Lotus Eye Hospital & Institute Ltd Directors Report.

Dear Shareholders,

Your directors have pleasure in presenting the 23rd Annual Report of your Company together with the audited accounts for the year ended 31st March 2020.

DR. S. K. SUNDARAMOORTHY

It is with a heavy heart that the board records that Dr. Selva K. Sundaramoorthy, the founder of this great institution is not with us today.

Dr. Selva K Sundaramoorthy was born in an agricultural family near Gobichettipalayam in Erode District, Tamilnadu.

He fought many odds to get educated. There were oppositions from his parents about his continuing to study. Convincing his parents about his need to get educated he completed his schooling in Gobi and then went on to study medicine at Stanley Medical College, Chennai.

He took up a job in the Government Health Department for a few years. He then decided to become an ophthalmologist and look up ophthalmology and got trained in Madurai. After this he did fellowship in Retina from Sankara Nethralaya, Chennai under the mentorship of well-known ophthalmologist, Dr. S. Badrinath from 1981-82.

He wanted to work with and get trained by ophthalmologist in other countries and took up a job in England. He acquired many skills there. He reached a stage of being on his own and help large numbers of people by setting up large ophthalmology service. He wanted to do this in India, Tamilnadu.

So he returned to Tamilnadu and started his practice in Coimbatore in the year 1989. He was recognised very soon by people of Coimbatore and neighbouring towns both in Tamilnadu and in Kerala.

This great institution is the result of his hard work, perseverance and determination. He lived his entire life for LOTUS at the cost of many personal sacrifices in his life. He was a continuous learner and a great teacher.

Above all, he was a great human being. His aim was to eradicate blindness in the rural society. He was so much passionate about it that he pursued it all through his life. He had trained many ophthalmologists. They are all very grateful to his training and guidance. The team he chose and trained at Lotus will carry forward his legacy as a mark of reverence and tribute to his great soul.

FINANCIAL RESULTS (Rs. in Lakhs)

PARTICULARS 31.03.2020 31.03.2019
(Current year) (Previous year)
Income from Operations and other income 4145.33 3910.28
Less: Expenses 3930.54 3847.43
Add/Less: Exceptional Items (69.25) (0.06)
Profit / (Loss) before Tax 145.55 62.79
Less: Provision for Taxes:
Current tax 63.11 12.93
Deferred Tax (24.02) (20.95)
Profit / (Loss) after tax 106.46 70.80

REVIEW OF OPERATIONS AND PERFORMANCE:

Your company has reported a growth of 6% with a turnover of Rs. 4145.33 Lakhs during the financial year 2019-20 compared to the turnover of Rs 3910.28 Lakhs in the previous financial year 2018-19.Your Company has a net profit of Rs. 106.46 lakhs for the financial year 2019-20 as compared to Rs. 70.80 Lakhs for the financial year 2018-19, representing the growth of profit of above 50%

Your Directors are putting consistent efforts to increase the turnover and net profit so that the Company can meet the expectations of the stakeholders.

DIVIDEND:

In view of the uncertainity of the financial position amid this pandemic, it has been decieded not to declare dividend for the financial year 2019-20.

SHARE CAPITAL:

The Paid up equity share capital as on 31st March, 2020 was 2,079.63 Lakhs. During the year under review, the Company has not issued any shares to the Shareholders. The company has neither issued shares with differential voting rights nor granted stock options or sweat equity shares.

FINANCE:

Cash and cash equivalents as at 31st March, 2020 was 701.63 Lakhs. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters which are kept under strict check through continuous monitoring.

TRANSFER TO RESERVE:

Consequent to inadequate profits, your company has not transferred any amount to reserve.

DEPOSITS:

During the year under review, your company has not accepted any deposits from public covered under Sections 73 to76 or any other relevant provisions of the Act and rules framed thereunder.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year under review, your Company has not given any loans or guarantees covered 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 the financial statements.

OUTLOOK FOR THE CURRENT YEAR:

As you know, the global HEALTHCARE industry has grappled with multiple issues during the year. The opthalmogy industry has gone through severe ups and downs during this year.

The sudden passing away of CMD Dr S K Sundaramoorthy has had a significant impact on LOTUS. It was a great shock to the entire team and LOTUS. The new team has made all efforts to steer the ship from this turbulence.

While we were steadying the ship and looking forward for an upward growth, next was the onset of the COVID-19 pandemic in the final quarter of the year, which has ushered in a new reality for the hospitals across the world.

The COVID-19 Pandemic and the lockdown have fundamentally changed the contours of the business environment in which we operate. The Hospitals need to make major changes in infection control to take care or face any patients and any healthcare emergency. The revenue has significantly dropped while the costs of operation have increased because of enhanced safety requirements. This has put in severe financial strain on all including your company. This turnaround journey has been interrupted, as demand deteriorated sharply on the back of an abruptly slowing economy due to the spread of COVID-19.

Charting out a new growth path, the new team is exploring all avenues to maintain and increase shareholders wealth. There will be restructuring of operations to ensure this growth.

CORPORATE SOCIAL RESPONSIBILITIES:

Your company does not fall within the bracket as prescribed by Section 135 of the Companies Act, 2013 and rules framed thereunder. Hence this clause is not applicable.

DIRECTORS:

Directors retiring by rotation:

Ms. Kavetha Sundaramoorthy (DIN: 02050806), Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for re-appointment.

Information regarding the Directors seeking appointment/re-appointment:

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

Declaration by Independent Directors:

All Independent Directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and regulation 16(b) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Familiarisation Programme:

Your Company has adopted policy on Familiarization programme of Independent Directors. During the year under review one programme was conducted by the company. Details of such programme for familiarisation of the Independent Directors are put on the website of the Company at the following web-link: https://www.lotuseye.org/investors.

