in

Corporate Information

BOARD OF DIRECTORS

Sai Ramakrishna Karuturi Chairman and Managing Director Anitha Karuturi Wholetime Director Aslesha P Madappa ( till 12th November 2013) Director Raja Vara Prasad Bommidala (till 17th July 2014) Director Mahendra Kumar Sunkara Director Man Mohan Agrawal Director Bina Dinesh Trivedi Director ( till 15th February 2014) COMPANY SECRETARY Sridhara BS (from17th November 2014) REGISTERED OFFICE # 204, Embassy Center, 11,Crescentt Road, Bangalore– 560001 Email: investorrelations@karuturi.com URL : www.karuturi.com REGISTRARS & SHARE TRANSFER AGENTS Karvy Computershare (P) Limited 17 -24 Vithal Rao Nagar, Madhapur Hyderabad 500 081 P : +91 040 44655124 || F : +91 40 23420814 Email: krishnans@karvy.com

 

1

Notice of AGM NOTICE is hereby given that the 19th Annual General Meeting of the Members of the Company will be held at 11:00 AM on Friday, the 20th day of March 2015, at Wadiyar Hall, Century Club, # 1, Sheshadri Road, Bangalore-560001 to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the audited Balance Sheet as at 31st

March,2014, and the Profit & Loss Account for the year ended as on that date and the Schedules thereto, and the Notes thereon, together with the Reports of the Directors and the Auditors thereon.

2. To appoint a Director in place of Mrs.Anitha Karuturi (DIN 01645602), who retires

by rotation and being eligible, offers herself for re-appointment. 3. To appoint Messrs S.Bhat & Associates, Chartered Accountants, Bangalore,

Registration No: 014925S & Signing Partner Membership No:228143 to hold the Office of Statutory Auditors from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to authorize the Board of Directors to fix their remuneration.

SPECIAL BUSINESS

1. To appoint Mr. Man Mohan Agrawal as an Independent Director and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 149,152 and other applicable provisions, if any, of the Companies Act, 2013 and any rules made there under read with Schedule IV to the said Act, Mr. Man Mohan Agrawal (DIN 00681433) a non-executive Director of the Company, be and is hereby appointed as an Independent Director of the Company for a period of five years from the date of this Annual General Meeting.”

2. To appoint Mr. Mahendra Kumar Sunkara as an Independent Director and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 149,152 and other applicable provisions, if any, of the Companies Act, 2013 and any rules made there under read with Schedule IV to the said Act, Mr. Mahendra Kumar Sunkara, (DIN 03011259) a non-

2

executive Director of the Company, be and is hereby appointed as an Independent Director of the Company for a period of five years from the date of this Annual General Meeting.”

3. Increase in Authorized Share Capital of the Company

To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to provisions of Section 61(1)(a) of the Companies Act, 2013, the Authorized Share Capital of the company be and is hereby increased from Rs. 1,10,00,00,000/- (Rupees One Hundred and Ten Crores) to Rs. 1,75,00,00,000/- (Rupees One Hundred and Seventy Five Crores) by creation of 65,00,00,000 further equity shares of Re.1/- each ranking pari passu with the existing equity shares of the Company.” 4. Alteration of Capital Clause of Memorandum of Association of the Company To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to the provisions of section 13 and all other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force), the existing Clause V of the Memorandum of Association of the Company be and is hereby substituted by the following:

V. "The Authorized Share Capital of the Company is Rs. 1,75,00,00,000/- (Rupees One Hundred and Seventy Five Crores only) divided into 1,75,00,00,000 (One Hundred and Seventy Five Crores) Equity Shares of Re. 1/- (Rupee One ) each.”

5. Alteration of Articles of Association of the Company To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to the provisions of section 14 and all other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force), the existing Article 4 of the Articles of Association of the Company be and is hereby substituted by the following:

"The Authorized Share Capital of the Company is Rs. 1,75,00,00,000/- (Rupees One Hundred and Seventy Five Crores only) divided into 1,75,00,00,000 (One Hundred and Seventy Five Crores) Equity Shares of Re. 1/- (Rupee One) each.”`

3

6. Preferential Allotment of Convertible Warrants To consider and if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution: “RESOLVED THAT subject to all the regulatory approvals, in accordance with the provisions of Section 42 & 62 and all other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force), and in accordance with the Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the “SEBI (ICDR) Regulations, 2009”), as amended thereto, the regulations/guidelines, if any, issued by the Government of India, the Reserve Bank of India and any other applicable laws, rules and regulations (including any amendment thereto or re-enactment thereof for the time being in force) and the relevant provisions of the Memorandum and Articles of Association of the Company and Listing Agreement entered into by the Company with the Stock Exchanges where the shares of the Company are listed, and subject to such approvals, consents, permissions and sanctions as may be required from the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges and any other relevant statutory, governmental authorities or departments, institutions or bodies (“Concerned Authorities”) in this regard and further subject to such terms and conditions or modifications thereto as may be prescribed or imposed by any of the Concerned Authorities while granting such approvals and permissions as may be necessary or which may be agreed to by the Board of Directors of the Company (hereinafter referred to as “the Board” which expression shall include any Committee constituted by the Board or any person(s) authorized by the Board to exercise the powers conferred on the Board by this Resolution) and subject to such terms, conditions and modifications as the Board may in its discretion impose or agree to, the Board be and is hereby authorized to create, offer, issue and allot by way of Preferential Allotment, up to 40,00,00,000 (Forty Crores) Convertible Warrants of Face value Re. 1/- (Rupee One) each to Non-Promoters, on preferential allotment basis in compliance with Chapter VII of SEBI (ICDR) Regulations, 2009 and subsequent amendments thereto & on such terms and conditions and in such manner as the Board may in its absolute discretion deem fit, to the following persons/entities as mentioned below: Sr. No.

Name of the Proposed Allottees

No. of Convertible Warrants proposed to be allotted

Name of the Ultimate Beneficiaries/ Owners

Non Promoters 1. Kireshwar Traders LLP 50000000 Kirtida Radhakrishna Desai

Bhaktidevi Radhakrishna Desai Nityanand Gurudas Desai

2. Ramnik Commosales LLP 20000000 Ravindra Shankar Sawant Rohini Ravindra Sawant

3. Aradhana Commosales LLP 50000000 Jaswant Dipchand Mehta Parimal Jaswantrai Mehta Parul Parimal Mehta

4

Binisha Amar Ajmera Shikha Parimal Mehta

4. Abhimanyu Commosales LLP 20000000 Manish Rameshbhai Vyas

5. Suhasit Garments Trading LLP 40000000 Madhu Sharma Tarun Sharma Kumar Kaushal Rajendra Sharma

6. Samdani Commosales LLP 20000000 Mohit Khullar Rohit Khullar

7. Shalini Sales LLP 10000000 Avinash Badyanath Sahay

8. Anoop Jain 20000000 Anoop Jain 9. Coronet Vyapaar Private

Limited 20000000 Amit Jain

Anuj Jain 10. Anoop Jain HUF 20000000 Anoop Jain (Karta) 11. Anil Aggarwal 10000000 Anil Aggarwal 12. Varun Sharma 10000000 Varun Sharma 13. Sreyasi Roy 10000000 Sreyasi Roy 14. Ajit Kumar J. Singh 30000000 Ajit Kumar J. Singh 15. Kingstone Capital Services

Private Limited 30000000 Premal Mukundrai Shah

Meghana Premal Shah 16. Nirupam Traders 20000000 Damyantiben Ramanlal Darji 17. Model Commercial Private

Limited 5000000 Manish Jain

Sanmat Jain 18. Sanjeev Jain 5000000 Sanjeev Jain

19. Sanmat Jain 5000000 Sanmat Jain

20. Madan Lal Jain 5000000 Madan Lal Jain TOTAL 400000000

RESOLVED FURTHER THAT: (i) The relevant date for the purpose of pricing of issue of Convertible Warrants in

accordance with the Regulation 71 of SEBI (ICDR) Regulations, 2009 (as amended) be fixed as 18th February 2015 that date being the 30th day prior to the date on which the Annual General Meeting of the shareholders is convened, in terms of Section 96 of the Companies Act, 2013 to consider the proposed preferential issue.

(ii) The aforesaid Convertible Warrants allotted in terms of this resolution shall rank pari passu in all respects with the existing equity shares of the Company.

(iii) The Board be also authorized to decide and approve the other terms and conditions of the issue of Convertible Warrants, and also shall be entitled to vary, modify or alter any of the terms and conditions, including the issue price on a higher side than mentioned above, as it may deem expedient.

5

RESOLVED FURTHER THAT the equity shares allotted on conversion of aforesaid Warrants issued on preferential basis shall be locked in from the date of trading approval granted from all the Stock Exchanges for such periods as prescribed in Regulation 78 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. RESOLVED FURTHER THAT each of the aforesaid warrants be converted at the option of the holder at any time within 18 months from the date of issue, into one fully paid-up Equity Share of Re.1/- each at the price which be determined in accordance with prevailing SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009 and a sum equivalent to 25% of the total consideration per warrant be received on the date of allotment of the said warrants and the balance 75% of the total consideration per warrant be received at the time of allotment of Equity Shares pursuant to exercise of option against each such warrant by the warrant holder. RESOLVED FURTHER THAT in the event of the Company making a bonus issue of shares or making rights issue of shares / convertible debentures or any other securities in whatever proportion prior to the exercise of the rights attached to the warrants, the entitlement of the holders shall stand augmented in the same proportion in which the equity share capital of the company increases as a consequences of such bonus/rights issues and that the exercise price of the warrant be adjusted accordingly, subject to such approvals as may be required. RESOLVED FURTHER THAT the Convertible Warrants to be so created, offered, issued and allotted shall be subject to the provisions of the Memorandum and Articles of Association of the Company. RESOLVED FURTHER THAT the Board be and is hereby authorized to accept any modifications in the proposal as may be required by the agencies involved in such issues but subject to such conditions as the Reserve Bank of India (RBI) / Securities and Exchange Board of India (SEBI) and/ or such other appropriate authority may impose at the time of their approval as agreed by the Board. RESOLVED FURTHER THAT for the purpose of creating, issuing, offering and allotting Convertible Warrants of the Company as aforesaid, the Board be and is hereby authorized to do and perform all such acts, deeds, matters and things as it may in its absolute discretion, deem necessary, expedient, desirable or appropriate to give effect to this resolution in all respects and in particular, to settle any questions, difficulties or doubts that may arise with regard to the offering, issuing, allotting and utilizing the issue proceeds of the Convertible Warrants of the Company, as it may in its absolute discretion, deem fit and proper.

RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein contemplated by this resolution to any Director or Directors or to any Committee of Directors or to any Officer or Officers of the company to give effect to this resolution.” 7. Preferential issue of fully convertible debentures

6

To consider and if thought fit ,to pass with or without modification , the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to the provisions of Section 42, 62 and 71and other applicable provisions, if any, of the Companies Act, 2013 ("the Act", including any statutory modification or re-enactment thereof for the time being in force), and in accordance with the applicable provisions of Foreign Exchange Management Act, 1999 (the "FEMA"), Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (the "FEMA Regulations") the guidelines and clarifications issued by the Government of India ("GOI"), Securities and Exchange Board of India (the "SEBI") including Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the "SEBI ICDR Regulations") and enabling provisions of the Articles of Association of the Company, the Listing Agreements entered into between the Company and each of the Bombay Stock Exchange and the National Stock Exchange (collectively the "Stock Exchanges"), and subject to all such approvals, permissions, consents and sanctions of any authorities, as may be necessary, including the approval of the Foreign Investment Promotion Board (the "FIPB"), Reserve Bank of India (the "RBI"), SEBI or any other relevant authority, from time to time, or approval from banks, financial institutions or other lenders of the Company, and subject to such conditions and modifications as may be prescribed or imposed by any one or more of them while granting any such approvals, consents, permissions or sanctions and as agreed to by the Board of Directors of the Company (the "Board", which term shall be deemed to include any Committee which the Board may have constituted or may hereinafter constitute to exercise its powers including powers conferred on the Board by this resolution), the consent of the Company be and is hereby accorded to the Board to create, offer, issue and allot up to 1000 Fully Convertible debentures of Rs. 5,00,000/- each on conversion of loans amounting to Rs. 50,00,00,000/-(Rupees Fifty Crores only) to M/s. Rhea Holdings Private Limited belonging to Promoter Group on Private Placement basis to be convertible into Equity Shares.

:

Sr.No: Names of the proposed allottees

No. of Debentures Name of the Ultimate Beneficiaries/ Owners

Promoter Group

1 Rhea HoldingsPrivate Limited

1000 1.Sai Ramakrishna Karuturi

2.Anitha Karuturi

7

Total 1000

RESOLVED FURTHER THAT the Board be and is hereby authorized on behalf of the Company to finalize the terms and conditions relating to issue of Fully Convertible Debentures and all matters incidental thereto as it may in it absolute discretion think fit, in accordance with all applicable laws, rules and regulations for the time being in force in that behalf.

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

RESOLVED FURTHER THAT the Fully Convertible Debentures shall be compulsorily convertible into Equity Shares before 18 months from the date of allotment.

RESOLVED FURTHER THAT the pricing of the resultant Equity Shares issued upon conversion of fully convertible debentures shall be made subject to and in compliance with all applicable laws, guidelines, notifications, rules and regulations considering the “Relevant Date” determined as per SEBI (ICDR) Regulations. RESOLVED FURTHER THAT the “Relevant Date” for the purpose of determining the pricing of any equity shares to be issued upon conversion of Fully Convertible Debentures shall be the date thirty days prior to the date on which M/s. Rhea Holdings Private Limited becomes entitled to apply for Equity Shares.

RESOLVED FUTHER THAT the Equity Shares so issued and allotted upon conversion of Fully Convertible Debentures shall rank pari passu with the then existing Equity Shares of the Company in all respects including dividend.

RESOLVED FURTHER THAT the Fully Convertible Debentures shall be subject to lock-in as per Regulation 78 of SEBI (ICDR) Regulations.

RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers conferred by this resolution on it, to any Committee of Directors or the Chairman or any other Director(s) or Officer(s) of the Company to give effect to the aforesaid resolution.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorized to agree, make and accept all such term(s), condition(s) and alteration(s) as it may deem fit, including conditions(s), modifications(s) and alteration(s) stipulated or required by any relevant authorities or by their bye-laws, rules regulations or guidelines and the Board is also hereby authorized to resolve and settle all questions, difficulties or doubts that may arise in regard to such offer, issue and allotment, to finalise and execute all agreements, documents and writings and to do all acts, deeds and

8

things in this connection and incidental as the Board m a y in its absolute discretion deem fit without being required to seek any further consent or approval of the C ompany or otherwise to the end and intent that they shall be deemed to have given approval thereto expressly by the authority of this resolution. FURTHER RESOLVED THAT the Board of Directors be and is hereby authorized to take all such steps as may be necessary, proper or expedient to give effect to this Resolution.”

8. To authorize Board of Directors to enter into related party transactions and if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 188 and all other applicable provisions, if any, of the Companies Act, 2013 and the Listing Agreements, and subject to such approvals, consents, sanctions and permissions as may be necessary, consent of the Members of the Company be accorded to ratify and approve all existing and future contracts / agreements / arrangements with the Related Parties as defined under the said Act, and authorize the Board of Directors of the Company to enter into contracts and/or agreements and arrangements with such Related Parties, with respect to sale, purchase or supply of any goods including capital goods, or materials, selling or otherwise disposing of or buying, leasing of property of any kind, availing or rendering of any services, appointment of agent for purchase or sale of goods, materials, services or property, or appointment of a related party to any office or place of profit in the Company or its subsidiary or associate company, or any other transaction of whatsoever nature with related parties. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to take such steps as may be necessary for obtaining approvals – statutory, contractual or otherwise – in relation to the above and to settle all matters arising out of and incidental thereto, and to sign and execute all deeds, applications, documents and writings that may be required, on behalf of the Company, and generally to do all acts, deeds, matters and things that may be necessary, proper and expedient or incidental thereto for the purpose of giving effect to this resolution. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to determine the actual sums to be involved in the proposed transactions and the terms and conditions related

9

thereto, and generally to do all acts, deeds, matters that may be necessary, proper and expedient or incidental thereto as the Board may at its absolute discretion deem fit , for the purpose of giving effect to this resolution.”

