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Lotus Eye Hospital & Institute Ltd.

BSE: 532998 Sector: Health care
NSE: LOTUSEYE ISIN Code: INE947I01017
BSE LIVE 15:40 | 07 Aug 34.70 -0.10
(-0.29%)
OPEN

34.50

HIGH

35.20

LOW

34.50

NSE 15:48 | 07 Aug 34.95 0.35
(1.01%)
OPEN

34.95

HIGH

35.90

LOW

32.95

OPEN 34.50
PREVIOUS CLOSE 34.80
VOLUME 6577
52-Week high 42.65
52-Week low 14.50
P/E 108.44
Mkt Cap.(Rs cr) 72
Buy Price 34.70
Buy Qty 304.00
Sell Price 0.00
Sell Qty 0.00
OPEN 34.50
CLOSE 34.80
VOLUME 6577
52-Week high 42.65
52-Week low 14.50
P/E 108.44
Mkt Cap.(Rs cr) 72
Buy Price 34.70
Buy Qty 304.00
Sell Price 0.00
Sell Qty 0.00

Lotus Eye Hospital & Institute Ltd. (LOTUSEYE) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 19th Annual Report of yourCompany together with the Audited Accounts for the year ended 31st March 2016.

FINANCIAL RESULTS

(Rs. in Lakhs)
Particulars 31.03.2016 31.03.2015
(Current year) (Previous year)
Income from Operations and other income 3170.58 3033.22
Less : Expenses 3172.63 3255.65
Profit/(Loss) before Tax (2.05) (222.43)
Less : Provision for Taxes:
Current Tax - -
Deferred Tax (12.13) (24.35)
Profit/(Loss) after tax 10.08 (198.08)

REVIEW OF OPERATIONS AND PERFORMANCE:

Your company has reported a growth of 4.53 % on turnover of Rs. 3170.58 Lakhs duringthe financial year 2015-16 compared to the turnover of Rs. 3033.22 Lakhs in the previousfinancial year 2014-15. Your Company has reported a growth of 105.09 % on net profit ofRs.10.08 Lakhs during the financial year 2015-16 against a net loss of Rs.198.08 Lakhsduring the previous financial year 2014-15.

Your Directors are putting consistent effort to increase the turnover and net profit sothat the Company can meet the expectations of the stakeholders.

DIVIDEND:

Due to inadequate profits your Directors do not recommend any dividend for the yearunder review.

SHARE CAPITAL:

The Paid up equity share capital as on 31st March 2016 was Rs. 2079.63Lakhs. During the year under review the Company has not issued any shares to theShareholders. The company has neither issued shares with differential voting rights norgranted stock options or sweat equity shares.

FINANCE:

Cash and cash equivalents as at 31st March 2016 was Rs. 247.37 Lakhs. TheCompany continues to focus on judicious management of its working capital receivablesinventories and other working capital parameters which are kept under strict check throughcontinuous monitoring.

TRANSFER TO RESERVE:

Consequence to inadequate profits your company has not transferred any amount toreserve.

DEPOSITS:

During the year under review your company has not accepted any deposits from publiccovered under Sections 73 to 76 or any other relevant provisions of the Act and rulesframed there under.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

During the year under review your Company has not given any loans or guaranteescovered under the provisions of section 186 of the Companies Act 2013.

The detail of the investments made by the company is given in the notes to thefinancial statements.

OUTLOOK FOR THE CURRENT YEAR:

Your company will establish infrastructure facilities for separate super-specialty forCornea and Retina at Peelamedu Main Hospital Coimbatore.

Your Company is planning to establish the new centre at Gobichettipalayam ErodeDistrict.

Your Company is also planning to establish another branch in Tirupur in couple ofyears.

CORPORATE SOCIAL RESPONSIBILITIES:

Your company does not falls under the category to comply with Corporate SocialResponsibility as required under Section 135 of the Companies Act 2013 and Rules madethere under. Hence it is not applicable.

DIRECTORS:

Appointment:

Pursuant to the provision of sections 196 197 and 203 read with Schedule V and allother applicable provisions if any of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (including anystatutory modification(s) or re-enactment thereof for the time being in force) themembers of the Company approved the appointment of Ms. Sangeetha Sundaramoorthy (DIN:01859252) as Whole Time Director of the Company for a period of 5 years with effectfrom 1st August 2014 liable to retire by rotation.

