To the Members
The Directors are pleased to present Twenty First Annual Report of the Company togetherwith the Audited Statements of Accounts for the year ended 31st March 2016.
Karuturi Global Limited is the worlds largest producer of cut roses and having aglobal presence in Asia America and Europe The company has its operations in IndiaEthiopia Dubai & Kenya diversified into agriculture floriculture and foodprocessing producing Pulses Oil seeds Maize Rice Sugar Cut roses Plants productionand distribution Gherkins Baby corn Jalapenos and Bottled pickles.
FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY:
The Companys financial performance for the year under review along with previousyear figures is given hereunder:
(Amount in Rs Lakhs)
|Particulars ||For the Year ended ||For the Year ended |
| ||31st March 2016 ||31st March 2015 |
|Net Sales /Income from Business Operations ||33149.77 ||26622.73 |
|Other Income ||1491.60 ||3938.59 |
|Total Income ||34641.37 ||30561.32 |
|Less: Depreciation ||4316.32 ||2709.09 |
|Profit after depreciation and other expenses ||2158.01 ||1700.87 |
|Less: Current Income Tax ||24.38 ||0.40 |
|Less: Deferred Tax ||87.56 ||(109.82) |
|Net Profit after Tax ||14904.83 ||3246.88 |
|Earnings per share (Basic) ||1.46 ||0.40 |
|Earnings per Share (Diluted) ||1.46 ||0.40 |
RESULTS OF OPERATIONS
During the financial year ended March 312016 total revenue of the Company was Rs34641.37 lakhs as against the revenue for the previous year which was Rs 30561.32 lakhsThe Company has during the year under review has posted a net profit of Rs.14 904.83lakhs against net profit of Rs 3246.88 lakhs in the previous year
During the year the company has issued 21 crores Equity Shares to Rhea HoldingsPrivate Limited On March 31 2016 the companys share capital stood at Rs1019726648/- divided into equity share of Rs.1/- each.
Changes in reserves is been disclosed in Notes to Accounts refer 2.2 table.
Your Directors do not recommend any dividend on the shares of the Company for the yearunder review.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
The company will transfer the amount to Investor Education and protection Fund on duedate as mentioned in the notice of the AGM no unclaimed dividend is due for transfer toInvestor Education and protection Fund.
The Company has neither accepted nor renewed any deposits during the year under review
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL
The Board is duly constituted with Six present Directors of the Company are as below:
a Sai Rama Krishna Karuturi
b Anitha Karuturi
c Man Mohan Agrawal
d Mahendra Kumar Sunkara
e Sunil Gupta
f Ananth Chandrakanth Darshan
Ms Anitha Karuturi Director retiring by rotation at this Annual General Meeting andbeing eligible offer herself for re- appointment.
Declaration by Independent Directors
The Company has received declarations from all Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed under Section149 of the Companies Act 2013 and Listing Regulations The Independent Directors have alsoconfirmed that they have complied with the Companys code of conduct.
Key Managerial Personnel
No directors were appointed or resigned during the year under review Mr Shireesh JainCFO of the Company resigned during the year under review.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had 4 Board meetings during the financial year under review.
|Sl No. ||Date of Board Meeting |
|1. ||30th May 2015 |
|2. ||14th August 2015 |
|3. ||13th November 2015 |
|4. ||13th February 2016 |
1 Karuturi Floritech Pvt Ltd India
2 Karuturi Foods Pvt Ltd. India
3 Karuturi Flower Express Pvt Ltd. India
4 Karuturi Overseas Ltd Dubai
5 Flower Xpress FZE Dubai
6 Yeshoda Investments Ltd Kenya
7 Rhea Holdings Ltd Kenya
8 Surya Holdings Ltd Kenya
9 Karuturi Sports Ltd Kenya.
10 Karuturi Hospital Ltd Kenya
11 Gambella Green Valley Plc Ethiopia
12 Ethiopian Meadows Plc Ethiopia
13 Karuturi Agro Products Plc. Ethiopia
14 Surya Blossoms Plc Ethiopia
15 Karuturi Greens and Marketing Private Limited. India
16 Karuturi Vegproducts Private Limited. India
17 Karuturi Farm Fresh Products Private Limited. India
18 Shiv Pack PLC Ethiopia
19 Karuturi Holdings Ltd Dubai
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the ends of the financial year to which these financial statements relateon the date of this report
SIGNIFICANT AND MATERIAL ORDERS
Karuturi Limited is Kenya is wound up pursuant to court order Apart from it there is noother order passed by any regulators which has impacted the going concern status andoperations of the company.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION DETAILS
The Board Nomination and Remuneration committee overseas the Companys Nominationprocess for Independent Directors and in that connection to identify screen and reviewindividuals qualified to serve as an independent Director on the Board.
