To the Members,
Your Directors have pleasure in submitting their Twenty Second Annual Report of the
Company together with the Audited Statements of Accounts for the year ended 31st March,
2017.
BUSINESS:
Karuturi Global Limited is the world's largest producer of cut roses and having a
global presence in Asia, America and Europe. The company has its operations in India,
Ethiopia, Dubai & Kenya, diversified into agriculture, floriculture and food
processing producing Pulses, Oil seeds, Maize, Rice, Sugar, Cut roses, Plants production
and 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 year
figures 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 |
1,015.69 |
1,421.46 |
22,612.76 |
33,033.90 |
| Profit/(loss) Before Interest, Depreciation & Tax (PBITD) |
-77.35 |
2,709.20 |
14,041.35 |
24,896.21 |
| Finance Charges |
125.24 |
3,852.88 |
936.63 |
5,546.52 |
| Depreciation |
74.56 |
53.85 |
4,356.56 |
4,316.32 |
| Provision for Income Tax (including for earlier year) |
-384.34 |
87.56 |
-309.37 |
111.94 |
| Net Profit /(loss) After Tax |
107.19 |
-1,285.09 |
9,057.53 |
14,921.43 |
RESULTS OF OPERATIONS
During the financial year ended March 31, 2017 total revenue of the Company was Rs.
1,015.69 lakhs as against the revenue for the previous year which was Rs. 1,421.46 lakhs
and net profit for the financial year ending March 31, 2017 Rs. 107.19 lakhs as against
the previous year which was Rs. (1,285.09) lakhs at standalone level. During the financial
year ended March 31, 2017 total revenue of the Company was Rs. 22,612.76 lakhs as against
the revenue for the previous year which was Rs. 33,033.90 lakhs and net profit of for the
financial year ending March 31, 2017 Rs. 9,057.53 lakhs as against the previous year which
was Rs. 14,921.43 lakhs at consolidated level.
SHARE CAPITAL
During the year, the company has issued 47,78,04,878 (Forty Seven Crores Seventy Eight
Lakhs Four Thousand Eight Hundred Seventy Eight) Equity shares to the Share holders. On
March 31, 2017, the company's share capital stood at Rs. 1,49,75,31,526/- divided into
equity shares of Rs. 1/- each.
RESERVES
Changes in reserves is been disclosed in Notes to Accounts refer 2.2 table.
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 PROTECTION FUND
The company will transfer the amount to Investor Education and protection Fund on due
date as mentioned 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 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 offer
herself for re- appointment.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all Independent Directors of the Company con
rming that they meet with the criteria of independence, as prescribed under Section 149 of
the Companies Act, 2013 and Regulation 25 of the Listing Regulations. The Independent
Directors 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 resigned
during the year
Mr. Ashok Herur was appointed as an Additonal Independent Director effective 15th
February 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 15th
February 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 |
SUBSIDIARY COMPANIES:
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 THE
FINANCIAL YEAR AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company
occurred between the ends of the financial year to which these financial statements relate
on the date of this report.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant material order passed by the regulators or courts or
tribunals which has impacted the going concern status and operations of the company in
future.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION DETAILS
The Board Nomination and Remuneration committee overseas the Company's Nomination
process for Independent Directors and in that connection to identify screen and review
individuals qualified to serve as an independent Director on the Board. Further, the
information about the elements of remuneration package of individual directors is provided
in the extract ofthe Annual Return in Form MGT-9 enclosed to Board's Report.
STATUTORY AUDITORS
Messer G.G Patil & Company were appointed as Statutory Auditor of the Company until
the conclusion of this Annual General Meeting. Due to their pre-occupation they have
resigned. The Board recommends appointment of Messer H. Muralidhar (Firm Registration
No.011874S) as a Statutory Auditor of the Company from the conclusion of the Annual
General Meeting up to the conclusion of 27th 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 appointed, it would be in accordance with
the provisions 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 ("CSR") initiatives
undertaken by the Company on CSR activities during the year are set out in Annexure B
required 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 of
intervention for CSR activities to cater to the pressing needs of society and deliver
optimal impact. As a socially responsible company, your Company is committed to increase
its CSR impact and spend over the coming years, with its aim of playing a larger role in
India's sustainable development by embedding wider economic, social and environmental
objectives.
The net profit of the company was Rs 107.19 lakhs and turnover of the Company Rs.
