- Lockdown 4.0: Stand-off between retailers and malls over rentals worsens
- Revised inter-creditor pacts may do away with need for 66% lenders' nod
- Revised inter-creditor pacts may do away with need for 66% lenders' nod
- Foreign funds flee India's bonds just when it needs them the most
- Doing away with labour laws is not feasible: Santosh Kumar Gangwar
- Doing away with labour laws is not feasible: Santosh Kumar Gangwar
- Moratorium may make your loan expensive but will protect your credit score
- Reliance looks at Nasdaq listing for Jio Platforms; IPO likely by 2021
- Reliance looks at Nasdaq listing for Jio Platforms; IPO likely by 2021
- S&P 500 clears 3,000 barrier on hopes of recovery, Covid-19 vaccine
Dr Lal Pathlabs Ltd.
|BSE: 539524||Sector: Health care|
|NSE: LALPATHLAB||ISIN Code: INE600L01024|
|BSE 00:00 | 26 May||1547.35||
|NSE 00:00 | 26 May||1547.45||
|Mkt Cap.(Rs cr)||12,896|
|Mkt Cap.(Rs cr)||12895.61|
Dr Lal Pathlabs Ltd. (LALPATHLAB) - Director Report
Company director report
Your Directors have pleasure in presenting the 25th AnnualReport on the business and operations of your Company along with the audited statement ofaccounts for the year ended March 31 2019.
The Financial performance of your Company for the year ended March 312019 is summarized below:
During the year under review the consolidated income of the Companyincreased to Rs.12493.67 million compared to Rs.10881.38 million in the previous yearregistering growth of 14.8%. Net profit after tax for the group increased to Rs.2004.67Million from Rs.1717.85 million representing a growth of 16.7%.
During the year under review the standalone income of the Companyincreased to Rs.12113.93 million compared to Rs.10555.56 million in the previous yearregistering growth of 14.8%. The standalone profit after tax for the year increased by16.2% to Rs.1954.38 million compared to Rs.1682.70 million in the previous year.
The consolidated financial statements of your Company for the FinancialYear 2018-19 are prepared in compliance with applicable provisions of the Companies Act2013 ('the Act") Accounting Standards and Listing Regulations as prescribed by theSecurities and Exchange Board of India (SEBI). The consolidated financial statements havebeen prepared on the basis of audited financial statements of the Company and itsSubsidiary Companies as approved by their respective Board of Directors.
During the Financial Year your Company declared and paid an interimdividend of Rs.2.50/- per equity share of face value of Rs.10/- each. In addition yourDirectors are pleased to recommend a dividend of Rs.3.50/- per equity share of face valueof Rs.10/- each as final dividend for the Financial Year 2018-19 for approval of theshareholders at the ensuing Annual General Meeting ("AGM") of the Company.
If approved by the members the total dividend for the Financial Yearshall be Rs.6/- per equity share of face value of Rs.10/- each.
The Dividend Distribution Policy of the Company is attached herewith asAnnexure 1 and forms an integral part of the Annual Report.
The said policy is also available at the website of the Company at:
https://www.lalpathlabs.com/pdf/brochures/Dividend Distribution Policymay.pdf
TRANSFER TO RESERVES
During the year under review no amount has been transferred to theGeneral Reserve of the Company.
AMALGAMATION OF DELTA RIA AND PATHOLOGY PRIVATE LIMITED
The Board of Directors of your Company in their meeting held on May 122017 approved a Scheme of Amalgamation of Delta Ria And Pathology Private Limited awholly owned subsidiary of the Company with the Company subject to requisite approvalsunder Section 230 to 232 of the Companies Act 2013.
The Scheme was sanctioned by the New Delhi and Ahmedabad Bench ofHon'ble National Company Law Tribunal (NCLT) on October 232018 and December 11 2018respectively.
The NCLT orders were filed with the Registrar of Companies NCT ofDelhi & Haryana on January 01 2019. (Being the effective date).
Pursuant thereto in accordance with the terms of the scheme Delta RiaAnd Pathology Private Limited was amalgamated with Dr. Lal PathLabs Limited w.e.f. April1 2017 (being the appointed date) and consequently stands dissolved without winding up.
The necessary accounting entries giving effect to the Scheme werepassed in the books of accounts of the Company.
CHANGES IN SHARE CAPITAL
Paid-up Share Capital
During the Financial Year 2018-19 the paid-up equity share capital ofthe Company has been increased from Rs.833327440/- to Rs.833416100/- pursuant toallotment of 8866 Equity Shares of Rs.10/- each under the Employee Stock Option Plan 2010of the Company.
