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Directors Report of Karuturi Global Ltd.

Mar 31, 2016

BOARDS'' REPORT

To the Members,

The Directors are pleased to present Twenty First Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2016.

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

For the Year ended 31st March, 2016

For the Year ended 31st March, 2015

Net Sales /Income from Business Operations

33,149.77

26,622.73

Other Income

1,491.60

3,938.59

Total Income

34,641.37

30,561.32

Less: Depreciation

4,316.32

2,709.09

Profit after depreciation and other expenses

2158.01

1,700.87

Less: Current Income Tax

24.38

0.40

Less: Deferred Tax

87.56

(109.82)

Net Profit after Tax

14,904.83

3,246.88

Earnings per share (Basic)

1.46

0.40

Earnings per Share (Diluted)

1.46

0.40

RESULTS OF OPERATIONS

During the financial year ended March 31,2016 total revenue of the Company was Rs. 34,641.37 lakhs as against the revenue for the previous year which was Rs. 30,561.32 lakhs. The Company has during the year under review has posted a net profit of Rs.14, 904.83 lakhs against net profit of Rs. 3,246.88 lakhs in the previous year.

SHARE CAPITAL

During the year, the company has issued 21 crores Equity Shares to Rhea Holdings Private Limited. On March 31, 2016, the company''s share capital stood at Rs. 101,97,26,648/-, divided into equity share 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 Six present Directors of the Company are as below:

a. Sai Rama Krishna Karuturi

b. Anitha Karuturi

c. Man Mohan Agrawal

d. Mahendra Kumar Sunkara

e. Sunil Gupta

f. Ananth Chandrakanth Darshan

Ms. Anitha Karuturi Director retiring by rotation at this Annual General Meeting and being eligible offer herself for reappointment.

Declaration by Independent Directors

The Company has received declarations 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 Listing Regulations. The Independent Directors have also confirmed that they have complied with the Company''s code of conduct.

Key Managerial Personnel

No directors were appointed or resigned during the year under review. Mr. Shireesh Jain CFO of the Company resigned during the year under review.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had 4 Board meetings during the financial year under review.

Sl. No.

Date of Board Meeting

1.

30th May 2015

2.

14th August 2015

3.

13th November 2015

4.

13th February 2016

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. Gambella Green Valley Plc , Ethiopia

12. Ethiopian Meadows Plc, Ethiopia

13. Karuturi Agro Products Plc., Ethiopia

14. Surya Blossoms Plc. Ethiopia

15. Karuturi Greens and Marketing Private Limited., India

16. Karuturi Vegproducts Private Limited., India

17. Karuturi Farm Fresh Products Private Limited., India

18. Shiv Pack PLC, Ethiopia

19. Karuturi Holdings Ltd, Dubai

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

Karuturi Limited is Kenya is wound up pursuant to court order. Apart from it there is no other order passed by any regulators which has impacted the going concern status and operations of the company.

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.

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 the appointment of M/s G.G. Patil and Co., as a statutory auditor of the Company from the conclusion of the Annual General Meeting up to the conclusion of 26th 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 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.

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: The Company had initially transferred an amount of 98,12,261.90 US$ (INR 4,555,088,130.75) as Share Application Money/loan to Karuturi Overseas Ltd, Dubai. This amount has been outstanding and shown in books as “Share Application Money pending allotment” under “Other Non Current Assets” / as ''Loans'' under ''Loans and Advances''. Out of this, 7,500,000 US$ has been utilized to allot shares of Karuturi Overseas Limited and the corresponding exchange gain of INR 14,88,84,929 has been transferred from FCMTR account to Profit & Loss account as per AS-11 “The Effects of Changes in Foreign Exchange Rates”.

Point no 3: The decrease is as per the calculations provided to the auditors and it is mainly due to fluctuation in the USD.INR parity.

Point no 4: The access to the books of accounts of Rhea Holdings Limited, Surya Holdings Limited & Yeshoda Investments Limited received to us late Mid May, due to which we could not had sufficient time to conduct audit before board meeting.

Point no 5: Company has received the forensic audit report of Karuturi Limited for the period from February 2014 to August 2015. With the intention of fair disclosure to share holders we have included the said report in the consolidated financial statement.

SECRETARIAL AUDITOR

The Company had appointed Mr. Vijayakrishna KT Company Secretary, Bangalore, to conduct its Secretarial Audit for the financial year ended March 31, 2016. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Report does contain certain qualification, 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 will file all the returns with Registrar of Companies

b. The company had sent returns to Authorized dealer bank but due to want of information there was delay in filing returns with RBI.

c. The company has appointed Company Secretary on August 12th 2016.

d. Company will take necessary steps to publish notice in newspaper.

e. The company will file all the returns with Registrar of Companies

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 & for 2015-16 - 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.

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 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 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. 31,517.62 lakhs

Total Foreign Exchange Outgo Rs. 26,513.49 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 committee, Nomination & Remuneration committee, Stakeholder Relationship Committee and Corporate Social Responsibility Committee. 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 etc.

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 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 & 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: 12/08/2016 Sai Ramakrishna Karuturi Anitha Karuturi

Place: Bangalore Managing Director Director


Mar 31, 2014

The Members Karuturi Global Limited Bangalore

The Directors are pleased to present the Nineteenth Annual Report along with the audited accounts of the Company for the financial year ended 31st March, 2014.

FINANCIAL RESULTS:

On a consolidation basis, the financial results for the year under report of your Company stood as follows:

(Rs. in lakhs) Particulars 2013-14 2012-13

Total Income 51,749.93 56,780.19

Profit before depreciation & tax 7,773.35 14,578.08

Less: Depreciation 3,889.21 3,296.08

Less: Provision for tax (886.04) 4.74

Add: Deferred Tax - Credit 1,465.96 4,180.01

Net Profit after Tax 6,909.18 10,813.54

COMPANY PERFORMANCE:

All of you are aware of the unfortunate developments in Kenya last year. Due to continued non-cooperation of various stake holders, Company is unable to complete consolidation of financials beyond 31.12.2013 Company had experienced extremely hostile situation and despite great efforts, found resistance in debt raising. Now, the Company has found a sudden change of fortune with the Govt of Ethiopia offering debt and christening the Company''s project as National Project. Also, the Company has generated significant liquidity with sale of surplus assets.

With the lower Oil price the Company expects a huge sustained saving in its freight cost. This, it is hoped, will more than compensate for the weaker Euro.

Income;

Sales - The sales in financial year 2013-14 were Rs. 49,305.70 lakhs as against Rs. 56,069.62 lakhs in financial year 2012-13.

Expenditure;

Material Expenses: In financial year 2013-14 the raw material expenses / purchases amounted to Rs. 13,133.67 lakhs constituting 26.63 % of net sales while raw material expenses in 2012-13 were Rs. 12,655.49 lakhs, constituting 22.57 % of net sales.

Manufacturing, Administrative & Selling Expenses: The Manufacturing, Administrative and Other Manufacturing Expenses comes to Rs. 20,155.15 lakhs in financial year 2013-14 as compared to Rs. 21,081.45 lakhs in financial year 2012-13. As a percentage of net sales it is increased to 40.88% in financial year 2013-14 from 37.60% in financial year 2012-13.

Employee Expenses - The employee expenses decreased to Rs. 3,426.09 lakhs in financial year 2013-14 from Rs. 4,973.48 lakhs in financial year 2012-13. As a percentage of net sales it has decreased from being 8.87% of net sales in financial year 2012-13 to 6.95% of net sales in financial year 2013-14.

Financial Charges - Financial charges amounted to Rs. 7,261.68 in financial year 2013-14 as compared Rs. 3.491.66 lakhs in financial 2012-13. As a percentage of net sales, the financial charges expenses increased from 6.23% in

2012- 13 to 14.73% in 2013-14.

