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Directors Report of Freshtrop Fruits Ltd.

Mar 31, 2015

Dear Members,

The Board of Directors have pleasure in presenting 23rd Annual Report and the Audited financial Statement of the Company for the financial year ended March 31, 2015.

FINANCIAL PERFORMANCE:

The working results of the Company for the period ended 31st March, 2015 are as follows:

Amount in Rs.

2014-15 2013-14

Total Income 1,230,946,549 1,147,868,701

Profit before Depreciation and Taxation 166,656,616 103,367,543

Less: Depreciation 37,915,269 21,406,059

Profit before Taxation and Exceptional Items 128,741,347 81,961,484

Less: Exceptional Items 4,705,358 -

Profit before Taxation and after Exceptional Items 124,035,989 81,961,484

Less : Current Tax 42,600,000 23,000,000

Less : Deferred Tax 5,147,048 2,509,091

Less : Tax in respect of earlier years 424,137 -

Profit after taxation 75,864,804 56,452,393

Less: Proposed Dividend 12,145,000 12,145,000

Distribution Tax on Proposed Dividends 2,472,722 2,064,043

Balance of Profit brought Forward from Balance Sheet 191,164,098 148,920,748

Balance of Profit carried to 249,440,049 191,164,098 Balance Sheet

OPERATIONS:

The weather conditions during the grape harvest season for the year under report were the worst we had in the last two decades. There were unseasonal rains in the first two weeks of March, significantly affecting the grape crop. Unfortunately the poor weather conditions affected all grape growing area in the state of Maharashtra.

Despite these conditions your Company has shown a growth in the total income from Rs.1147 million to Rs.1230 million an increase of 6.75%, while the profit after tax has grown from Rs.56.45 million to Rs.75.86 million an increase of 25.59%.

The food processing business also became profitable in the year under report, assisting in achieving the above results.

FRESH FRUITS SEGMENT:

India continues to be an important supplier of Fresh Grapes to Europe. Poor weather conditions have affected this business for the last two years but in fresh produce business the stake holders have learnt the methods of mitigating the risks. The grape growers too have now understood the requirements of the international markets and are to a large extent able to fulfil them.

Total exports of grapes from India to EU decreased from 80325.69MT in 2013-14 season to 55094.87MT in 2014-15 season. While our exports of grapes increased from Rs.837 million to Rs.898 million an increase of 7.28%.

Our business is now expanding into other countries like China and Russia and for the future we expect to continue to grow this business at an average of over 20% for the coming few years.

FOOD PROCESSING SEGMENT:

The Indian food processing industry continues to be a focus area for our Government. Many Incentives are offered for stabling and operating this business. Maggi noodle incident is having on the growth of this business but we feel that this is a temporary phenomenon and all concerned agencies will learn a lot from this and the industry as a whole would mature and get more organized.

We feel the food processing industry is poised for huge growth both in the domestic and the international markets. During the year under report our income from this segment grew from 236.69 million in 2013-14 to 307.27 million in 2014-15 a growth of 30%. We expect to maintain this for the coming year as well.

DIVIDEND:

Considering the performance during the year 2014-15, your Directors have recommended a Dividend of Rs.1/- per share (10 per cent) for the financial Year 2014-15. The dividend payout, if approved, will result in outflow of Rs.14,617,722 inclusive of Rs.24,72,722 on account of Dividend Distribution Tax.

DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Mr. Mayur J Shah, Mr. Dinesh Oza, and Mr. Anil Sharma were appointed as independent directors at the Annual General Meeting of the Company held on September22, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Companies Act, 2013. Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and clause 49 of Listing Agreement and there has been no change in the circumstances which may affect their status as independent director during the year.

The appointments of the Key Managerial Personnel have been made before the commencement of the financial year under review and the same have been formalised during the year as per the Companies Act, 2013.

INSURANCE:

The Companies Plants,Property,Equipments & Stocks adequately insured against the loss of fire and other risks which are considered necessary by the management. The Company has also taken sales turnover policy which includes Marine Coverage, Domestic Sales & inter unit movement of goods. The Company has also taken Directors and officers Liabilities Policies to provide coverage against the liabilities arising on them.

FIXED DEPOSIT:

During the year under review, your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made there under.

CERTIFICATION:

During the year under review, the Company has obtained the following certifications pertaining to the Highest International Standard of Food Safety and Hygiene:

1. ISO 22000:2005 - This certifies the presence of highest food safety management system covering all organisation in the food chain from "farm to fork".

2. SGF International E.V. - This certifies participation of the Company in Voluntary Control System for safeguarding the perfect quality of its products and enhancing customer and consumer safety.