By Order of the Board

For Karuturi Global Limited

Sridhara BS

Company Secretary

Place: Bangalore Date: 14 February ,2015

10

Notes: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED

TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 in respect of the above- mentioned special business is annexed hereto.

3. The instrument appointing the proxy should be deposited at the registered office of the Company not less than 48 hours before the commencement of the meeting. Corporate Members are requested to send a duly certified copy of the Board resolution, authorizing their representative(s) to attend and vote at the Annual General Meeting, pursuant to the provisions of Section 105 of the Companies Act, 2013.

4. Members/proxies should bring the attendance slip sent herewith, duly filled-in along with the annual report for attending the Meeting.

5. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote.

6. Members may also please note that as per Section 124 (5) and Section 125C of the Companies Act, 2013, all the amounts transferred to the Unpaid Dividend Account of the Company for the year ended 31st March, 2007 remaining unpaid or unclaimed for a period of seven years from the date of such transfer have been transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. 7. Pursuant to SEBI notification no. MED/ DOP/ Circular/05/2009 dated May 20, 2009, it has become mandatory for the transferee(s) to furnish copy of PAN Card to the Company/ RTA to enable/effect transfer of Shares in physical form. 8. The Register of Members and Share Transfer Books will remain closed from

13th March 2015 to 20th March 2015 (both days inclusive). 9. Members are requested to notify the Registrar & Share Transfer Agents, Karvy

Computershare (P) Limited, 17 -24, Vithal Rao Nagar, Madhapur, Hyderabad 500 081 for any change in their address so as to enable the Company to address future communications to their correct addresses.

10. As part of the “Green Initiative in Corporate Governance”, t a k e n b y the Ministry of Corporate Affairs (MCA), Karuturi Global Limited shall send all shareholder communications such as the notice of General Meetings, Audited Financial Statements, Directors’ Report, Auditors’ Report, etc., to members in electronic form to the E-mail Id provided by them and made available to us by the Depositories. Members are requested to register their E-mail Id with their Depository Participant and inform them of any changes in the same from time to time. However, Members who prefer physical copy to be delivered may write to the Company at its registered office or send an E-mail to investorrelations@karuturi.com ,cs@karuturi.com by providing their DP Id and Client Id as reference.

11

11. Voting through electronic means:

Members may please note the electronic voting particulars as set out below for the purpose of E-VOTING in terms of Clause-35B of the Listing Agreement:

EVEN (E-Voting Event Number) : Karuturi Global Limited

USER ID: ________________________________________

PASSWORD: _____________________________________

Note: Please follow the e-voting instructions mentioned hereafter.

PROCEDURE FOR E-VOTING

In terms of Clause 35 B of the Listing Agreement, the Company is pleased to provide the facility to Members to exercise their right to vote by electronic means. The Members, whose names appear in the Register of Members / list of Beneficial Owners as on 20th day, February, 2015, i.e. the cut-off date taken by the Company for dispatch of the Annual Report and the Notice calling the Annual General Meeting. The e-voting period will commence from 12th March 2015, at 10.00 am and will end at 5.00 pm on 16th March 2015. The e-voting module will be disabled on 16th March 2015 at 5.00 pm. The voting right of Members shall be in proportion to their share in the paid up equity share capital of the Company as on the cut-off date, 20th February 2015.

The Company has entered into an arrangement with Karvy Computershare Private Limited (Karvy) for facilitating e-voting for the AGM. The instructions for e-voting are as under:

1. Open your web browser during the voting period and navigate to ‘https://evoting.karvy.com’

2. Enter the login credentials (i.e. user-id & password) mentioned on the Attendance Slip/ Email forwarded through the electronic notice.

12

User –ID : For Shareholder(s)/ Beneficial Owner(s) holding Shares In Demat Form:-

: For NSDL: 8 characters DP ID followed by 8 digits Client ID

: For CDSL: 16 digits Beneficiary ID

: For Members holding shares in Physical Form:

Folio Number registered with the Company.

Password : Your Unique Password is printed on the AGM Attendance Slip / sent via email

forwarded through the electronic notice.

Captcha : Enter the Verification Code for security reasons i.e., please enter the alphabets and

numbers in the exact way as they are displayed.

3. After entering these details appropriately, click on “LOGIN”.

4. Members holding shares in Demat/Physical form will now reach password change menu wherein they are required to mandatorily change their login password in the new password field. The new password has to be minimum eight characters consisting of at least one upper case (A-Z), one lower case (a-z), one numeric value (0-9) and a special character (like *,#,@ etc).

Kindly note that this password can be used by the Demat holders for voting for resolution of any other Company on which they are eligible to vote, provided that Company opts for e-voting through Karvy Computershare Private Limited e-Voting platform. System will prompt you to change your password and update any contact details like mobile #, email ID etc on 1st login. You may also enter the Secret Question and answer of your choice to retrieve your password in case you have forgotten it. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Kindly ensure that you note down your password for future reference.

13

5. You need to login again with the new credentials.

6. On successful login, system will prompt to select the ‘Event’ i.e., 'KARUTURI GLOBAL LIMITED'.

7. If you are holding shares in Demat form and had logged on to https://evoting.karvy.com and had cast your vote earlier for any other company, then your existing login id and password are to be used.

8. On the voting page, you will see Resolution Description and against the same the option ‘FOR/AGAINST/ABSTAIN’ for voting . Enter the number of shares under ‘FOR /AGAINST / ABSTAIN’ or alternatively you may partially enter any number in ‘FOR’ and partially in ‘AGAINST’, but the total number in ‘FOR/AGAINST’ taken together should not exceed your total shareholding. If you do not want to cast a vote, you may select ‘ABSTAIN’.

9. After selecting the resolution if you have decided to cast vote on the same, click on “SUBMIT” and a confirmation box will be displayed. If you wish to confirm your vote, click on “OK”; or else to change your vote, click on “CANCEL" and accordingly modify your vote.

10. Once you ‘CONFIRM’ your vote on the resolution, you will not be allowed to modify your vote.

11.Corporate/Institutional Members (corporates /Fls/Flls/Trust/Mutual Funds/Banks, etc) are required to send scanned copy (PDF format) of the relevant Board Resolution to the Scrutinizer through e-mail to biswajit.ghosh@hbcs.in with a copy to evoting@karvy.com. The file scanned image/pdf file of the Board Resolution should be in the naming format “Corporate Name”.

Contact for issues relating to e-voting:

M/s.Karvy Computershare Private Limited, Plot No.17-24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081. Toll Free Number: 1-800-3454-001.

14

 

EXPLANATORY STATEMENT PURSUANT TO SEC. 102 OF COMPANIES ACT, 2013: Item No.1 & 2: Section 177 & 178 of the Companies Act, 2013 and the relevant rules made there under prescribe that the board of directors of every listed company and such other classes of companies as may be prescribed shall constitute an Audit Committee, consisting of minimum three directors with independent directors forming a majority, and a Nomination & Remuneration Committee consisting of three or more non executive directors out of which not less than one half shall be independent directors. To strictly comply with the provisions contained in Section 177 and 178 of Companies Act, 2013, the Board of Directors has recommended the appointment of Mr.Man Mohan Agrawal and Mr.Mahendra Kumar Sunkara for the position of Non-executive Independent Directors under the provisions of Sections 149 and 152 of the said Act to function along with the other Directors of Karuturi Global Ltd . In the opinion of the Board of Directors, both of them fulfill the conditions specified in the Companies Act, 2013 and the rules framed there under for such an appointment, and they are independent of the Management of the Company. Mr. Man Mohan Agrawal retired as Deputy Managing Director of Axis Bank Ltd after serving as its Executive Director-Corporate Banking and President- Capital Markets. He has vast experience in Industry, Banking and Agriculture. Mr. Mahendra Kumar Sunkara is a Professor in Chemical Engineering in the University of Louisville, USA. Except Mr.Man Mohan Agrawal and Mr.Mahendra Kumar Sunkara, being the appointees, none of the Directors and Key Managerial Personnel of the Company and their relatives, is concerned or interested, financially or otherwise, in the resolutions except and to the extent they are members of the Company.

Item No. 3, 4 & 5 In order to meet the long term working capital needs of the Company it is proposed by the Board to infuse additional funds and enhance the existing share capital. Your Board at its meeting held on 14th November 2014, has, subject to the approval of the members, and receipt of such other statutory/regulatory approvals, as may be required, proposed to increase the Authorized Share Capital of the Company from Rs. 1,10,00,00,000/- (Rupees One Hundred and Ten Crores) to Rs. 1,75,00,00,000/- (Rupees One Hundred and Seventy Five Crores).

According to Section 61 of the Companies Act, 2013, if Authorized Share Capital of the Company is to be increased, a special resolution is required to be passed by the members of the Company.

15

Your Board of Directors recommends the Special Resolution for your approval as set out under item No. 3 of this Notice.

The Proposed resolutions under the items No. 4 & 5 seek to obtain members’ approval to alter Capital Clause as mentioned above in the Memorandum and Articles of Association. According to Section 13 and 14 of the Companies Act, 2013, if the Memorandum and Articles are to be altered respectively, a Special Resolution is required to be passed by the members of the Company. Your Board of Directors recommends the Special Resolutions for your approval as set out under item No.4 & 5 of the Notice of Annual General Meeting.

A Copy of the Memorandum and Articles of Association of the Company will be available for inspection by the Members at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days except 2nd and 4th Saturdays, and Sundays & Public Holidays up to the date of this Annual General Meeting.

None of your Directors is concerned or interested in the above resolutions except to the extent of their shareholding in the Company.

Item No.6 and 7: As per Section 62 of the Companies Act, 2013 approval of members in the General Meeting is required for allotment of Convertible Warrants and Fully Convertible Debentures on preferential basis and hence the resolutions are placed before the members. The purpose of the proposed issue of fully convertible warrants on preferential basis is to meet the funding requirements including, but not limited to, funding ongoing capital expenditure and for augmenting the working capital, improving its project capacity, enhancing infrastructure facilities and for general corporate purposes. The proceeds of the proposed issue may be utilized for any of the aforesaid purposes to the extent permitted by law. For this purpose, as may be decided by the Board from time to time in the best interests of the Company, it is proposed to issue up to 40,00,00,000 fully convertible warrants of Re one each on preferential allotment basis.

The Company had deployed funds up to an aggregate of Rs.50 Crores for its various operations and expansions from time to time. These funds were contributed by a Person belonging to the Promoters’ Group. These funds have been utilized for meeting the working capital requirements for agri and floriculture business expansion. It is now proposed to issue 1000 Fully Convertible Debentures of Rs 5,00,000 each on preferential basis as proposed in the resolution.

16

The necessary information pertaining to the proposed preferential allotment of Convertible Warrants and Fully Convertible Debentures in terms of Regulation 73(1) of SEBI (ICDR) Regulations, 2009, as amended thereto, are set out as below: 2. a. List of Allottees for Preferential Allotment of Convertible Warrants Sr. No.

Name of the Proposed Allottees

No. of Convertible Warrants proposed to be allotted

Name of the Ultimate Beneficiaries/ Owners

Non Promoters 1. Kireshwar Traders LLP 50000000 Kirtida Radhakrishna Desai

Bhaktidevi Radhakrishna Desai Nityanand Gurudas Desai

2. Ramnik Commosales LLP 20000000 Ravindra Shankar Sawant Rohini Ravindra Sawant

3. Aradhana Commosales LLP 50000000 Jaswant Dipchand Mehta Parimal Jaswantrai Mehta Parul Parimal Mehta Binisha Amar Ajmera Shikha Parimal Mehta

4. Abhimanyu Commosales LLP 20000000 Manish Rameshbhai Vyas

5. Suhasit Garments Trading LLP 40000000 Madhu Sharma Tarun Sharma Kumar Kaushal Rajendra Sharma

6. Samdani Commosales LLP 20000000 Mohit Khullar Rohit Khullar

7. Shalini Sales LLP 10000000 Avinash Badyanath Sahay

8. Anoop Jain 20000000 Anoop Jain 9. Coronet Vyapaar Private

Limited 20000000 Amit Jain

Anuj Jain 10. Anoop Jain HUF 20000000 Anoop Jain (Karta) 11. Anil Aggarwal 10000000 Anil Aggarwal 12. Varun Sharma 10000000 Varun Sharma 13. Sreyasi Roy 10000000 Sreyasi Roy 14. Ajit Kumar J. Singh 30000000 Ajit Kumar J. Singh 15. Kingstone Capital Services

Private Limited 30000000 Premal Mukundrai Shah

Meghana Premal Shah 16. Nirupam Traders 20000000 Damyantiben Ramanlal Darji 17. Model Commercial Private

Limited 5000000 Manish Jain

Sanmat Jain

17

18. Sanjeev Jain 5000000 Sanjeev Jain

19. Sanmat Jain 5000000 Sanmat Jain

20. Madan Lal Jain 5000000 Madan Lal Jain TOTAL 400000000

1. b. List of Allottee for Allotment of Fully Convertible Debentures

Sr.No: Names of the proposedallottees

No. of Debentures

Name of the Ultimate Beneficiaries/ Owners

Promoter Group

1 Rhea Holdings PrivateLimited

1000 1.Sai Ramakrishna Karuturi

2. Anitha Karuturi

Total 1000

2. Object/s of the issue: The purpose of the proposed issue of fully convertible warrants on preferential basis is to meet the funding requirements including, but not limited to, funding ongoing capital expenditure and for augmenting the working capital, improving its project capacity, enhancing infrastructure facilities and for general corporate purposes. The proceeds of the proposed issue may be utilized for any of the aforesaid purposes to the extent permitted by law. For this purpose, as may be decided by the Board from time to time in the best interests of the Company, it is proposed to issue up to 40,00,00,000 fully convertible warrants on preferential allotment basis.

The Company had deployed funds up to an aggregate of Rs.50 Crores for its various operations and expansions from time to time. These funds were contributed by a Person belonging to the Promoters’ Group. These funds have been utilized for meeting the working capital requirements for agro and floriculture business expansion. It is now proposed to issue 1000 fully convertible Debentures of Rs 5,00,000 each on preferential basis.

3. Intention of Promoters/ Directors/ Key Management Persons to subscribe to the offer:

The Promoters/Directors/ Key Management of the Company are not intending to subscribe to the offer being proposed under special resolution under Item No. 6 of the Notice for members’ approval at this meeting.

18

However, M/s. Rhea Holdings Private Limited, which forms part of the Promoter Group of the Company intends to subscribe to 1000 Fully Convertible debentures of Rs. 5,00,000/- each on conversion of loans amounting to Rs. 50,00,00,000/-(Rupees Fifty Crores only) on Private Placement basis as set out under special resolution under Item No. 7 of the Notice for members’ approval at this meeting.

4. Shareholding Pattern before and after the Issue: The shareholding pattern before and after the allotment of Convertible Warrants and Fully Convertible Debentures is as under :( As on 31st December, 2014) Category of Shareholders

Pre Preferential Shareholding

Post Preferential Shareholding after conversion of Debentures and Assuming full conversion of warrants into Equity Shares

No. of Shares As a % of (A+B+C)

No. of Shares As a % of (A+B+C)

Promoter and Promoter Group (A)

4,46,69,085 5.52 37,80,02,418 24.50

Public Shareholding (B) 75,45,96,563 93.19 1,15,45,96,563 74.83

Total (A) + (B) 79,92,65,648 98.71 1,53,25,98,981 99.32

Custodian (C) 1,04,61,000 1.29 1,04,61,000 0.68

Grand Total (A) + (B) + (C)

80,97,26,648 100.00 1,54,30,59,981 100.00

5. Consequential Changes in the Voting Rights: Voting rights will change according to the change in the shareholding pattern mentioned above.

6. Proposed time within which the allotment shall be completed:

The Board proposes to allot the Convertible Warrants and Fully Convertible Debentures within a period of 15 days from the date of passing of the resolution by the members in the Annual General Meeting, provided that when the allotment on preferential basis is pending on account of pendency of any approval or permission for such allotment by any regulatory authority or the Central Government, the period of fifteen days shall be counted from the date of such approval or permission. The allotment of Equity Shares pursuant to exercise of option by warrant holder will be made within a reasonable time after exercise of such option.