Depreciation - Depreciation amounted to Rs. 3,889.21 lakhs in financial year 2013- 14 as compared to Rs 3,296.08 lakhs in financial year 2012-13, representing an increase of 17.99%.

Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) - The Company recorded EBIDTA of Rs. 15,035.03 lakhs in financial year 2013- 14 as against an EBIDTA of Rs. 18,069.77 lakhs in financial year 2012-13, with EBIDTA margin decreasing to 30.49% in financial year 2013-14 from 32.23% in financial year 2012-13. Net Profit after tax and prior period adjustment - Our Net Profit for the financial year 2013-14 stood at Rs. 6,909.18 lakhs as against Rs.10,813.54 lakhs for financial year 2012-13.

DIVIDEND:

In view of the aggressive ongoing expansion programs and considering the requirement of funds, Directors have decided not to recommend payment of dividend for the financial year 2013-14.

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS:

BUSINESS REVIEW:

During the financial year 2013 -14, your Company was able to maintain its position in the Floriculture Industry during continued European Crisis which is its key market. The Company continued to make steady progress in its Agricultural foray developing Land in Ethiopia.

AGRICULTURE:

Company continued its efforts to develop the agriculture farm. Major crops expected are corn, pulses, sugarcane, oil seeds and paddy.

Company has been focusing on wet cultivation during the monsoons. Agriculture during the dry seasons will be driven by construction of canals and implementation of over 90 high performance pumps to draw water from the river Baro. Water supply will be further augmented by bore wells.

The Company works with expert farming companies from South America, USA, South Africa and India who have been contributing immensely to the farming operations in Gambella. Karuturi is synonymous with responsible and good business in Ethiopia.

FLORICULTURE:

The cut flower business had a stable beginning this year with the Euro remaining around 1.35 to a dollar. This has added stability towards margins of the company. The weather conditions also remained helpful to the flower business.

The Company continued its efforts for sustainable initiatives like cutting edge biological controls like Phytoselius (Predatory Mites). We have eliminated spraying for two spotted red spider mites by 95%. Moving to Hydroponics resulted in 10% improvement in production with 30% reduction in consumption of water & fertilizers. Keeping in mind its responsibility towards environment, the Company has stopped all cultivation on riparian land and is in complete compliance with all local regulations.

The Company has established an earth worm project on an area of 2000 square meters and is consulting organic scientists from the University of Nairobi for further refining the leachate. This project has reduced the fertilizer cost by 10-12%.

The above efforts have considerably reduced the operational costs and are making floriculture business sustainable for a longer period.

FOOD PROCESSING:

Karuturi Foods Private Limited (KFPL) continued its efforts to maintain its top line in food processing during the year. The weather conditions in the region have been a little unfavorable and hence the growth could not be achieved to the maximum. The Company continued its reach to Africa, Greece, South America and East European countries besides its main markets in Russia & Ukraine Regions. In the year under report, the Company has been trying to spread its market across various countries to reduce its dependency on Russia which is a very price sensitive and volatile market.

To strengthen the Agri Operations, the Company had gone to non- traditional Gherkin growing areas to improve the yield as well as to source higher volumes to avoid field competition.

The Company''s factory has been certified by BRC (British Retail Consortium) besides HACCP, FDA & KOSHER, as all customers expect these Certifications as a pre-requisite for placing the Orders with KFPL.

OUTLOOK:

Your Company has a strategic goal to bring a larger area under Agricultural Production and simultaneously continues to create new opportunities in its Floriculture and Food Processing businesses.

REPLY TO AUDITORS''S QUALIFICATIONS Dtd 14.02.2015

Point No. 1: Karuturi Limited and its associate companies have vigorously contested the receivership in the Kenyan Court and the Management is hopeful of a result in favor of the company.

Point No.2 & 3: The Company''s Sales and Purchase transactions are normally supported by valid documents such as P.O., 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.4: The Company had initially transferred an amount of 98,012,261.90 US$ (INR 4,555,088,130.75) as Share Appplication Money / loan to Karuturi Overseas Ltd, Dubai. This amount has been outstanding and shown in books as "Share Application Money pending allotment" under "Other Non Current Assets" / as ''Loans'' under ''Loans and Advances''. Out of this, 12,500,000 US$ has been utilized to allot shares of Karuturi Overseas Limited and the corresponding exchange gain of INR 203779048 has been transferred from FCMTR Account to Profit & Loss Account as per AS-11 "The Effects of Changes in Foreign Exchange Rates.

Point No.5: The records and documents for the stock taking were provided for auditing. Since the subsidiary is in Agriculture domain, stock taking is an elaborate exercise which was getting done only once a year; however based on the recommendation of the auditors, the same has been started on quarterly basis, which further needs to be strengthened. It may, however, be noted that there is no variation from the accounting policies followed by the Company.

Point No.6: The increase is as per the calculations provided to the auditors and it is mainly due to very high fluctuation in the USD / INR parity.

PAID UP CAPITAL:

The total Paid-up Capital of the Company continued to remain at Rs. 80,97,26,648/- as on 31.03.2014.

GROUP COMPANIES:

The following persons constitute the group coming within the definition of Group as defined in the Monopolies and Restrictive Trade Practices Act, 1969, who exercise or are established to be in a position to exercise control, directly or indirectly over the Company [Section 2(ef)] as on 31.03.2014:

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

DIRECTORS:

Mrs. Anitha Karuturi , Director, retires by rotation and being eligible, offers herself for re-appointment.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws, continued to discharge its functions during the year under review.

PERSONNEL:

The Directors wish to place on record their sincere appreciation for the services rendered by the employees of the Company at all levels both placed in India and Overseas.

EMPLOYEE STOCK OPTION PLAN (ESOP):

The Company had 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 on exercise of Options granted to the eligible employees of the Company to convert into Equity Shares during the year 2012-2013. (For 2013-14: NIL)

DEPOSITS:

The Company has not accepted any deposits from the public falling under the purview of Section 58A of the Companies Act, 1956.

AUDITORS:

Messrs YCRJ & Associates, Chartered Accountants, Bangalore, the existing Auditors, are not being reappointed at the ensuing Annual General Meeting. Hence based on requisition from shareholders, your Directors recommend Messrs S. Bhat & Associates as the Statutory Auditors for the year 2014-15 in the ensuing Annual General Meeting.

FOREIGN EXCHANGE EARNINGS & OUTFLOW:

The Company earned Rs.431.97 Lakhs in Foreign Exchange for the year ended 31.03.2014 as compared to Rs.1,431.75 lakhs for the year ended 31.03.2013.

The out flow in foreign exchanges was Rs.0.35 lakhs during the year under report as compared to Rs.90.74 lakhs during the previous year.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, CEO&CFO certification on the financials 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.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Directors state:

i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departure;

ii) that 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 the profit of the Company for the period;

iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors had prepared the annual accounts on a going concern basis.

INSURANCE COVERAGE:

The Board reports that the Company has adequately insured all the assets of the Company.

ACKNOWLEDGEMENTS:

Your Directors acknowledge with gratitude the confidence reposed on the Company by the Shareholders, Bankers, Statutory Authorities, Customers, Vendors and all others who deal with the Company and also wish to thank all the employees, both India and Overseas, for extending their sincere and unstinted support, and expect the same for the years to come.

By the Order of the Board

Place: Bangalore Sai Ramakrishna Karuturi Date: 14th Feb 2015 Chairman and Managing Director


Mar 31, 2013

To The Members of Karuturi Global Limited

Bangalore

The Directors have pleasure in presenting the Eighteenth Annual Report along with the audited accounts of the Company for the financial year ended 31st March, 2013.