M/s S Bhat & Associates. Chartered Accountants (Registration Number 014925S) wereappointed as the Statutory Auditors of the Company holds office till the conclusion ofthis Annual General Meeting The Board recommends the appointment of M/s G.G Patil and Co.as a statutory auditor of the Company from the conclusion of the Annual General Meeting upto the conclusion of 26th Annual General Meeting in terms of the section 139(1) of theCompanies Act 2013 The Company has received a certificate from the above Auditors to theeffect that if they are reappointed it would be in accordance with the provisions ofSection 141 of the Companies Act 2013.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
The brief outline of the Corporate Social Responsibility ("CSR") initiativesundertaken by the Company on CSR activities during the year are set out in Annexure Brequired under the provisions of Section 135 and schedule VII of the Companies Act 2013The CSR policy is available on the website of the Company The Company was in the processof evaluating the focus areas / locations of intervention for CSR activities to cater tothe pressing needs of society and deliver optimal impact As a socially responsiblecompany your Company is committed to increase its CSR impact and spend over the comingyears with its aim of playing a larger role in Indias sustainable development byembedding wider economic social and environmental objectives.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS
Point no 1: The Companys Sales and Purchase transactions are normally supportedby valid documents such as P.Os. D.C. G.R.N etc However in view of some uniqueand unconventional trade practices including barter systems and not having/not using bankaccounts which are peculiar to agricultural business all the transactions are not as perthe procedures suggested by the Auditors The Company has substantially improved upon thedocumentation and continues to do so It is also submitted that apart from certainintricacies related to the sectoral business there is no material misstatement.
Point no 2: The Company had initially transferred an amount of 9812261.90 US$ (INR4555088130.75) as Share Application Money/loan to Karuturi Overseas Ltd Dubai Thisamount has been outstanding and shown in books as "Share Application Money pendingallotment" under "Other Non Current Assets" / as Loans underLoans and Advances Out of this 7500000 US$ has been utilised to allotshares of Karuturi Overseas Limited and the corresponding exchange gain of INR148884929 has been transferred from FCMTR account to Profit & Loss account as perAS-11 "The Effects of Changes in Foreign Exchange Rates".
Point no 3: The decrease is as per the calculations provided to the auditors and it ismainly due to fluctuation in the USD.INR parity.
Point no 4: The access to the books of accounts of Rhea Holdings Limited SuryaHoldings Limited & Yeshoda Investments Limited received to us late Mid May due towhich we could not had sufficient time to conduct audit before board meeting Point no 5:Company has received the forensic audit report of Karuturi Limited for the period fromFebruary 2014 to August 2015 With the intention of fair disclosure to share holders wehave included the said report in the consolidated financial statement.
The Company had appointed Mr Vijayakrishna KT Company Secretary Bangalore to conductits Secretarial Audit for the financial year ended March 31 2016 The Secretarial Auditorshave submitted their report confirming compliance by the Company of all the provisions ofapplicable corporate laws The Report does contain certain qualification reservation oradverse remark The Secretarial Audit Report is annexed to this report.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE SECRETARIAL AUDITORS IN THEIR REPORTS
a The company will file all the returns with Registrar of Companies
b The company had sent returns to Authorised dealer bank but due to want of informationthere was delay in filing returns with RBI.
c The company has appointed Company Secretary on August 12th 2016
d Company will take necessary steps to publish notice in newspaper
e The company will file all the returns with Registrar of Companies
EMPLOYEE STOCK OPTION PLAN (ESOP):
The Company has commissioned its maiden Employees Stock Option Plan during the year2006 Through this the Company allotted 747416 Equity Shares of Re 1 each were allottedon exercise of options granted to the eligible employees of the Company into Equity Sharesduring the year 2012-13 for 2014-15 Nil & for 2015-16 Nil.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Company does not have any Risk Management Policy as the element of risk threateningthe Companys existence is very minimal.
