Karuturi Global Ltd Directors Report.
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.
Karuturi Global Limited is the worlds 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 Companys financial performance for the year under review along with previous year figures is given hereunder:
(Amount in Rs. Lakhs)
|Particulars||Financial Year Ended|
|Profit/(loss) Before Interest, Depreciation & Tax (PBITD)||-77.35||2,709.20||14,041.35||24,896.21|
|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.
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 companys share capital stood at Rs. 1,49,75,31,526/- divided into equity 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 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.
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
|1.||Sai RamaKrishna Karuturi||Chairman and Managing Director|
|2.||Anitha Karuturi||Whole Time 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 Companys 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|
|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 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 DIRECTORS APPOINTMENT AND REMUNERATION DETAILS
The Board Nomination and Remuneration committee overseas the Companys 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 Boards Report.
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 Indias 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 Companys Sales and Purchase transactions are normally supported by valid documents such as P.Os., 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.
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 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 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.
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.
The Code of Conduct and vigil mechanism applicable to Directors and Senior Management of 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 Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure A and is attached to this Report.
Pursuant to Regulation 34 of the Listing Regulations executed with the stock exchange, a management discussion and analysis, Corporate Governance report and Auditors 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 arms 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 Companys 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.
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.
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.
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).
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|