DIRECTORS REPORT TO THE MEMBERS, Your directors have pleasure in submitting their twentieth annual report of the company together with the audited statement of accounts for the year ended 31st march 2015. BUSINESS Karuturi global limited is the world largest producer of cut roses and having a global presence in asia, America and Europe. The company has its operations in india ethiopla dubal Kenya diversified in to agriculture and food processing producing pulses oil seeds maize, rice suger cut roses plants production and distribution gherikins baby com jalapenos and bottled pickles. RESULTS OF OPERATION During the financial year ended march 31, 2015 total revenue of the company was Rs. 30,561.32 lakhs against the revenue for the previous year which was Rs.51,749.93 lakhs . the company has during the year under review has posted a net profit of Rs.3,246.88 lakhs against net profit of Rs.6,909.18lakhs in the previous year. Revenue and profit decreased due to non inclusion of Kenyan operation. SHARE CAPITAL During the year there was no change in the issued paid up subscribed equity share capital of the company on march 31,2015 the company share capital stood at Rs.80,97,26,648/- divided in to share of Rs.1/- each. RESERVES Changes in reserves is been disclosed in notes to accounts refer 22table. DIVIDEND Your directors do not recommend any dividend on the shares of the company for the year under review. TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PERTECTION FUND The company will transfer the amount to investor education and protection fund on due date due date as merationed in the notice of the AGM no unclaimed dividend is due for transfer to investor education and protection fund Deposits 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. 1. Mr. Sai Ramakrishna Karuturi 2. Ms. Anitha Karuturi 3.man mihan agarwal 4.mahendra kumar sunkara 5.sunil gupta 6.ac daeshan Mr sunit gupta and mr.ac darshan were appointed as additional directors on 30th may 2015 and hold the said office till the date of this annual general meeting. A notice has been received from a member proposing his candidature for his reappointment. Declaration by independent directors The company has received declaration from all independent directors of the company confirming that they meet with the criteria of independence as prescribed under section 149 of the companies act 2013 and clause 49 agreement the independent directors have also confirmed that they have complied with the company code of conduct Key managerial personnel Mr. shireesh jain the cfo resigned during the year under review 1. Mr. Sai Ramakrishna Karuturi 2. Ms. Anitha Karuturi 3. Karuturi Floritech Pvt Ltd. India 4. Florista India Pvt. Ltd. India 5. Karuturi Flower Express Pvt. Ltd. India 6. Karuturi Foods Pvt Ltd., India 7. Karuturi Overseas Ltd., Dubai 8. Flower Xpress FZE, Dubai 9. Yeshoda Investments Ltd, Kenya 10. Rhea Holdings Ltd, Kenya 11. Surya Holdings Ltd, Kenya 12. Karuturi Sports Ltd, Kenya. 13. Karuturi Ltd, Kenya 14. Karuturi Hospital Ltd, Kenya 15. Ethiopian Meadows Plc, Ethiopia 16. Karuturi Agro Products Plc., Ethiopia 17. Surya Blossoms Plc. Ethiopia 18. Shiv Pack PLC, Ethiopia 19. Karuturi Greens and Marketing Private Limited 20. Karuturi Vegproducts Private Limited 21. Karuturi Farm Fresh Products Private Limited 22. Karuturi Holdings Ltd, Dubai Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report No material changes and commitments affecting the financial position of the company occurred between the end of the financial year to which this financial statement relate on the date of this report Statutory auditors m/s.s bhat & associates chartered accountants registration number 014925s)were appointed as the statutory auditors of the company holds office till the conclusion of this annual general meeting. The board recommends’ their appointment as statutory auditors of the company from the conclusion of this annual general meeting upto the conclusion of 24th annual general meeting in terms of the section 139 (1) of the companies act 2013. The company has received a certificate from the above auditors to the effect that if they are reappointed it would in accordance with the provision of section 141 of the companies act 2013. Details of policy developed and implemented by the company on its corporate social responsibility initiatives The brief outline of the corporate social responsibility initiatives undertaken by the company on csr activities during the year are set out in annexure b required under the provision of section 135 and schedule vii of the companies act 2013. The csr policy is available on the website of the company Being the initial year the company was in the process of evaluating the focus areas / locations of intervention for csr activities to cater to the pressing needs of society responsible company .your company is committed to increase its CSR impact and spend over the coming years with aim of playing a largest role in India sustainable development by embedding wider economic social and environmental objectives. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company operation in future No orders were passed by any couts or tribunals impacting the going concern status and company operations in future Explanation or comments on qualification reservation or adverse remarks or disclaimers made by the auditors in their reports Point: 1 the company sales and purchase transaction are normality supported by valid documents such as p.o.d.c,g.r.n.etc however in view of some unique and unconventional trade practives including barter systems and not having not using bank accounts which are peculiar to agricultural business all the transaction are not as per the procedures suggested by the suditors the company has substantially improved upon the documentation and continues to do so it is also submitted that apart from certain intricacies related to the sectoral business there is no material misstatement Point 3 the company has initially transferred an amount of 98,12,261,90 uss as share application moneylaone to karuturi overseas ltd Dubai . this amount has been outstanding and shown in books as shares application money pending allotment under other non current assets as loans under loans and advances out of this 10,000,000us$ has been utilized to allot shares of karuturi oversee as limited and the corresponding exchange gain of INR 15,41,03,228 has been transferred from FCMTR account to profit & loss account as per as-11 the effects of changes on foreign exchange rates . Point 4: the increase is as per the calculation provided to the auditors and it is mainly due to very high function in the usd inr parity. Secretarial auditors The company has appointed mr vijayakrishna kt company secretary Bangalore to conduct its secretarial audit for the financial year ended march31,2015. The secretarial auditors have submitted their report confirming compliance by the company of all the provision of applicable corporate laws. The report has certain qualification reservation or adverse remak. The secretarial audit report is annexed to this report. Explanation or comments on qualification reservation or adverse remarks or disclaimers made by the secretarial auditors in their reports a.the company has updated all the policies in the website of the company however dur to technical errors certain policies were crashed same will be updated. b.the company will file all the returns with registrar of companies c.the company did not receive the accounts from the receivers because of which there was delay in holding annual general meeting . with regard to constitution of nomination and remuneration committee the board is appointing two more independent directors to comply with to comply with the statute. D&e.the company will take appropriate steps with regard to the same. The company has filed the delayed rectums as accounts were not received from kerya there was delay in filling the returns with reserve bank of india f. the company has taken appropriate stapes with regard to falling of foreign assets and liabilities statement with RBI. g. the company has sent all the rectums to AD banker but they did not accept dur to want of information the company was given all the information because of which there was delay in the returns . h.the company has paid the penalty and closed the issue with regard to related party transaction the same were included in notes to accounts EMPLOYEE STOCK OPTION PLAN (WSOP) the company has commissioned its maiden employee stock option plan during the year 2006. Through this the company allotted 7,47,416 equity shares of Rs.1 each were allotted on exercise of options granted to the eligible employee of the company in to equity shares dueling the year 2012-13 for 2014-15 nil STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY the company does not have any risk management policy as the element of risk threatening the company existence is very minimat INTERNAL FINANCIAL CONTROLS OVER FINANCIAL STATEMENTS AND COMPLIANCE OF LAWS The board of directors is of the view that the existing financial controls adopted with reference to financial statements within the company are adequate. The company has a adequate systems and process to monitors and endure compliance with applicable laws rules guidelines. Audit committee The audit committee constituted by the company meets the requirement of section 177 of the companies act 2013 as well as of clause 49 of the listing agreement and the details of ifs composition are furnished in the corporate governance report attached, there was no instance during the year 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 the requirement of section 178 of the companies act 2013 as well as that of clause 49 of the listing agreement and the details of its composition are furnished in to corporate governance report attached the company is appointing two independent directors to fulfill all the obligation require under stature. Vigil mechanism The code of conduct and vigil mechanism applicable to directors and denior management of the company is available on the company website at www.karuturi.com. Annual return The extracts of annual retune pursuant to the provision of section 