FINANCIAL RESULTS:

On a consolidation basis, the financial results for the year under report of your Company stood as follows: (Rs. in lacs)

Particulars 2012-13 2011-12

Total Income 56780.19 58925.88

Profit before depreciation & tax 14578.11 17674.85

Less: Depreciation 3296.08 3,867.98

Less: Provision for tax 4.74 139.62

Add: Deferred Tax – Credit 4180.01 17.08

Net Profit after Tax 10813.57 15632.35

COMPANY PERFORMANCE:

Income:

Sales – The sales in fiscal 2013 were Rs. 55,986.10 lakhs as against Rs. 56,314.26 lakhs in fiscal 2012.

Expenditure:

Material Expenses - In fiscal 2013 the raw material expenses / purchases amounted to Rs. 32,631.69 lakhs constituting 58.29 % of net sales while raw material expenses in 2012 were Rs. 30,858.30 lakhs, constituting 54.80 % of net sales.

Selling & Administrative Expenses - The administrative expenses decreased to Rs 1743.29 lakhs in fiscal 2013 as compared to Rs 2,326.11 lakhs in fiscal 2012. As a percentage of net sales it to 3.11 % in fiscal 2013 from 4.13 % in fiscal 2012.

Employee Expenses - The employee expenses decreased to Rs.1,240.31 lakhs in fiscal 2013 from Rs.3,993.83 lakhs in fiscal 2012. As a percentage of net sales it has decreased from being 7.09% of net sales in fiscal 2012 to 2.22% of net sales in fiscal 2013.

Financial Charges - Financial charges amounted to Rs. 3491.29 lakhs in fiscal 2013 as compared Rs.1,257.89 lakhs in fiscal 2012. As a percentage of net sales, the financial charges expenses increased from 2.23 % in 2012 to 6.24% in 2013.

Depreciation - Depreciation amounted to Rs 3296.08 lakhs in fiscal 2013 as compared to Rs.3867.98 lakhs in fiscal 2012, representing a decrease of 14.29%.

Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) – The Company recorded EBIDTA of Rs. 18,069.40 lakhs in fiscal 2013 as against an EBIDTA of Rs. 18,932.74 lakhs in fiscal 2012, with EBIDTA margin decreased from 33.62 % in fiscal 2012 to 32.27% in fiscal 2013. Net Profit after tax and prior period adjustment – Our Net Profit for the fiscal 2013 stood at Rs.10,813.57 lakhs as against Rs.15,632.35 lakhs for fiscal 2012.

DIVIDEND:

In view of the aggressive ongoing expansion programs and considering the requirement of funds, Directors have decided not to recommend payment of dividend for the financial year 2012-13.

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS :

BUSINESS REVIEW:

During 2012 -13, your Company was able to maintain its position in the Floriculture Industry in the midst of the European Crisis which is its key market. The Company continued to make steady progress in its Agricultural foray developing 35,000 Acres of Land in Ethiopia.

AGRICULTURE:

Karuturi has harvested its maiden 21,000 tonnes of Maize crop cultivating on 10,000 Acres in Ethiopia.

Karuturi is at the threshold of planting 12,500 Acres this April –May 2013. Apart from corn, other crops which will form a part of our agro portfolio will be sugarcane, oil seeds and paddy. While wet cultivation during the monsoons is being maximized, agriculture during the dry seasons will be driven by construction of canals and implementation of over 90 high performance pumps to draw water from the river Baro and further irrigate over 35,000 hectares. This is augmented by bore wells.

The Company now work with expert farming companies from South America, USA, South Africa and India who have been contributing immensely to the farming operations in Gambella. Karuturi is synonymous with responsible and good business in Ethiopia.

FLORICULTURE:

The cut flower business has had a strong and vibrant beginning this year with the Euro surging to 1.35 from 1.27 to a dollar last year. This has added significant margin to our already comfortable margin of 27% taking it to 32%.

The excellent weather this year has helped to have a very buoyant flower market. This was the best Valentine the Company had in 10 years with record price surges, the top seller Red variety from Ethiopia fetched Euro 0.81/stem (INR 58) and Kenya fetched 0.46 (INR 33).

The Company adopted sustainable initiatives like cutting edge biological controls like Phytoselius (Predatory Mites) we have eliminated spraying for two spotted red spider mites by 95%. Also moving to Hydroponics entailed 10% improvement in production with 30% reduction in consumption of water & fertilizers. Keeping our environmental responsibilities in mind the company has stopped all cultivation on riparian land and is in complete compliance with all regulations.

The Company has established a earth worm project on an area of 2000 square meters and we are consulting organic scientists from the University of Nairobi with view to further refining the leachate. This project has reduced our fertilizer cost by 8-10%.

The operational costs have considerably reduced by 28.57% adding an additional $ 5 million to the bottom-line for 2013.

FOOD PROCESSING:

This food Processing business at Karuturi Foods Private Limited (KFPL) has shown about 29 % growth in the top line during the year. The Company has expanded its reach to newer markets to Africa, Greece , South America and East European countries besides its main markets in Russia & Ukraine Regions. The Company has invested in some new machinery to increase the efficiency level of its processing to increase line speed. In the current year your Company plans to spread its market across various countries to reducing its dependency on Russia which is a very price sensitive & volatile market.

To strengthen the Agri Operations, Your company had gone to nontraditional Gherkin growing areas to improve the yields as well as to source higher volumes to avoid the field competition.

KFPL has participated in the Moscow Food Fair and ANUGA at Cologne, Germany and PLMA, Amsterdam.

KFPL Plans to increase its processing capacity again in the next year by installing another pasteurizer, boiler and material handling equipment.

The factory has been certified by BRC (British Retail Consortium) besides HACCP, FDA & KOSHER as all customers expect these Certifications as pre requisite for placing the Orders with KFPL.

OUTLOOK:

Your Company''s Strategic Goal this year would be to bring a larger area under Agricultural Production and continue to create new opportunities in its Floriculture & Food Processing.

INCREASE IN PAID UP CAPITAL:

The total Paid up Capital of the Company as on 31.03.2013 was Rs. 80,97,26,648/- as compared to Rs. 808,979,232/- as on 31.03.2012. This increase in Capital is pursuant to allotment of 7,47,416 Equity Shares of Re1/- each to the Employees as per ESOS.

Preferential Allotment of Fully Convertible Debentures

The statutory approvals are awaited and hence the allotment is pending.

The allotment of the aforesaid Fully Convertible Debentures shall be made within 15 days from the date of passing of the resolution subject however to the applicable statutory regulatory provisions and the Guidelines by the Securities Exchange Board of India.

The Fully Convertible Debentures will be compulsorily convertible into Equity Shares with face value of Re. 1/- each before expiry of 18 months from the date of such allotment.

The number of Equity Shares to be allotted shall be dependent on the pricing determined under SEBI Regulations and other factors shall be determined at the time of conversion to equity.

The pricing of the resultant Equity Shares shall be determined as per SEBI (ICDR) Regulations which at present is as follows:

Higher of the following:

The average of the weekly high and low of the closing prices of the related equity shares quoted on the recognised stock exchange during the six months preceding the relevant date; or n The average of the weekly high and low of the closing prices the related equity shares quoted on a recognised stock exchange during the two weeks preceding the relevant date. For the aforesaid purpose, ''''Relevant date'''' as per regulation 71(b) of SEBI (ICDR) regulations means the date in case of preferential issue of convertible securities, a date thirty days prior to the date on which the holders of convertible securities become entitled to apply for equity shares.

