venture company.


During the year under report, the Company has spent an amount of Rs. 43.78 lacs as R&D expenditure (0.85% of the turnover) as against Rs. 31.87 lacs spent in the previous financial year (0.68%of the turnover).


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


During the year under report, 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 ( The Company has appointed the Company Secretary as its nodal officer under the provisions of IEPF.


Mr. Nilesh Jain retires as director by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

Mr. Saahil Parikh is being re-appointed as the Wholetime Director of the Company for a further period of 3 years with effect from 11th August, 2020 and the necessary resolution in this regard is being proposed at the ensuing Annual General Meeting for the approval of the members.

Mr. R. K. P. Verma, Mr. P. M. Kathariya and Ms. Dipti Shah who are independent directors, have submitted a 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 Director retiring by rotation and eligible for re-appointment as well as Wholetime Director being re-appointed is furnished in the Report on Corporate Governance, annexed herewith.


During the financial year under report, the following persons are the Key Managerial Personnel:

Mr. Saahil Parikh - Wholetime Director / CEO
Mr. Nilesh Jain - Wholetime Director
Mr. Sandeep Kadam - Manager – Accounts / CFO
Ms. Khyati Danani - Company Secretary

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, 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:

• 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; - the candidate should be free from any disqualifications as provided under Sections 164 and 167 of the Companies Act, 2013;

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

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.


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,

The Board has carried out evaluation of its own performance as well as that of the Committees of the Board and all the Directors.


All the Independent Directors of the Company have registered their names in the database maintained by Indian Institute of Corporate Affairs, Manesar, Haryana. Those of the Independent Directors who are not otherwise exempted shall appear for the common proficiency test conducted by the said institute within the prescribed time.


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 Information about elements of remuneration package of individual directors is provided in the extract of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 which is annexed.


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


This information has been furnished under Report on Corporate Governance, which is annexed.


Your Directors confirm:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith 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, 2020 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 an d 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.


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.


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.


Details of the Audit Committee along with its constitution and other details are provided 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 37th AGM and this appointment was ratified by the shareholders of the Company at the 33rd Annual General Meeting of the Company held on 2nd August, 2018.

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.


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 2019-20.

The Cost Audit Report for the financial year 2018-19, which was due to be filed with the Ministry of Corporate Affairs by 23rd October, 2019 was filed on 11th October, 2019.

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.


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 2019-20.

The Secretarial Auditors Report is annexed hereto. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors.


The provisions of Section 135 of the Companies Act, 2013 pertaining to Corporate Social Responsibility (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 on safety and environment.


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.


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 /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.


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. The full Annual Report including the aforesaid information is available on the Companys website


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 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.


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


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 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.


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.


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.


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.


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.


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, an abstract of Annual Return in Form MGT-9 is furnished as Annexure 5 to this report which is placed on the website of the Company as part of Companys Annual Report 2019-20.


The Company has complied with all the applicable Secretarial Standards.


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
15th June, 2020 Chairman