1,015.69 lakhs during the year under review. Therefore the Company is not subject to
provisions of Section 135 of the Companies Act, 2013
EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR
DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS
Point No 1 : The Company's Sales and Purchase transactions are normally supported by
valid documents such as P.O's., D.C., G.R.N. etc. However, in view of some unique and
unconventional trade practices including barter systems and not having/not using bank
accounts which are peculiar to agricultural business, all the transactions are not as per
the procedures suggested by the Auditors. 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 No 2: RBI condition was conditional and same was not agreed to by Bondholders.RBI
capped interest @7% however Bondholder agreed to 7.7%.We sought RBI permission for
relaxation and the same was not yet granted.
SECRETARIAL AUDITOR
The Company had appointed Mr. Vijayakrishna KTCompany Secretary, Bangalore, to conduct
its Secretarial Audit for the nancial year ended March 31, 2017. The Secretarial Auditors
have submitted their report, con rming compliance by the Company of all the provisions of
applicable corporate laws. The Report does contain certain quali cation, reservation or
adverse remark. The Secretarial Audit Report is annexed to this report.
EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR
DISCLAIMERS 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 of
information 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 year
2006. Through this, the Company allotted 7,47,416 Equity Shares of Re. 1 each were
allotted on exercise of options granted to the eligible employees of the Company into
Equity 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 THE
COMPANY
The Company does not have any Risk Management Policy as the element of risk threatening
the 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 has
contributed to establishment of more robust and effective IFC framework, prescribed under
section 134(5) of Companies Act, 2013. 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 monitor and ensure
compliance with applicable laws, rules and guidelines.
AUDIT COMMITTEE
The Audit Committee constituted by the Company meets the requirement of Section 177 of
the Companies Act, 2013 as well as that of Regulation 18 of the SEBI (Listing Obligations
and Disclosure Requirements,)Regulations 2015 and the details of its 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 Regulation 19 of
the SEBI (Listing Obligations and Disclosure Requirements,)Regulations 2015 and the
details of its composition are furnished in the Corporate Governance Report attached. The
company is appointing one additional Independent Director and one Executive Director to
fulfill all the obligations required under statute.
VIGIL MECHANISM
The Code of Conduct and vigil mechanism applicable to Directors and Senior Management
of the Company is available on the Company's website at www.karuturi.com.
ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions 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 Regulation 34 of the Listing Regulations executed with the stock exchange,
a management discussion and analysis, Corporate Governance report and Auditor's
Certificate regarding compliance of conditions of corporate Governance forms part of the
annual report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES
ACT, 2013
Particulars of loans, guarantees and investments form part of Note no 2.13, 2.12, 2.19,
and 2.1 respectively to the financial statements provided in the full version of the
Annual Report.
RELATED PARTY TRANSACTION
All arrangements / transactions entered by the Company with its related parties during
the year were in ordinary course of business and on an arm's length basis. During the
year, the Company had not entered into any arrangement / transaction with related parties
which could be considered material in accordance with the Company's Policy on Related
Party Transactions and accordingly, the disclosure of Related Party Transactions in Form
AOC 2 is not applicable. However, names of Related Parties and details of transactions
with them have been included in Note no. 2.3C, 2.18, and 3.6 to the nancial 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 aware 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 during the year under review is as
follows:
Total Foreign Exchange Earnings Rs. 29,185.21 lakhs.
Total Foreign Exchange Outgo Rs. 19,753.77 lakhs.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the
Board hereby submits its responsibility Statement:
a) In the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures;
b) The directors had selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs 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 had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions 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 had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 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 Audit, Nomination & Remuneration and
Compliance Committees. Some of the key criteria considered while conducting evaluation
such as degree of fulfilling the key Responsibilities, effectiveness of Board process,
information and functioning, Board dynamics and efficacy of communication with external
stakeholders, Contribution at Board/Committee meetings, guidance or support to Management
outside Board/Committee Meetings.
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 Act, 2013 read with
Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
in 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 the
Members and others entitled thereto, excluding the information on employees' particulars
which is available for inspection by the Members at the Registered Office of the Company
during business hours on working days of the Company up to the date of the ensuing Annual
General Meeting. If any Member is interested in obtaining a copy thereof, such Member may
write to the Company Secretary in this regard.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 While the Company has set up a Committee to look into the
complaints under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, no complaint 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 under
section 143 of the Companies Act, 2013 (including any statutory modification(s) or
re-enactment for the time being in force).
ACKNOWLEDGEMENTS
Your Directors place on record their sincere thanks to bankers, business associates,
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 |
|
| Date: 12/07/2017 |
Sai Ramakrishna Karuturi |
Anitha Karuturi |
| Place: Bangalore |
Managing Director |
Whole Time Director |