GROUP COMPANIES:

The following persons constitute the group coming within the definition of ''''Group'''' as defined in the Monopolies and Restrictive Trade Practices Act, 1969, who exercise or are established to be in a position to exercise control, directly or indirectly over the Company [Section 2(ef)]:

1 Mr. Sai Ramakrishna Karuturi

2 Ms. Anitha Karuturi

3 Karuturi Floritech Pvt Ltd. India

4 Karuturi Foods Pvt Ltd., India

5 Karuturi Overseas Ltd , Dubai

6 Flower Xpress FZE, Dubai

7 Yeshoda Investments Ltd, Kenya

8 Rhea Holdings Ltd, Kenya

9 Surya Holdings Ltd, Kenya

10 Karuturi Sports Ltd, Kenya.

11 Karuturi Ltd, Kenya

12 Karuturi Hospital Ltd, Kenya

13 Ethiopian Meadows Plc, Ethiopia

14 Karuturi Agro Products Plc., Ethiopia

15 Surya Blossoms Plc. Ethiopia

16 Karuturi Greens and Marketing Private Limited

17 Karuturi Vegproducts Private Limited

18 Karuturi Farm Fresh Products Private Limited

19 Shiv Pack PLC, Ethiopia

Karuturi Telecom Pvt Ltd., India (upto 19.04.2013)

DIRECTORS:

Mr. Raja Vara Prasad Bommidala and Mr. Mahendra Kumar Sunkara Directors, retire by rotation and being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws, continued to discharge its functions during the year under review.

PERSONNEL:

The Directors wish to place on record their sincere appreciation for the services rendered by the employees of the Company at all levels both placed in India and Overseas.

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 2012-2013.

DEPOSITS:

The Company has not accepted any deposits from the public falling under the purview of Section 58A of the Companies Act, 1956.

AUDITORS:

Messrs Hari Bhakti & Co., Chartered Accountants, the existing Auditors have resigned. Hence based on requisition from shareholders, your Directors recommend Messrs YCRJ & Associates, Chartered Accountants, Bangalore as the statutory auditors for the year 2013-14 in the ensuing Annual General Meeting.

FOREIGN EXCHANGE EARNINGS & OUTFLOW:

The Company earned Rs. 1,431.75 Lakhs in Foreign Exchange for the year ended 31.03.2013 as compared to Rs. 2,102.11 lakhs for the year ended 31.03.2012.

The out flow in foreign exchanges was Rs 90.74 lakhs as compared to Rs. 4.75 lakhs during the previous year.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, CEO&CFO certification on the financials of the Company, Report on Corporate Governance, and Auditors'' Report on compliance with the Corporate Governance requirements have been included as Annexures to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Directors state:

I) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departure;

ii) that 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 the profit of the Company for the period;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the annual accounts on a ''going concern'' basis.

INSURANCE COVERAGE:

The Board reports that the Company has adequately insured all the assets of the Company.

ACKNOWLEDGEMENTS:

Your Directors acknowledge with gratitude the confidence reposed on the Company by the Shareholders, Bankers, Statutory Authorities, Customers, Vendors and all others who deal with the Company and also wish to thank all the employees both India and Overseas for their sincere and unstinted support extended and expects the same for the years to come.

By the Order of the Board

Place : Bangalore Sai Ramakrishna Karuturi

Date : 12th August,2013 Chairman and Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Seventeenth Annual Report along with the audited accounts of the Company for the financial year ended 31st March, 2012.

FINANCIAL RESULTS:

On a consolidation basis, the financial results for the year under report of your Company stood as follows:

(Rs. in lacs)

Particulars 2011-12 2010-11

Total Income 56,304.67 63,872.65

Profit before depreciation & tax 19,622.82 21,821.78

Less: Depreciation 3,867.98 6,186.55

Less: Provision for tax 139.62 104.49

Add: Deferred Tax – Credit -17.08 33.30

Net Profit after Tax 15,632.30 15,497.44

COMPANY PERFORMANCE:

Income:

Sales – The sales in fiscal 2012 were Rs. 56,304.67 lakhs as against Rs. 63,872.65 lakhs in fiscal 2011.

Expenditure :

Material Expenses – In fiscal 2012 the raw material expenses / purchases amounted to Rs.21,374.16 lakhs constituting 37.96% of net sales while raw material expenses in 2011 were Rs.21,329.25 lakhs, constituting 33.39% of net sales.

Selling Administrative Expenses – The administrative expenses increased to Rs.1,4,193.40 lakhs in fiscal 2012 as compared to Rs.13,921.71 lakhs in fiscal 2011. As a percentage of net sales it increased to 25.21% in fiscal 2012 from 21.80% in fiscal 2011

Employee Expenses – The employee expenses increased from Rs.5,964.15 lakhs in fiscal 2011 to Rs.4,422.87 lakhs in fiscal 2012. As a percentage of net sales it has decreased from being 9.34% of net sales in fiscal 2011 to 7.86% of net sales in fiscal 2012.

Financial Charges – Financial charges amounted to Rs.1,257.78 lakhs in fiscal 2012 as compared Rs.1,736.60 lakhs in fiscal 2011. As a percentage of net sales, the financial charges expenses decreased from 2.72% in 2011 to 2.23% in 2012.

Depreciation – Depreciation amounted to Rs.3,867.96 lakhs in fiscal 2012 as compared to Rs.6,186.55 lakhs in fiscal 2011, representing an decrease of 2.82%.

Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) – The Company recorded EBIDTA of Rs.20,880.60 lakhs in fiscal 2012 as against an EBIDTA of Rs. 23,558.51 lakhs in fiscal 2011, with EBIDTA margin decreased from 37.90% in fiscal 2011 to 37.09% in fiscal 2012. Net Profit after tax and prior period adjustment – Our Net Profit for the fiscal 2012 stood at Rs.15,632.30 lakhs as against Rs.15,497.45 lakhs for fiscal 2011.

DIVIDEND:

In view of the aggressive on going expansion programs and considering the requirement of funds, Directors have decided not to recommend payment of dividend for the financial year 2011-12.

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS :

BUSINESS REVIEW:

During 2011 -12, your Company was able to maintain its position in the Floriculture Industry in the midst of the European Crisis which is its key market. The Company continued to make steady progress in its Agricultural foray developing 1,00,000 Ha of Land in Ethiopia.

AGRICULTURE :

Your Company has procured wide range of machinery and equipment, for sowing, harvesting, spraying and other processes, like high end Tractors of 250 HP and 450 HP, Mulch Rippers, Trailers, Disc plough, cultivators, maize planters, puddling wheels for the plantation purpose. These equipments have been procured from all over the world from companies like CASE, John Deere, Great Plains, Doosan, Volvo, CRI, JCB, Ashok Leyland etc.

Your Company had planted more than 10000 Ha last year in June but suffered a setback due to flash floods which had damaged the crops. Subsequently dykes were rebuilt with a larger base of 9 meters width at the bottom, 3 meters width at the top and a height of 3 meters. Dykes spreading over 110 KM has been built and the same is being expanded to all areas. This will prevent any flooding in future.

Your Company has made substantial progress in setting up irrigation systems and is building a network of canals and pumping water from Baro river.

This season 5000 Ha of Maize and some trial crop of Paddy has been planted and the same is growing very well. A good harvest is expected. Drought in America and increased demand has resulted in the price of Maize quoting at a very encouraging level. The Sugarcane Nursery is being expanded to cover about 200 Ha.

Your Company has engaged a team of Farmers from Uruguay, South America and Farmers National Company, USA to provide the necessary expertise for Large Scale Farming. These farmers have over 20 years of experience in doing Large scale farming using high end farm equipments. These farmers have been engaged on a success based model extending its scheme of engaging with various specialists for Key functional and support areas.

FLORICULTURE:

The flagship floriculture business has been affected largely by the volatility of the Euro and the Euro zone events. During Valentine this year both the quantities and prices were affected due to extreme weather condition going down to – 20 degrees in most parts of the markets in Europe. The Company has managed to keep the impact of the Euro Zone crisis at the minimum level.

In its Kenyan operations the Company continues to focus on green initiatives which include Bio gassifiers to generate electricity, expanding the vermi licheate program and also a further extension of the green planet program.

The Company has also planted new varieties in the farms which have good potential acceptability.