3. Halal Certificate - This certificate is recognition that the products are permissible in Islamic Law and we acquired this certificate to export our products in Islamic Countries.

4. Kosher Certificate - This certificate helps in increasing the saleability of the product in the international supermarkets. There is clear evidence that a kosher symbol boosts market share that a kosher product can win more favourable shelf space, and that positioned next to a competing non-kosher brand. Kosher is and therefore an important investment our Company makes in order to increase market reach and share.

5. BRC certificate for Nasik (Unit I) Pack house and Sangli (Unit II) Pack house.

6. FDA, USA to supply products in US Market.

7. APEDA Recognition for Nasik (Unit I), Sangli (Unit II).

8. Global GAP Certificate

9. FSSAI

10. Business Social Compliance Initiative (BSCI)

FINANCE:

1. CARE has affirmed its rating on long term bank facilities of the Company "CARE A -" & "CARE A2 " for short term facilities of the company.

2. The Bank has renewed Fund and Non Fund Base working Capital Credit facilities up to Rs.2,100 Lakhs.

ENERGY CONSUMPTION:

Total energy consumption and energy consumption per unit of production are as under:

2014-15 2013-14

1. Electricity

a) Purchased

Units KWH 2,282,098 1,958,557

Total amount Rs. 14,748,881 12,136,478

Rate / Unit Rs. 6.46 6.20

b) Own Generation through Diesel Generator Set Units

Diesel

Quantity trs 12,555 21,202

Total Amount Rs. 758,169 1,229,266

Rate / Unit Rs. 60.39 57.98

c) Coal and other Fuels

Units Kgs 1,332,805 9,03,785

Total Amount Rs. 8,678,991 5,898,091

Rate / Unit Rs. 6.51 6.53

TECHNOLOGY ABSORPTION AND ENERGY CONSERVATION:

The Company has a continuous focus on energy conservation. Regular studies are conducted to analyse quantitative energy conservation patterns and variances are rigorously scrutinized. The Company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies.

NUMBER OF BOARD MEETINGS:

The Board of Directors met 4 (four) times during the year under review. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Report.

INDEPENDENT DIRECTORS' MEETING:

The Independent Directors met on March 18, 2015, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of non-independent directors and the Board as a whole; the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

BOARD EVALUATION:

The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013 is available on the website of the Company.

FOREIGN EXCHANGE EARNING AND OUTGO:

Foreign Exchange earnings during the year amounts to Rs.924,157,495 (Previous Year Rs.897,853,788) and Foreign Exchange outgo during the year was Rs.149,881,785 (Previous Year Rs.139,979,724).

CORPORATE GOVERNANCE:

The Company has adopted Corporate Governance practices and has complied with all the mandatory requirements as specified under clause 49 of the Listing Agreement. As required under the listing agreement, a separate Report on Corporate Governance forms part of this Annual Report. The certificate from statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed.

The Board of Directors support the basic principles of good corporate governance. In addition to this, the Board lays strong emphasis on transparency, accountability and integrity.

In compliance with Corporate Governance requirements as per Clause 49 of the Listing Agreement, your Company has formulated and implemented a Code of Business Conduct and Ethics for all Board members and senior management personnel of the Company, who have affirmed the compliance thereto.

CORPORATE SOCIAL RESPONSIBILITY

The details of Corporate Social Responsibility (CSR) carried out by the Company are appended in the Annexure to the Directors' Report.

The particulars of the CSR committee constituted by the Company pursuant to the provisions of Section 135 of the Companies Act, 2013 and the rules forming part of the same are included in the Corporate Governance Report annexed and forming part of this Annual Report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provision of Section 124 of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, 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 upto the date of the ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

SECRETARIAL STANDARDS OF ICSI

The Companies Act, 2013 has mandated the Secretarial Standards on Board Meetings & General Meetings specified by the Institute of Company Secretaries of India (ICSI). The secretarial standards issued by ICSI from time to time, though were recommendatory in nature, have been complied with by the Company during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required by Clause 49 of the Listing Agreement with Stock Exchanges, a management discussion and analysis report is appended to the Annual Report.

FORMATION OF VARIOUS COMMITTEES:

Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed which is a part of this report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirement, The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made thereunder, your Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9, is annexed to this Report as Annexure.

RELATED PARTY TRANSACTIONS:

All the related party transactions entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the rules made thereunder, your Company had appointed Mr. R.S. Sharma, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for financial year 2014-15 is annexed, which forms part of this report as Annexure-B. There were no qualifications, reservation or adverse remarks in the Secretarial Audit Report of the Company.