Authorized Share Capital
During the Financial Year 2018-19 the Authorized Share Capital gotincreased from Rs.1079000000/- to Rs.1079500000/- by virtue of the NCLT orderpassed sanctioning the Scheme of Amalgamation of Delta Ria & Pathology Private Limitedwith the Company.
EMPLOYEES STOCK OPTION PLAN / SCHEME
During the year under review there has been no material change in theESOP-2010/ RSU-2016 Scheme(s) of the Company and these Schemes continue to be incompliance with relevant/applicable ESOP Regulations/clauses.
Further the details required to be provided under the SEBI (Share BasedEmployee Benefits) Regulations 2014 are disclosed on the website of the Company and canbe accessed at https://www.lalpathlabs.com/pdf/Information-as-per-SEBI-(SBEB)-Regulations-FY-19.pdf
A report on the performance and financial position of each of thesubsidiaries for the financial year ended March 31 2019 as per the Companies Act 2013 isset out in Annexure 2 and forms an integral part of this Annual Report.
The annual accounts of the subsidiaries shall also be made available tothe Members of the Company/Subsidiary Companies seeking such information at any point oftime. The annual accounts of the subsidiaries are also available for inspection for anyMember during business hours at the Registered Office of the Company and SubsidiaryCompanies and have also been uploaded on the website of the Company (www.lalpathlabs.com).
The Company has formulated a policy for determining materialsubsidiaries. The said policy is also available on the website of the Company athttps://www.lalpathlabs.com/pdf/Policy-for- determining-Material-Subsidiaries.pdf.
During the year under review Dr. Lal Ventures Private Limited andPathLabs Unifiers Private Limited were incorporated on December 10 and December 122018respectively as wholly owned subsidiaries of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report forms an integral part ofthis Annual Report and gives details of the overall industry structure developmentsperformance and state of affairs of the Company's business and other material developmentsduring the Financial Year.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report ('BRR') forms an integral part ofthis Annual Report. The BRR provides a detailed overview of initiatives taken by yourCompany from environmental social and governance perspectives.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
Material changes and commitments other than disclosed as part of thisreport affecting the financial position of the Company are set out in Note 49 and Note 44to the Standalone and Console Financial Statements respectively.
During the Financial Year 2018-19 your Company has not accepted anydeposit within the meaning of Sections 73 and 74 of the
Companies Act 2013 read together with the Companies (Acceptance ofDeposits) Rules 2014.
CORPORATE GOVERNANCE REPORT
In compliance with the provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate report on corporate governancealong with a certificate from the Practicing Company Secretary on its compliance forms anintegral part of this Annual Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided in theprescribed format and annexed herewith as Annexure 3 to this Report.
The statement containing particulars of employees as required underSection 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in aseparate annexure forming part of this report. Further the Report and the accounts arebeing sent to the members excluding the aforesaid annexure. In terms of Section 136 of theAct the said annexure is open for inspection at the Registered Office of the Companyduring the business hours till the date of the ensuing Annual General Meeting. Anyshareholder interested in obtaining a copy thereof may write to the Company Secretary ofthe Company.
The composition of Audit Committee has been detailed in the CorporateGovernance Report forming part of this Annual Report.
All recommendations made by the Audit Committee have been accepted bythe Board of Directors.
I. Retirement by rotation and subsequent re-appointment:
Mr. Rahul Sharma (DIN: 00956625) Non-Executive Director of the Companyis liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section152 of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 and being eligible offers himself for reappointment. Appropriateresolution for his re-appointment is being placed for the approval of the shareholders ofthe Company at the ensuing AGM. A Brief profile of Mr. Rahul Sharma and other relatedinformation has been detailed in the Notice convening the 25th AGM of yourCompany.
(1) Ms. Somya Satsangi (DIN: 07275574) was appointed as an AdditionalDirector (Independent) for a period of 3 Years w.e.f February 8 2019.
(2) Dr. Archana Lal Erdmann (DIN: 08432506) was appointed as anAdditional Director (Non-Executive) liable to retire by rotation w.e.f. May 17 2019.
According to the provisions of Section 161 of the Companies Act 2013additional directors shall hold office upto the date of the ensuing Annual GeneralMeeting.
The Board considers their appointment in the interest of the Companyand hence recommended the same to the shareholders for approval.
Brief resume/details regarding Director proposed to be reappointed asabove are furnished in the Notice of the AGM.
Mr. Arun Duggal resigned as an Independent Director with effect fromMarch 1 2019.
The Board places on record its appreciation for the services renderedby him during his association with the Company.