FOOD PROCESSING:

This food Processing business at Karuturi Foods Private Limited(KFPL) has shown about 30% growth in the topline shipping about 260 containers during the year. The Company has expanded its reach to newer markets in South America and East European countries besides its main markets in Russia and USA. The Company has invested in some new machinery to increase the efficiency levels of its processing. In the current year your Company plans to spread its market across various countries reducing its dependence on Russia which is a volatile market.

The factory has been certified by BRC (British Retail Consortium) besides HACCP, FDA & KOSHER.

KFPL has participated in the Moscow Food Fair and ANUGA at Cologne, Germany and PLMA, Amsterdam. KFPL plans to increase its processing capacity again in the next year by installing another pasteurizer, boiler and material handling equipments.

ISP:

The ISP business being carried on under Karuturi Telecom Private Limited (KTPL) was stable with the said Company growing its capacity by about 20% in terms of delivery of Bandwidth and VOIP minutes. The Company saw pressure on the margins due to fall in prices. The Company has acquired some new customers in various geographies and also continues to grow its business with its existing key customers. Stable growth is expected in the current year.

OUTLOOK:

Your Company's Strategic Goal this year would be to bring a larger area under Agricultural Production during the year and continue to create new opportunities in its Floriculture, Food Processing and IT businesses.

INCREASE IN PAID UP CAPITAL:

The total Paid up Capital of the Company as on 31.03.2012 was Rs. 80,89,79,232/- as compared to Rs. 80,55,07,010/- as on 31.03.2011. This increase in Capital is pursuant to allotment of 3,472,222 Equity Shares of Re1/- each to the strategic investors.

GROUP COMPANIES:

The following persons constitute the group coming within the definition of "Group" as defined in the Monopolies and Restrictive Trade Practices Act, 1969, who exercise or are established to be in a position to exercise control, directly or indirectly over the Company [Section 2(ef)]:

1. Mr. Sai Ramakrishna Karuturi

2. Ms. Anitha Karuturi

3. Karuturi Telecom Pvt Ltd., India

4. Karuturi Floritech Pvt Ltd. India

5. Karuturi Foods Pvt Ltd., India

6. Karuturi Overseas Ltd , Dubai

7. Flower Xpress FZE, Dubai

8. Yeshoda Investments Ltd, Kenya

9. Rhea Holdings Ltd, Kenya

10. Surya Holdings Ltd, Kenya

11. Karuturi Sports Ltd, Kenya.

12. Karuturi Ltd, Kenya

13. Karuturi Hospital Ltd, Kenya

14. Gambella Green Valley Plc , Ethiopia

15. Ethiopian Meadows Plc, Ethiopia

16. Karuturi Agro Products Plc., Ethiopia

17. Surya Blossoms Plc. Ethiopia

18. Karuturi Greens and Marketing Private Limited

19. Karuturi Vegproducts Private Limited

20. Karuturi Farm Fresh Products Private Limited

DIRECTORS:

Mrs. Aslesha Madappa and Mr. Man Mohan Agrawal, Directors, retire by rotation and being eligible, offer themselves for re-appointment. Mr. Raaj Sah, a very eminent professor in USA, was inducted to the Board during the year as Additional Director is recommended to be appointed as Director.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws, continued to discharge its functions during the year under review.

PERSONNEL:

The Directors wish to place on record their sincere appreciation for the services rendered by the employees of the Company at all levels both placed in India and Overseas.

EMPLOYEE STOCK OPTION PLAN (ESOP):

The Company has commissioned its maiden Employees Stock Option Plan during the year 2006. Through this, the Company has converted 3,910,166 Stock options granted to the eligible employees of the Company into Equity Shares during the year 2009 -2010 & 2010-2011.

DEPOSITS:

The Company has not accepted any deposits from the public falling under the purview of Section 58A of the Companies Act, 1956.

AUDITORS:

Messrs Ishwar & Gopal, Chartered Accountants, the existing Auditors, have expressed their inability to be reappointed at the ensuing Annual General Meeting. Hence, based on requisition from a Shareholders, your Directors recommend Messrs Haribhakti & Co, Chartered Accountants, Bangalore as the statutory auditors for the year 2012-13 in the ensuing Annual General Meeting.

FOREIGN EXCHANGE EARNINGS & OUTFLOW:

The Company earned Rs.2,480.16lakhs in Foreign Exchange for the year ended 31.03.2012 as compared to Rs. 2,564.49 lakhs for the year ended 31.03.2011.

The out flow in foreign exchanges was Rs.4.75 lakhs as compared to Rs.7.51 lakhs during the previous year.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, CEO&CFO certification on the financials of the Company, Report on Corporate Governance, and Auditors' Report on compliance with the Corporate Governance requirements have been included as Annexures to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Directors state:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departure;

ii) that 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 the profit of the Company for the period;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the annual accounts on a 'going concern' basis.

INSURANCE COVERAGE:

The Board reports that the Company has adequately insured all the assets of the Company.

ACKNOWLEDGEMENTS:

Your Directors acknowledge with gratitude the confidence reposed on the Company by the Shareholders, Bankers, Statutory Authorities, Customers, Vendors and all others who deal with the Company and also wish to thank all the employees both India and Overseas for their sincere and unstinted support extended and expects the same for the years to come.

By the Order of the Board

Place:Bangalore Sai Ramakrishna Karuturi

Date :4th September,2012 Chairman and Managing Director


Mar 31, 2011

To

The Members Karuturi Global Limited Bangalore

The Directors have pleasure in presenting the Sixteenth Annual Report along with the audited accounts of the Company for the financial year ended 31st March, 2011.

FINANCIAL RESULTS:

On a consolidation basis, the financial results for the year of your Company stood as follows:

(Rs. in lacs)

Particulars 2010-11 2009-10

Total Income 63,872.65 53,381.82

Profit before depreciation & tax 21,821.78 19,837.44

Less: Depreciation 6,186.55 5,562.30

Less: Provision for tax 104.49 8.64

Add: Deferred Tax 33.30 (71.97)

Net Profit after Tax 15,497.44 14,338.47

COMPANY PERFORMANCE:

Income:

Sales – The sales in fiscal 2011 were Rs. 63,872.65 lakhs as against Rs 5,3381.62 lakhs in fiscal 2010

Expenditure :

Material Expenses – In fiscal 2011 the raw material expenses / purchases amounted to Rs. 21,292.82 lakhs constituting 33.34 % of net sales while raw material expenses in 2010 were Rs. 16,689.84 lakhs, constituting 31.26% % of net sales.

Selling Administrative Expenses – The administrative expenses increased to Rs.14,506.48 lakhs in fiscal 2011 as compared to Rs. 13,633.31 lakhs in fiscal 2010. As a percentage of net sales it increased to 22.71 % in fiscal 2011 from 25.54 % in fiscal 2010.

Employee Expenses - The employee expenses increased from Rs. 3,860.73 lakhs in fiscal 2010 to Rs. 4,240.53 lakhs in fiscal 2011 . As a percentage of net sales it has decreased from being 7.23% of net sales in fiscal 2010 to 6.64% of net sales in fiscal 2011.

Financial Charges - Financial charges amounted to Rs.2,660.45 lakhs in fiscal 2011 as compared Rs. 649.48 lakhs in fiscal 2010. As a percentage of net sales, the financial charges expenses increased from 1.22% in 2010 to 4.17% in 2011.

Depreciation - Depreciation amounted to Rs. 6,186.55 lakhs in fiscal 2011 as compared to Rs.5,562.29 in fiscal 2010, representing an increase of 11.22% The increase is on account of additional capital expenditure in Ethiopia.

Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) – We recorded EBIDTA of Rs. 24,482.23 lakhs in fiscal 2011 as against an EBIDTA of Rs. 20,486.92 lakhs in fiscal 2010, with EBIDTA margin increased from 37.50% in fiscal 2010 to 37.90 % in fiscal 2011 .