12. Identity of the proposed allottee and the percentage of post preferential issue capital that may be held by them

Identity Pre Preferential No. of Post Shareholding

19

Shareholding Convertible Warrants/ Fully Convertible Debentures to be issued

Pattern (After Conversion of fully Convertible Debentures and Assuming full conversion of warrants)

Proposed Allottees No. of Shares

%age No. of Warrants/ Debentures

No. of Shares

%age

Promoter M/s. Rhea Holdings Private Limited

17708556 2.19 333333333 351041889 22.75

Non Promoter Kireshwar Traders LLP

NIL N.A. 50000000 50000000 3.24

Ramnik Commosales LLP

NIL N.A. 20000000 20000000 1.30

Aradhana Commosales LLP

NIL N.A. 50000000 50000000 3.24

Abhimanyu Commosales LLP

NIL N.A. 20000000 20000000 1.30

Suhasit Garments Trading LLP

NIL N.A. 40000000 40000000 2.59

Samdani Commosales LLP

NIL N.A. 20000000 20000000 1.30

Shalini Sales LLP NIL N.A. 10000000 10000000 0.65

Anoop Jain NIL N.A. 20000000 20000000 1.30

Coronet Vyapaar Private Limited

NIL N.A. 20000000 20000000 1.30

Anoop Jain HUF NIL N.A. 20000000 20000000 1.30

Anil Aggarwal NIL N.A. 10000000 10000000 0.65

Varun Sharma NIL N.A. 10000000 10000000 0.65

Sreyasi Roy NIL N.A. 10000000 10000000 0.65

20

Ajit Kumar J. Singh NIL N.A. 30000000 30000000 1.94

Kingstone Capital Services Private Limited

NIL N.A. 30000000 30000000 1.94

Nirupam Traders NIL N.A. 20000000 20000000 1.30

Model Commercial Private Limited

NIL N.A. 5000000 5000000 0.32

Sanjeev Jain NIL N.A. 5000000 5000000 0.32

Sanmat Jain NIL N.A. 5000000 5000000 0.32

Madan Lal Jain NIL N.A. 5000000 5000000 0.32

Assumptions: 1. All the Convertible Warrants, as are offered to the aforesaid proposed allottees, are fully subscribed and allotted to them.

2. The warrants are held by the aforesaid allottee at the time of exercise of the option and 3. The options are exercised by them in full. 4. All the fully Convertible Debentures as are offered to the M/s. Rhea Holdings Private Limited, are fully converted.

8. Lock in Period:

The aforesaid Convertible Warrants and Fully Convertible Debentures allotted on preferential basis shall be locked in as per Regulation 78 of Chapter VII of the SEBI (ICDR) Regulations, 2009, as amended.

9. Change in Management: The proposed preferential allotment of Convertible Warrants and Fully Convertible Debentures will not result in any change in the management and control of the Company. Voting right shall change according to the change in shareholding pattern mentioned above.

10. Pricing of the issue:

The pricing of Convertible Warrants and Fully Convertible Debentures allotted on preferential basis shall not be lower than the price determined in accordance with the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009.

Currently SEBI (ICDR) Regulations 2009 provides that the issue of shares on preferential basis can be made at a price not less than the higher of the following:

21

1. The average of the weekly high and low of the volume weighted average price of the related equity shares quoted on the recognized stock exchange during the twenty six weeks preceding the relevant date; or 2. The average of the weekly high and low of the volume weighted average price of the related equity shares quoted on a recognized stock exchange during the two weeks preceding the relevant date. The relevant date for the purpose of pricing of the Convertible Warrants and Fully Convertible Debenture shall be 18th February 2015 being the date which is 30 days prior to the date of this Annual General Meeting. “Stock Exchange” for this purpose means BSE Limited / National Stock Exchange of India Limited on which the highest trading volume in respect of the equity shares of the company has been recorded during the preceding twenty six weeks prior to the Relevant Date.

11. Auditor’s Certificate:

A copy of the certificate of the Auditors of the Company certifying the adherence to SEBI’s Regulations for Preferential Issues of Convertible Warrants and Fully Convertible Debentures, being Chapter VII to the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009 by the proposed issue shall be laid before the Members at their proposed Annual General Meeting.

12. Payment and Conversion Terms for Preferential Allotment of Convertible Warrants:

25% of the value of the warrant is to be paid against each warrant on the date of allotment of warrants. The balance 75% is payable at the time of allotment of Equity shares pursuant exercise of the option for conversion of the warrant. Warrant will be converted at the option of the allottees, into one equity share of Face value of Re.1/- each at a price which is determined in accordance with the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009 at any time within 18 months from the date of issue. In case the option is not exercised within a period of 18 months from the date of issue, the aforesaid 25% amount paid on the date of allotment shall be forfeited.

13.Undertakings: Ι. The Issuer Company undertakes that they shall re-compute the price of the Equity shares

in terms of the provision of SEBI (ICDR) Regulations, 2009, as amended where it is required to do so.

A) The Issuer Company undertakes that if the amount payable on account of the re-

computation of price is not paid within the time stipulated in terms of the provision of SEBI (ICDR) Regulations, 2009, the Equity Shares shall continue to be locked–in till the time such amount is paid by the allottees.

14.Interest of Promoters/ Directors relating to Item no. 6

22

None of the Directors and Promoters of the Company is in any way, directly or indirectly concerned or interested in the above resolution as set out in item no. 7 of this Notice.

Interest of Promoters/ Directors relating to Item no. 7 Except M/s. Rhea Holdings Private Limited belonging to Promoter Group of the Karuturi Global Limited (“the Company”) and Mr. Sai Ramkrishna Karuturi and Ms. Anitha Karuturi, who are the Promoters and Directors of the Company as well as Directors of Rhea Holdings Private Limited, none of the other Directors and Promoters of the Company is in any way, directly or indirectly concerned or interested in the above resolution.

The members are, therefore, requested to accord their approval authorizing the Board to go for the proposed private placement and/ or preferential issue as set out in the special resolutions at items no 6 & 7.

The Board of Directors recommends the said Special Resolutions for your approval.

ITEM No 8: Pursuant to Section 188 of the Companies Act, 2013, the Company can enter into transactions mentioned in the resolution under this Item which are not in the ordinary course of business and / or are not on arm-length basis, only with the approval of the shareholders accorded by way of a special resolution. Though your Company always endeavours to enter into transactions with related parties in the ordinary course of business and on arm’s length basis, still there may be some occasions when it has entered into such transactions in the larger interests of the Company. Shareholders’ approval is required under the provisions of the said Act and under the provisions of Revised Clause 49 of the Listing Agreement for the related party transactions.

The above proposal is in the interests of the Company and your Board of Directors recommends the resolution to be passed as a special resolution.

None of the Directors or Key Managerial Personnel is concerned or interested in the said resolution except to the extent of their shareholding in the Company or in their interest as director or shareholder or partner or otherwise in such other related party entity, if any.

** ** ** **  

Annexure to notice 

 

Particulars  Mr. Man Mohan Agrarwal 

Mr. Mahendra Kumar Sunkara 

Mrs. Anitha Karuturi.

Date of Birth & Nationality

04/August/1950 Indian

14th June,1965 Indian

11th July 1974 Indian

Date of Appointment

25/09/2010

29/01/2010 26/12/1994

Qualifications BE, CAIIB, Part 1 Chemical Engineering

B.E

Directorships held in other P u b l i c c o m p a n i e s ( e x c l u d i n g f o r e i g n Companies).

1.Jaguar Overseas Limited 2. Essar Power Limited. 3. Mercator Lines Limited. 4. Bombay Rayon Fashion Limited Singapore. 5. Essar power (Jharkhand )limited.

NIL

Nil

Membership/ Chairmanships of Committees of other public companies (included only

NIL

NIL

     NIL 

Audit and Shareholders/ Investors Grievance Committee)

Shareholding in the Company (No. of shares)

5000 shares. Nil 1054105 shares 

 

 

DIRECTORS' REPORT To The Members Karuturi Global Limited Bangalore Your 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 y ea r 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 f inanc ia l 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 s i m u l t a n e o u s l y continues to create new opportunities in its Floriculture and F o o d 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:

Director’s 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: 1 4 t h F e b 2 0 1 5 Chairman and Managing Director

ANNEXURE No : 1

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956

In accordance with the provisions of Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors’ Report, as an addendum thereto. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and accounts as therein set out, are being sent to all members of the Company excluding the aforesaid information about the employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

ANNEXURE No: 2

CEO & CFO CERTIFICATION

I, Sai Ramakrishna Karuturi, Chairman & Managing Director and Mrs. Anitha Karuturi, Whole time Director of the Company responsible for the finance functions certify that:

We have reviewed the financial statements and cash flow statement for the year ended 31st March, 2014 and to the best of our knowledge and belief.

These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading:

These statements together present a true and fair view of the Company’s affairs and are in compliance with existing Accounting standards, applicable laws and regulations.

To the best of our knowledge and belief, no transactions entered into by the Company during the year ended 31st March, 2014 are fraudulent, illegal or violate the Company’s code of conduct.

We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting.

Deficiencies in the design or operation of such internal controls, if any, of which we are aware have been disclosed to the Auditors and the Audit Committee and steps have been taken to rectify these deficiencies.

There has not been any significant change in internal control over financial reporting during the year under reference. There has not been any significant change in accounting policies during the year requiring disclosure in the notes to the financial statements and we are not aware of any instance during the year of significant fraud with involvement therein of the management or any employee having a significant role in the Company’s internal control system over financial reporting.

Place : Bangalore Anitha Karuturi Sai

RamakrishnaKaruturi Date: 14th February ,2015 Wholetime Director Chairman & Managing

Director

 

Rs in lacs Particulars KFTPL (Rs) KFEPL (Rs) FIPL (Rs) KFPL (Rs) KOL (Rs) EMPLC (Rs) KAPLC (Rs) SBPLC (Rs) SPPLC (Rs) F Z E (Rs) KL (Rs) RHL (Rs) SHL (Rs) YIL (Rs) KHL (Rs) KSL (Rs) Total

Capital 5.00 30.00 86.57 200.00 70,474.17 10,905.60 623.18 654.34 31.16 140.37 3.47 0.69 0.14 0.01 0.69 0.69 83,156.09 Reserve (480.39) (71.89) (46.96) 89.46 65,116.37 (2,058.97) (475.05) (1,259.83) 22.27 46,322.30 15,783.59 (138.60) 1,659.27 837.28 (142.68) (13.26) 125,142.91 Detail of Investment - - 30.57 - 12,202.99 1,275.83 - - - - - - - 2,188.65 - - 15,698.04 Total Assets 170.94 29.17 158.84 4,287.58 318,684.44 46,232.75 28,937.39 17,716.44 281.90 88,123.50 32,448.22 1,211.97 1,665.89 2,188.85 30.94 3.26 542,172.08 Total Liabilities 170.94 29.17 158.84 4,287.58 318,684.44 46,232.75 28,937.39 17,716.44 281.90 88,123.50 32,448.22 1,211.97 1,665.89 2,188.85 30.94 3.26 542,172.08 Turnover 118.80 1.35 228.38 2,027.31 31,965.41 380.81 364.03 351.73 - 13,126.23 1,707.22 55.05 37.88 - 41.51 29.88 50,435.59 Profit Before Tax (480.11) 0.07 (19.44) (225.71) 6,848.76 (597.31) (739.63) (639.47) (11.69) 3,368.86 (2,511.78) 47.48 26.46 (0.44) (58.89) (15.32) 4,991.84 Less: Provision for Tax - - 3.17 (19.06) - - - - - - 1,777.18 (14.25) - - - - 1,747.05 Profit After Tax (480.11) 0.07 (22.61) (206.65) 6,848.76 (597.31) (739.63) (639.47) (11.69) 3,368.86 (4,288.96) 61.73 26.46 (0.44) (58.89) (15.32) 3,244.79 Proposed Dividend - - - - - - - - - - - - - - - - -

KFTPLKFPLKOL

EMPLCKAPPLC

SBPLCSPPLC

FZE

Place : Bangalore

Date: 14th February,2015

BS Sridhara

Company Secretary

Shiv Pack Plc

Details pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies 2013-14

Anitha Karuturi

Wholetime Director

KL Karuturi Floritech Pvt Ltd.

Surya Holding Ltd.

Flower Xpress Fze

RHL SHL YIL

KHL KSL

Karuturi Foods Pvt Ltd.Karuturi Oversesas LtdEthiopian Meadows PlcKaruturi Agro Product Plc.Surya Blossoms Plc

Karuturi Limited

Yeshoda Investment Ltd

Rhea Holding Ltd

Sai Ramakrishna Karuturi

Chairman & Managing Director

Karuturi Hospital Ltd. Karuturi Sports Ltd.

COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE Karuturi Global Limited does believe and practice Good Corporate Governance by ensuring integrity, fairness, transparency, equity, accountability and ethics in all its business dealings.

Corporate Governance refers to a combination of laws, regulations, procedures, implicit rules and good corporate practices which ensure that a Company meets obligations to optimize shareholders value and fulfill its responsibilities to the community, customers, employees, Government and other segments of society. Some of the important best practices of corporate governance framework are timely and accurate disclosure of information regarding the financial situation, performance, ownership and governance of the Company

Your Company will continue to focus its resources, strengths and strategies for creation and safeguarding of shareholders’ wealth and at the same time protect the interests of all its shareholders while upholding the core values of excellence, integrity, responsibility, unity and understanding which are imperative to the Karuturi Group.

a. BOARD OF DIRECTORS: As on 31st March, 2014, the Board of the Company comprised of five Directors. The Company has an Executive Chairman and one Whole-time Director. The number of Non-Executive Directors being three, all of them were Independent Directors. The composition of the Board is in accordance with the Clause 49 of the Listing Agreement and exceeds the percentages stipulated in the subject clause.

The Non-Executive Directors are eminent industrialists or/and professionals with rich experience in management, finance, Agriculture, law and banking.

Details of composition of the Board of Directors and their attendance at the Board Meetings and Annual General Meeting and their association with other companies as Directors and membership in other companies /committees are as follows:

Name of the Director

Category

No. of Board

Meetings attended

Directorships in other

Companies/ Firms

Membership in other

Companies/ Committees

Attendance at previous

AGM

Sai Ramakrishna Karuturi

Executive & Non Independent Director

4 10 NA Yes

Raja Vara Prasad Bommidala

Non Executive and Independent Director

0

12

NA

No

Anitha Karuturi

Executive & Non Independent Director

4 10 NA

Mahendra Kumar Sunkara

Non Executive and Independent Director

2 1 NA No

Manmohan Agrawal

Non Executive and Independent Director

3 12 NA Yes

b. DATES OF BOARD MEETINGS: During the year under review, 4 Board Meetings were held on the following dates: 7-June 2013; 12- August 2013; 12- November 2013; 15- February 2014.

 

 

 

 

 

 

 

 

 

REPORT ON CORPORATE GOVERNANCE AUDIT COMMITTEE: The Company has an independent Audit Committee in line with the Clause 49 of the listing agreement and Section 177 of the Companies Act, 2013. The Audit Committee of the Board, inter alia, provides reassurance to the Board on the existence of an effective internal control environment that ensures: • Efficiency and effectiveness of operations; • Safeguarding of assets and adequacy of provisions for all liabilities; • Reliability of financial and other management information and adequacy of disclosures; • Compliance with all relevant statutes.

The role of the Committee includes the following: • Overseeing the Company’s financial reporting process and the

disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible;

• Reviewing the Company’s financial and risk management policies; • Recommending the appointment and removal of external auditors,

fixation of audit fee and approval of payment of fees for any other services rendered by the auditors;

• Reviewing with the management and internal auditors, – the adequacy of internal control systems; – internal audit function; – internal audit scope, coverage and frequency; – reports of internal audit for any significant findings, including matters

where there is suspected fraud or irregularity or failure of internal control systems of a material nature and follow-up thereon

• Reviewing with the management and external auditors, – Nature and scope of audit – Any areas of concern and comments contained in their management letter – and the financial statements prior to endorsement by the Board; – Compliance with Stock Exchange and legal requirements concerning financial statements – Related party transactions – Report of the Directors & Management Discussion and Analysis • Review of the financial statements of unlisted subsidiary companies • Looking into the reasons for substantial defaults, if any, in payment

to Shareholders (in case of non- payment of declared dividends) and

creditors; • Considering such other matters as may be required by the Board; • Reviewing any other areas which may be specified as role of the Audit Committee under the Listing Agreement, Companies Act and other statutes, as amended from time to time. The minutes of the Audit Committee meetings are placed before the Board of Directors in the subsequent Board Meeting. During the year 2013-14, the Audit Committee met on four times i.e. 7-June 2013; 12-August 2013; 12-November 2013; 15-February 2014. The constitution of Audit Committee and attendance of the Members for the year 2013-14 is as under:

Name of the Member Category No ofMeetings

Attendance

Manmohan Agrawal Raja Bommidala Bina Trivedi Aslesha Madappa

Non-Executive&Independent Director Non-Executive & Independent Director Non-Executive& Independent Director Non-Executive & Independent Director

4 4 4 4

4 3 3 4

The Statutory Auditor, Head of Finance and Chief Executive Officer are invited to attend and participate at meetings of the Committee.