92 read with rule 12 of the companies management and administration rules 2014 is furnished in annexure a and is attached to this report Corporate governance Pursuant to clause 49 of the listing agreement with the stock exchanges CEO& CFO certification of the financial of the company report on corporate governance and auditors report on compliance with the corporate governance requirements have been included as annexure to this report. Particulars of loans guarantees or investments made under section 188 of the companies act 2013 Particulars of loans guarantes and investments form part of note no 2.13,212.2019 and 2.1 respectively to the financial statements provided in the full version of the annual report. Related party transaction All arrangements /transaction entered by the company with it related parties during the year were in ordinary course of business and an arms length basis. during the year , the company has not entered into any arrangement transaction with related partied which could be considered material accordance with the company policy on related party transaction and accordingly the disclosure of related party transaction in form AOC 2 is not applicable however names of related parties and details of transaction with them have been included in note no.2.3c,2.19 and 3.6 to the financial statements provided 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 of technology the company is however aeare of its responsibilities and has at every available opportunities used and implemented such measures so as to enable energy conservation. There has been no technology absorption involved . The total foreign exchange inflow and outflow dueing the year under review is as follows Total foreign exchange earnings Rs. 25,41,13.40lakhs Total foreign exchange outgo Rs. 22,165,.54lakhs DIRECTORS RESPONSIBILITY STATEMENT In accordance with provision of section 134(5) of the companies act 2013 the board hereby submits its responsibility statement a.in the preparation of the annual account the applicable accounting standards has been followed along with proper explanation relating to material departures b)the directors has selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and dair view of the state of affaires of the company at the end of the financial year and of the profit and loss of the company for that period c)the directors has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets 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 company and such internal controls are adequate and operating effectively and f .the directors has divided proper systems to ensure compliance with the provision of all applicable laws and that such systems were adequate and operating effectively BOARD EVALUATION pursuant to the provision of the companies act 2013 and clause 49 of the listing agreement the board has carried out an annual performance evaluation of its own performance the directors individually as well as the evaluation of the working of its austi nomination &remuneration and compliance committees the manner in which the evaluation has been carried out is posted on the website of the company independent directors a separate meeting of the independent directors was convened which reviewed the performance of the board as a whole the non independent directors and the chairman. Remuneration policy The board has on the recommendation of the nomination remuneration committee framed a policy for selection and appointment of directors senior management and their remuneration the remuneration policy is stated in the corporate governance report. The information required pursuant to section 197 of the companies 2013 read rule 5 of the companies rules 2014 in respect of employee of the company is furnished in annexure to mgt -9 Particulars of employee In terms of section 136 of the act the report and accounts are being sent to the members and others entitled ther to excluding the information on employee particulars which is available for inspection by the member at the registered office of the company during business hours on working day of the company up to the date of the ensuing annual general meeting. If any member is interested in obtaining a copy there of such member may write to the company secretary in this regard DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSED)ACT 2013. While the company has set up a committee to look in to the companions under the sexual harassment of women at workplace (prevention prohibition and redressed ) act 2013 no complaint relating to sexual harassment at work place has been revived during the year ACKNOWLEDGEMENT Your directors place on record their sincere thanked to bankers business associated consultants and various government authorities for their continued support extended to your companies activities during the year under review your directors also acknowledges gratefully the shareholders for their support and confidence reposed on your company FOR AND ON BEHALF OF THE BOARD OF DIRECTORS SAI REMAKRISHNA KARUTURI MANAGING DIRECTORS ANITHA KARUTURI DIRECTORS DATE : 14/08/2015 PLACE : BANGALORE |