Net Profit after tax and prior period adjustment – Our Net Profit for the fiscal 2011 stood at Rs.15,497.44 lakhs as against Rs. 14,338.47 lakhs for fiscal 2010 .

DIVIDEND:

Continuing with the policy of sharing the profits with the shareholders and keeping in mind the ongoing aggressive expansions programs, your Board is pleased to recommend Dividend of Re 0.10 per Equity Share of Re.1/- each (10%).

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS :

BUSINESS REVIEW :

During 2010-11, your Company continued to consolidate its leadership position in floriculture globally, increased presence in our retail and processed foods business and were on track on our ambitious project of developing 1,10,000 Ha (1st Phase) of agricultural land in Ethiopia across two sites in Gambela and Bako.

AGRICULTURE :

During the year 2010-11 your Company made substantial progress in the Agriculture project implementation at the sites at Bako and Gambela in Ethiopia.

Your Company has cleared and developed over 50000 Ha of Land in total out of which over 20000 Ha of land is ready for sowing and additional 10000 ha is being made ready. The cultivation of paddy and maize has already commenced on more than 12000 Ha.

Your Company has procured Wide range of Machinery and Equipment for Land Development, Sowing, Harvesting, Spraying and other processes like Mulch Rippers, Trailers, Disc plough, cultivators, maize planters, Paddy Planters, puddling wheels etc.. These equipments have been procured from all over the world USA, China, India, Israel, Korea, Japan from Companies like John Deere, Case, Great Plains, Doosan, Volvo, CRI, JCB, Ashok Leyland etc. The company has made a substantial progress in setting up irrigation systems. Over 50km of drainage has been established, 40km of dykes and over 50 KM of Canals for Irrigation have been built. Pumping system for water from Baro River with 22000 LPS capacity has been setup. Company is developing Infrastructure like Roads, Storage, Housing etc.

Sowing maize has started since June 2011 on over 10000Ha. Sugarcane nursery has been set up on 100Ha which shall be doubled to 200ha.

In Bako, over 2300Ha of Land is under the process of sowing, spraying and weeding. Maize has been planted in Bako.

In Gambella, a nursery was established for Palm, which currently has 500,000 Palm plants ready for transplanting on 3 - 4,000 Ha of land with each hectare having a potential of yielding 5,000 Kgs of crude oil.

Your Company has engaged experts from various fields to assist the project implementation with their technical knowhow and insights. Bruce Crabb from Scotland is working on the Oil palms, Water watch & WAPCO team is handling Irrigation and Drainage, Dr. Kaironthe, Former head of Cotton research Institute, Nagpur is associated with the cotton project, while Mr. Daves from Swaziland is advising on the Equipment selection, I-maritime Marine consultancy group has designed the logistics for transporting grains from Gambella to Southern Sudan, Northern Sudan, Uganda and Kenya. Dr. Biksham from Switzerland is guiding the company on SRI and SSI techniques in rice and sugarcane. Work has been initiated to take care of the social and environmental obligations as per our detailed environmental Impact study that was carried out earlier.

Sensing the need for value creation along the agro supply chain, your Company is in the process of establishing joint ventures for setting up agro processing plants near the farming area. Rice processing unit of 8 tons per hour, Sugar mill with 5000 tons crushing capacity per day and Oil extraction units for oil palm have been planned for the initial phases of our harvest.

To tap the local and international markets for supply of produce, your Company has been actively building a strong customer network through Trade shows and marketing across Ethiopia, South Sudan, Sudan, Djibouti, Kenya Tanzania, UGANDA, Middle East. Associations have been established for supply of produce to Ethiopian Commodity Exchange, USAID's World Food Program and several other regional and other international food processing companies.

The Company agricultural initiatives will not only have a major long term impact on the country but also the entire Africa continent. Its ability to produce over a little over half a million tons of cereals and 100,000 tons of palm oil will significantly alter the demand situation in favor of the African consumer.

FLORICULTURE :

Your Company currently enjoys a 9% market share in the European cut rose industry and with plans to add another 25 Ha at Wolliso in Ethiopia under green houses by 2012. Company has been focusing on bringing higher efficiency and developing new markets in the Floriculture business. The Company has gained access to new markets in the East European Block and Scandinavian countries. These markets have given a good response to its Hybrid Tee varieties from Ethiopia. It has also seen growth in its Middle East markets. It has long term contracts with the global retailing chains for retailing its produce across Europe.

In its Kenyan operation the Company has focused on green initiatives which include:

Back to Earth program, Recycling of farm green cuttings into organic mulch and compost, leading to savings in fertilizers and energy requirements.

Bio Gasifiers to convert all uprooted root stalk and plant pruning's into electricity through conversion of trapped gases, with a current planned capacity to generate 30000 units of electricity per month and 100000 units per month in future, use of earthworms to produce 360000 litres of vermin leacheate per annum. Capacity expansion planned to touch 500000 litres per annum so as to bring in additional savings in fertilizer usage. Green Planet Program to plant 100,000 drought resistant African species of plants on track.

FOOD PROCESSING :

Karuturi Foods Pvt. Ltd. (KFPL) a 100% subsidiary of Karuturi Global Lmited is working on doubling its processing capacity. KFPL has added a vegetable filling machine which will increase the capacity of bottling to double. KFPL has won the bid and has been given the LOA to take over on PPP basis 3 farms of the Karnataka Government to develop and grow horticultural crop. This will give a big boost to the processing business. The factory has been certified by HACCP, FDA and Kosher and has also got certified for BRC (Global Standard for Food Safety) which will give a big boost to access the USA and Europe markets.

KFPL has participated in leading Food Trade Fairs in Germany, Middle East, Russia and Africa and will be participating in the coming year too along with USA trade fair as soon as BRC certification is in place. The company has achieved a status as multi product, multi pack company in the international market. KFPL has developed and exported products like Pickled Gherkins, Jalapenos, Cherry Tomatoes, Sliced and Diced Gherkins and other vegetables. KFPL has successfully exported products in glass jars, cans/tins, pails, drums and even glass jars with shrink wrapped form.

KFPL has also entered into domestic markets under its private label as well as with other brands for selling into Retail and Food Services.

ISP :

The Internet Service business started looking up after facing a downside last year due to the recessionary trends. Pressure on margins continues to haunt all the service providers since there has been severe budgetary constraints among the customers especially the IT companies who are one of the largest consumers of Internet bandwidth and other solutions.

The focus continued in expanding our business within the areas where the Company has presence and has created some local POP's in states like Gujarat/Tamil Nadu etc to increase the reach on a franchisee model. VOIP business continues to be one of the focus areas to address the corporate for both their office and remote needs.

Data center business has been identified as a growth area and efforts are on to formalize the same and start offering the services from middle of next year. Services could not start from the current year due to challenges in terms of availability of requisite power, which can be scaled up based on the needs.

Company has strategize to offer retail broadband and a few operators with their own cable network have been identified to start the services in Bangalore on a pilot.

OUTLOOK :

Our strategic goals this year will be, to increase land productivity in agriculture through innovation, continue to build leadership and expand our markets in cut flower exports, create new opportunities for our food processing and broadband businesses.

INCREASE IN PAID UP CAPITAL:

The total Paid up Capital of the Company as on 31.03.2011 was Rs. 80,55,07,010/- as compared to Rs. 48,93,05,325/- as on 31.03.2010. This increase in Capital is pursuant to conversion of Warrants to the extent of Rs. 21.87 crores of Re.1 each, FCCB conversions to the extent of Rs.1,25,52,918, conversion of 8,58,666 Employee Stock Options into Equity Shares , issue of 3,63,90,101 shares under private equity transaction and 4,77,00,000 under laying shares of the GDR issue of USD 22 Mln.