Declaration of Independence from Independent Directors
Your Company has received declarations from all the IndependentDirectors (Including Ms. Somya Satsangi) confirming that they meet the criteria ofindependence as prescribed under the provisions of Companies Act 2013 read with theSchedules and Rules issued thereunder as well as SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
In the opinion of the Board Independent Directors fulfill theconditions specified in Companies Act 2013 read with the Schedules and Rules issuedthereunder as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and are independent from Management.
KEY MANAGERIAL PERSONNEL
During the year under review Mr. Dilip Bidani resigned as the ChiefFinancial Officer of the Company and in his position Mr. Ved Prakash Goel was appointed asthe Chief Financial Officer w.e.f August 10 2018.
In accordance with the provisions of Sections 2(51) 203 of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the following are the Key Managerial Personnel of the Company ason March 31 2019
1. (Hony) Brig. Dr. Arvind Lal - Chairman and Managing Director
2. Dr. Om Prakash Manchanda - CEO and Whole Time Director
3. Dr. Vandana Lal - Whole Time Director
4. Mr. Ved Prakash Goel - Chief Financial Officer; and
5. Mr. Rajat Kalra - Company Secretary and Legal Head
ANNUAL EVALUATION OF BOARD'S PERFORMANCE:
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried outannual evaluation of (i) its own performance; (ii) Individual Directors Performance; and(iii) Performance of all committees of Board for the Financial Year 2018-19.
A structured questionnaire was prepared after taking into considerationthe inputs received from Nomination and Remuneration Committee covering various aspectsof the Board's functioning such as adequacy of the composition of the Board and itsCommittees Board culture execution and performance of specific duties obligations andgovernance. A separate exercise was carried out to evaluate the performance of individualDirectors who were evaluated on parameters such as level of engagement and contributionindependence of judgment safeguarding the interest of the Company and its minorityshareholders etc. The performance evaluation of the Independent Directors was carried outby the entire Board. The performance evaluation of the Non - Independent Directors wascarried out by the Independent Directors.
The Directors expressed their satisfaction with the evaluation process.
In compliance with the provision of Section 178 of the Companies Act2019 the Board has on the recommendation of the Nomination & Remuneration Committeeof the Company framed a policy for selection and appointment of Directors Key ManagerialPersonnel Senior Management and their remuneration.
The Nomination and Remuneration Policy is set out as Annexure 4 andforms an integral part of this Annual Report and can also be accessed at the website ofthe Company at the following web link:
https://www.lalpathlabs.com/pdf/brochures/Nomination and RemunerationPolicy may.pdf
NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES & DETAILS OFATTENDANCE
The details of the meetings of the Board of Directors and itsCommittees and attendance by Directors/Members convened during the Financial Year 2018-19are given in the Corporate Governance Report which forms an integral part of this AnnualReport.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directorsconfirm that:
a) in the preparation of the annual accounts for the Financial Yearended March 31 2019 the applicable accounting standards and Schedule III of theCompanies Act 2013 have been followed and there are no material departures from thesame;
b) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of your Company as at March 31 2019and of the profit and loss of the Company for the Financial Year ended March 31 2019;
c) proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the annual accounts have been prepared on a 'going concern' basis;
e) proper internal financial controls laid down by the Directors werefollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
AUDITORS AND AUDITORS' REPORT
I. Statutory Auditors
The shareholders at the 23rd AGM approved the appointmentof M/s. Deloitte Haskins & Sells LLP Chartered Accountants (Firm Registration No.117366W/W - 100018) as the Statutory Auditors for a period of five (5) years i.e. fromthe conclusion of the 23rd AGM till the conclusion of 28th AGM ofthe Company subject to ratification of appointment by the shareholders at every AnnualGeneral Meeting.
However pursuant to the notification dated May 07 2018 issued by theMinistry of Corporate Affairs the requirement for ratification of Statutory Auditors atevery Annual General Meeting has been done away with.
Accordingly M/s. Deloitte Haskins & Sells LLP CharteredAccountants shall continue as the Statutory Auditors of the Company till the conclusion of28th AGM in terms of the shareholders resolution dated July 20 2017 passed atthe 23rd AGM.
The Statutory Auditors of the Company have not reported any fraud asspecified under the second proviso of Section 143(12) of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force).
The Auditors' Report for the Financial Year ended March 31 2019 doesnot contain any qualification reservation or adverse remark.
Further the Auditors' Report being self-explanatory does not call forany further comments from the Board of Directors.
II. Maintenance of cost Records and Cost Auditors
In terms of the Section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 the Company is required to maintain costaccounting records and get them audited every year. Accordingly such accounts and recordswere made and maintained.