AUDITORS' & AUDITORS' REPORT:

The Statutory Auditors of the Company, M/s. Mayank Shah & Associates, Chartered Accountants (Firm Registration Number - 106109W) retire at the conclusion of the ensuing Annual General Meeting. The said Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The necessary resolution seeking your approval for re-appointment of Statutory Auditors has been incorporated in the Notice convening the Annual General Meeting.

The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The observations and comments, if any, appearing in the Auditors' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors.

APPRECIATION:

Yours Directors place on record their appreciation of the sincere and devoted services, rendered by all employees of the company and the continued support and confidence of the customers. The Board expresses special thanks to progressive farmers of Maharashtra who have worked hard to achieve International Standards in the quality of their produce. The Board also expresses its sincere thanks to Axis Bank Ltd. and their officers, Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Food Processing Industry (MFPI) and all other well wishers, for their timely support.

Date : August 14, 2015 By order of the Board

Regd. Office: For Freshtrop Fruits Ltd.,

A-603, Shapath IV, Opp. Karnavati Club, S G Road, Ahmedabad - 380 015 Ashok V Motiani Chairman & Managing Director (DIN: 00124470)






Mar 31, 2014

Dear Members,

The Board of Directors have pleasure in presenting 22nd Annual Report and the Audited financial Statement of the Company for the financial year ended March 31, 2014.

FINANCIAL RESULTS:

The working results of the Company for the period ended 31st March, 2014 are as follows:

Amount in Rs. 2013-14 2012-13

Total Income 1,147,868,701 935,028,676

Profit before Depreciation 103,367,543 76,677,010 and Taxation

Less: Depreciation 21,406,059 23,731,319

Net Profit before Taxation 81,961,484 52,945,691

Less: Current Tax 23,000,000 9,806,700

MAT Credit Entitlement - (9,806,700)

Deferred Tax 2,509,091 17,540,433

Tax in respect of earlier years - 32,171

Profit after taxation 56,452,393 35,373,087

Less: Proposed Dividends 12,145,000 1,19,45,000

Distribution Tax on Proposed Dividends 2,064,043 19,37,778

Add/Less: Balance of (Loss) of 148,920,748 127,430,437 Previous years

Balance of Profit/ (Loss carried 191,164,098 148,920,746 to Balance Sheet

OPERATIONS:

The year under report shows a growth in the total income from ''935 million to ''1147 million an increase of 22.76%, while the profit after tax has grown from ''35.37 million to ''56.45 million an increase of 59.59%. The increase in the Income has come from growth in both our business segments, fresh fruits exports and processed food business. We feel both these segments have a large potential and will continue to grow and contribute to the profits of your company in the coming years.

FRESH FRUITS SEGMENT:

Demand for Indian grapes continues to grow in the EU markets. Total exports of grapes from India to EU increased from 64,644MT in 2013 season to 80,141MT in 2014 season an increase of 24%. While our Exports of grapes increased from ''651 million to ''837 million an increase of 28.61%. We are also working on expanding this business in non EU markets. During the 2014 season the business to this market was stagnant but it has a large potential for growth in the coming years.

FOOD PROCESSING SEGMENT:

During the year under report our Income from this segment grew from ''218.70 million in 2012-13 to ''236.69 in 2013-14 a growth of 8.23%.

DIVIDEND:

Considering the performance during the year 2013-14, your Directors have recommended a Dividend of ''1/- per share (10 per cent) for the year ended 31st March 2014. The dividend payout, if approved, will result in outflow of ''14,209,043 inclusive of ''20,64,043 on account of Dividend Distribution Tax.

DIRECTORS:

Mr. Ramchandra Joshi, Independent Director of the Company has resigned w.e.f. November 15, 2013. The Board places on record its deep appreciation of the valuable services and guidance provided by Mr. Ramchandra Joshi during his tenure.

The Company had, pursuant to the provisions of clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. Mayur J Shah, Mr. Dinesh Oza, and Mr. Anil Sharma, as Independent Directors of the Company. As per Section 149(4) of the Companies Act, 2013, which came into effect from April 1, 2014, every listed public company is required to have at least one-third of the total number of directors as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Mrs. Nanita Motiani, who retires by rotation as Director of the Company but being eligible offers herself for re-appointment.

Brief details of Directors proposed to be appointed/re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of Annual General Meeting forming part of this Annual Report.

INSURANCE:

The assets of the Company are adequately insured against the loss of fire and other risks which are considered necessary by the management.

FIXED DEPOSIT:

The Company has not accepted any deposit under the provision of Section 58-A of the Companies Act, 1956 as applicable.