GROUP COMPANIES:

The following persons constitute the group coming within the definition of "Group" as defined in the Monopolies and Restrictive Trade Practices Act, 1969, Who exercise or are established to be in a position to exercise control, directly or indirectly over the Company [Section 2(ef)]:

1. Mr. Karuturi Sai Ramakrishna

2. Ms. Karuturi Anitha

3. Mr. Karuturi Surya Rao (Since demised)

4. Karuturi Telecom Pvt Ltd., India

5. Karuturi Floritech Pvt Ltd. India

6. Karuturi Foods Pvt Ltd., India

7. Karuturi Flower Express Pvt Ltd, India

8. Karuturi Overseas Ltd , Dubai

9. Flower XPress FZE, Dubai

10. Yeshoda Investments Ltd, Kenya

11. Rhea Holdings Ltd, Kenya

12. Surya Holdings Ltd, Kenya

13. Karuturi Sports Ltd, Kenya.

14. Karuturi Ltd, Kenya

15. Karuturi Hospital Ltd, Kenya

16. Gambella Green Valley Plc , Ethiopia

17. Ethiopian Meadows Plc, Ethiopia

18. Karuturi Agro Products Plc., Ethiopia

19. Surya Blossoms Plc. Ethiopia

DIRECTORS:

The Directors, Mr. Raja Varaprasad Bommidala and Mr.Mahendra Kumar Sunkara, retire by rotation and being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws, continued to discharge its functions during the year under review.

PERSONNEL:

The Directors wish to place on record their sincere appreciation for the services rendered by the employees of the Company at all levels both placed in India and Overseas.

EMPLOYEE STOCK OPTION PLAN (ESOP):

The Company has commissioned its maiden Employees Stock Option Plan during the year 2006. Through this the Company has converted 30,51,500 Stock options granted to the eligible employees of the Company into Equity Shares during the year 2008 - 09 & 2009 - 10 and for the year ended 31.03.2011 the company has converted 8,58,666 stock options into Equity Shares.

DEPOSITS:

The Company has not accepted any deposits from the public falling under the purview of Section 58A of the Companies Act, 1956.

AUDITORS:

Messrs ISHWAR & GOPAL, Chartered Accountants, the existing Auditors, have expressed their willingness to get reappointed at the ensuing Annual General Meeting.

The Board of Directors recommends their appointment.

FOREIGN EXCHANGE EARNINGS & OUTFLOW:

The Company earned Rs 2,564.49 lakhs in Foreign Exchange for the year ended 31.03.2011 as compared to Rs. 2,021.75 lakhs for the year ended 31.03.2010.

The out flow in foreign exchanges was Rs.7.51 lakhs as compared to Rs.5.64 lakhs during the previous year.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, CEO&CFO certification on the financials of the Company, Report on Corporate Governance, and Auditors' Report on compliance with the Corporate Governance requirements have been included as Annexures to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Directors State:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departure;

ii) that 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 the profit of the Company for the period;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the annual accounts on a 'going concern' basis.

INSURANCE COVERAGE:

The Board reports that the Company has adequately insured all the assets of the Company.

ACKNOWLEDGEMENTS:

Your Directors acknowledge with gratitude the confidence reposed on the Company by the Shareholders, Bankers, Statutory Authorities, Customers, Vendors and all others who deal with the Company and also wish to thank all the employees both India and Overseas for their sincere and unstinted support extended and expects the same for the years to come.

By the Order of the Board

Place : Bangalore Sai Ramakrishna Karuturi Anitha Karuturi

Date : August 12, 2011 Managing Director Director


Mar 31, 2010

The Directors have pleasure in presenting the Fifteenth Annual Report along with the audited accounts of the Company for the financial year ended 31st March, 2010.

FINANCIAL RESULTS:

On a consolidation basis, the financial results for the year under report of your Company stood as follows:

(Rs. in lacs)

Particulars 2009-10 2008-09

Total Income 54,670.59 45,983.61

Profit before depreciation & tax 19,837.44 13,942.49

Less: Depreciation & Amortization 5,562.30 2,127.90

Less: Provision for tax 8.64 15.46

Add: Deferred Tax - (Credit) (71.97) 44.09

Net Profit after Tax 14,338.47 11,737.61

COMPANY PERFORMANCE: Income:

Sales - The sales in fiscal 2010 were Rs.53,381 Lakhs as against Rs. 44,310 lakhs in fiscal 2009. In the fiscal

2009 the Company had initiated modernization of the existing facilities and had also started exploring new markets in Russia and European countries. As a result of successful execution of above initiatives sales rose by about 20.4%

Expenditure :

Material Expenses - In fiscal 2010 the raw material expenses / purchases amounted to Rs. 16,689 lakhs constituting 31.3% of net sales while raw material expenses in 2009 were Rs. 14,240 lakhs , constituting 32.1% of net sales.

Selling & Administrative Expenses - The administrative expenses is increased to Rs. 12,236 lakhs in fiscal

2010 as compare to Rs. 11,375 lakhs in fiscal 2009. As a percentage of net sales it decreased to 22.9% in fiscal 2010 from 25.7 % in fiscal 2009.

Employee Expenses - The employee expenses increased from Rs. 5,257 lakhs in fiscal 2009 to Rs. 4,925 lakhs in fiscal 2010. As a percentage of net sales it has decreased from being 9.8% of net sales in fiscal 2009 to 11.1% of net sales in fiscal 2010.

Interest & Bank Charges - Interest expenses amounted to Rs.649 lakhs in fiscal 2010 as compared Rs.1,498 lakhs in fiscal 2009. As a percentage of net sales, the interest expenses decreased from 3.4% in 2009 to 1.2% in 2010.

Depreciation - Depreciation amounted to Rs. 5,562 lakhs in fiscal 2010 as compared to Rs. 2,127 lakhs in fiscal 2009, representing an increase of 261 %. The increase is on account of additional capital expenditure in Ethiopia.

Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) - We recorded EBIDTA of Rs. 20,486 lakhs in fiscal 2010 as against an EBIDTA of Rs. 15,439 lakhs in fiscal 2009, with EBIDTA margin increased from 34.8 % in fiscal 2009 to 38.3 % in fiscal 2010.

Net Profit after tax and prior period adjustment - Our Net Profit for the fiscal 2010 stood at Rs.14338 lakhs as against Rs. 11737 lakhs for fiscal 2009.

DIVIDEND:

Continuing with the policy of sharing the profits, with the shareholders, your Board is pleased to recommend Dividend of Re 0.10 per Equity Share of Re.1/- each.

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS:

BUSINESS REVIEW:

During 2009, Your Company continued to strengthen its leading market positions in floriculture globally, increased profitability in our retail and processed foods business and were on track on our ambitious project of developing 7,65,000 acres of agricultural land in Ethiopia.

AGRICULTURE:

During the year 2009-10, Your Company made substantial progress in the Agriculture project implementation at the sites at Bako and Gambella in Ethiopia.

In Bako more than 5000 Ha of Land was cleared and made ready for cultivation. Your Company acquired various machinery like High end Tractors, Excavators, Bore drilling machines, other implements from India and USA to augment the land development process. A trial production of maize is also under way . Investment has been made in building an all weather Road, 12 Km of which is already completed. Major sowing will take place in October 2010 on this 5000+ Ha besides developing the rest of the land for yielding production next year.

In Gambella, a nursery was established for Palm, which currently has 2 million Palm plants ready for transplanting on 20,000 Ha of land. Each hectare is having a potential of yielding 5,000 Kgs of crude oil. If properly cultivated, using superior seeds, the yield may go up to 15,000 Kgs per ha. A trial run for Paddy cultivation has also been completed on 11,700 Ha in Bako, Ethiopia which is on the shores of River Gibe. Each hectare has the potential to produce 7.5 tons of Paddy. The crop has a gestation period of 5 to 6 months. In Gambella, our State-of-the-art agricultural machineries have arrived and we have started developing 20,000 hectares of land for cultivation of maize with each Ha has the potential to produce 4.5 tons cereals with a gestation period of 3 to 5 months.