The Company Secretary acts as the Secretary to the Committee.

REMUNERATION COMMITTEE: The Company has constituted Remuneration Committee to review periodically the managerial Remuneration and make Proper recommendations. The said committee reconstituted on 15th November 2011, remained unaltered consisting of three non-executive Directors i.e Mr. Manmohan Agrawal, Mr. Raja Bommidala and Ms. Bina Trivedi. COMMITTEE OF DIRECTORS The Company has constituted Committee of Directors to take dec is ions on the normal course o f bus iness . The said Committee reconstituted on 15th November 2011, remained unaltered consisting of three Directors i.e Mr. Sai Ramakrishna Karuturi , Mrs. Aslesha Madappa and Mrs. Anitha Karuturi.

GENERAL BODY MEETINGS:

A) Details of location and time of holding the last 3 AGMs are as follows: Year

Date and Time Venue

Year Date and Time Ven

16th AGM 17th AGM 18th AGM

23-sep-2011at 3.00 PM

28-Sep-2012 at 5.00 PM

30-Sep-2013 at 4:30 PM

Wadiyar Hall, Century Club, No.1, Seshadri Road, Bangalore-560001

Wadiyar Hall, Century Club, No.1, Seshadri Road, Bangalore-560001

Wadiyar Hall, Century Club, No.1, Seshadri Road, Bangalore-560001

DETAILS OF SPECIAL RESOLUTIONS PASSED:

During the 18th Annual General Meeting of the Company, two special resolutions were passed: 1. To appoint Mr Sai Rama Krishna Karuturi as Managing Director of the company from

1/10/2013 to 30/09/2018.

2. To appoint Mrs Anitha Karuturi as Whole Time Director of the company from 1/10/2013 to 30/09/2018.

6. MEANS OF COMMUNICATION: The Quarterly/ Half Yearly/ Annual results of the Company are published in leading dailies of the country and also hosted on the Company’s website www.karuturi.com. The same are available on the respective web sites of NSE and BSE. Periodic information notices on the latest developments in the Company are circulated among the shareholders of the Company through Stock Exchange and Company web sites. The Company also communicates with the Shareholders through annual general meetings and extra ordinary general meetings and also through postal ballots.

SHAREHOLDERS’ GRIEVANCES COMMITTEE: The Investors’ Grievances Committee comprises of two Directors, Mr Mahendra Kumar Sunkara, Non Executive Director and Mrs. Anitha Karuturi, who is an Executive Director.

The Company has a Shareholder’s/Investors’ Grievance Committee comprising of two Directors and Chairman is an Independent, Non Executive Director. The Committee looks into redressing the grievances of shareholders and investors like transfer of shares, non receipt of balance sheet, non receipt of declared dividend and related matters. There were no pending investor complaints at the beginning of the year. During the year 2013-14, the Company received 12 investor complaints, which have been attended to, and no complaints remain unresolved at the end of the year. Mrs. Anitha Karuturi, Executive Director is also the Compliance Officer of the Company. The

Committee acts in close liaison with its Share Transfer Agents and Registrars.

Details of Investor Grievances received and resolved during the year are as under:

Sl.NO. PARTICULARS RECEIVED DISPOSED PENDING AS ON 31.03.2014

1

2

3

4

NON RECEIPT OF

SHARE CERTIFICATES

NON RECEIPT OF

DIVIDEND WARRANTS

NON RECEIPT OF

ANNUAL REPORTS

COMPLAINT FORM STOCK EXCHANGE / SEBI

0

12

12

0

0

12 12 0

0 0 0 0

Total

12

12

0

Power to process the share transfer requests and other grievances of the share holders was allocated to certain key personnel in Karvy Computershare Pvt Ltd, Hyderabad and also in the Company, so as to enable the requests to be processed at the earliest which might other wise be delayed due to the absence of any committee members. Periodically, audits are carried out at the office of the Share Transfer Agents by independent Practicing Company Secretary and requisite Certificates/Reports are obtained and furnished to the Stock Exchanges.

7. CODE FOR PREVENTION OF INSIDER TRADING The Company has adopted a code of conduct for Prevention of Insider Trading in the shares of the Company. The code, inter-alia, prohibits purchase/sale of shares of the Company by employees while in possession of unpublished price sensitive information in relation to the Company. 8. CEO/CFO CERTIFICATION The CEO/CFO give quarterly and annual certification of the financial statements to the Board, as required under clause 49. 9. RECONCILIATION OF SHARE CAPITAL AUDIT A qualified practicing Company Secretary carries out quarterly Reconciliation of Share Capital audits to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/ paid up capital is in agreement with the aggregate of total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.

10. COMPLIANCE The certificate regarding compliance of the conditions of corporate governance obtained from Practicing Chartered Account Mr R Narasimhan. 

is given elsewhere in this Annual Report. 11. GENERAL SHAREHOLDERS’ INFORMATION

i) AGM Date: 20th March 2015, Time : 11:00 AM

Venue : Wadiyar Hall, Century Club, # 1, Sheshadri Road, Bangalore- 560001 ii) Financial Year ending 31st March 2014 iii) Date of dispatch of Annual Reports : On or before 26TH February 2015. iv) Book Closure dates: 13th March 2015 to 20th March 2015 (both days inclusive) LISTING ON STOCK EXCHANGES:

The Shares of the Company are listed on the Bombay Stock Exchange Ltd, Mumbai, National Stock Exchange of India Ltd, Mumbai.

DISTRIBUTION OF SHARE HOLDING AS ON 31.03.2014:

Sl no

Category No. of Cases % of Cases Amount % of Amount

1 1-5000 64075 87.58%

5.48%3.10%1.16%0.57%0.45%0.82%0.84%

64701151  7.99%

2 5001- 10000 4012        5.48% 

31487482 

3.89%

3 10001- 20000 2267 3.10% 

33723279 

4.16%

4 20001- 30000 851 1.16% 

21591919 

2.67%

5 30001- 40000 414 0.57% 

14810981 

1.83%

6 40001- 50000 326 0.45% 

15228159 

1.88%

7 50001- 100000 600 0.82% 

44705945 

5.52%

8 100001& Above 638 0.84% 

583477732 

72.06%

Total: 73183 100 809726648 100

Shareholding pattern as on 31.03.2014:

Category No of

Holders Total Number

of shares % of

Equity

Promoter Group  2 17789190 2.20%

Promoters & Directors  3 26879895 3.32%

Foreign Institutional Investors  6 134456772 16.61%

Mutual Funds /UTI  0 0 0%

TRUSTS 1 85000 0.01%

NON RESIDENT INDIANS  768 40361328 4.98%

FOREIGN COMPANIES  3 105416325 13.02

FOREIGN BODIES  2 30282786 3.74

CLEARING MEMBERS  128 3077911 0.38

Bodies Corporate  1084 71303000 8.81

Insurance Companies  1 1500000 0.19

GDR 1 10461000 1.29

Resident Individuals 71183 367979441 45.44

Central Government / State Government(s)  1 134000 0.02

           

   73183 809726648 100%

SHARE PRICE MOVEMENTS:

The monthly high and low quotations on Bombay Stock Exchange Ltd are as follows:

Month

High Price

Low Price

Close Price

Volume of shares

Apr-13 3.75 2.91 3.30 1,14,97,323

May-13 3.55 2.96 2.98 89,53,046

Jun-13 3.14 2.33 2.38 84,07,961

Jul-13 2.78 1.67 1.85 1,41,33,644

Aug-13 2.11 1.08 1.32 1,24,68,477

Sept-13 1.38 0.63 0.68 5,01,60,705

Oct-13 1.73 0.71 1.73 36,63,673

Nov-13 1.99 1.32 1.39 1,26,82,955

Dec-13 1.54 1.30 1.33 84,54,046

Jan-14 1.39 0.88 0.97 1,27,29,900

Feb-14 1.11 0.82 0.84 52,18,287

Mar-14 1.58 0.83 1.57 2,53,06,549

The monthly high and low quotations on National Stock Exchange Ltd are as follows: Month

High Price

Low Price

Close Price

Volume of shares

Apr-13 3.75 2.80 3.30 3,04,61,588

May-13 3.55 2.95 3.00 1,86,39,503

Jun-13 3.15 2.35 2.35 1,65,04,016

Jul-13 2.80 1.65 1.80 3,58,13,047

Aug-13 2.15 1.00 1.30 2,17,08,137

Sept-13 1.40 0.60 0.70 7,46,67,630

Oct-13 1.70 0.75 1.70 2,23,36,882

Nov-13 1.85 1.40 1.40 85,36,411

Dec-13 1.50 1.30 1.30 80,03,525

Jan-14 1.35 0.90 1.00 1,75,19,472

Feb-14 1.10 0.80 0.85 99,90,501

Mar-14 1.55 0.80 1.55 3,24,63,001

vii) The ISIN No for the dematerialized Shares of the Company is INE 299C01024

FACILITIES/ PLANT LOCATION

India : 1 95/1,Naranahalli

Village, Doddabelavangala, Doddaballapur, Bangalore District – 561203

2. 66 & 73/2 Beledhara Village Tumkur- Madhugiri Road Tumkur District - 572106

Overseas: 1. Wollisso City

Ethiopia 2. Holeta

Ethiopia 3. Gambe

lla 4. Bako, Gambella

Ethiopia 5. Naivasha

Kenya

Address for Correspondence: Registered Office

No.204, Embassy Center,11 Crescent Road, Bangalore-560001, India. Corporate Office No.204, Embassy Center,11 Crescent Road, Bangalore – 560001, India. Ph : 080 40809000 Email:cs@karuturi.com; investorrelations@karuturi.com Registrar & Transfer Agents Karvy Computershare (P) Limited, 17 -24 Vithal Rao Nagar, Madhapur Hyderabad 500 081 P : +91 040 44655124 || F : +91 40 23420814 Email: krishnans@karvy.com Name of the contact Person: Mr.S.Krishnan, Senior Manager. email: krishnans@karvy.com.

ix) Unclaimed Dividends

Pursuant to Section 205C of the Companies Act, 1956, dividends that are unpaid/unclaimed for a period of seven years from the date they became due for payment are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF). Given below are the dates of declaration of dividend and corresponding dates when unpaid/unclaimed dividends are due for transfer to IEPF.

Year Type of

dividend Dividend pershare

Date of declaration of

Due date for transfer to

2007-20082008-20092009-20102010-2011

Dividend Final Dividend Final Dividend Final Dividend Final Dividend

Re 0.20 Re 0.10 Re 0.10 Re 0.10

02-Nov-08 02-Nov-09 01-Nov-10 30-Oct-11

01-Nov-15 31-Oct-16 30-Oct-17 28-Oct-18

Members who have so far not encashed their dividend warrants are requested to write to the Company / Registrar to claim the same, to avoid transfer to IEPF. Members are advised that no claims shall lie against the said Fund or the Company for the amounts of dividend so transferred to the said Fund.

Service of documents through electronic mode:

As a part of Green initiative, the members who wish to receive documents like the Notice convening the general meetings, Financial Statements, Directors’ Report, Auditors’ Report etc., through e-mail, may kindly intimate their e-mail address to Company/Registrars (for shares held in physical form) and Depository Participants (for shares held in dematerialized form).

Other useful information to shareholders

• Equity Shares of the Company are under compulsory demat trading by all investors, with effect from 21st March 2000.Considering the advantages of scripless trading, shareholders are requested in their own interest to consider demateralisation of their shareholding so as to avoid inconvenience in future. • Shareholders/Beneficial Owners are requested to quote their Registered

Folio No./ DP & Client ID Nos. as the case may be, in all correspondence with the RTA/Company. The Company has also designated an exclusive E-mail ID: investors@karuturi.com for effective investors’ services where they can complaint / query and request for speedy and prompt redressal.

• Shareholders holding shares in physical form are requested to notify to the RTA/ Company, change in their address/Pin Code number with proof of address and Bank Account details promptly by written request under

the signatures of sole/first joint holder. Shareholders may note that for transfer of shares held in physical form, as per recent circular issued by SEBI, the transferee is required to furnish copy of their PAN card to the Company/RTAs for registration of transfer of shares.

• Beneficial Owners of shares in demat form are requested to send their instructions regarding change of name, bank details, nomination, power of attorney, etc., directly to their Depository Participants only.

• Non-resident members are requested to immediately notify the following to the Company in respect of shares held in physical form and to their Depository Participants in respect of shares held in dematerialized form:

– Indian address for sending all communications, if not provided so far; – Change in their residential status on return to India for permanent settlement; – Particulars of the Bank Account maintained with a bank in India, if not

furnished earlier; and – E-mail ID and Fax No(s), if any. • In case of loss/misplacement of shares, investors should immediately

lodge FIR/ Complaint with the Police and inform to the Company along with original or certified copy of FIR/acknowledged copy of the Police complaint.

• For expeditious transfer of shares, shareholders should fill in complete and correct particulars in the transfer deed. Wherever applicable, registration number of Power of Attorney should also be quoted in the transfer deed at the appropriate place.

• Shareholders are requested to keep record of their specimen signature before lodgment of shares with the Company to obviate the possibility of difference in signature at a later date.

• Shareholders of the Company, who have multiple accounts in identical names(s) or holding more than one Share Certificate in the same name under different Ledger Folio(s), are requested to apply for consolidation of such Folio(s) and send the relevant Share Certificates to the Company.

• Section 109A of the Companies Act, 1956 extends nomination facility to individuals holding shares in physical form in Companies. Shareholders, in particular those holding shares in single name, may avail of the above facility by furnishing the particulars of their nominations in the prescribed Nomination Form.

• Shareholders are requested to give their valuable suggestions for improvement of the Company’s investor services.

x) The Practicing Company Secretary’s certificate on Corporate Governance as required by Clause 49 of the listing agreement is given as Annexure to this report.

Auditor’s Certificate on Corporate Governance

To The Members Karuturi Global Limited

1. I have examined the compliance of the conditions of Corporate Governance

by Karuturi Global Limited for the year ended 31st March, 2014 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange, Mumbai and with the National Stock Exchange of India Limited.

2. The compliance of the conditions of Corporate Governance is the

responsibility of the Management. My examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of the opinion on the financial statements of the Company.

3. In my opinion and to the best of my information and explanations given to

me, I certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

4. I state that in respect of investor grievances received during the year

ended 31st March, 2014, no investor grievances is pending against the Company as on 31st March, 2014, as per the records maintained by the Company and presented to the Shareholders’ and Investors’ Grievances Committee.

5 I further state that such compliance is neither an assurance as to the

future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

Place : Bangalore Mr R Narasimhan Date : 1 4 t h F e b r u a r y , 2 0 1 5 Practicing Chartered Accountant M.NO 19197

 

 

 

INDEPENDENT AUDITORS’ REPORT

To the Members of Karuturi Global Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Karuturi Global Limited ("theCompany"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit andLoss and the Cash Flow Statement of the Company for the year then ended, and a summary ofsignificant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true andfair view of the financial position and financial performance in accordance with the AccountingStandards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act").This responsibility includes the design, implementation and maintenance of internal controlrelevant to the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing issued by the Institute ofChartered Accountants of India. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Company's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by management, as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our qualified audit opinion.

Basis for Qualified Opinion

1. During the year the Company has made Rs.1,409.60 lakhs of total sales turnover, which compriseslocal sales of Plants, Bud-wood and Root-stock amounting to Rs.860.73 lakhs over which there wasno internal control on which we could rely for the purpose of our audit. There were no othersatisfactory audit procedures that we could adopt to satisfy ourselves that the recorded turnover wasfree from material misstatement.

2. During the year the Company has made Rs.543.04 lakhs of the purchases, which comprises localpurchases of Plants, Bud-wood and Root-stock amounting to Rs.472.13 lakhs over which there wasno internal control on which we could rely for the purpose of our audit. There were no othersatisfactory audit procedures that we could adopt to satisfy ourselves that the recorded turnover wasfree from material misstatement.