Statutory Disclosure:

None of the Directors of the Company is disqualified as per the applicable provisions of the Act.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the Directors performance individually as well as evaluation of the working of its 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 and composition; 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 communication with external stakeholders, etc.

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

Key Parameters: Attendance at meetings; contribution at meetings; independence of judgment; 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 of Committee Composition; Effectiveness of meetings; Committee dynamics; Quality of relationship 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 recommended by the Nomination & Remuneration Committee has been approved by the Board of Directors. The said policies are annexed to the Boards Report and are also available on the Companys website at the following link: https://www.lotuseye.org/investors.

MEETINGS:

During the year, five Board Meetings, five Audit Committee Meetings, five Nomination and Remuneration Committee Meetings were convened and held. The two Stakeholder Relationship Committee Meetings for the financial year 2019-20 were held on 28th May, 2019 and 06th February, 2020. The details of there are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD:

Currently the Company has three Committees i.e. Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. All the committees are Independent under the Chairmanship of an Independent Director. The details of the compositions, terms of reference, meetings, etc., of said Committees are given in the Report 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 to state that:

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

II. Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that have been made are reasonable and prudent so as to give a true and fair view of the company at the end of the financial year and of the company for that period.

III. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 2013 for safeguarding the assets of the company and for the preventing and detecting fraud and other irregularities.

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

V. Internal financial controls to be followed by the company were followed and those internal financial controls are adequate and were operating effectively.

VI. Devised proper systems to ensure compliance with the provisions of all applicable laws 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 on an arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014.

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

There are no significant and material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status and Companys 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 the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and date of this report.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "Code of Conduct" which forms an Appendix to the Code. The Code has also been posted on the Companys website at the following link: https://www.lotuseye.org/investors

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

All the Board Members and the Senior Management personnel have confirmed compliance with 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 / cessation during the year under review and remuneration are given in the Extract of Annual Return annexed 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 and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.

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

Your Company will not tolerate any form of victimization and will take appropriate steps to protect a bona fide whistle blower and shall treat any retaliation as a serious disciplinary offence that merits disciplinary action. The Company will protect the identity of the whistle blower, if so desired, provided that the whistle blower will need to attend any disciplinary hearing or proceedings as may be required for investigation of the complaint. The mechanism provides for a detailed complaint and investigation process. If circumstances so require, the employee can make complaint directly to the Chairman of the Audit Committee. The said mechanism can also be availed by the Directors of the Company.

Whistle Blower Policy of your Company is available on the website of the Company at the following link: https://www. lotuseye.org/investors

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

The same Code is available in the website of your Company at the following link: https://www.lotuseye.org/investors All Board of Directors and the designated employees have confirmed compliance with the Code.

AUDITORS REPORT:

The observation made in the Auditors Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

AUDITORS:

M/s. Anbarasu & Jalapathi, Chartered Accountants are your statutory auditors, who shall hold office till the conclusion of 25th Annual General Meeting, statutory fees paid Rs. 2.65 Lacks p.a

INTERNAL AUDITORS:

CA P Vishnu Adithan, Practicing Chartered Accountant was appointed as the Internal Auditors of the Company for the financial year 2019-20 pursuant to Section 138(1) of the Act.

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 has appointed Mr.P.Eswaramoorhy (CP No. 7069) Company Secretary in Practice to undertake the Secretarial Audit of the Company.

As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. The Company Secretary in Practice has made his observation in Secretarial Audit Report. (MR-3) which is annexed herewith as "Annexure - II"

With regards to the observations/remarks contained in the Secretarial Auditors Report the management wishes to respond/ state as under:

• Observation No.1: Company is in compliance with the required disclosure under Regulation 23(9) of SEBI (LODR) Regulations, 2015 from the half-year ended March, 2020.

• Observations No.2: Company has two promoters in the promoter group holding 100 shares each which are in physical form and hasnt been dematerialized. Shares which were sold in physical mode have not been lodged for transfer. The whereabouts of the respective promoters are being difficult to pin down, but the management will apprehend the matter to the best of its abilities.

• Observation No.3: Company is cognizant of the Regulation 47(4) of SEBI and is now in compliance by publishing all notices and results in vernacular language in the vernacular newspaper as oppose to in English in the vernacular newspaper.

• Observation No.4: An alternate director was appointed during the meeting held on 13th Jan, 2020 and subsequently the original director returned to country by 06th Feb, 2020 , within the due period of 30 days for filing E-form DIR12 for appointment of alternate director. Hence, the required filing has not been made.

PARTICULARS OF EMPLOYEES:

Statements containing the details as required in terms of the provisions of Section 197 of the Act read with Rule 5(1), (2) and (3) of the Companies (Appointment and Remuneration of 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 of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, is set out as separate Annexure, together with the Certificate from the Auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. (Refer "Annexure - IV" and "Annexure - V"

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure - III".

BUSINESS RISK MANAGEMENT:

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage. As part of the Risk Management framework, the Company reviewed periodically the various risks and finalized the mitigation plans. The identified risk areas were covered by the Internal Audit and major risks were discussed periodically.

Your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in:

(a) Overseeing and approving the Companys enterprise wide risk management framework and processes; (b) Identifying risks;

(c) Optimizing risk situations; and

(d) Strengthening the risk management system through continuous learning and development.

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

On an average the following quantity of waste is diposed off by the company, red waste 1 kg, yellow waste 0.27 kg and blue waste 0.7 kg.

The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are as under: a) Conservation of Energy:

Steps taken for conservation The operation of the Company being service related requires 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 (Rs. In Lakhs):

Earnings Nil
Outgo Nil

ACKNOWLEDGEMENTS:

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