CERTIFICATION:

During the year under review, the Company has obtained the following certifications pertaining to the Highest International Standard of Food Safety and Hygiene:

1. ISO 22000:2005 - This certifies the presence of highest food safety management system covering all organisation in the food chain from "farm to fork".

2. SGF International E.V. - This certifies participation of the Company in Voluntary Control System for safeguarding the perfect quality of its products and enhancing customer and consumer safety.

3. Halal Certificate - This certificate is recognition that the products are permissible in Islamic Law and we acquired this certificate to export our products in Islamic Countries.

4. Kosher Certificate - This certificate helps in increasing the saleability of the product in the international supermarkets. There is clear evidence that a kosher symbol boosts market share that a kosher product can win more favourable shelf space, and that positioned next to a competing non-kosher brand. Kosher is and therefore an important investment our Company makes in order to increase market reach and share.

5. BRC certificate for Nasik (Unit I) Pack house and Sangli (Unit II) Pack house.

6. FDA, USA to supply products in US Market.

7. APEDA Recognition for Nasik (Unit I), Sangli (Unit II) and Satara (Unit III) Pack houses.

8. Global GAP Certificate

9. FSSAI

10. Business Social Compliance Initiative (BSCI)

FINANCE:

During the year under review, the Company has enhanced its Working Capital Facilities of ''1500.00 Lacs for the peak season and ''900.00 Lacs for off season to ''2100.00 Lacs and 900.00 Lacs from Axis Bank Limited for the Fresh Fruits and Food Processing activities of the Company. During the year under review, Axis bank has also sanctioned total fresh term loans of ''550.00 Lacs out of which ''100 lacs for expansion of Unit-1, and ''450 lacs for Expansion of unit-4.

ENERGY CONSUMPTION:

Total energy consumption and energy consumption per unit of production are as under:

2013-14 2012-13

1. Electricity

a)Purchased

Units KWH 1,958,557 1,863,625

Total amount RS 12,136,478 12,129,924 Rate / Unit RS 6.20 6.51

b)Own Generation through Diesel Generator Set

Units

Diesel

Quantity Ltrs 21,202 26,595

Total Amount RS 1,229,266 1,317,202

Rate / Unit RS 57.98 49.53

c) Coal and other Fuels

Units Kgs 9,03,785 763,098

Total Amount RS 5,898,091 4,313,828

Rate / Unit RS 6.53 5.65

TECHNOLOGY ABSORPTION AND ENERGY CONSERVATION:

The Company has a continuous focus on energy conservation. Regular studies are conducted to analyse quantitative energy conservation patterns and variances are rigorously scrutinized. The Company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies.

FOREIGN EXCHANGE EARNING AND OUTGO:

Foreign Exchange earnings during the year amounts to ''897,853,788 (Previous Year ''690,486,703) and Foreign Exchange outgo during the year was ''189,579,203 (Previous Year ''172,288,874).

CORPORATE GOVERNANCE:

The Company has adopted Corporate Governance practices and has complied with all the mandatory requirements as specified under clause 49 of the Listing Agreement. As required under the listing agreement, a separate Report on Corporate Governance forms part of this Annual Report. The certificate from statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed.

The Board of Directors support the basic principles of good corporate governance. In addition to this, the Board lays strong emphasis on transparency, accountability and integrity.

CORPORATE SOCIAL RESPONSIBILITY

The details of Corporate Social Responsibility (CSR) carried out by the Company are appended in the Annexure to the Directors'' Report.

The particulars of the CSR committee constituted by the Company pursuant to the provisions of Section 135 of the Companies Act, 2013 and the rules forming part of the same are included in the Corporate Governance Report annexed and forming part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required by Clause 49 of the Listing Agreement with Stock Exchanges, a management discussion and analysis report is appended to the Annual Report.

FORMATION OF VARIOUS COMMITTEES:

Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed which is a part of this report.

SECRETARIAL AUDIT REPORT:

As a good Corporate Governance practice, the Board of Directors of the Company appointed M/s. R.S. Sharma & Associates, Ahmedabad, Practicing Company Secretary, to conduct Secretarial Audit of the Company. The Secretarial Audit report for the year ended on 31st March, 2014 is provided in the Annual Report.

AUDITORS'' & AUDITORS'' REPORT:

The Statutory Auditors of the Company, M/s. Mayank Shah & Associates, Chartered Accountants (Firm Registration Number - 106109W) retire at the conclusion of the ensuing Annual General Meeting. The said Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The necessary resolution seeking your approval for re-appointment of Statutory Auditors has been incorporated in the Notice convening the Annual General Meeting.