3. Attention is invited to note no. 2.29 forming part of the Financial Statements ('Notes') regardingtreatment of accumulated balance of Foreign Currency Monetary Translation Reserve (FCMTR).Wherein, during the year, the Company had opted for conversion of its Advance made to KaruturiOverseas Ltd (KOL), Dubai a wholly owned subsidiary to Equity investment, total amounting toRs.6,798.66 lakhs (USD 125.00 lakhs). Consequently, an amount of Rs.2,037.79 lakhs had beentransferred from the accumulated balance of Foreign Currency Monetary Translation Reserve(FCMTR) to Statement of Profit and Loss as exchange gain and treated as income during the year.As per para 15, read with para 31 and para 32 of the Accounting Standards-11 "The effects ofchanges in foreign exchange rates", the accumulated amount in FCMTR account can be transferredto Statement of Profit and Loss only at the time of disposal of net investments in the non-integralforeign operations and in our opinion, the said transaction of conversion of advance made to a non-integral foreign operation i.e., to a wholly owned subsidiary into an equity investment will nottantamount to disposal of net investment in the said subsidiary and in our opinion,, the said amountof Rs.2,037.79 lakhs should not have been transferred from FCMTR to Statement of Profit and Loss.Hence, the above transaction constitutes a departure from the Accounting Standards-11 "The effectsof changes in foreign exchange rates" as referred to in sub-section (3C) of section 211 of theCompanies Act, 1956 resulting overstatement of income to that extent.

Qualified Opinion

In our opinion and to the best of our knowledge and according to the information and explanations givento us, except for the effects of the matters described in paragraphs 1 to 3 of the Basis for Qualified Opinionparagraph, the said financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principles generally accepted inIndia.

i. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

ii. in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matters/ Other Matters:

1. Attention is invited to note no. 2.3 B forming part of the Financial Statements ('Notes')regarding the Company’s Foreign Currency Convertible Bonds (FCCBs) liability, which iscarried at Rs.35,990.37 lakhs (USD 606.65 lakhs) in the Balance Sheet as at March 31, 2014.The FCCB Loan was due for repayment on 19th October, 2012 and the Company hasdefaulted in repayment of the same. During the year the RBI has approved the restructuredrepayment proposal of the Company, conditionally, and as stated in the said note, theCompany in turn is not in a position of meeting certain conditions relating to the all-in-costas per ECB guidelines as stated in the conditional approval of the RBI. Out of the aboveliability, Rs.8,911.94 lakhs (USD 148.29 lakhs) has become due for repayment as per theproposed restructure plan also and has been classified under Other Current Liabilities.However, the Company has not disclosed any strategic plan as to how the above liabilitywill be discharged.

2. Attention is invited to note no. 2.12 forming part of the Financial Statements ('Notes')regarding the Non Current Investments, which includes investment in subsidiaries totalamounting to Rs.52,520.89 lakhs, which are stated at cost. However, the realisable value ofthese investments could not be ascertained as audited accounts of these entities are notreceived.

3. Attention is invited to note no. 2.16 forming part of the Financial Statements ('Notes')regarding the Trade Receivables, wherein the overseas trade receivable are disclosed at netof advance received for export sales orders.

4. Attention is invited to note no. 3.2 forming part of the Financial Statements ('Notes')regarding the outcome of the various contingent liabilities and corporate guarantees givenby the Company and the possible exposure of the same on the Company's financialstatement.

5. Attention is invited to note no. 3.2 forming part of the Financial Statements ('Notes')regarding the seizure of bank accounts by the Income Tax Department.

Our report is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by theCentral Government of India in terms of sub-section (4A) of section 227 of the Act, we givein the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with bythis Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash FlowStatement comply with the Accounting Standards referred to in subsection (3C) ofsection 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2014,and taken on record by the Board of Directors, none of the directors is disqualified as onMarch 31, 2014, from being appointed as a director in terms of clause (g) of sub-section(1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which thecess is to be paid under section 441A of the Companies Act, 1956 nor has it issued anyRules under the said section, prescribing the manner in which such cess is to be paid, nocess is due and payable by the Company.

Place: Bangalore For YCRJ & Associates

Date: 30th May 2014 Chartered Accountants

Firm Regn No. 006927S

Yashavanth Khanderi

Partner

M.No: 029066

Annexure to Independent Auditors’ Report

Annexure referred to in paragraph “Report on Other Legal and Regulatory Requirements” ofour report of even date on accounts of Karuturi Global Limited for the year ended 31st March,2014.

1. In respect of its fixed assets:

a. The Company has not maintained proper records showing full particulars includingquantitative detail, situation and description of fixed assets.

b. All the fixed assets have not been physically verified by the management during the year andthere is no regular program for verification.

c. The Company has not disposed of substantial part of fixed assets during the yearand the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management during theyear. In our opinion, the frequency of verification needs improvement.

b. In our opinion and according to the information and explanations given to us, the existingprocedures of physical verification of inventories followed by the management are notadequate in relation to the size of the Company and the nature of its business and needsimprovement.

c. The Company is maintaining certain records of inventory. In our opinion, such records needto be improved to have a proper control on the inventory. As explained to us and certified bythe management, there were no material discrepancies noticed on physical verification ofinventory carried out at the end of the year as compared to the book records, having regard tothe size of the operations of the Company.

3. In respect of register maintained under section 301 of the Companies Act, 1956:

a. According to the information and explanations given to us, the Company has notgranted any loans, secured or unsecured, to companies, firms or other partiescovered in the register maintained under section 301 of the Companies Act, 1956.Accordingly, the provisions stated in paragraph 4 (iii) (b), (c) and (d) of the Orderare not applicable.

b. During the year, the Company had taken loan from three parties covered in theregister maintained under section 301 of the Companies Act, 1956. The Maximumamount involved during the year was Rs. 7,666.62 Lakhs and the year-end balanceof all loans taken from all such parties was Rs. 5,511.60 Lakhs.

c. In our opinion, the rate of interest and other terms and conditions for such loans arenot, prima facie, prejudicial to the interest of the Company.

d. In respect of the aforesaid loans, the loan is repayable on demand.

4. In our opinion and according the information and explanations given to us, the internal controlsystem is not commensurate with the size of the Company and the nature of its business withregard to purchase of inventory, sale of goods and fixed assets. During the course of audit, we haveobserved the following weakness in internal control system of the Company;

a) Purchase order and goods receipt notes are not prepared for recording purchase andinventory in certain cases.

b) Sales order and delivery challans are not prepared for recording sale of goods in certaincases.

c) The sales documents such as proof of transportation, proper acknowledgement by the buyerfor having the goods received are not made available to us.

d) Purchase of root-stock, bud-wood and plants are paid either in cash or by the barter systembasis and the transactions are settled on net basis.

e) Sales of root-stock, bud-wood and plants are received either in cash or by the barter systembasis and the transactions are settled on net basis.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, theparticulars of contracts or arrangements referred to in section 301 of the CompaniesAct, 1956 that need to be entered into in the register maintained under Section 301 ofthe Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements entered in the registermaintained under Section 301 of the Companies Act, 1956 and exceeding the value ofrupees five lakhs in respect of any party during the year have been entered intoduring the financial year at prices which are reasonable having regard to prevailingmarket prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company hasnot complied with the provisions of Section 58A/ 58AA, Companies (Acceptances of Deposits)Rules, 1975 and other relevant provisions of the Companies Act, 1956 with regards to the depositsaccepted from public. The Company has, in earlier years and during the year, accepted depositsfrom its directors Mr. Sai Ramakrishna Karuturi and Ms. Anitha Karuturi who are also membersof the company and the amount accepted during the year were Rs.201.26 lakhs and Rs.509.20 lakhsrespectively and the year-end balances were Rs. 622.82 Lakhs and Rs. 1,861.40 Lakhs respectively,which were transferred to a KMP Related Entity, M/s. Rhea Holding (P) Ltd at the year end. Also,it has accepted a loan from a person of general public amounting to Rs.134 lakhs, at the year-endbalance of the same is Rs. NIL. According to the information and explanations given to us, noOrder has been passed by the Company Law Board or National Company Law Tribunal or ReserveBank of India or any Court or any other Tribunal on the company in respect of the aforesaiddeposits.

7. As per the information and explanations given to us, the company has an internal audit systemconducted by external auditors on annual basis. However, no internal audit reports have beenfurnished for our review. Hence, we are unable to comment on the adequacy of the internal auditsystem existing in the company.

8. The Central Government has not prescribed maintenance of cost records under clause (d)of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of thecompany.

9. In respect of statutory dues:

a. Undisputed statutory dues including provident fund, investor education and protectionfund, employees' state insurance, income-tax, Income Tax Deducted at source (TDS), sales-tax, wealth-tax, service-tax have not been regularly deposited with the appropriate authoritiesand there have been considerable delays.

b. According the information and explanations given to us, undisputed dues in respect ofprovident fund, investor education and protection fund, employees' state insurance, income-tax, income tax deducted at source (TDS), sales-tax, wealth-tax, service-tax and otherstatutory dues which were outstanding at the year-end for a period of more than six monthsfrom the date they became payable are as follows.

Name of the Statute Nature of thedues

Amount Period to whichthe amount

relates

Income Tax Act, 1961Tax Collected at

Source0.01 Lakhs AY 2013-14

Income Tax Act, 1961Tax Collected at

Source0.03 Lakhs AY 2014-15

Income Tax Act, 1961 Income Tax 182.24 Lakhs AY 2012-13

Income Tax Act, 1961Tax Deducted at

Source39.70 Lakhs

AY 2014-15 &Prior to AY 2014-

15

Income Tax Act, 1961Tax Deducted at

Source469.34 Lakhs AY 2014-15

Income Tax Act, 1961Tax Deducted at

Source187.29 Lakhs AY 2013-14

Karnataka Value AddedTax Act, 2003

Value AddedTax

2.49 Lakhs AY 2013-14

Karnataka Value AddedTax Act, 2003

Value AddedTax

1.71 Lakhs AY 2014-15

Finance Act, 1994 Service Tax 9.66 Lakhs AY 2009-10

Finance Act, 1994 Service Tax 0.21 Lakhs AY 2010-11

Finance Act, 1994 Service Tax 0.21 Lakhs AY 2011-12

Finance Act, 1994 Service Tax 37.42 Lakhs AY 2011-12

Finance Act, 1994 Service Tax 0.09 Lakhs AY 2011-12

Finance Act, 1994 Service Tax 2.27 Lakhs AY 2013-14

Finance Act, 1994 Service Tax 0.51 Lakhs AY 2014-15

c. According to the information and explanation given to us, and based on the records of thecompany, the dues outstanding in respect of income-tax, sales-tax, wealth-tax, service-taxand other statutory duties on account of any dispute, are as follows:

Name of theStatute

Nature ofthe dues

Amount Period towhich the

amountrelates

Pending before theauthority

Finance Act,1994

Service Tax 172.62Lakhs

AY 2006-07 Commissioner/CESTAT (Appeals)

Income Tax Act1961

IncomeTax

863.44Lakhs

AY 2005-06 Commissioner(Appeals) Bangalore

Income Tax Act1961

IncomeTax

792.72Lakhs

AY 2006-07 Income Tax AppellateTribunal Bangalore

Income Tax Act1961

IncomeTax

1,850.91Lakhs

AY 2007-08 Commissioner(Appeals) Bangalore

Income Tax Act1961

IncomeTax

6,902.34Lakhs

AY 2008-09 Income Tax AppellateTribunal Bangalore

Income Tax Act1961

IncomeTax

3,254.27Lakhs

AY 2009-10 Commissioner(Appeals) Bangalore

Income Tax Act1961

IncomeTax

5,064.47Lakhs

AY 2010-11 Dispute ResolutionPanel

Karnataka Taxon Entry of

Goods Act, 1979

Entry Tax 0.97 Lakhs AY 2005-06 Joint Commissioner ofCommercial Taxes,

Audit-13, VAT DVO –1

Karnataka Taxon Entry of

Goods Act, 1979

Entry Tax 3.87 Lakhs AY 2007-08 Joint Commissioner ofCommercial Taxes,

Audit-13, VAT DVO –1

Karnataka Taxon Entry of

Goods Act, 1979

Entry Tax 1.57 Lakhs AY 2008-09 Joint Commissioner ofCommercial Taxes,

Audit-13, VAT DVO –1

10. In our opinion, as at 31st March 2014 the accumulated losses of the company are not morethan fifty percent of its net worth. Further, the company has not incurred cash lossesduring the financial year ended on that date or in the immediately preceding financialyear and hence reporting under clause 4(x) does not arise.

11. In our opinion and according to the information and explanations given to us,

The Company had defaulted in repayment of principal dues to Axis Bank, amounting to Rs.2,000lakhs which became due for repayment on 13th February 2013. However, the company has repaidthe same with interest total amounting to Rs.2,101.27 lakhs on 28th June 2013.

The Company has also defaulted in repayment of dues to Foreign Currency Convertible Bond(FCCB) holders amounting to Rs.35,990.37 lakhs (including additional interest payable till 31stMarch, 2014) which became due for repayment on 19th October, 2012.

12. According to the information and explanations given to us and based on the documentsare records produced to us, the company has not granted any loans and advances on thebasis of security by way of pledge of shares, debentures and other securities and hencereporting under Para 4(xii) of the Order does not arise.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/Society. Hence, theprovisions of para 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are notapplicable to the company.

14. The Company is not dealing in or trading in shares, securities, debentures and otherinvestments. Accordingly, the provisions of para 4(xiv) of the Companies (Auditor’sReport) Order, 2003 are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the termsand conditions on which the company has given guarantees for loans taken by othersfrom banks or financial institutions are not prejudicial to the interest of the company.

16. According to the information and explanations given to us, the Company has not obtainedany term loans during the financial year covered by our audit report.

17. According to the information and explanations given to us and on an overall examination of thebalance sheet of the company and due to the accounting transactions passed in the books of account,

we are not able to comment on whether funds raised on short-term basis have been used for long-term investment.

18. According to the information and explanations given to us, the Company has not madeany preferential allotment of shares to parties and companies covered in the Registermaintained under Section 301 of the Act during the year under audit and hence reportingunder Para 4(xviii) of the Order does not arise.

19. According to the information and explanations given to us, during the period covered byour audit report, the company has not issued debentures. Accordingly, the provisions ofpara 4(xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to theCompany.

20. According to the information and explanations given to us, during the period covered byour audit report, the company has not raised money by way of public issue. Accordingly,the provisions of para 4(xx) of the Companies (Auditor’s Report) Order, 2003 are notapplicable to the Company.

21. During the course of our examination of the books and records of the company, carriedout in accordance with the generally accepted auditing practices in India, and according tothe information and explanations given to us, we have neither come across any instance offraud on or by the company, noticed or reported during the year, nor have we beeninformed on such case by the management.

Place: Bangalore For YCRJ & Associates

Date: 30th May 2014 Chartered Accountants

Firm Regn No. 006927S

Yashavanth Khanderi

Partner

M.No: 029066

Page 1 of 6

INDEPENDENT AUDITORS’ REPORT

To The Board of Directors of Karuturi Global Limited

Report on the Consolidated Financial Statements of Karuturi Global Limited

We have audited the accompanying consolidated financial statements of Karuturi Global Limited ("the Company") and its subsidiaries (Collectively referred to as “Group”), which comprise the Consolidated Balance Sheet as at 31st March 2014, the consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information which we have signed under reference to this report.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the group in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

The consolidated financial statements have been prepared by the Company in accordance with the requirement of Accounting Standard (AS-21) on Consolidated Financial Statements.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on

Page 2 of 6

the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

1. Attention is invited to note no.1.2 forming part of the Consolidated Financial Statements ('Notes') regarding the appointment of Receivers by the Bank for one subsidiary (Karuturi Limited) and the inclusion of only 9 months' unaudited financial statements for consolidation. The financial statements of such subsidiary considered for consolidation reflect total assets (net) of Rs.32448.22 lakhs, total revenues of Rs.1707.22 lakhs and net cash outflows amounting to Rs.677.38 lakhs. Consequent to petition by creditors and placement of the subsidiary under receivership casts doubt on the continuity of the subsidiary (Karuturi Limited) as a going concern as well as its holding company (Yeshoda Investments Limited) since its holding company’s main investment is in Karuturi Limited. However, the subsidiary has contested the appointment of receivership.

