To the Members
Your Directors have pleasure in submitting their Twenty Second Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2017.
Karuturi Global Limited is the world's 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 Company's financial performance for the year under review along with previous yearfigures is given hereunder:
| || |
(Amount in Rs. Lakhs)
|Particulars ||Financial Year Ended |
| ||Standalone ||Consolidated |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Total Revenue ||1015.69 ||1421.46 ||22612.76 ||33033.90 |
|Profit/(loss) Before Interest Depreciation & Tax (PBITD) ||-77.35 ||2709.20 ||14041.35 ||24896.21 |
|Finance Charges ||125.24 ||3852.88 ||936.63 ||5546.52 |
|Depreciation ||74.56 ||53.85 ||4356.56 ||4316.32 |
|Provision for Income Tax (including for earlier year) ||-384.34 ||87.56 ||-309.37 ||111.94 |
|Net Profit /(loss) After Tax ||107.19 ||-1285.09 ||9057.53 ||14921.43 |
RESULTS OF OPERATIONS
During the financial year ended March 31 2017 total revenue of the Company was Rs.1015.69 lakhs as against the revenue for the previous year which was Rs. 1421.46 lakhsand net profit for the financial year ending March 31 2017 Rs. 107.19 lakhs as againstthe previous year which was Rs. (1285.09) lakhs at standalone level. During the financialyear ended March 31 2017 total revenue of the Company was Rs. 22612.76 lakhs as againstthe revenue for the previous year which was Rs. 33033.90 lakhs and net profit of for thefinancial year ending March 31 2017 Rs. 9057.53 lakhs as against the previous year whichwas Rs. 14921.43 lakhs at consolidated level.
During the year the company has issued 477804878 (Forty Seven Crores Seventy EightLakhs Four Thousand Eight Hundred Seventy Eight) Equity shares to the Share holders. OnMarch 31 2017 the company's share capital stood at Rs. 1497531526/- divided intoequity shares 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 Seven Present Directors of the Company are as below
|Sl.No ||Particulars ||Designation |
|1. ||Sai RamaKrishna Karuturi ||Chairman and Managing Director |
|2. ||Anitha Karuturi ||Whole Time Director |
|3. ||Yeshoda Karuturi ||Director |
|4. ||Mahendra Kumar Sunkara ||Independent Director |
|5. ||Ananth Chandrakanth Darshan ||Independent Director |
|6. ||Sunil Gupta ||Independent Director |
|7. ||Ashok Herur ||Independent Director |
Ms. Anitha Karuturi retire at this Annual General Meeting and being eligible offerherself for re- appointment.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all Independent Directors of the Company conrming that they meet with the criteria of independence as prescribed under Section 149 ofthe Companies Act 2013 and Regulation 25 of the Listing Regulations. The IndependentDirectors have also con rmed that they have complied with the Company's code of conduct.
Details of Directors and Key Managerial Personnel who were appointed or have resignedduring the year
Mr. Ashok Herur was appointed as an Additonal Independent Director effective 15thFebruary 2017.Members attention is drawn to note no 5 of the notice for appointment of Mr.Ashok Herur as Additional Independent Director of the Company.
Ms. Yeshoda Karuturi was appointed as an Additonal Executive Director effective 15thFebruary 2017.Members attention is drawn to note no 4 of the notice for appointment of Ms.Yeshoda Karuturi as Executive Director of the Company.
Mrs. Rashi Singhal was appointed as the Company Secretary effective 02nd February 2017.
Mr. Man Mohan Agrawal Director of the Company resigned effective 28th November 2016.
Mr. Mahaveer Jain Company Secretary resigned effective 28th October 2016
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had 5 Board meetings during the financial year under review.
|Sl. No. ||Date of Board Meeting |
|1. ||28th May 2016 |
|2. ||13th August 2016 |
|3. ||10th September2016 |
|4. ||24th November 2016 |
|5. ||14th February 2017 |
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. Ethiopian Meadows Plc Ethiopia
12. Karuturi Agro Products Plc. Ethiopia
13. Surya Blossoms Plc. Ethiopia
14. Shiv Pack PLC Ethiopia
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
There were no significant material order passed by the regulators or courts ortribunals which has impacted the going concern status and operations of the company infuture.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION DETAILS
The Board Nomination and Remuneration committee overseas the Company's Nominationprocess for Independent Directors and in that connection to identify screen and reviewindividuals qualified to serve as an independent Director on the Board. Further theinformation about the elements of remuneration package of individual directors is providedin the extract ofthe Annual Return in Form MGT-9 enclosed to Board's Report.