The Board has duly reviewed the Statutory Auditors'' Report on the Accounts. The observations and comments, if any, appearing in the Auditors'' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors.

APPRECIATION:

Yours Directors place on record their appreciation of the sincere and devoted services, rendered by all employees of the company and the continued support and confidence of the customers The Board expresses special thanks to progressive farmers of Maharashtra who have worked hard to achieve International Standards in the quality of their produce. The Board also expresses its sincere thanks to Axis Bank Ltd. and their officers, Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Food Processing Industry (MFPI) and all other well wishers, for their timely support.

Date : 13.08.2014 By order of the Board For Freshtrop Fruits Ltd

Registered Office A-603, Shapath IV, Opp. Karnavati Club, S G Road, Ashok V Motiani Ahmedabad - 380 015 Chairman & Managing Director (DIN: 00124470)


Mar 31, 2013

Dear Members,

The Board of Directors have pleasure in presenting 21st Annual Report and the Audited financial Statement of the Company for the financial year ended 31st March, 2013.

FINANCIAL RESULTS:

The working results of the Company for the period ended 31st March, 2013 are as follows:

Amount in Rs.

2012-13 2011-12

Total Income 935,028,676 618,775,514

Profit before Depreciation and Taxation 76,677,010 30,680,028

Less: Depreciation 23,731,319 23,109,919

Net Profit before Taxation 52,945,691 7,570,109

Less: Current Tax 9,806,700 660,000

MAT Credit Entitlement (9,806,700) (660,000)

Deferred Tax 17,540,433 2,178,734

Tax in respect of earlier years 32,171 -

Profit after taxation 35,373,087 5,391,375

Less: Proposed Dividends 11,945,000 -

Distribution Tax on Proposed Dividends 1,937,778 -

Add/Less : Balance of (Loss) of Previous years 127,430,437 122,039,062

Balance of Profit/(Loss) carried to Balance Sheet 148,920,746 127,430,437

OPERATIONS:

The year under report shows a growth in the total income from Rs. 619 million to Rs. 935 million an increase of 51%, while the profit after tax has grown from Rs. 5.4 million to Rs. 35.37 million. The increase in the Income has come from growth in both our business segments, fresh fruits exports and processed food business. We feel both these segments have a large potential and will continue to grow and contribute to the profits of your company in the coming years.

FRESH FRUITS SEGMENT:

Demand for Indian grapes continues to grow in the EU markets. Our exports of grapes to EU increased from 3,286MT in 2012 season to 3,851MT in 2013 season an increase of 17%. We have been working on expanding this business in non EU markets, our exports to these markets have increased from 532MT in 2012 to 1,476MT in 2013 an increase of 177%.

The domestic fresh fruit and vegetables distribution industry is yet to move from unorganized wasteful system to organized well controlled and hygienic distribution system. We would like to wait some more time before moving into this business.

FOOD PROCESSING SEGMENT:

During the year under report our Income from this segment grew from Rs. 154.44 million in 2011-12 to Rs. 218.70 in 2012-13 a growth of 41.65%. We expect to continue this growth rate for the coming few years.

The domestic industry is yet to change its preference in favour of processed foods. Consumption of value added fruits and vegetables are low compared to the primary processed foods, and fresh fruits and vegetables. The inclination towards processed foods is presently visible only in urban centers but it is bound to spread and increase rapidly in the near future.

Growing urbanization, increasing disposable income, emergence of organised food retail, changing lifestyles and food consumption patterns are the key factors driving growth for processed foods in India. These are post-liberalisation trends that have given an impetus to the sector.

DIVIDEND:

Considering the performance during the year 2012-13, your Directors have recommended a Dividend of Rs. 1/- per share (10 per cent) for the year ended 31st March 2013. The dividend payout, if approved, will result in outflow of Rs. 13,882,778 inclusive of Rs. 1,937,778 on account of Dividend Distribution Tax.

EMPLOYEE STOCK OPTION SCHEME

Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably.

A certificate from M/s. Mayank Shah & Associates, Statutory Auditors, with respect to the implementation of the Company''s Employees Stock Option Scheme, would be placed before the shareholders at the ensuing Annual General Meeting and a copy of the same will also be available for inspection at the registered office of the Company.

Further, the Board of Directors of your Company has vide resolution dated August 13, 2013 approved formulation of a new Employee Stock Option Scheme viz. "Freshtrop Fruits Limited Employee Stock Option Scheme - 2013" ("ESOS-2013") in terms of the SEBI guidelines. The Board has mandated the ESOS Compensation Committee to implement and administer the ESOS-2013. Items seeking your approval for introduction and implementation of ESOS-2013 and granting such number of Stock Options exercisable into not more than 2,00,000 equity shares of Rs. 10/- each to permanent employees, including any Managing or Whole-time Director(s) of your Company and its holding and / or subsidiary companies are included in the Notice

DIRECTORS:

Mr. Dinesh Oza, who retires by rotation as Director of the Company but being eligible offers himself for re- appointment.