Further Dr. Kavetha Sundaramoorthy was appointed as an Additional Director by theBoard of the Company in their meeting held on 30th May 2016. As required bysection 160 of the Act a notice in writing has been received from a shareholder alongwith a deposit of Rs. 100000 proposing her candidature for the office of Directorliable to retire by rotation. The said appointment is subject to approval of the membersat the ensuing Annual General Meeting.

Directors retiring by rotation:

Ms. Sangeetha Sundaramoorthy (DIN: 01859252) Whole-Time Director of the Companyretires by rotation at the forthcoming Annual General Meeting and being eligible offerherself for re-appointment.

Information regarding the Directors seeking appointment/ re-appointment:

Resume and other information regarding the Directors seeking appointment/re-appointmentas required by Regulation 36 of the SEBI (LODR) Regulations 2015 has been given in theNotice convening the ensuing Annual General Meeting and in the Statement pursuant toSection 102 of the Act.

Declaration by Independent Directors:

All Independent Directors have given declaration that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and regulation16(b) of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015.

Familiarisation Programme:

Your Company is yet to adopt the policy on Familiarization programme of IndependentDirectors. However at the time of the appointment of an Independent Director the Companyissues a formal letter of appointment outlining his/her role function duties andresponsibilities and further familiarizes with the activities of the Company on continualbasis. The format of letter of appointment is available on the website of the Company(http://www.lotuseye.org/team.php )

Statutory Disclosure:

None of the Directors of the Company are disqualified as per the applicable provisionsof the Act. However Dr. Kavetha Sundaramoorthy (DIN: 02050806) Director vacatedthe office of Director of the Company with effect from 15.02.2016 due to not attending anyboard meetings held during the last twelve months.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Board has carried out an evaluation of itsown performance the Directors individually as well as the evaluation of the working ofits Audit Committee and Nomination and Remuneration Committee.

The criteria for performance evaluation are as under:

Performance Evaluation of Board:

Key Parameters: Degree of fulfillment of key responsibilities; Board structure andcomposition; Establishment and delineation of responsibilities to Committees;Effectiveness of Board processes information and functioning; Board Culture and Dynamics;Quality of relationship between the Board and the Management; Efficacy of communicationwith external stakeholders etc.

Self Assessment of the Performance by Individual Directors (including IndependentDirector):

Key Parameters: Attendance at meetings; contribution at meetings; independence ofjudgment; direction/guidance to senior Management etc.

Self Assessment of the Performance by the Board Level Committees:

Key Parameters: Degree of fulfillment of key responsibilities; Adequacy ofCommittee Composition; Effectiveness of meetings; Committee dynamics; Quality ofrelationship of the committee with the Board and the Management etc.

The Directors have expressed their satisfaction with the evaluation process.

REMUNERATION POLICY:

The Policy on Board Diversity and Nomination & Remuneration Policy as recommendedby the Nomination & Remuneration Committee have been approved by the Board ofDirectors. The said policies are annexed to the Board's Report as "Annexure-IV"and are also available on the Company's website at the following link:http://www.lotuseye.org/corporate.php

MEETINGS:

During the year four Board Meetings four Audit Committee Meetings and one Nominationand Remuneration Committee Meeting were convened and held. The details of which are givenin the Corporate Governance Report. The intervening gap between the Meetings was withinthe period prescribed under the Companies Act 2013.

COMMITTEES OF THE BOARD:

Currently the Company has three Committees i.e. Audit Committee Nomination andRemuneration Committee and Stakeholders' Relationship Committee. All the committees areIndependent under the Chairmanship of an Independent Director. The details of thecompositions terms of reference meetings etc. of said Committees are given in theReport on Corporate Governance which forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act 2013 the Directors would like tostate that:

I. In the preparation of the annual accounts the applicable accounting standards havebeen followed.

II. Appropriate accounting policies have been selected and applied consistently andjudgments and estimates that have been made are reasonable and prudent so as to give atrue and fair view of the company at the end of the financial year and of the company forthat period.

III. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities.

IV. Annual accounts have been prepared on going concern basis.

V. Internal financial controls to be followed by the company and that such internalfinancial control are adequate and were operating effectively.

VI. Devised proper system to ensure compliance with the provisions of all applicablelaws and that such system were adequate and operating effectively.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large. Accordingly no transactions are being reported in FormAOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts)Rules 2014.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status and Company's operations in future.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary company.