2. During the year, there were local sales of Plants, Bud-wood and Root-stock Rs.860.73 lakhs in the Karuturi Global Limited and local sales of un-processed gherkins and other vegetables amounting to Rs.1249.58 lakhs in one subsidiary (Karuturi Foods Pvt Ltd), over which there was no internal control on which we could rely for the purpose of our audit. There were no other satisfactory audit procedures that we could adopt to satisfy ourselves that the recorded turnover was free from material misstatement.

3. During the year, there were local purchase of Plants, Bud-wood and Root-stock Rs.472.13 lakhs in Karuturi Global Limited and local purchase of un-processed gherkins and other vegetables amounting to Rs.996.72 lakhs in one subsidiary (Karuturi Foods Pvt Ltd), over which there was no internal control on which we could rely for the purpose of our audit. There were no other satisfactory audit procedures that we could adopt to satisfy ourselves that the recorded purchases were free from material misstatement.

4. Attention is invited to note no.2.30 forming part of the Consolidated Financial Statements ('Notes') regarding treatment of accumulated balance of Foreign Currency Monetary Translation Reserve (FCMTR). Wherein, during the year, the Company had opted for conversion of its Advance made to Karuturi Overseas Ltd (KOL), Dubai a wholly owned

Page 3 of 6

subsidiary to Equity investment, total amounting to Rs.6,798.66 lakhs (USD 125.00 lakhs). Consequently, an amount of Rs.2,037.79 lakhs had been transferred from the accumulated balance of Foreign Currency Monetary Translation Reserve (FCMTR) to Statement of Profit and Loss as exchange gain and treated as income during the year. As per para 15, read with para 31 and para 32 of the Accounting Standards-11 "The effects of changes in foreign exchange rates", the accumulated amount in FCMTR account can be transferred to Statement of Profit and Loss only at the time of disposal of net investments in the non-integral foreign operations and in our opinion, the said transaction of conversion of advance made to a non-integral foreign operation i.e., to a wholly owned subsidiary into an equity investment will not tantamount to disposal of net investment in the said subsidiary and in our opinion,, the said amount of Rs.2,037.79 lakhs should not have been transferred from FCMTR to Statement of Profit and Loss. Hence, the above transaction constitutes a departure from the Accounting Standards-11 "The effects of changes in foreign exchange rates" as referred to in sub-section (3C) of section 211 of the Companies Act, 1956 resulting overstatement of income to that extent.

5. In respect of Inventories, one subsidiary Company (Karuturi Foods Private Limited) has shown closing stock aggregating to Rs.1154.38 lakhs. However, on the basis of sample check conducted, in our opinion, the value of the said closing stock are significantly overstated as at 31st March, 2014. Accordingly, we are unable to quantify the actual stock as at that date and the effect of the same on the loss for the year.

6. In respect of Foreign Currency Translation Reserve, the increase of Rs.14660.45 lakhs (from –Rs937.08 lakhs to Rs.13723.37 lakhs) is subject to reconciliation. In the absence of such reconciliation, we are unable to comment on the effect, if any, on the consolidated profit and loss and on the consolidated assets and liabilities.

Qualified Opinion

In our opinion and to the best of our knowledge and according to the information and explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries, except for the effects of the matters described in paragraphs 1 to 6 of the Basis for Qualified Opinion paragraph, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India.

i. in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2014;

ii. in the case of the Consolidated Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matters/ Other Matters:

Page 4 of 6

1. We did not audit the financial statements of 12 subsidiaries mentioned in Annexure to this report, whose financial statements reflect total assets (net) of Rs.507,085.74 lakhs as at 31st March 2014, total net revenues of Rs.46,580.97 lakhs and net cash outflows amounting to Rs.919.92 lakhs for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us for the purpose of consolidation and our opinion, in so far as it related to the amounts included in respect of the subsidiaries, is based solely on the report of such other auditors. The audit report in respect of one subsidiary (Florista India Private Limited) is not provided to us.

2. Attention is invited to note no.1.2 forming part of the Consolidated Financial Statements ('Notes') regarding the appointment of Receivers by the Bank for one subsidiary (Karuturi Limited) and the inclusion of only 9 months unaudited financial statements for consolidation. We have relied on the unaudited financial statements as on 31st December 2013 of the said subsidiary whose financial statements reflect total assets (net) of Rs.32448.22 lakhs, total revenues of Rs.1707.22 lakhs and net cash outflows amounting to Rs.677.38 lakhs. Our report in so far as it relates to the amounts included in respect of the said subsidiary is based solely on such unaudited financial statements.

3. Attention is invited to note no.1.1(k) forming part of the Consolidated Financial Statements ('Notes') regarding non-inclusion of 4 subsidiaries for consolidation.

4. Attention is invited to note no.2.3B forming part of the Consolidated Financial Statements ('Notes') regarding the Company’s Foreign Currency Convertible Bonds (FCCBs) liability, which is carried at Rs.35,990.37 lakhs (USD 606.65 lakhs) in the Balance Sheet as at March 31, 2014. The FCCB Loan was due for repayment on 19th October, 2012 and the Company has defaulted in repayment of the same. During the year the RBI has approved the restructured repayment proposal of the Company, conditionally, and as stated in the said note, the Company in turn is not in a position of meeting certain conditions relating to the all-in-cost as per ECB guidelines as stated in the conditional approval of the RBI. Out of the above liability, Rs.8,911.94 lakhs (USD 148.29 lakhs) has become due for repayment as per the proposed restructure plan also and has been classified under Other Current Liabilities. However, the Company has not disclosed any strategic plan as to how the above liability will be discharged.

5. Attention is invited to note no.3.1 forming part of the Consolidated Financial Statements ('Notes') regarding the outcome of the various contingent liabilities and

Page 5 of 6

corporate guarantees given by the Company and the possible exposure of the same on the Company's financial statement.

6. Attention is invited to note no.3.1(d) forming part of the Consolidated Financial Statements ('Notes') regarding the seizure of bank accounts of the holding Company (Karuturi Global Limited) by the Income Tax Department.

Our opinion is not qualified in respect of these matters.

Place: Bangalore For YCRJ & Associates Date: 14th February 2015 Chartered Accountants

Firm Regn No. 006927S

Yashavanth Khanderi Partner

M.No: 029066

Page 6 of 6

Annexure to the Independent Auditors Report (Annexure referred to in our report of even date) The Following subsidiaries have been considered for the consolidation of Karuturi Global Limited for the period 1st April 2013 to 31st March 2014:

(Rs in lakhs)

Name of the company Total Assets

Total Revenue

Total Cash

flows Name of the Auditors

Karuturi Overseas Limited

3,21,070.79

31,965.41 849.68 M & M Al Menahali Auditing Florista India Pvt ltd 158.84 228.44 -2.68 S S Rane & Co Ethiopian Meadows Plc 45,695.96 380.81 22.50 Tibebe Mengistu & Co Flower Xpress FZE 88,123.50 13,126.23 0.31 M & M Al Menahali Auditing Surya Blossoms PLC 17,716.44 351.73 0.15 Tibebe Mengistu & Co Karuturi Agro Products PLC 28,937.39 364.03 54.84 Tibebe Mengistu & Co Shiva Pack PLC 281.90 Nil Nil Tibebe Mengistu & Co Surya Holdings Ltd 1,665.89 37.88 -0.07 Gad Wekesa & Associates Reha Holdings Ltd 1,211.97 55.05 0.05 Gad Wekesa & Associates Yeshoda Investments Ltd 2,188.85 Nil -1.52 Gad Wekesa & Associates Karuturi Sports Ltd 3.26 29.88 -3.31 Gad Wekesa & Associates Karuturi Hospitals Limited 30.94 41.51 -0.02 Gad Wekesa & Associates Total 5,07,085.73 46,580.97 919.93

*Total assets, revenues and cash flows are computed at closing conversion rate and average conversion rate respectively. Place: Bangalore For YCRJ & Associates Date: 14th February 2015 Chartered Accountants

Firm Regn No. 006927S

Yashavanth Khanderi Partner

M.No: 029066

KARUTURI GLOBAL LIMITEDBalance Sheet as on 31st March 2014Amount expressed in Indian Rupees in Lakhs unless otherwise stated

EQUITY AND LIABILITIESShareholders' Funds

Share Capital 2.1 8,097.27 8,097.27Reserves and Surplus 2.2 178,035.47 155,329.19Money Received against Share Warrants/ESOPHead Office Account **

Share application money pending allotment 2.2A - -Minority Interest 2.29 22.80

Non-Current LiabilitiesLong-term borrowings 2.3 49,757.22 33,279.14Deferred Tax Liabilities (Net) 2.4 118.59 2,387.86Other Long Term Liabilities 2.5 2,262.92 2,170.58Long Term Provisions 2.6 76.70 51.55

Current LiabilitiesShort-Term Borrowings 2.7 27,431.67 44,446.44Trade Payables 2.8 12,346.38 9,127.06Other Current Liabilities 2.9 25,362.91 9,764.18Short term Provisions 2.10 2,487.47 211.70

305,978.87 264,887.77

ASSETSNon Current Assets

Goodwill on Consolidation (Net) 2.11Fixed Assets - Tangible Assets 2.11 232,863.09 215,224.43 - Intangible Assets 2.11 2,650.15 2,975.69 - Capital Work in Progress 2.11 27,126.80 9,269.77 - Intangible assets under development

Non Current Investments 2.12 161.93 194.25Deferred Tax Assets (Net) 2.4 3,029.53 791.73Long Term Loans and Advances 2.13 1,668.66 1,705.97Other Non Current Assets 2.14 365.95 31.44

Current AssetsCurrent investments 2.15 - -Inventories 2.16 2,143.23 3,227.69Trade Receivables 2.17 16,724.07 9,667.78Cash and Cash Equivalents 2.18 3,338.26 2,058.37Short Term Loan and Advances 2.19 15,032.33 18,526.01Other Current Assets 2.20 874.86 1,214.61

305,978.87 264,887.77

Significant Accounting Policies and Other Disclosuresforming Integral part of financials 1&3Contingent Liabilities and Capital Commitments 3.1As Per our Report of even date attached

For YCRJ & AssociatesChartered Accountants For and on behalf of BoardFirm Regn. No. 006927S

Yashavanth Khanderi Sai Ramakrishna Karuturi Anitha Karuturi B.S SridharaPartner Managing Director Director Company SecretaryM. No. 029066

Place : Bangalore Place : BangaloreDate : 14/02/2015 Date : 14/02/2015

Particulars As on 31.03.2013 As on 31.03.2014Note

KARUTURI GLOBAL LIMITEDStatement of Profit and loss account for the year ended 31st March 2014

Amount expressed in Indian Rupees in Lakhs unless otherwise statedParticulars Note Year Ending Year Ending

31st March 2014 31st March 2013Income

Sale of products 2.21 40,358.55 54,854.47Less: Excise dutyNet sale of products - 40,358.55 54,854.47

Sale of trading products 2.21 8,409.69 597.17Sale of services 2.21 188.97 617.97Other operating revenues 2.22 348.49 -

Revenue from Operations 49,305.70 56,069.62

Other Income 2.23 2,444.23 710.57Total Revenue 51,749.93 56,780.19

ExpensesCost of Materials Consumed 2.24 11,069.15 12,321.56Purchase of Stock-in Trade 2.25 1,133.18 448.35Cost of services rendered 2.24 - -Change in Inventory of Finished Goods, Work-in-Progress and Stock-in Trade 2.26 931.34 (114.41)Employee Benefits Expense 2.27 3,426.09 4,973.48Finance Costs 2.28 7,261.68 3,491.66Depreciation and Amortisation Expenses 3,889.21 3,296.08Other Expenses 2.29 20,155.15 21,081.45

Total expenses 47,865.79 45,498.16

Profit / (Loss) Before Exceptional and Extraordinary Items and Tax 3,884.14 11,282.03

Exceptional Items 2.30 2,037.79 -

Profit / (Loss) Before Extraordinary Items and Tax 5,921.93 11,282.03Extraordinary Items 2.31Prior Period Items 2.32 -Profit / (Loss) Before tax 5,921.93 11,282.03

Tax expense Current Tax (886.04) 4.742. minimum alternative tax entitlement3. foreign taxes Deferred Tax charge / (Credit) (1,465.96) (1,021.88) Deferred Tax for Previous Year - (3,158.13) Others -

Profit after tax 8,273.94 15,457.30

Prior Period Items 2.32 1,362.47 4,643.58

Profit / (Loss) from operations 6,911.47 10,813.72 Transfer to Minority Interest 2.29 (0.15) Profit / (Loss) from operations after tax 6,909.18 10,813.57 Earning per Equity Share

Basic 0.85 1.34 Diluted 0.85 1.34

No. of shares used in computing earnings per share Basic 0.85 1.34 Diluted 0.85 1.34

Significant Accounting Policies and Other Disclosuresforming Integral part of financials 1&3Contingent Liabilities and Capital Commitments 3.1As Per our Report of even date attached

For YCRJ & AssociatesChartered Accountants For and on behalf of BoardFirm Regn. No. 006927S

Yashavanth Khanderi Sai Ramakrishna Karuturi Anitha Karuturi B.S SridharaPartner Managing Director Director Company SecretaryM. No. 029066

Place : Bangalore Place : BangaloreDate : 14/02/2015 Date : 14/02/2015

31.03.2014 31.03.2013A. Cash Flows from Operating Activities

Profit before tax but after prior period items 4,559.47 6,638.45Less; Exeptional Items-Being withdrawal of Depreciation (2,037.79) -Net Cash Adjustment to reconcile profit before tax to net cash Flows 2,521.68 6,638.45Depreciation on tangible assets 3,046.23 2,553.33Amortisation of Goodwill 842.98 742.75Creditors written back (34.80) (26.89)Exchange gain (2,067.82) (86.50)Exchange loss included in finance cost 5.35 32.52Loss/(Profit) on sale of Tangible Assets - 334.04Exchange loss 175.69 -Provision for doubtful debts 306.39 155.40Bad debts (117.27) 98.99Effect of exchange flucutation on foreign currency translation reserve 14,660.46 5,017.88Interest expense 7,256.33 3,458.77Interest Income (20.67) (85.10)Dividend Income (7.99) (5.16)Profit on sale of investments - (112.33)Written back ESOPs 4.44 -Profit on Disposal of Subsidiary - (120.23)Prior Period Expenses - 4,643.58Operating Profit Before Working Capital Changes 26,571.00 23,239.50

Movement In working Capital :Increase/(Decrease) in Liabilities 21,773.28 3,706.60(Increase)/Decrease in Trade Receivables (7,056.29) 2,970.53(Increase)/Decrease in Inventories 1,084.46 236.62(Increase)/Decrease in Other Current Assets 1,298.32 (8,812.25)Cash Generated from/(used in operations) 43,670.77 21,340.99Direct Taxes Paid (Net of refunds) -Net Cash Flow from(used in ) Operating Activities Before Extraordinary Items 43,670.77 21,340.99Less: Extraordinary Items -Net Cash Flow From Operating Activities (A) 43,670.77 21,340.99

B Cash Flows from Investing ActivitiesPurchase of Fixed Assets Including intangible asset,CWIP and Capital Advances (39,896.47) (26,890.71)Proceeds of Insurance from loss of asset - 733.33Proceeds from sale of Fixed Asset - 2,250.97Proceeds of Non Current Investment 32.32 137.51Interest Received 20.78 86.60Dividend Received 7.99 5.16Net Cash flow from(used in) Investing Activities (B) (39,835.38) (23,677.14)

C. Cash Flows from Financing ActivitiesProceeds from Issuance of Share Capital - 7.46Share application money - (2.98)Proceeds from Issuance of Share Options 4.44 (17.25)Proceeds from Securities Premium 0.00 (939.07)Increase / Decrease in Borrowings (536.70) 5,183.07Interest Paid (2,014.83) (3,452.77)Net Cash flow from/(used in ) Financing Activities (C) (2,547.09) 778.46

Net Increase/(decrease) in Cash and Cash equivalents during the year (A+B+C) 1,288.29 (1,557.68)

Cash and Cash Equivalents at the beginning of the year 2,021.88 3,579.56Cash and Cash Equivalents at the end of the Year 3,310.17 2,021.88Net Increase/(decrease) in Cash and Cash equivalents during the year 1,288.29 (1,557.68)

Significant Accounting Policies and Other Disclosures 1&3

2.17: Cash and Bank BalancesParticulars 31.03.2014 31.03.2013Cash and cash equivalents

Cash on hand 29.10 42.72Balances in current account 988.81 96.72

Other Bank BalancesDeposits with maturity more than 3 months but less than 12 months 903.29 1,011.28Deposits with maturity more than 3 months but less than 12 months 1,388.97 871.16

Total 3,310.17 2,021.88Note

1 These balances are not available for use by the company as they represent margin money deposit2 These balances are not available for use by the company as they represent unpaid dividend liability

For YCRJ & AssociatesChartered Accountants For and on behalf of BoardFirm Regn. No. 006927S

Yashavanth Khanderi Sai Ramakrishna Karuturi Anitha Karuturi B.S SridharaPartner Managing Director Director Company SecretaryM. No. 029066Place : Bangalore Place : Bangalore

Date : 14/02/2015 Date : 14/02/2015

KARUTURI GLOBAL LIMITEDCash Flow Statement For The Year Ended 31st March 2014

Amount expressed in Indian Rupees in Lakhs unless otherwise statedParticulars

1.1 Principles of consolidation

Country ofIncorporation

Voting powerheld as at 31st

March 2014

Voting power heldas at 31st March 2013by the holding Co.