The Board of Directors on the basis of recommendations from AuditCommittee has appointed M/s A.G. Agarwal & Associates Cost Accountants as costauditors of the Company for the Financial Year 2019-20 at a fee of Rs.60000 (Rupees SixtyThousand only) plus applicable taxes and out of pocket expenses subject to theratification of the said fees by the shareholders at the ensuing AGM.
III. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 your Company had appointed M/s PDS & Co. Company Secretaries ("SecretarialAuditors") to conduct the Secretarial Audit of your Company for the Financial Year2018-19.
The Secretarial Audit Report for the Financial Year ended March 312019 is annexed herewith as Annexure 5 and forms an integral part of this Annual Report.The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return of the Company as on March 31 2019 inForm MGT- 9 in accordance with Section 92(3) of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 is available on the website of theCompany at https://www.lalpathlabs.com/pdf/Extract of Annual Return-MGT-9-FY%202018-197july2019.pdf and is set out herewith as Annexure 6 and forms an integral part of thisAnnual Report.
RELATED PARTY TRANSACTIONS
In compliance with the requirements of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasformulated a Policy on Related Party Transactions which is also available on Company'swebsite at https:// www.lalpathlabs.com/pdf/Policv-on-Related-Partv-Transactions.pdf.
The Policy intends to ensure that proper reporting approval anddisclosure processes are in place for all transactions between the Company and RelatedParties. All Related Party Transactions are placed before the Audit Committee for reviewand approval. Prior omnibus approval is obtained for Related Party Transactions fortransactions which are of repetitive nature and / or entered in the Ordinary Course ofBusiness and are at Arm's Length.
All related party transaction entered during the year were in OrdinaryCourse of the Business and on Arm's Length basis. No Material Related Party Transactionsi.e. transactions exceeding ten percent of the annual consolidated turnover as per thelast audited financial statements were entered during the year by your Company.Accordingly the disclosure of Related Party Transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable.
LOANS AND INVESTMENTS
Details of Loans Guarantees given and Investments made by the Companyduring Financial Year 2018-19 within the meaning of Section 186 of the Companies Act 2013read with the Companies (Meetings of Board and its Powers) Rules 2014 and Schedule V ofthe SEBI Listing Regulation are set out in Note 48 to the Standalone Financial Statementsof the Company.
Your Company recognizes that risk is an integral part of business andis committed to managing the risks in a proactive and efficient manner. Your Companyperiodically assesses risk elements in the internal and external environment along withthe cost of treating such risk elements and incorporates risk treatment plans in itsstrategy business and operational plans. As on the date of this report the Company doesnot foresee any critical risk which threatens its existence.
Your Company through its risk management policy strives to containimpact and likelihood of the risks within the risk appetite as agreed from time to timewith the Board of Directors. The Company has a Risk Management Committee to identifyelements of risk in different areas of operations; the details of the Risk ManagementCommittee are included in the Corporate Governance Report.
Your Company has a Vigil Mechanism in place as required under Section177 of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015. No matter was reported during the year under review. Moredetails in this regard have been outlined in the Corporate Governance Report annexed tothis report and are also available under Investor Section on the Company's web-site(www.lalpathlabs.com).
CORPORATE SOCIAL RESPONSIBILITY
For your Company Corporate Social Responsibility (CSR) means theintegration of social environmental and economic concerns in its business operations. CSRinvolves operating Company's business in a manner that meets or exceeds the ethicallegal commercial and public expectations that society has of businesses. In alignmentwith vision of the Company through its CSR initiative your Company will enhance valuecreation in the society through its services conduct and initiatives so as to promotesustained growth for the society.
The Board of Directors of your Company has further formulated andadopted a policy on Corporate Social Responsibility which can be accessed at our websiteat https://www.lalpathlabs.com/pdf/ brochures/CSR-Policy.pdf.
The CSR Policy of your Company outlines the Company's philosophy forundertaking socially useful programs through the creation of a CSR Trust for welfare andsustainable development of the community at large as part of its duties as a responsiblecorporate citizen. During the year under review there has been no change in the policy.
The composition of CSR committee and disclosure as per Rule 8 of theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure 7and forms an integral part of this Annual Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in compliancewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment.
The Company has complied with the provisions relating to theconstitution of Internal Complaints Committee as specified under the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company conducts sessions for employees to build awareness amongstemployees about the Policy and the provisions of Prevention of Sexual Harassment of Womenat Workplace Act.
During the period under review 6 (Six) complaints were received by theICC and the same were disposed off.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134 of the Companies Act2013 read with the Companies (Accounts) Rules 2014 is set out hereunder:
I. Conservation of energy and Technology Absorption
Maintaining power factor (PF) up to .99 (unity). Maintaining upto- 0.9994.
Recycling of RO waste water and treated lab waste as part ofwater conservation.