Your company has commissioned well known agencies to do a complete feasibility study for various crops. A detailed environmental Impact study has also been done to make sure that social and environmental obligations are taken care of.

FLORICULTURE:

At present, your Company enjoys a 9% market share in the European cut rose Imports.With plans to add another 100 Ha at Walliso in Ethiopia under green houses by 2014, this market share is expected to go up further.

Currently your Company has 15 flower retail out lets across India including all major Airports in the country and planning to expand its net work in the next 2 years. It has long term contracts with the global retailing chains for its produce across Europe. The Company is planning to foray into Japanese markets under franchise model. Due to its strategic operational presence in Kenya and Ethiopia, the Company has a distinct advantage of marketing its products in Middle East through Dubai Flower Centre.

This year in an effort to deliver further value to our customers, the Company proposes to invest on the ‘peak fresh packaging technology’ that will increase the shelf life of roses from 15 days to as much as 3 months.

FOOD PROCESSING:

During the year under review, Karuturi Foods Pvt Ltd (KFPL) a wholly owned subsidiary of the Company has vigorously marketed its products in various countries.

Participating in leading Food trade Fairs in Germany, Middle East, Russia, France, Africa & USA has enabled the company to develop a wider product range having added Pickled Jalapenos, Cherry Tomatoes, Sliced Gherkins and other vegetables. To commercially pack these products, the factory has added a sophisticated machine to pack Relish, and other products.

Meanwhile, the packing lines have also been expanded to include packing in cans and pails. The development of packing in multi-layered plastic Jars & in plastic Pouches as per the demands of certain markets is under way.

Your Company is acquiring farms close to the factory where vegetables will be grown for captive consumption by the factory, as well as for local markets.

Domestic marketing efforts have resulted in entering select markets within India under private label, in retail packs. Soon your Company will be supplying to leading food chains in Food Service pack as well.

KFPL has entered into a contract to sell pickles under its own brand name in UK, Africa and within India.

Your Company has invested in training the key personnel at factory for international GMP standards, a program conducted with USFDA trainers.

KFPL is HACCP certified, with OU Kosher and other quality certifications. BRC certification is underway and with this, your Company is expected to supply to all major food chains stores in USA & Europe very soon.

ISP

The Internet Service business faced a downside last year due to the recessionary trends and there was pressure on margins for all the service providers.

Our focus continued in expanding our business within the areas where we have presence and also on the VOIP business where we identified newer areas and multiple solutions to address the corporate for both their office and remote needs.

Data center business has been identified as a growth area and efforts are on to formalize the same and start offering the services sometime middle of next year.

Your Company is also looking at a strategic tie up with a ILD player to expand the service portfolio

OUTLOOK:

The strategic goals this year will be, to increase land productivity in agriculture through innovation, continue to build leadership and expand our markets in cut flower exports, create new opportunities for our food processing and broadband businesses.

INCREASE IN PAID UP CAPITAL:

The total Paid up Capital of the Company as on 31.03.2010 was Rs. 4893.05 lakhs as compared to Rs. 4529.09 lakhs as on 31.03.2009. This increase in Capital is pursuant to conversion of Warrants to the extent of INR 2.28 crores of Re.1 each, FCCB conversions to the extent of INR 110.63 lakhs and also due to the conversion of 25,33,750 Employee Stock Options into Equity Shares.

GROUP COMPANIES:

The following persons constitute the group coming within the definition of “Group” as defined in the Monopolies and Restrictive Trade Practices Act, 1969, Which exercises or is established to be in a position to exercise control, directly or indirectly over the Company [Section 2(ef)]:.

1. Mr. Karuturi Sai Ramakrishna

2. Ms. Karuturi Anitha

3. Mr. Karuturi Surya Rao

4. Karuturi Telecom Pvt Ltd., India.

5. Karuturi Floritech Pvt Ltd. India.

6. Karuturi Foods Pvt Ltd., India.

7. Karuturi Flower Express Pvt Ltd, India.

8. Karuturi Overseas Ltd , Dubai.

9. Flower Xpress FZE, Dubai.

10. Yeshoda Investments Ltd, Kenya

11. Rhea Holdings Ltd, Kenya.

12. Surya Holdings Ltd, Kenya.

13. Karuturi Sports Ltd, Kenya.

14. Karuturi Ltd, Kenya.

15. Karuturi Hospital Ltd, Kenya.

16. Gambella Green Valley Pic , Ethiopia.

17. Ethiopian Meadows Pic, Ethiopia.

18. Karuturi Agro products Pic, Ethiopia.

19. Surya Blossoms Pic, Ethiopia.

STATUTORY DISCLOSURES:

The Company has made the application with Govt, of India, Ministry of Corporate Affairs seeking exemption from attaching the Balance Sheet, the individual Annual Reports of the subsidiary Companies to its audited account for the financial year ended 31.3.2010. In anticipation of the approval from the Ministry, as per the terms of exemption, a statement containing brief financial details of the Companys subsidiaries for the year ended 31.3.2010 is included in the Annual Report. Annual Accounts of these subsidiaries are available for inspection by any Member at the Registered Offices or at the respective Head Offices of those subsidiary companies.

DIRECTORS:

The Directors, Mr. Satish Caroli and Ms. Aslesha Madappa, retire by rotation and being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws, continued to discharge its functions during the year under review.

PERSONNEL:

The Directors wish to place on record their sincere appreciation for the services rendered by the employees of the Company at all levels both placed in India and Overseas. None of the employees employed during the year was in receipt of remuneration in excess of the prescribed limit specified in Section 217 (2A) of the Companies Act, 1956.

EMPLOYEE STOCK OPTION PLAN (ESOP):

The Company has commissioned its maiden Employees Stock Option Plan during the year 2006. Through this the Company has converted 517,750 Stock options granted to the eligible employees of the Company into Equity Shares during the year 2008.09 and for the year ended 31.03.2010 the Company has converted 25,33,750 stock options into Equity Shares.

DEPOSITS:

The Company has not accepted any deposits from the public falling under the purview of Section 58A of the Companies Act, 1956.

AUDITORS:

Messrs ISHWAR & GOPAL, Chartered Accountants, the existing statutory Auditors, have expressed their willingness to get reappointed at the ensuing Annual General Meeting.

The Board of Directors recommends their appointment.

FOREIGN EXCHANGE EARNINGS:

The Company earned Rs. 2021.75 lakhs in Foreign Exchange for the year ended 31.03.2010 as compared to Rs. 3097.20 lakhs for the year ended 31.03.2009.

The outflow in Foreign Exchange was Rs. 5.64 lakhs for the year ended 31.03.2010 as compared to 8.35 lakhs during the previous Year.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, CEO&CFO certification on the financials of the Company, Report on Corporate Governance, and Auditors’ Report on compliance with the Corporate Governance requirements have been included as Annexures to this Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Directors State:

i) That in the preparation of the annual accounts, the applicable accounting standards had been followed

along with proper explanations relating to material departure;

ii) That 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 the profit of the Company for the period;

iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting

records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors had prepared the annual accounts on a ‘going concern’ basis.

INSURANCE COVERAGE:

The Board reports that the Company has adequately insured all the assets of the Company.

ACKNOWLEDGEMENTS:

Your Directors acknowledge with gratitude the confidence reposed on the Company by the Shareholders, Bankers, Statutory Authorities, Customers, Vendors and all others who deal with the Company and also wish to thank all the employees both India and Overseas for their sincere and unstinted support extended and expects the same for the years to come.

On behalf of the Board

Place : Bengaluru Sai Ramakrishna Karuturi Anitha Karuturi Date : August 18, 2010 Managing Director Director