India 100% 100%India 52.99% 52.99%India 100% 100%UAE 100% 100%

Country ofIncorporation

Voting powerheld as at 31st

March 2014UAE 100%Ethiopia 100%Kenya 100%Kenya 100%Kenya 100%Kenya 100%Kenya 100%Kenya 100%Ethiopia 100%Ethiopia 100%Ethiopia 94.9%

Flower Xpress FZE Karuturi Overseas Limited.,Ethiopian Meadows PLC Karuturi Overseas Limited.,Yeshoda Investment Limited Flower Xpress FZE

Surya Blossoms PLC Ethiopian Meadows PLCShiva Pack PLC Ethiopian Meadows PLC

Karuturi Hospital Limited Yeshoda Investment limitedKaruturi Sports Limited Flower Xpress FZEKaruturi Agro Products PLC Ethiopian Meadows PLC

NOTES TO ACCOUNTS:1.       SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED ACCOUNTS

a)       The financial statements of the Company and its subsidiary companies are combined on a line-by-line basis by adding together the book values of like itemsof assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses inaccordance with Accounting Standard (AS) 21 - "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India.b)       In case of foreign subsidiaries, being non-integral foreign operations, revenue items are consolidated at the average rate prevailing during the year. All assetsand liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognized in the foreign currencytranslation reserve.c)       The difference between the costs of investment in the subsidiaries, over the net assets at the time of acquisition of subsidiaries is recognized in the financialstatements as Goodwill or Capital Reserve as the case may be. Goodwill is amortized in phased manner based on impairment test. During the year under reviewRs. 842.98 Lakhs is amortized (Previous year Rs 742.75 Lakhs).d)      The difference between the proceeds from disposal of investments in subsidiaries and the carrying amount of its assets less liabilities as of the date of disposalis recognized in the consolidated statement of profit and loss being the profit or loss on disposal of investment in subsidiary.

Florista India Pvt LimitedKaruturi Floritech Pvt LimitedKaruturi Overseas Ltd., (Consolidated)

i) Subsidiaries and step down subsidiaries of Karuturi Overseas Limited, an 100% subsidiary of the Company as on 31 st March 2014 are:

Name of Enterprises Name of the Holding Company

e)       Minority interest share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at thenet income attributable to share holders of the Company. Where the losses applicable to the minority in a consolidated subsidiary exceed the minority interest inthe equity of the subsidiary, the excess, and any further losses applicable to the minority, are adjusted against the majority interest. If the subsidiary subsequentlyreports profits, all such profits are allocated to the majority interest until the minority’s share of losses previously absorbed by the majority has been recovered

f)        Minority interest share of net asset of consolidated subsidiaries is identified and presented in the consolidated balance sheet separate from liabilities and theequity of Company share holders.g)       As far as possible, the consolidated financial statements are prepared using uniform accounting policies for the like transactions and other events in similarcircumstances and are presented in the same manner as the company’s separate financial statements.

h)      The enterprises considered in the consolidated financial statement are:

Name of Enterprises

Karuturi Foods Pvt Limited

1.2 Basis of AccountingThe consolidated financial statements relate to Karuturi Global Ltd (‘the Company’) and its wholly owned subsidiaries together refer to as ‘Karuturi Group’ or‘Group’ The Financial Statements of the group are prepared under historical cost convention, except for the revaluation of certain fixed assets, on accrual basis ofaccounting to comply in all material respects, with the mandatory Accounting standards as notified by the Companies (Accounting Standards) Rules, 2006 asamended (‘the Rules’) and the relevant provisions of the Companies Act, 1956 (‘the Act’). The Accounting policies have been consistently applied, and theaccounting policies not referred to otherwise, are in conformity with the Indian Generally Accepted Accounting Principles (‘Indian GAAP).

(i) Gambella Green Valley (Subsidiary of Ethiopian Meadows Plc)

Surya Holding Limited Flower Xpress FZERhea Holding Limited Flower Xpress FZEKaruturi Limited Yeshoda Investment limited

j) Karuturi Flower Express Private Limited is a 100% subsidiary of Florista India Private Limited.

k) The following step down subsidiaries are not considered for consolidation as there are no assets are held /liabilities payable by these Companies and notransactions are carried out.

The accounts of Indian subsidiaries have been prepared in compliance with the Accounting Standard as notified by the Companies (Accounting Standards) Rules,2006 as amended (‘the Rules’) and the relevant provisions of the Companies Act, 1956 (‘the Act’) and those of the foreign subsidiaries have been prepared incompliance with the local laws and applicable accounting standards. Necessary adjustments for differences in accounting policies, wherever applicable, have beenmade in the consolidated financial statements.

The operating cycle is a period of production and their realization in cash and cash equivalents. The normal operating cycle of the company cannot be identified, itis assumed to have duration of 12 months.

The basis of inclusion of the 9-month Unaudited  Financial Statement of  Karuturi Limited, Kenya for the purpose of consolidation:During last Quarter of the financial year, CFC Stanbic Bank has appointed receivers for Karuturi Ltd. The company contested the appointment of receivers andhave been granted a stay on sale of Business/Farm of the company. Due to the receivership, company is not able to finalise its audited accounts for the completeyear 2013-14. However, for the purpose of consolidation, company has considered Unaudited financial statements of the said subsidiary for 9 months endingDecember 31st, 2013.

(ii) Karuturi Greens and Marketing Private Limited (Subsidiary of Karuturi Foods P.Ltd)(iii) Karuturi Vegproducts Private Limtied (Subsidiary of Karuturi Foods Pvt Ltd)(iv) Karuturi Farm Fresh Products Private Limited (Subsidiary of Karuturi Foods P. Ltd)

S.No Books of AccountsLedger account AmountKL books FZE account Euro 2064519FZE books KL account Euro 2252155KL books KHL account Kshs 4938293KHL books KL account Kshs 5200021KL books KHL account Kshs 1245549KHL books KL account Kshs (824)KL books KSL account Kshs 1973957KSL books KL account Kshs 2128190KL books RHL account Kshs 23052970RHL books KL account Kshs 24985110KL books SHL account Kshs 10451970SHL books KL account Kshs 11489978KL books FZE account Kshs 577781970FZE books KL account Euro 3831127KL books Land rent Kshs 9938310RHL books KL account Kshs 7801920SHL books KL account Kshs 5369160

Operating Lease rentals are accounted on the basis of period of lease.

1.5    Tangible and Intangible Assets

Capital work in progress:

1.6    Depreciation

1.7    Investments

1.10 Foreign Currency TransactionsForeign currency transactions are generally recorded at the prevailing rate on the date of the transaction.

Long term and strategic investments are stated at cost, less any diminution in the value other than temporary.

1.8    Goodwill on consolidation

Goodwill represents the difference between the Group’s share in the net worth of a subsidiary and the cost of acquisition. For this purpose, the Group’s share of networth is determined on the basis of the latest financial statements prior to the acquisition after making necessary adjustments for material events between the dateof such financial statements and the date of respective acquisition. Capital Reserve on consolidation represents negative goodwill arising on consolidation.Goodwill arising out of acquisition of equity stakes in a subsidiary is amortized in equal amounts over a period of ten years.

1.9    Borrowing CostBorrowing costs including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost, thatare attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready forits intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All otherborrowing costs are recognized as an expense in the period in which they are incurred.

Intangible Assets are stated at actual cost less accumulated depreciation. The actual cost includes acquisition cost, taxes, duties, wherever applicable, and all otherexpenses directly attributable for putting the asset into its intended use.

Capital work in progress is stated at cost and not depreciated until such time the assets are ready for intended use and transferred to respective category underproperty, plant and equipment.

a)       Depreciation on fixed assets has been provided on “Straight line method at the rates prescribed in Schedule XIV to the Companies Act 1956. Depreciation onadditions/disposals of the fixed assets during the year is provided on pro-rata basis according to the period during which assets are put to use / sold. Assetspurchased/Installed during the year costing less than Rs.5000/- each are fully depreciated.

b)       Biological assets are not depreciated as the same is not covered in AS 6.

Investments, which are readily realizable and intended to be held for not more than 1 year from the date on which such investments are made, are classified as aCurrent Investments. All other investments are classified as non-current investments.Current investments are carried at the lower of cost and quoted/fair value computed category wise.

Income by way of ‘interest’ is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.Income by way of ‘dividend’ is recognized when the Company’s right to receive dividend is established.

Other income from the sale of duty credit scrip under Vishesh Krishi and Gram Udyog Yojana has been accounted on the basis of estimated realization of scrip’s.

Tangible Assets are stated at actual cost less accumulated depreciation and impairment if any. The actual cost includes acquisition cost, taxes, duties, whereverapplicable, and all other expenses directly attributable for putting the asset into its intended use.

The cost and accumulated depreciation of tangible assets sold are removed from the stated values and the resultant Profit/Loss has been included in Statement ofProfit & Loss.

Biological assets are stated at revalued amount, which is the fair value at the date of revaluation less any accumulated impairment losses. Fair value is determinedby market based evidence by appraisal that is carried out by professionally qualified valuer. Revaluation of biological assets are carried out at sufficient regularityand any material differences are adjusted accordingly to ensure that the carrying value of the asset does not differ materially from the fair values determined as atbalance sheet date.

Also, Consolidated financial statements are adjusted for repayment of Bank Loan by Flower Xpress FZE on behalf of Karuturi Ltd, Kenya for an amount of INR3,411.29 lakhs (Bank of India INR 3,168.43 lakhs and CFC Stanbic Bank INR 242.86 lakhs)

1.3    Use of EstimatesThe preparation of the financial statements are in conformity with the Indian GAAP which requires the management make estimates and assumptions that affectthe reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue andexpenses during the reported period. Actual results could differ from these estimates. Difference between the actual results and estimates are recognized in theperiod in which the results are known/materialized.

1.4    Revenue RecognitionRevenue from Services consist primarily of revenue earned from services performed on a ‘time and material’ basis. The related revenue is recognized as and whenthe services are performed.

Export sales are accounted at the exchange rate prevailing on the date of sale.

Not possible for elimination

1 Purchase and Sale transaction between Flower XpressFZE & Karuturi Ltd.,

Euro 2064519 is been considered forelimination

6 Related Party balances between Karuturi Ltd & SuryaHolding Ltd

Kshs 10451970 is been considered forelimination

8 Land rent between Karuturi Ltd, Rhea Holding Ltd &Surya Holding Ltd

Kshs 9938310 is been considered forelimination

4 Related Party balances between Karuturi Ltd &Karuturi Sports Ltd

Kshs 1973957 is been considered forelimination

5 Related Party balances between Karuturi Ltd & RheaHolding Ltd

Kshs 23052970 is been considered forelimination

7 Related Party balances between Karuturi Ltd &Flower Xpress FZE

Euro 3831127 is been considered forelimination

Considering the non matching periods of Financial statements, following related party transactions are dealt as per the remarks stated against the amounts.

2 Medical service transaction between Karuturi Ltd &Karutur Hospital Ltd, Kenya

Kshs 4938293 is been considered forelimination

3 Related Party balances between Karuturi Ltd &Karuturi Hospital Ltd

Type of transaction Remark

In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with originalmaturities of three months or less.

Deferred Tax resulting from timing difference between book profit and taxable profit is accounted for using the tax rates and laws that are enacted or substantiallyenacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent there is a reasonable certainty that the asset will berealized in future.

Deferred tax assets and deferred tax liabilities have been offset wherever the company has a legally enforceable right to set off current tax assets against current taxliabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.

Minimum Alternative Tax credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income taxduring the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent thereis no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

1.16 Impairment of Assets:An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in theyear in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of

1.17 Cash and Cash Equivalents.

1.13 Employee Stock OptionsThe options are valued, as per SEBI Guidelines “Employee Stock Option Plans/Employee Stock Purchase Plans”, based on the fair market value of the shares on thedate of grant. The difference between the fair market value of shares and the exercise price would be expensed off in the year of exercise of the options, net off anyreceipt of amount from the employee towards exercise of the options.

1.14 Earnings Per ShareBasic earnings per equity share are computed by dividing net profit after tax by weighted average number of equity shares outstanding during the year. Dilutedearnings per equity share is computed by dividing adjusted net profit after tax by the aggregate of weighted average number of equity shares and all dilutivepotential equity shares.

1.15 Provision for Current Tax and Deferred Income TaxProvision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.

Defined Benefit Plan:Gratuity: The Company and its Indian subsidiaries provide for Gratuity, a defined benefit retirement plan (Gratuity Plan) covering eligible employees. Inaccordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation ortermination of employment, of an amount based on the respective employee’s salary and tenure of employment. Liabilities with regard to the Gratuity Plan aredetermined by actuarial valuation as of the balance sheet date, based upon which, the Company makes necessary and adequate provisions in the books of accounts.The consequent actuarial gain or loss is expensed in the period of accrual of gain or loss.

Other Long term Benefits:Compensated Absence: Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end aretreated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additionalamount expected to be paid as a result of the unused entitlement as at the year end.

Accumulated compensated absences, which are expected to be availed or encased beyond 12 months from the end of the year end, are treated as other long termemployee benefits. The Company’s liability is actuarially determined using the Projected Unit Credit methods at balance sheet date. Actuarial losses/ gains arerecognised in the Statement of Profit and Loss in the year in which they arise.

All the Retirement benefits and other long term benefits in respect of foreign subsidiaries are provided as required by the local laws.

Cost of Inventories comprises of all cost of purchase, cost of conversion and other cost incurred in bringing them to their respective present location and condition.

Inventory as physically verified and certified by the management are valued at cost or market rate whichever is lower using the FIFO method, except for onesubsidiary in which the inventory is valued using Weighted Average method. However as a reason of this, there is no material impact on the value of theinventory. Agricultural products are valued at net releasable value basis.

1.12 Employee BenefitsShort Term Employee Benefits: The company accounts for short term employee benefits viz., salary, bonus and other allowances as and when the services arerendered by employees i.e., on accrual basis of accounting and dues within 12 months.

Defined Contribution Plan:Provident Fund: Contribution towards provident fund for certain employees is made to the regulatory authorities, where the Company has no further obligations.Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on amonthly basis.

Monetary assets and liabilities denominated in foreign currency are restated at the rates of exchange as on the Balance Sheet date and exchange gain/loss is suitablydealt with in the Profit and Loss Account.

In accordance with the option given in the Ministry of Corporate Affairs Notification No. GSR 225(E) dated 31 st March 2009 and amended from time to time theExchange fluctuations arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded duringthe period, or reported in previous financial statements, insofar as they relate to acquisition of a depreciable capital assets, is added to or deducted from the cost ofthe assets and will be depreciated over the balance life of the asset, and in other cases is accumulated in ‘Foreign Currency Monetary Item Translation DifferenceAccounts’ in the Company’s financial statements and amortized over the balance period of such long term asset/liability but not beyond 31 st march 2020, byrecognition as income or expenses in each such of the period.

The assets and liabilities of foreign subsidiaries whose operations are of non-integral nature are translated at the closing exchange rates, the items of income andexpense of foreign subsidiaries are translated at average exchange rate and resulting exchange difference are classified as cumulative translation adjustment anddebited / credited to Foreign Currency Translation Reserve until the disposal of such operations.