Post reports of energy Audit of Lab chiller load is directed totwo of the more efficient chillers.
Descaling done of chillers to improve efficiency and retuned theevaporator pressure drop and condenser water flow to maximize efficiency of chillers.
Replaced cooling tower fills and eliminator to improveefficiency of cooling tower.
Reduction in number of chillers operational during off peakhours and switching on only cooling water pump to maintain set temperature.
Installing split AC in areas which are operating extended hoursto avoid the running of entire floor AHU.
All utilities functions are operated during off peak hours thisgives advantage of off peak hours Tariff rebate extended by NDPL.
Optimizing operations of two elevators during peak and off time.
During winters when the load demand is reduced we proactivelyshut down one of the transformer alternately to save transformer loss.
LED lights change from conventional lights for energy savingexercise.
Installed 50KW Solar Rooftop power plant system for generationof natural energy saving.
Additional 50KW Solar Rooftop power plant system for generationof natural energy saving planned for installation this year for both the reference labs atRohini (NRL) and Kolkata (KRL).
Replaced the existing cold room unit by energy efficient units.
Kolkata reference laboratory(KRL) received the "LEED 2009GOLD certification" for Leadership in Energy and Environmental Design (LEED). LEED isa third party verification system for green buildings developed by the U.S. Green BuildingCouncil (USGBC). The certification covers all phases of development from design andconstruction operations and maintenance to significant retrofits.
II. Foreign exchange earnings and outgo
INTERNAL FINANCIAL CONTROLS
Your Company has in place an adequate internal financial controlframework with reference to financial and operating controls thereby ensuring orderly andefficient conduct of its business including adherence to the Company's policiessafeguarding of its assets prevention and detection of frauds and errors accuracy andcompleteness of accounting records and timely preparation of reliable financialinformation.
During Financial Year 2018-19 such controls were tested and noreportable material weakness in the design or operation was observed.
The Directors have in the Directors Responsibility Statement confirmedthe same to this effect.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators orCourts or Tribunals impacting the going concern status of your Company and its operationsin future.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company has duly complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) andshareholders (SS-2).
Your Directors wish to convey their gratitude and place on record theirappreciation for all the employees at all levels for their hard work solidaritycooperation and dedication during the year. Your Directors sincerely convey theirappreciation to customers shareholders vendors bankers business associates regulatoryand government authorities for their continued support.
Annexure - 1
Policy on Dividend Distribution
Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("Regulations")notified on July 08 2016 provides for top five hundred listed entities based on marketcapitalization (calculated as on March 31 of every financial year) to formulate a dividenddistribution policy.
Considering that the Company is amongst the top 500 listed entitiesbased on Market Capitalization as on 31st March 2016 the Board of Directors ofDr. Lal PathLabs Limited ("Company") have adopted this policy on DividendDistribution.
2. Objectives & Scope
This Policy lays downs the broad framework which will act as a guidingprinciple for the purpose of declaring or recommending dividend during or for anyfinancial year by the Company.
Through this policy the Company shall endeavour to bring a transparentand consistent approach to its dividend pay-out plans.
The Policy however is not an alternative to the decision makingprocess of the Board for recommending Dividend and the Board may take into considerationother factors as well in addition to the ones enumerated in this policy.
3.2. "Applicable Laws" shall mean the Companies Act 2013 andRules made thereunder the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015; as amended from time to time and such otheract rules or regulations which provides for the distribution of dividend.
3.3. "Company" shall mean Dr. Lal PathLabs Limited.
3.4. "Board" or "Board of Directors" shall meanBoard of Directors of the Company.
3.5. "Dividend" shall mean Dividend as defined underCompanies Act 2013.
3.6. "Policy or this Policy" shall mean the Policy onDividend Distribution.
3.7. "SEBI Regulations" shall mean the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 together with the circulars issued thereunder including any statutorymodification(s) or re-enactment(s) thereof for the time being in force.
4. Parameters for declaration of Dividend
In line with the philosophy stated above the Board of Directors shallconsider the following parameters for declaration of dividend:
4.1 Financial Parameters
> Consolidated Net operating profit after tax;
> Working Capital requirements;
> Capital expenditure requirements;
> Likelihood of crystallization of contingent liabilities if any;
> Resources required to fund acquisition of brands/ business(es);
> Cash flow required to meet contingencies;
> Outstanding borrowings;
4.2 Internal Factors
> Potential opportunities available for growth/expansion
> Past Dividend Trends;
> Expectation of major shareholders;
> Prudential requirements for cash conservation
4.3 External Factors
> Prevailing legal requirements regulatory conditions orrestrictions laid down under applicable laws including tax laws;
> Dividend Pay-out ratios of companies in similar industries
> Economic Environment
Post consideration of the above factors the Board shall take aninformed decision about the dividend pay-out ratio and shall strive to maintain the samein the range of 10%-50% of the Profit after Tax (PAT) on Standalone Financials for theconcerned Financial Year.