CHANGE IN NATURE OF BUSINESS IF ANY:

During the year under review there is no change in nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe Financial Statements relate and date of the report.

CODE OF CONDUCT:

The Board of Directors have approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings/behaviors of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofconduct" which forms an Appendix to the Code. The Code has been posted on theCompany's website http://www.lotuseye.org/corporate.php

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.

KEY MANAGERIAL PERSONNEL

The details of the Key Managerial Personnel of the Company their appointment/cessationduring the year under review and remuneration are given in the Extract of Annual Returnannexed hereto and forming a part of this Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Your Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behaviour.

Your Company is committed to developing a culture where it is safe for any WhistleBlower to raise concerns about any poor or unacceptable practice and any event ofmisconduct. The alleged misconduct may be classified in many ways; namely violation of alaw rule regulation and/or a direct threat to public interest such as health and safetyviolations and corruption.

Your Company will not tolerate any form of victimization and will take appropriatesteps to protect a bona fide whistle blower and shall treat any retaliation as a seriousdisciplinary offence that merits disciplinary action. The Company will

protect the identity of the whistle blower if so desired provided that the whistleblower will need to attend any disciplinary hearing or proceedings as may be required forinvestigation of the complaint. The mechanism provides for a detailed complaint andinvestigation process. If circumstances so require the employee can make complaintdirectly to the Chairman of the Audit Committee. The said mechanism can also be availed bythe Directors of the Company.

'Whistle Blower Policy' of your Company is available on the website of the Company atthe following link:

http://www.lotuseye.org/corporate.php

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.

The same Code is available on the website of the Company at the following link:

http://www.lotuseye.org/corporate.php

All Board Directors and the designated employees have confirmed compliance with theCode.

AUDITOR'S REPORT:

The observation made in the Auditors' Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.

AUDITORS:

The Auditors M/s. V E K A M and Associates Chartered Accountants Coimbatore retireat the conclusion of the ensuing Annual General Meeting and being eligible offerthemselves for re-appointment.

INTERNAL AUDITORS:

M/s. Anbarasu & Jalapathi Chartered Accountants was appointed as the InternalAuditors of the Company for the financial year 2015-16 pursuant to Section 138(1) of theAct.

SECRETARIAL AUDIT/AUDITORS:

Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Mr. P. Eswaramoorhy (CP No. 7069) Company Secretary in Practice to undertake theSecretarial Audit of the Company.

As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report. The Company Secretary in Practice has made certain observationsin its Secretarial Audit Report which is annexed herewith as "Annexure-II".

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure-III". BUSINESS RISK MANAGEMENT:

The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimise adverse impact onthe business objectives and enhance the Company's competitive advantage. As part of theRisk Management framework the Company reviewed periodically the various risks andfinalised the mitigation plans. The identified risk areas were covered by the InternalAudit and major risks were discussed periodically.

PARTICULARS OF EMPLOYEES:

Statements containing the details as required in terms of the provisions of Section 197of the Act read with Rule 5(1) (2) and (3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are attached to this Report as "Annexure-I".During the year under review no complaint/case was filed pursuant to Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:

The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexure together with theCertificate from the Auditors of the Company regarding compliance with the requirements ofCorporate Governance as stipulated in SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. (Refer "Annexure-IV" and "Annexure-V").

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of Energy Technology Absorption Foreign Exchange Earnings and Outgo areas under:

a) Conservation of Energy:

Steps taken for conservation The operation of the Company being service related require normal consumption of electricity. The Company is taking every necessary step to reduce the consumption of energy.
Steps taken for utilizing alternate sources of energy Nil
Capital investment on energy conservation equipments In view of the nature of activities carried on by the Company there is no capital investment on energy conservation equipments.

b) Technology Absorption:

Efforts made for technology absorption Nil
Benefits derived Nil
Expenditure on Research & Development if any Nil
Details of technology imported if any Nil
Year of import Nil
Whether imported technology fully absorbed Nil
Areas where absorption of imported technology has not taken place if any Nil

c) Foreign Exchange Earnings/Outgo in Lakhs):

Earnings Nil
Outgo 48.18

ACKNOWLEDGEMENTS:

Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff at all levels for their continuous cooperation and assistance.

For and on behalf of the Board
Place : Coimbatore (Sd.)
Date : 30th May 2016 S.K. Sundaramoorthy
Chairman cum Managing Director