AUDIT COMMITTEE:

The Audit Committee consisting of Independent Directors Mr. Ramchandra G. Joshi, Mr. Mayur J. Shah and Executive Director Mrs. Nanita A. Motiani, satisfy the requirements of section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with the Stock Exchange.

INSURANCE:

The assets of the Company are adequately insured against the loss of fire and other risks which are considered necessary by the management.

FIXED DEPOSIT:

The Company has not accepted any deposit under the provision of Section 58-A of the Companies Act, 1956 as applicable.

CERTIFICATION:

During the year under review, the Company has obtained the following certifications pertaining to the Highest International Standard of Food Safety and Hygiene:

1. ISO 22000:2005 - This certifies the presence of highest food safety management system covering all organisation in the food chain from "farm to fork".

2. SGF International E.V. - This certifies participation of the Company in Voluntary Control System for safeguarding the perfect quality of its products and enhancing customer and consumer safety.

3. Halal Certificate - This certificate is recognition that the products are permissible in Islamic Law and we acquired this certificate to export our products in Islamic Countries.

4. Kosher Certificate - This certificate helps in increasing the salability of the product in the international supermarkets. There is clear evidence that a kosher symbol boosts market share that a kosher product can win more favorable shelf space, and that positioned next to a competing non-kosher brand. Kosher is an therefore an important investment our Company makes in order to increase market reach and share.

5. BRC certificate for Nasik (Unit I) Pack house and Sangli (Unit II) Pack house.

6. FDA, USA to supply products in US Market.

7. APEDA Recognition for Nasik (Unit I), Sangli (Unit II) and Satara (Unit III) Pack houses.

8. Global GAP

9. FSSAI

10. Business Social Compliance Initiative (BSCI)

FINANCE:

During the year under review, the Company has renewed its Working Capital Facilities of Rs. 1500.00 Lacs for the peak season and Rs. 900.00 Lacs for off season from Axis Bank Limited for the Fresh Fruits and Food Processing activities of the Company. During the year under review, Axis bank has also sanctioned total fresh term loan of Rs. 487.50 Lacs out of which Rs. 75 lacs for up-gradation of Unit-1, Rs. 112.50 for expansion at Unit-4 and Rs. 300 lacs for working capital requirement of the Company.

TECHNOLOGY ABSORPTION AND ENERGY CONSERVATION:

The Company has a continuous focus on energy conservation. Regular studies are conducted to analyze quantitative energy conservation patterns and variances are rigorously scrutinized. The Company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies.

FOREIGN EXCHANGE EARNING AND OUTGO:

Foreign Exchange earnings during the year amounts to Rs. 690,486,703 (Previous Year Rs. 456,875,079) and Foreign Exchange outgo during the year was Rs. 172,288,874 (Pr. Yr. Rs. 112,700,089).

CORPORATE GOVERNANCE:

The Company has adopted Corporate Governance practices and has complied with all the mandatory requirements as specified under clause 49 of the Listing Agreement. As required under the listing agreement, a separate Report on Corporate Governance forms part of this Annual Report. The certificate from statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed.

The Board of Directors support the basic principles of good corporate governance. In addition to this, the Board lays strong emphasis on transparency, accountability and integrity.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required by Clause 49 of the Listing Agreement with Stock Exchanges, a management discussion and analysis report is appended to the Annual Report.

FORMATION OF VARIOUS COMMITTEES:

Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed which is a part of this report.

SECRETARIAL AUDIT REPORT:

As a good Corporate Governance practice, the Board of Directors of the Company appointed M/s. R.S. Sharma & Associates, Ahmedabad, Practicing Company Secretary, to conduct Secretarial Audit of the Company. The Secretarial Audit report for the year ended on 31st March, 2013 is provided in the Annual Report.

AUDITORS'' & AUDITORS'' REPORT:

M/s. Mayank Shah & Associates, Chartered Accountants, Statutory Auditor of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a confirmation from M/s. Mayank Shah & Associates to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

APPRECIATION:

The Board places on record the appreciation of the sincere and devoted services rendered by all the employees and the continued support and confidence of the customers. The Board expresses special thanks to progressive farmers of Maharashtra who have worked hard to achieve International Standards in the quality of their produce. The Board also expresses its sincere thanks to Axis Bank Ltd., The Royal Bank of Scotland N.V. (formerly known as ABN Amro Bank B.V.) and their officers, Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Food Processing Industry (MFPI) and all other well wishers, for their timely support.