5. Circumstances under which the shareholders may or may not expectdividend:
The Shareholders of the Company may expect dividend only if the Companyis having surplus funds after providing for all expenses depreciation other non-cashcharges etc. and complying all other statutory requirements of the Applicable Law.
The Board shall consider the factors mentioned under Clause 4 above andbefore determination of any dividend payout analyze the prospective opportunities andthreats viability of the option of dividend payout or retention etc. The Board shall notrecommend dividend if they are of the opinion that it is financially not prudent to do so.
6. Utilization of retained earnings
The Board may retain its earnings in order to make better use of theavailable funds and increase the value of the stakeholders in the long run. The decisionof utilization of the retained earnings of the Company shall be based on the followingfactors:
> Market expansion plan;
> Product/Service expansion plan;
> Modernization plan;
> Diversification of business;
> Long term strategic plans;
> Replacement of capital assets;
> Where the cost of debt is expensive;
> Such other criteria as the Board may deem fit from time to time.
7. Provision with regard to various classes of shares
The holders of the equity shares of the Company as on the record dateare entitled to receive dividends. Since the Company has issued only one class of equityshares with equal voting rights all the members of the Company shall be entitled toreceive the same amount of dividend per share. The policy shall be suitably revisited atthe time of issuance of any new class of shares depending upon the nature and guidelinesprevailing thereon.
> The Board of Directors may review or amend this policy in wholeor in part from time to time as it may deem fit.
> In case of any amendment(s) issued by the relevant authoritiesnot being consistent with the provisions laid down under this Policy then suchamendment(s) shall be treated as part of this Policy and this Policy shall stand amendedaccordingly from the effective date as laid down under such amendment(s).
> In case of any clarification(s) circular(s) etc. issued by therelevant authorities not being consistent with the provisions laid down under thisPolicy then this Policy shall be read along with such clarification(s) circular(s) soissued from the effective date as laid down under such clarification(s) circular(s)etc.
The Company shall disclose this policy in its Annual Report &website.
Annexure - 2
(Pursuant to first proviso to sub-section (3) of Section 129 read withrule 5 of Companies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries / associate companies / joint ventures
* Functional Currency is EUR
** Functional Currency is NPR
*** Functional Currency is BDT Notes:
a. Dr. Lai PathLabs International B.V. incorporated on March 202014is yet to commence its operations. No Investments have been made by the Company.
b. The Board of Directors in their meeting held on 12 May 2017approved the "Scheme of Amalgamation" of Delta Ria and Pathology Private Limited(Transferor Company) a wholly owned subsidiary with the Company (Transferee Company)w.e.f. 1 April 2017 (the appointed date). As per the said scheme the undertaking of thetransferor company shall stand transferred to and vested in the transferee Company on agoing concern basis without any further act deed of matter.
The Scheme envisages transfer of all properties rights assetsinterests and claims of the Transferor Company to the Transferee Company. Pursuant to thescheme coming into effect w.e.f. January 12019 all the equity shares held by theTransferee Company in Transferor Company stand automatically cancelled.
The amalgamation has been accounted for under section 133 of theCompanies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules2014.The difference between the carrying value of investments in the books of theTransferee Company and the amount of the net assets of Transferor Company has beenadjusted in Capital Reserve as per the scheme. The impact of the amalagamation has beengiven from the date on which the Transferee Company obtained the control of the TransferorCompany i.e. 21 December 2016 in accordance with the pooling of interests methodprescribed under Ind AS 103 Business Combinations.
c. The reporting period for all the subsidiaries is March 312019.
Annexure - 3
Disclosures pertaining to remuneration under Section 197(12) of the Actread with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 for the year ended March 31 2019.
A. The ratio of the remuneration paid to each director during the yearto the median remuneration of the employees of the Company for the Financial Year:
"Does not include a non-cash (stock related) perk ofRs.17460700/- on exercise of Stock options.
"Mr. Arun Duggal resigned from the Board w.e.f. March 1 2019
*** Ms. Somya Satsangi was appointed on the Board w.e.f. February 82019
B. The percentage increase in remuneration of each Director ChiefFinancial Officer Chief Executive Officer Company Secretary or Manager in the FinancialYear:
"Mr. Rahul Sharma was not entitled to any remuneration for theFinancial Year 2017-18.