Messer G.G Patil & Company were appointed as Statutory Auditor of the Company untilthe conclusion of this Annual General Meeting. Due to their pre-occupation they haveresigned. The Board recommends appointment of Messer H. Muralidhar (Firm RegistrationNo.011874S) as a Statutory Auditor of the Company from the conclusion of the AnnualGeneral Meeting up to the conclusion of 27th Annual General Meeting in terms of thesection 139(1) of the Companies Act 2013. The Company has received a certificate from theabove Auditors to the effect that if they are appointed it would be in accordance withthe provisions of Section 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 2013.The CSR policy is available on the website of the Company.
The Company was in the process of evaluating the focus areas / locations ofintervention for CSR activities to cater to the pressing needs of society and deliveroptimal impact. As a socially responsible company your Company is committed to increaseits CSR impact and spend over the coming years with its aim of playing a larger role inIndia's sustainable development by embedding wider economic social and environmentalobjectives.
The net profit of the company was Rs 107.19 lakhs and turnover of the Company Rs.1015.69 lakhs during the year under review. Therefore the Company is not subject toprovisions of Section 135 of the Companies Act 2013
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS
Point No 1 : The Company's Sales and Purchase transactions are normally supported byvalid documents such as P.O's. D.C. G.R.N. etc. However in view of some unique andunconventional 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: RBI condition was conditional and same was not agreed to by Bondholders.RBIcapped interest @7% however Bondholder agreed to 7.7%.We sought RBI permission forrelaxation and the same was not yet granted.
The Company had appointed Mr. Vijayakrishna KTCompany Secretary Bangalore to conductits Secretarial Audit for the nancial year ended March 31 2017. The Secretarial Auditorshave submitted their report con rming compliance by the Company of all the provisions ofapplicable corporate laws. The Report does contain certain quali cation 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 has appointed an interim CFO during the year under review.
b. Company will take necessary steps to publish notice in newspaper.
c. The company had sent returns to Authorised dealer bank but due to want ofinformation there was delay in filing returns with RBI.
d. The company will take necessary steps to file all the returns with ROC.
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 wereallotted on exercise of options granted to the eligible employees of the Company intoEquity Shares during the year 2012-13 for 2014-15 Nil 2015-16 Nil & for 2016-17-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 Company's 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. Thecompany is appointing one additional Independent Director and one Executive Director tofulfill all the obligations required under statute.
The Code of Conduct and vigil mechanism applicable to Directors and Senior Managementof the Company is available on the Company's 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 Auditor'sCertificate 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 arm's length basis. During theyear the Company had not entered into any arrangement / transaction with related partieswhich could be considered material in accordance with the Company's 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 transactionswith them have been included in Note no. 2.3C 2.18 and 3.6 to the nancial statementsprovided in 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 everyavailable opportunities used and implemented such measures so as to enable energyconservation. There has been no technology absorption involved.
The total Foreign Exchange Inflow and Outflow during the year under review is asfollows:
Total Foreign Exchange Earnings Rs. 29185.21 lakhs.
Total Foreign Exchange Outgo Rs. 19753.77 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 Nomination & Remuneration andCompliance Committees. Some of the key criteria considered while conducting evaluationsuch as degree of fulfilling the key Responsibilities effectiveness of Board processinformation and functioning Board dynamics and efficacy of communication with externalstakeholders Contribution at Board/Committee meetings guidance or support to Managementoutside Board/Committee Meetings.
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 Remuneration Policy is stated in the Corporate Governance Report.
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 employees' particularswhich is available for inspection by the Members at the Registered Office of the Companyduring business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. If any Member is interested in obtaining a copy thereof such Member maywrite to the Company Secretary in this regard.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 While the Company has set up a Committee to look into thecomplaints under The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 no complaint relating to sexual harassment at work place has beenreceived 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: 12/07/2017 ||Sai Ramakrishna Karuturi ||Anitha Karuturi |
|Place: Bangalore ||Managing Director ||Whole Time Director |