Date : 13.08.2013

By order of the Board Registered Office For Freshtrop Fruits Ltd

A-603, Shapath IV,

Opp. Karnavati Club, S G Road,

Ahmedabad - 380 015 Ashok V Motiani

Chairman & Managing Director


Mar 31, 2012

Dear Members,

The Board of Directors presents 20th Annual Report and the Audited Statement of Accounts of the Company for the period ended 31st March, 2012.

FINANCIAL RESULTS:

The working results of the Company for the period ended 31st March, 2012 are as follows:

Amount in 2011-12 2010-11

Total Income 618,775,514 563,369,007

Profit before Depreciation and Taxation 30,680,028 24,635,430

Less: Depreciation 23,109,919 22,792,573

Net Profit before Taxation 7,570,109 1,842,857

Less: Current Tax 660,000 269,000

MAT Credit Entitlement (660,000) (269,000)

Deferred Tax 2,178,734 731,085

Tax in respect of earlier years - 644,029

Profit after taxation 5,391,375 467,743

Add/Less: Balance of (Loss) of Previous Years 122,039,062 98,195,606

Balance of Profit/(Loss) carried to Balance Sheet 127,430,437 122,039,062

OPERATIONS:

The year under report shows a growth in the total income from Rs.563 million to Rs.619 million an increase of 9.83%, while the profit has grown from a meagre Rs. 0.47 million to Rs.5.4 million. The increase in the income has come mainly from the food processing business which we feel, will now contribute significantly to the profits of the company in the coming years.

FRESH FRUITS SEGMENT:

The German supermarkets after doing an extensive food safety analysis have once again started buying Indian grapes. This is a big positive for industry. This can be seen from the growth in exports of Indian grapes to Europe from 1800 containers in 2011 season to 3200 containers in 2012 season.

Europe has been in recession for the last few years but despite this our exports to EU, except for a dip in 2011 due to CCC issue have shown a steady increase from 224 containers in 2008 to 260 containers in 2012.

We have been working on expanding our business in non EU markets, our exports to non EU markets have increased from 23 containers in 2011 season to 42 Containers in 2012. As a percentage of total exports, our non EU business grew from 9% in 2011 to 14% in 2012. We expect this would increase further in the coming years.

The demand for coloured grapes in the non EU markets has always been quite good but now it is increasing in the EU market as well. This would help us extend our grape export season, resulting in increasing sales without making additional capital investment.

The domestic market for good quality product continues to grow very fast. There is a very huge potential for growth in this market but we have to wait for either the Indian supermarkets to organize their supply chain in the fruit and vegetable segment or the FDI in multi-brand retail being allowed to do business in our country.

Pomegranate availability has also increased and good quality fruit is now available at competitive price. The demand for this product in non EU markets is also very good and we expect this business to revive in the coming years.

FOOD PROCESSING SEGMENT:

During the year under report our income from this segment grew from Rs. 104.02 million in 2010-11 to Rs. 154.44 million in 2011-12 a growth of 45.73%. We expect this to continue for another few years.

In food business it is important to have all quality certifications in place before approaching processed food manufacturers for supplies. For agricultural inputs where the availability of raw materials is seasonal in nature, this process takes time. After all the quality control certificates are in place most of the FMCGs conduct their own audits. Freshtrop has now gone through all this, we are now approved suppliers to some of the large beverages and processed food manufacturers in India.

The fall of the Indian rupee against the US dollar has had a favourable impact on ingredient suppliers to the processed food business. Domestic supplies have become competitive and the food manufacturers have started developing local vendors. We feel this would help us in increasing our business from this segment.

DIVIDEND:

In view of the commitment of the Company towards running of the Food Processing Plant established at Nasik, the Board of Directors are of the view to conserve the resources and do not recommend dividend for this year.

DIRECTORS:

Mr. Ramchandra G Joshi, who retires by rotation as Director of the Company and being eligible offers himself for re-appointment at the ensuing Annual General Meeting.

AUDIT COMMITTEE:

The Audit Committee consisting of Independent Directors Mr. Ramchandra G. Joshi, Mr. Mayur J. Shah and Executive Director Mrs. Nanita A. Motiani, satisfy the requirements of section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with the Stock Exchange.

INSURANCE:

The assets of the Company are adequately insured against the loss of fire and other risks which considered necessary by the management.

FIXED DEPOSIT:

The Company has not accepted any deposit under the provision of Section 58-A of the Companies Act, 1956 as applicable.