**Ms. Somya Satsangi was appointed on the Board w.e.f February 8 2019.
"""Mr. Dilip Bidani resigned as the Chief FinancialOfficer on August 10 2018.
""""Mr. Ved Prakash Goel was appointed as ChiefFinancial Officer w.e.f August 102018.
C. Percentage increase in the median remuneration of employees in theFinancial Year:
The average percentage increase in the median remuneration of employeesin the Financial Year is 18.03.
D. Number of permanent employees on the rolls of the Company:
The number of permanent employees on the rolls of the Company as ofMarch 31 2019 is 3941.
E. Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last Financial Year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration:
F. Affirmation that the remuneration is as per the Remuneration Policyof the Company:
It is hereby confirmed that the remuneration is as per the Nominationand Remuneration Policy of the Company.
Annexure - 4
Nomination And Remuneration Policy
In terms of Section 178 of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 this policy onnomination and remuneration of Directors Key Managerial Personnel (KMP) SeniorManagement and other employees of the Company has been formulated by the Board ofDirectors on the recommendation of Nomination and Remuneration Committee of the Company.This policy shall act as a guideline for determining inter-alia qualifications positiveattributes and independence of a Director matters relating to the remunerationappointment removal and evaluation of performance of the Directors Key ManagerialPersonnel Senior Management and other employees.
2. Policy Objective
a. To lay down criteria for identifying persons who are qualified tobecome Directors and who may be appointed in Key Managerial and Senior Managementpositions and to recommend to the Board their appointment and removal.
b. To lay down criteria to carry out evaluation of every Director's/KMP/Senior Management Personnel and other employees performance.
c. To formulate criteria for determining qualification positiveattributes and Independence of a Director.
d. To recommend to the Board a policy relating to remuneration ofdirectors key managerial personnel and other employees. While recommending such policythe Nomination and Remuneration Committee shall ensure:
i. The level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors of the quality required to run theCompany successfully.
ii. Relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.
iii. Remuneration of Directors Key Managerial Personnel and SeniorManagement involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.
e. To formulate a Board Diversity Policy.
f. To recommend to the Board all remuneration in whatever formpayable to Senior Management
a. "Board of Directors" means the "Board ofDirectors" of Dr. Lal PathLabs Limited as constituted from time to time.
b. "Company" means Dr. Lal PathLabs Limited.
c. "Independent Director" means a Director of the Companynot being a Managing or Whole-Time Director or a Nominee Director and who is neither aPromoter nor belongs to the Promoter Group of the Company and who satisfies the criteriaof independence as prescribed under the provisions of the Companies Act 2013 (includingthe rules prescribed thereunder) and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
d. "Key Managerial Personnel" or KMP means key managerialpersonnel as defined under the Companies Act 2013 & in relation to the Companymeans:-
I. Chief Executive Officer or the Managing Director or the Manager;
II. Company Secretary;
III. Whole Time Director;
IV. Chief Financial Officer; and
V. Such other officer as may be prescribed
e. "Nomination & Remuneration Committee" means"Nomination & Remuneration Committee" constituted by the Board of Directorsof the Company from time to time under the provisions of the Companies Act 2013 (includingthe rules prescribed thereunder) and the Listing Obligations and Disclosure Requirementswith the Stock Exchanges.
f. "Other employees" means all the employees other thanDirectors KMPs and the Senior Management Personnel.
g. "Policy" means the Nomination & Remuneration Policy.
"Senior Management Personnel" means the personnel of theCompany who are members of its core management team excluding Board of Directorscomprising of all members of management one level below the Chief ExecutiveOfficer/Managing Director/Whole Time Director (including chief executive office in casehe is not part of the board) and shall specifically include company secretary and chieffinancial officer).
a. The Board shall determine the membership of the Nomination &Remuneration Committee.
b. The Committee shall comprise of at least three nonexecutivedirectors of which not less than one-half shall be independent directors.
c. Chairman of the committee shall be an Independent Director.
d. The Company Secretary shall act as Secretary to the committee.
This policy is divided into three parts:
5.1 Appointment & Removal
a. Criteria for identifying persons who are qualified to be appointedas a Director / KMP / Senior Management Personnel / Other Employees of the Company:
i. The Committee shall consider the ethical standards of integrity andprobity qualification expertise and experience of the person for appointment asDirector KMP or at Senior Management level and accordingly recommend to the Board his /her appointment.
ii. The Committee should ensure that the person so appointed asDirector/ Independent Director/ KMP/
Senior Management Personnel shall not be disqualified under theCompanies Act 2013 rules made thereunder Listing Agreement or any other applicableenactment for the time being in force.
iii. The Director/ Independent Director/ KMP/ Senior ManagementPersonnel shall be appointed as per the procedure laid down under the provisions of theCompanies Act 2013 rules made thereunder Listing Agreement or any other applicableenactment for the time being in force.
iv. The other employees shall be appointed and removed as per thepolicy and procedure of the Company.
b. Term / Tenure:
The Term / Tenure of the Directors shall be governed as per provisionsof the Companies Act 2013 and rules made thereunder and Listing agreement as amended fromtime to time.
