1. We have audited the attached Balance Sheet of LOTUS EYE CARE
HOSPITAL LIMITED Coimbatore as at 31 March 2011 and the Profit and
Loss Account of the Company for the year ended on that date and also
the cash flow statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors'' Report) Order, 2003, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of the
c) The Balance Sheet, the Profit and Loss Account and the Cash flow
statement dealt with by this report are in agreement with the books of
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash flow statement dealt with by this report comply with the
Accounting Standards referred to in sub- section (3C) of Section 211 of
the Companies Act, 1956;
5. On the basis of the written representations received from the
Directors as on 31 March, 2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31s'' March, 2011 from being appointed as a Director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
6. In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements, give the
information required by the Companies Act, 1956, in the manner so
required and present a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011; ii) in the case of the Profit and Loss
Account, of the profit for the year ended on that date; and iii) in the
case of cash flow statement, of the cash flows of the company for the
year ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
Referred to in Paragraph (3) of the Auditors report of even date to the
members of LOTUS EYE CARE HOSPITAL LIMITED on the financial statements
for the year ended 31st March, 2011.
(i). a) The company has generally maintained proper records showing
full particulars including quantitative details and situation of fixed
assets, and the updation of records are still in progress. However an
item wise list of fixed assets containing the particulars for
calculation of depreciation is maintained.
b) All the assets have not been physically verified by the
management.during the year but there is a phased programme of
verification based on the item wise list maintained for calculation of
depreciation which, in our opinion, needs to be srengthened having
regard to the size of the company and nature of its assets. As
informed, no material discrepancies were noticed on such verification.
However, in absence of complete information in fixed asset register as
stated in clause (a) above, we are unable to comment on the
discrepancies, if any.
c) During the year, there is no disposal of substantial part of fixed
(ii). a) The Management has conducted physical verification of
inventories at reasonable intervals during the year.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventories. The discrepancies noticed on verification between the
physical stocks and the book records have been properly dealt within
the books of account.
(iii). According to the information and explanations given to us, the
Company has neither granted nor taken any loan secured or unsecured to
/ from the companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956, during the
(iv). In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have neither come across nor we have been informed of any
major weakness in internal control procedures.
(v). a) According to the information and explanations provided by the
management and based on the audit procedure applied by us we are of the
opinion that the particulars of all contracts or arrangements that need
to be entered in the register maintained in pursuance of section 301 of
the act have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transaction so entered in the register maintained
under section 301 of the Act and exceeding Rupees Five lakhs during the
year in respect of each party have been made at prices which are
reasonble have been regard to prevailing market prices at the relevant
(vi). In our opinion and according to the information and explanations
furnished to us, the Company has not accepted any public deposit within
the meaning of Sections 58 A and 58AA of the Companies Act, 1956.
(vii). The Company''s internal audit system needs improvement for its
size and nature of its business. However, its control procedures ensure
reasonable internal checking of its financial and other records.
(viii).The Company informed us that the Central Government has not
prescribed the maintenance of cost records under section 209(1) (d) of
the Companies Act, 1956 to the hospital industry.
(ix). a) According to the information and explanations given to us, and
records provided to us, the undisputed statutory dues including
provident fund, investor education fund, income tax, sales tax, wealth
tax, customs duty, cess and other material statutory dues applicable to
it have generally been regularly deposited with appropriate authorities
though there have been slight delay in a few cases except that
employees security deposit amounting to Rs. 29.25 lakhs has not been
deposited with scheduled banks or post office savings scheme.
b) According to the information and explanation given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs duty and Excise duty were in arrears as at
31.03.2011 for a period of more than six months from the date they
c) According to the information and explanation given to us, there are
no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty
and Excise duty which have not been deposited on account of any
(x). The Company has no accumulated losses as at 31s'' March, 2011 and
the Company has not incurred any cash loss during the financial year
covered by our audit and during the immediately preceding financial
(xi). In our opinion and according to the information and explanations
furnished to us, we are of the opinion that the Company, during the
year, has not defaulted in repayment of dues to financial institution,
bank or debenture holders wherever applicable.
(xii). According to the information and explanations furnished to us,
the Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii). In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Accordingly the provisions of clause 4
(xiii) of the Companies (Auditor''s Report) Order 2003 are not
applicable to the Company.
(xiv). In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order
2003 are not applicable to the Company.
(xv). The company has not given any guarantees for loans taken by
others from banks or financial institutions.
(xvi). Based on the information and explanations given to us by the
management, term loans have been applied for the purpose for which the
said loans were obtained.
(xvii). According to the information and explanations given to us and
on an over all examination of the Balance sheet of the company, we
report that no funds raised on short term basis have been used for long
(xviii). The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
(xix). During the year the Company has not issued any debentures and
hence the provisions of clause 4 (xix) of the Companies (Auditor''s
Report) Order 2003 are not applicable to the company.
(xx). During the year the Company has not raised any money through
Public issue. However the Company has disclosed the end use of money
raised by public issue in the preceding previous year in the notes to
the financial statements including the deviation from offer document
which has been disclosed in the Notes B, 1 (III) of the schedule No.12
to the financial statement and the same has been verified by us.
(xxi) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us no fraud on or by the company has been noticed
or reported during the course of our audit.
For VEKAM AND ASSOCIATES
Firm Registration No: 05256S
Place : Coimbatore (Sd.) M.P. Panneerselvan
Date : 04th August, 2011 Partner
Membership No. 026129