CERTIFICATION:

During the year under review, the Company has been through the following certifications to the Highest International Standard of Food Safety and Hygiene:

1. ISO 22000:2005 - This certifies the presence of highest food safety management system covering all organisations in the food chain from "farm to fork".

Z SGF International E.V. - This certifies participation of the Company in Voluntary Control System for safeguarding the perfect quality of its products and enhancing customer and consumer safety.

3. Halal Certificate - This certificate is a recognition that the products are permissible in Islamic Law and we acquired this certificate to export our products in Islamic Countries.

4. Kosher Certificate - This certificate helps in increasing the saleability of the product in the international supermarkets. There is a clear evidence that a kosher symbol boosts market share, that a kosher product can win more favorable shelf space, and that positioned next to a competing non-kosher brand. Kosher is an therefore an important investment our Company makes in order to increase market reach and share.

5. BRC certificate for Sa ng I i U n it.

6. FDA, USA to supply products in US Market.

7. APEDA Recognition for Nasik (Unit I), Sangli (Unit II) and Satara (Unit III) Pack houses.

& GlobalGAP Certificate SHARE

FINANCE:

During the year under review, the Company enjoying its Working Capital Facilities ofRs. 1500.00 Lacs for the peak season and Rs. 900.00 Lacs for off season from Axis Bank Limited for the Fresh Fruits and Food Processing activities of the Company. During the year under review, Axis Bank Limited has also been sanctioned a Fresh short term loan of Rs. 200.00 Lacs for working capital requirement of the Company.

ENERGY CONSUMPTION:

Total energy consumption and energy consumption per unit of production are as under:

2011-2012 2010-2011

1. Electricity

a) Purchased Unite KWH 1,791,469 1,437,899

Total amount Rs. 10,297,827 8,540,514

Rate / Unit 5.75 5.94

b) Own Generation through Diesel Generator Set

Units

Diesel

Quantity Ltrs 25,605 19,040

Total Amount 11,14,133 767,774

Rate / Unit 43.51 40.32

c) Coal and other Fuels

Unite_Kgs 848,955 728,870

Total Amount 4,961,327 3,683,371

Rate /Unit 5.84 5.05

TECHNOLOGY ABSORPTION AND ENERGY CONSERVATION:

The Company has a continuous focus on energy conservation. Regular studies are conducted to analyze quantitative energy conservation patterns and variances are rigorously scrutinized. The Company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies.

FOREIGN EXCHANGE EARNING AND OUTGO:

Foreign Exchange earning during the year amounts to Rs. 456,875,079 (Previous year Rs. 438,836,451) and Foreign Exchange outgoing during the year amounts to Rs. 89,074,661 (Previous year. Rs. 89,805,592)

CORPORATE GOVERNANCE:

The Company has adopted Corporate Governance practices and has complied with all the mandatory requirements as specified under clause 49 of the Listing Agreement. As required under the listing agreement, a separate Report on Corporate Governance forms part of this Annual Report. The certificate from statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed.

The Board of Directors supports the basic principles of corporate governance. In addition to this, the Board lays strong emphasis on transparency, accountability and integrity.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required by Clause 49 of the Listing Agreement with Stock Exchanges, a management discussion and analysis report is appended to the Annual Report.

FORMATION OF VARIOUS COMMITTEES:

Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed which is a part of this report.

SECRETARIAL AUDIT REPORT:

As a good Corporate Governance practice, the Board of Directors of the Company appointed M/s. R.S. Sharma & Associates, Ahmedabad, Practicing Company Secretary, to conduct Secretarial Audit of the Company. The Secretarial Audit report for the year ended on 31st March, 2012 is provided in the Annual Report.

AUDITORS' & AUDITORS' REPORT:

M/s. Mayank Shah & Associates, Chartered Accountants, Statutory Auditor of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a confirmation from M/s. Mayank Shah & Associates to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

APPRECIATION:

The Board places on record the appreciation of the sincere and devoted services rendered by all the employees and the continued support and confidence of the customers. The Board expresses special thanks to progressive farmers of Maharashtra who have worked hard to achieve International Standards in the quality of their produce. The Board also expresses its sincere thanks to Axis Bank Ltd., The Royal Bank of Scotland N.V. (formerly known as ABN Amro Bank N.V.) and their officers, Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Food Processing Industry (MFPI) and all other well wishers, for their timely support.

13th August, 2012 By order of the Board

Regd. Office : For Freshtrop Fruits Ltd.,

A-603,ShapathIV,

Opp. Karnavati Club, S G Road, Ashok V. Motiani

Ahmedabad - 380 015 Chairman & Managing Director

 
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