The Term/Tenure of the KMP's/Senior Management Personnel and otheremployees shall be as per the companies prevailing policy.
Due to reasons for any disqualification mentioned in the Companies Act2013 rules made thereunder or under any other applicable Act rules and regulations orany other reasonable ground the Committee may recommend to the Board for removal of aDirector KMP or a Senior Management Personnel.
The removal of other employees shall be as per the Company's prevailingpolicy.
The director KMP senior management personnel & other employeesshall retire as per the relevant provisions of the Companies Act 2013 along with therules made thereunder and the prevailing policy of the Company as may be applicable.
The BOD however will have the discretion to retain subject toregulatory approval if applicable the Director KMP Senior Management Personnel in thesame position/remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.
The level and composition of remuneration to be paid to the ManagingDirector Whole-Time Director(s) Non-Executive Director(s) KMP's Senior ManagementPersonnel and other employees shall be reasonable and sufficient to attract retain andmotivate directors KMP's Senior Management and other employees of the quality requiredto run the company successfully. The relationship of remuneration to performance should beclear and meet appropriate performance benchmarks. The remuneration should also involve abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the company and its goals.
1. Whole Time Director(s)/ Managing Director
The Whole Time Director(s)/ Managing Director shall be eligible forremuneration as may be approved by the Shareholders of the Company on the recommendationof the Committee and the Board of Directors. The breakup of the pay scale performancebonus and quantum of perquisites shall be decided and approved by the Board on therecommendation of the Committee and shall be within the overall remuneration approved bythe shareholders and Central Government wherever required.
While recommending the remuneration payable to Whole Time Director(s)/Managing Director the Nomination and Remuneration Committee shall inter alia haveregard to the following matters:
Financial and operating performance of the Company
Relationship between remuneration and performance
Industry/ sector trends for the remuneration paid to executivedirectorate
Annual Increments to the Whole Time Director(s)/ Managing Directorshall be within the slabs approved by the Shareholders. Increments shall be recommended bythe Nomination and Remuneration Committee to the Board of Directors at times it desires todo so but preferably on an annual basis.
2. Non-Executive / Independent Directors
i) Remuneration / Commission:
The remuneration / commission shall be fixed as per the slabs andconditions mentioned in the Articles of Association of the Company and the Act.
ii) Sitting Fee:
The Non- Executive / Independent Directors may receive remuneration byway of fees for attending meetings of Board or Committee thereof. Provided that the amountof such fees shall not exceed Rupees One Lakh per meeting of the Board or Committee orsuch amount as may be prescribed by the Central Government from time to time.
Commission may be paid within the monetary limit approved byshareholders subject to the limit not exceeding 1% of the profits of the Company computedas per the applicable provisions of the Act.
iv) Stock Options:
An Independent Director shall not be entitled to any stock option ofthe Company.
3. Senior Management Personnel / KMPs
The Remuneration to be paid to Senior Management Personnel / KMP'sshall be based on the experience qualification expertise of the related personnel aswell as the prevailing market conditions and shall be decided by the Board on therecommendation of Nomination and Remuneration Committee and consonance with the limits ifany prescribed under the Companies Act 2013 and rules made thereunder or any otherapplicable enactment for the time being in force.
4. Other Employees
The power to decide structure of remuneration for other employees hasbeen delegated to the CEO & Whole Time Director of the Company who shall decide thesame in consultation with the Chief Human Resource Officer of the Company.
1. Criteria for evaluation of Directors:
As members of the Board the performance of the individual Directors aswell as the performance of the entire Board and its Committees is required to be formallyevaluated annually.
In developing the methodology to be used for evaluation on the basisof best standards and methods meeting international parameters the Board may considertaking the advice of an Independent Professional Consultant.
2. Criteria for evaluating performance of Key Managerial Personnel andSenior Management Personnel:
The performance evaluation of KMP's and Senior Management Personnelshall be done by their respective reporting heads based on the KRA's given to them at thebeginning of the year.
3. Criteria for evaluating performance of Other Employees:
The performance evaluation of other employees shall be done as perCompany's Policy.
This Policy shall be disclosed on the website of the Company.
The Board of Directors may review or amend this policy in whole or inpart from time to time after taking into account the recommendations from the Nomination& Remuneration Committee.