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Lotus Eye Hospital & Institute Ltd.

BSE: 532998 Sector: Health care
NSE: LOTUSEYE ISIN Code: INE947I01017
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28.85

NSE 00:00 | 14 Aug 28.50 -0.50
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OPEN 28.85
PREVIOUS CLOSE 29.00
VOLUME 100
52-Week high 35.95
52-Week low 16.65
P/E 41.21
Mkt Cap.(Rs cr) 60
Buy Price 23.55
Buy Qty 2000.00
Sell Price 30.40
Sell Qty 250.00
OPEN 28.85
CLOSE 29.00
VOLUME 100
52-Week high 35.95
52-Week low 16.65
P/E 41.21
Mkt Cap.(Rs cr) 60
Buy Price 23.55
Buy Qty 2000.00
Sell Price 30.40
Sell Qty 250.00

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

Company auditors report

To the Members of Lotus Eye Hospital and Institute Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Lotus Eye Hospital andInstitute Limited ("the Company") which comprises the balance sheet as at March31 2019 and the statement of profit and loss (including other comprehensive income)statement of changes in equity and the cash flow statement for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards specified under Section 133 of theAct read with the Companies (Indian Accounting Standards) Rules 2015 as amended andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 the profit and other comprehensive income changes in equityand its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter How the matter was addressed in our audit
Evaluation of uncertain tax positions
The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on a Our audit procedures include the following substantive procedures:
range of tax matters during the normal course of business • Obtained understanding of key uncertain tax positions;
including direct and indirect tax matters. These involve significant management judgment to determine the • Read and analyzed select key correspondences including responses to the tax authorities;
possible outcome of the uncertain tax positions consequently having an impact on related accounting and disclosures in the financial statements. Refer Note 1(B)(19) and Note 31 to the financial statements. • Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions and the possible outcome of the disputed cases;

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. if based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit and other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influ

enced. We consider quantitative materiality and qualitative factors in (i) planning thescope of our audit work and in evaluating the results of our work; and (ii) to evaluatethe effect of any identified misstatements in the standalone financial statements

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The balance sheet the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account;

d. In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

e. On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164(2) of theAct;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations as at March 31 2019 onits financial position in its financial statements - Refer Note 31 to the financialstatements;

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

h. With respect to the matters to be included in the Auditor's Report under section197(16) of the Act as amended:

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

For Anbarasu & Jalapathi
Chartered accountants
Firm Registration No: 010795S
Place:Coimbatore
Date: 28th May 2019 (Sd.) S. Anbarasu
Partner
Membership No: 212299

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 1 under Report on Other Legal and Regulatory Requirements'section of our report to the members of Lotus Eye Hospital and Institute Limited of evendate)

(i) a. The Company is in the process of updating its records showing full particularsincluding quantitative details and

situation of fixed assets. However an item wise list of fixed assets containing theparticulars for calculation of depreciation is maintained.

b. All the fixed assets have not been physically verified by the management during theyear but there is a phased program of verification based on the item wise list maintainedfor computation of depreciation which in our opinion needs to be strengthened havingregard to the size of the company and nature of its assets. As informed no materialdiscrepancies were noticed on such verification. However in the absence of completeinformation in fixed asset register as stated in clause (a) above we are unable tocomment on the discrepancies.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable propertiesincluded in the fixed assets are held in the name of the Company. (Except with respect tothe buildings on leasehold premises)

(ii) According to the information and explanations given to us the inventories(excluding stocks with third parties and goods- in-transit) have been physically verifiedby the management during the year and there were no material discrepancies noticed onphysical verification carried out during the year. In our opinion the frequency of suchverification is reasonable.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly reporting under clause 3(iii) of the Order is not applicable to thecompany.

(iv) According to the information and explanations given to us the Company has notgranted any loans made investments provided any guarantee or security and hencereporting under clause 3(iv) of the Order is not applicable to the company.

(v) According to the information and explanations given to us the Company has notaccepted any deposits covered under Section 73 to 76 of the Act. Accordingly paragraph3(v) of the Order is not applicable to the company.

(vi) We have broadly reviewed the cost records maintained by the company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) (a) According to the information and explanations provided to us the company hasbeen generally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income tax sales tax service tax value added tax goods andservice tax customs duty excise duty cess and any other material statutory duesapplicable to it with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax goods and service tax customs duty excise duty cess andany other material statutory dues applicable to it were outstanding at the year end fora period of more than six months from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax goods and service taxcustoms duty excise duty on account of any dispute are as follows:

Nature of Statute Nature of Dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Kerala Value Added Tax Act VAT Liability 1.89 01.04.2012 to 31.03.2013 Kerala Value Added Tax Appellate tribunal
Kerala Value Added Tax Act VAT liability 5.16 01.04.2013 to 31.03.2014 Kerala Value Added Tax Appellate tribunal
Kerala Value Added Tax Act VAT liability 9.71 01.04.2011 to 31.03.2012 High Court Kerala
Kerala Value Added Tax Act VAT liability 11.90 01.04.2011 to 31.03.2012 High Court Kerala

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to any financial institution or a bank. The Company has nodebentures or loans and borrowings payable to government during the year.

(ix) According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) and any term loans during the year. Accordingly reporting under clause 3(ix)of the Order is not applicable to the company.

(x) According to the information and explanations given to us no fraud by the Companyand no material fraud on the Company by its officers or employees has been noticed orreported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid orprovided by the Company in accordance with the provisions of Section197 read with ScheduleV to the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly reporting under clause 3(xii) of the Order is not applicableto the company.

(xiii) According to information and explanations given to us and on the basis of ourexamination of the records of the Company all transactions with the related parties arein compliance with Section 177 and 188 of the Act where applicable and the details havebeen disclosed in the Ind AS financial statements as required by the applicable Indianaccounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Accordingly clause3(xiv) of the Order is not applicable to the company.

(xv) According to information and explanations given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with him during theyear.

(xvi) The Company is not required to be registered under Section 45-iA of the ReserveBank of india Act 1934.

For Anbarasu & Jalapathi
Chartered accountants
Firm Registration No: 010795S
Place:Coimbatore
Date: 28th May 2019 (Sd.) S. Anbarasu
Partner
Membership No: 212299

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under'Report on Other Legal and Regulatory Requirements'section of our report to the members of Lotus Eye Hospital and Institute Limited of evendate)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Lotus EyeHospital and Institute Limited ("the Company") as of March 31 2019 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of internal FinancialControls Over Financial Reporting issued by the iCAi.

For Anbarasu & Jalapathi
Chartered accountants
Firm Registration No: 010795S
Place:Coimbatore
Date: 28th May 2019 (Sd.) S. Anbarasu
Partner
Membership No: 212299