INTERNAL FINANCIAL CONTROLS OVER FINANCIAL STATEMENTS AND COMPLIANCE OF LAWS
The Company during the year has reviewed its internal financial control systems and hascontributed to establishment of more robust and effective IFC framework prescribed undersection 134(5) of Companies Act 2013 The Board of Directors is of the view that theexisting financial controls adopted with reference to financial statements within theCompany are adequate The Company has a adequate systems and process to monitor and ensurecompliance with applicable laws rules and guidelines
The Audit Committee constituted by the Company meets the requirement of Section 177 ofthe Companies Act 2013 as well as that of Regulation 18 of the SEBI (Listing Obligationsand Disclosure Requirements)Regulations 2015 and the details of its composition arefurnished in the Corporate Governance Report attached There was no instance during theyear where the Board had not accepted any recommendation of the Audit Committee
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee constituted by the Company meets therequirement of Section 178 of the Companies Act 2013 as well as that of Regulation 19 ofthe SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and thedetails of its composition are furnished in the Corporate Governance Report attached
The Code of Conduct and vigil mechanism applicable to Directors and Senior Managementof the Company is available on the Companys website at www.karuturi.com.
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure Aand is attached to this Report.
Pursuant to Regulation 34 of the Listing Regulations executed with the stock exchangea management discussion and analysis Corporate Governance report and AuditorsCertificate regarding compliance of conditions of corporate Governance forms part of theannual report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
Particulars of loans guarantees and investments form part of Note no 2.13 2.12 2.19and 2.1 respectively to the financial statements provided in the full version of theAnnual Report.
RELATED PARTY TRANSACTION
All arrangements / transactions entered by the Company with its related parties duringthe year were in ordinary course of business and on an arms length basis During theyear the Company had not entered into any arrangement / transaction with related partieswhich could be considered material in accordance with the Companys Policy on RelatedParty Transactions and accordingly the disclosure of Related Party Transactions in FormAOC 2 is not applicable However names of Related Parties and details of transactions withthem have been included in Note no 2.3C 2.18 and 3.6 to the nancial statements providedin the full version of the Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has not actively engaged in the consumption of energy or absorption oftechnology The Company is however aware of its responsibilities and has at every availableopportunities used and implemented such measures so as to enable energy conservationThere has been no technology absorption involved The total Foreign Exchange Inflow andOutflow during the year under review is as follows: Total Foreign Exchange Earnings Rs31517.62 lakhs Total Foreign Exchange Outgo Rs 26513.49 lakhs
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors has led down internal financial controls to be followed by the Companyand such internal controls are adequate and operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit committee Nomination & Remunerationcommittee Stakeholder Relationship Committee and Corporate Social ResponsibilityCommittee Some of the key criteria considered while conducting evaluation such as degreeof fulfilling the key Responsibilities effectiveness of Board process information andfunctioning Board dynamics and efficacy of communication with external stakeholders etc
A separate meeting of the independent Directors was convened which reviewed theperformance of the Board (as a whole) the non- independent directors and the Chairman
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company is furnished in Annexure to MGT-9
Particulars of Employees
In terms of Section 136 of the Act the Report and Accounts are being sent to theMembers and others entitled thereto excluding the information on employeesparticulars which is available for inspection by the Members at the Registered Office ofthe Company during business hours on working days of the Company up to the date of theensuing Annual General Meeting If any Member is interested in obtaining a copy thereofsuch Member may write to the Company Secretary in this regard.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
While the Company has set up a Committee to look into the complaints under The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 nocomplaint relating to sexual harassment at work place has been received during the year
Details in respect of frauds reported by auditors under Section 143
The statutory auditors of the Company have not reported any fraud as specified undersection 143 of the Companies Act 2013 (including any statutory modification(s) orre-enactment for the time being in force)
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS |
|Date: 12/08/2016 ||Sai Ramakrishna Karuturi ||Anitha Karuturi |
|Place: Bangalore ||Managing Director ||Director |