1.11 Inventory

Note: 2.1SHARE CAPITAL Rs in lakhs

No. of Shares Amount No. of Shares Amount

1,100,000,000 11,000.00 1,100,000,000 11,000.00

809,726,648 8097.27 809,726,648 8097.27809,726,648 8,097.27 809,726,648 8,097.27

a. Reconciliation of the equity shares outstanding at the beginning and at the end of the reporting period:

No. of Shares Amount No. of Shares Amount809,726,648 8,097.27 808,979,232 8,089.79

- - 747,416.00 7.47809,726,648 8,097.27 809,726,648 8,097.27

c. Details of shares issued for consideration other than cash & shares bought back .

e. The details of shareholder holding more than 5% equity shares are set below;

No. of Sharesheld % of Holding

No. of Sharesheld % of Holding

61,057,000 7.54% 61,057,000 7.55%43,959,886 5.43% 43,959,886 5.43%41,000,000 5.06% 41,000,000 5.07%41,000,000 5.06% 41,000,000 5.07%

2.2 RESERVES AND SURPLUS 31.03.2014 31.03.2013

787.59 787.59- -

787.59 787.59

553.08 553.08- -

553.08 553.08Closing Balance

Add: Amount TransferredClosing BalanceCapital ReserveOpening BalanceAdd: Amount Transferred

Emerging India Focus FundsRays Global CorporationMaxworth Investment Ltd

ParticularsGeneral ReserveOpening Balance

d. Unpaid calls by directors/officer.There is no unpaid call due from the directors and officers of the company.

Name of Shareholder31 March 2014 31 March 2013

Elera India Oppertunities Fund ltd

Alloted against ESOP entitlement No. of Equity Shares outstanding at the end of the year

b. Terms/rights attached to equity sharesThe company has only one class of equity shares having par value of Rs 1 per Share. Each holder of equity shares is entitled to one vote per share. The Companydeclares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual GeneralMeeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of allpreferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The company has not issued any shares for consideration other than cash & no shares have been bought back by the company.

31.03.2013

Number of Equity Shares outstanding at the beginning of the

Equity shares of Re.1/- each Subscribed, Issued and Paid Up: 80,97,26648 Equity shares of Re.1/- each fully paid up Total

Particulars 31.03.2014

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for preparing and presenting the financial statementof the Company as a whole.Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, whichrelate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under “Unallocated corporate expenses”.

Particulars 31.03.2014 31.03.2013

Authorised Capital

Operating Lease:As a lessee: The Company leases certain tangible assets were risks and rewards of ownership are retained by the lesser are classified as operating leases. Paymentsmade under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.

As a lesser: The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownershipare classified as operating leases. Lease income on such operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the leaseterm which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognised as anexpense in the Statement of Profit and Loss in the period in which they are incurred.

Finance lease:Assets held under finance lease are included in the statement of financial position at cost less depreciation in accordance with the Company’s normal accountingpolicies. Interest is charged to the profit and loss account over the period of the lease in proportion to the principal sum outstanding.

1.20 Segment Reporting

Karuturi Floritech Pvt Ltd, Karuturi Flower Express Pvt Ltd & Rhea Holdings Ltd have negative networth, but Promoter Companies have advanced sufficientfunds to these companies to take care of the deficit. Also, Karuturi Sports Ltd & Karuturi Hospitals Ltd are Companies for employees welfare run by KaruturiGroup, which also been taken care.

1.18 Provisions, Contingent Liabilities and Contingent Assets:Provisions are recognized in terms of Accounting Standard – 29: “Provisions, Contingent Liabilities and Contingent Assets”, issued by the Institute of CharteredAccountants of India, where there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources tosettle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation from past events due to occurrence or non-occurrence of one or more uncertain futureevents not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where areliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources areprovided for.Contingent Assets are not recognized in the Financial Statements.

1.19 Leases

69,937.04 70,876.12- 939.08

69,937.04 69,937.04

4,765.83 4,765.831,109.55 -5,875.38 4,765.83

16.15 33.294.44 -- 12.98- 4.16

20.58 16.15

(937.08) (5,954.96)16,698.25 5,017.88(2,037.79)13,723.37 (937.08)

17.79 17.79- -

17.79 17.79

80,188.77 69,255.046,909.18 10,813.56

22.66 120.2387,120.61 80,188.77

178,035.46 155,329.17

2.3 LONG TERM BORROWINGS

Non Current Current Non Current Current

8.76 - 8.76 54.33 17,366.79 6,915.42 958.74 355.46

170.55 166.59

27,078.43 8,911.94 28,017.05 2,688.385,286.42 250.00 4,292.01

16.83 34.63 2.5849,757.22 16,282.54 33,279.14 3,264.76

- 16,282.53 - 3,264.76

49,757.22 (0.00) 33,279.14 -

2.3 A)Details of Secured Term Loans:

31/03/2014 31/03/2013

1 1,333.06 1,271.13

2 5.69 7.64

3 13,822.95 -

4 4.28 6.43

5 5,916.07 -

6 111.05 -

7 - 55.45

8 170.55 166.59

9 3,086.13 -

10 11.72 36.63

24,461.52 1,543.88

2.3 B) Foreign Currency Convertible Bonds:

Particulars

Apna Sahakari Bank Residential flat of Mr. Sameer Dalvi (Director) Monthly Rs. 0.19 lakhs payable andending on April 2014

ICICI Bank Ltd

Personal Guarantee of Mr. Sai RamakrishnaKaruturi the promoter Residing, CorporateGuarantee from Karuturi Global Limited andEthiopia and Kenya Subsidiary Companies. Quarterly 938lakhs payable

Dhanalakshmi Bank Hypothecation of Vehicle of Karuturi Foods PvtLtd.,

Monthly Rs. 0.16 lakhs repayable endingMay 2017

Axis Bank Ltd Corporate Guarantee of Karuturi Global Ltd.,Repayable in 10 equal installmentcommencing Dec 2014 and ending on June2019

Sl. No.Name of

Bank/Financial Details of Security Amount of Outstanding Repayment Terms

Zemen Bank, EthiopiaCharges on Green House of Ethiopian MeadowsPlc and current assets of Ethiopia Meadows Plcand Surya Blossoms Plc

Monthly Rs. 18.63 lakhs payable, endingon May 2013

Loans and advance from related parties(Refer note 2.3C) Others

TotalLess: Current maturities of long term debt disclosed under (Refer Note 2.9) Net Long term Borrowings

Term loan 2)From others NHB Soft Loan(Refer note 2.3A) B. Unsecured 1) From others Foreign Currency Convertible Bonds (FCCB) (Refer note 2.3B)

Particulars 31.03.2014 31.03.2013

A. Secured Loans 1)From bank Finance lease obligation(Refer note 2.3A)

Opening BalanceAdd: Profit for the YearAdd/Less: Amount transferred/utilisedClosing Balance

Total

Legal ReservesOpening BalanceAdd: Amount TransferredClosing Balance

Surplus / (Deficit) balance in the Statement of Profit and

Closing BalanceForeign Currency Translation ReserveOpening BalanceAdd: Amount Transferred during the yearLess:-Amount Utilised during the yearClosing Balance

Closing BalanceShare Options Outstanding AccountOpening BalanceAdd: Amount Transferred during the yearLess: Deffered ESOP oustanding AccountLess: Deffered ESOP oustanding written back

Less: FCCB Redemption PremiumClosing BalanceRevaluation ReservesOpening BalanceAdd: Amount Transferred

Securities Premium AccountOpening Balance

Lion Bank, Ethiopia Hypothecation of Vehicles of EthiopianMeadows PLC and Karuturi Agro Products PLC

Half yearly Rs. 42.53 lakhs payable endingNov 13

ICICI Bank Ltd,Bangalore

Charges on Fixed assets of Karuturi Foods PvtLtd.,

Quarterly 15 lakhs payable, ending on15.10.2012

Total

Kotak Mahindra PrimeLimited Hypothecation of Vehicle

Loan amounting to Rs .100 lakhsrepayable in 24 monthly instalmentsbeginning from 19 June 2012 along withinterest of 20.21%

National HorticultureBoard, Bangalore

Equitable Mortgage Leasehold Land, Bldg, Plant& Machinery at Doddaballapur

To be set off against deposits made by thecompany grouped under short term Loansand advances

CFC Stanbic Bank Charge on Fixed assets & Currents assets ofKaruturi Ltd, Kenya Repayable on demand

The original terms & conditions of FCCB were as:

Issue CurrencyIssue SizeIssue DateMaturity Date*Coupon RateYield to maturity-compounded semi annuallyConversion Price post price reset.Fixed Exchange Rate of ConversionConversions as at 31st March 2012

Mandatory Conversion Option

Sl. No. Repayment Terms1234

2.4 DEFERRED TAX:

31.03.2014 31.03.2013

791.73 -2,237.81 791.733,029.54 791.73

2,387.86 -- 74.51

2,269.28 2,313.35118.58 2,387.86

Deferred Tax Assets and Deferred Tax Liabilities have not been offset as they relate to different governing taxation laws

2.5 OTHER LONG TERM LIABILITIES:31.03.2014 31.03.2013

2,262.92 2,170.582,262.92 2,170.58

2.6 LONG TERM PROVISIONS:31.03.2014 31.03.2013

73.18 49.203.52 2.36

76.70 51.56

2.7 SHORT TERM BORROWINGS:31.03.2014 31.03.2013

24,091.47 38,895.67From Bank/Bank O.D (refer note 2.7A) 24.70 -

438.73 2,025.90

Total

ParticularsSecuredWorking capital facilities from BankWorking capital facilities (refer note 2.7A)

Other short term loans (refer note 2.7A)

ParticularsLand Lease PayableTotal

ParticularsGratuity (Unfunded)Compensated absence (Unfunded)

Deferred Tax Assets:Deferred Tax Liabilities:Opening BalanceAdditions during the yearDeletion during the yearDeferred Tax Liabilities:

Deferred tax liability and asset are recognized based on timing difference using the tax rates substantively enacted on the Balance date. Deferred Tax Assets andLiabilities as on 31st March 2014 are as under:ParticularsDeferred Tax Assets:Opening BalanceAdditions during the year

Rhea Holding Pvt. Ltd., Repayable in 2015-16 2,001.42 NilTOTAL 5,286.42 4,292.02

K.S Ramakrishna Karuturi* Repayable in 2014-15 Nil 100.00Rhea Holding Pvt. Ltd., Proposed to be converted into 2,585.00 2,585.74

In the opinion of management, there will not be any penal consequences in the event of non approval of FCCB restructuring from RBI and hence contingent liabilityis not disclosed.

2.3 C) Details of Term Liabilities from Related Parties:Name of Person/ Company Amount O/s as on 31-03-2014 Amount O/s as on 31-03-2013Anitha Karuturi* Repayable in 2014-15 700.00 1,606.28

The bonds of an accreted principal amount of US$ 9,885,711.50 on 29 April 2015;

On or before 8 May 2013, Exchange on a cashless basis, the bonds of accreted principal value of USD 30,363,256.75 plus the additional exchange amount for the newbonds. The new bonds of the company shall be issued by the company on 8 May 2013 ( New bond issue date).

Additional exchange amount will be interest on US $ 55,077,535.50 at the rate of 7% Per annuam from and including 19 October 2012 to, but excluding, new bondissue date.

The new bonds of the company shall be issued by the company on the new bond issue date in two tranches being tranche A(Tranche A Bonds”) and trancheB(“Tranche B Bonds”). Bonds of an accreted principal value of US$ 15,000,000 shall be exchanged with Tranche A Bonds issued by the company on the new bondissue date and bonds of an accreted principle value of US$ 15,363,256.75 plus the additional exchange amount shall be exchanged with Tranche B Bonds issued bythe Company on the New Bond Issue Date.

On 31 January 2014, RBI has approved the restructured repayment proposal of the Company, conditionally, and the Company in turn is not meeting certainconditions relating to the all-in-cost as per ECB guidelines as stated in the conditional approval of the RBI. However, the Company is under the process of re-approaching the RBI/ Bond holders for the above matter.The management hereby states that, the money received through FCCB has been invested in its subsidiary companies and it has adequate amount in the form ofinvestment in subsidiaries for repayment of the same.

Yes

*On maturity of FCCB on 19th Oct 2012, the company had applied to the bonds holders for restructuring the bonds. The bonds holders vide resolution dated 05 th

March 2013 approved the restructuring of FCCB on the following terms subject to RBI approval, and hence is in default.

The proposed redemption plan would be as:The bonds of an accreted principal amount of US$ 49,42,885.75 on 08 May 2013;The bonds of an accreted principal amount of US$ 9,885,711.50 on 29 April 2014;

Rs. 39.73$ 110.00 lakhs

Prorata premium on redemption provided for as on 31st March 2012 $ 141.53 lakhs or Rs. 7,805.38 lakhs

USD500 lakhs12th Oct 200719th Oct 2012Zero Coupon7.00%Rs. 18.99 per Share

*Company is in default of Companies (Acceptance of Deposits) Rules,1975 with respect to loans from Directors and is in the process of compounding the same

24,554.90 40,921.57

571.69 1,047.962,305.07 2,476.922,876.76 3,524.88

27,431.67 44,446.45

Sl. No Repayment Terms

31.03.2014 31.03.2013

1 2,208.69 2,058.21 Repayable ondemand

2 54.42 - Repayable ondemand

3 13,055.48 12,509.54 Repayable ondemand

4 6,009.98 5,750.44 Repayable ondemand

5 394.40 5,370.94 Repayable ondemand

6 12.81 -Repayable ondemand

7 3.34 34.61Repayable ondemand

8 1,506.01 1,336.96 Repayable ondemand

9 24.70 - Repayable ondemand

10 1,240.74 1,194.41 Repayable ondemand

11 - 2,912.89 Repayable ondemand

12 44.33 - Repayable ondemand

13 - 7.64 Repayable ondemand

14 - 2,417.07 Repayable ondemand

15 - 2,025.90 Repayable ondemand

16 - 5,302.96 Repayable ondemand

24,554.91 40,921.57

2.8 TRADE PAYABLES:31.03.2014 31.03.2013

- -12,346.38 9,127.0612,346.38 9,127.06

2.9 OTHER CURRENT LIABILITIES:31.03.2014 31.03.2013

16,282.53 3,264.76178.89 110.42543.87 16.70

26.30 33.20902.32 357.30

4,255.91 3,923.98346.68 41.45

- 217.562,826.42 1,798.82

25,362.91 9,764.19

2.10 SHORT TERM PROVISIONS:31.03.2014 31.03.2013

2.32 0.703.93 3.746.62 6.62

2,474.59 200.642,487.47 211.70

Provision for Taxation (Net)Total

Employee BenefitsGratuity (Unfunded) (refer note 3.2)Compensated absence (Unfunded) (refer note 3.2)Provision for BonusOthers

Forward contract payableOther Payables

Total

Particulars

Interest accrued but not dueUnpaid DividendsStatutory RemittancesLiability for ExpensesEmployee benefits payable

- Others creditors**Total

ParticularsCurrent Maturities of Long term Debt (refer note 2.3)Advance Received From Customers

** Balances in parties accounts are subject to reconciliation/confirmation and adjustment consquent to such reconciliation, if any* As per the information available with the company

CFC Stanbic Bank,Kenya

Total

Particulars- Due to micro and small enterprises*

Axis Bank Ltd

Bank of India

Zemen Bank

Dhanalaxmi Bank

ICICI Bank Ltd

Pari passu charge on current assets of Karuturi Global Ltd, India

SBLC issued by Axis bank, Dubai

Charge on Surya Blossoms PLC assets

Secured by Hypothecation of vehicles

Charges on Fixed Assets & Current assets of Karuturi Ltd., Kenya

Axis Bank Ltd Secured on personal asset of Director - Anitha Karuturi

Corporate Guarantee of Karuturi Global Ltd

Axis Bank Ltd

Central Bank of India

ICICI Bank , Dubai

ICICI Bank , Dubai

Apna Sahakari Bank

Pari passu charge on the current assets of the respective Companiesfunded by the bank. Personal Guarantee of Mr. Sai Ramakrishna Karuturi the promoterResiding, Corporate Guarantee from Karuturi Global Limited andEthiopia and Kenya Subsidiary Companies.

Corporate guarantee by KGL and charges on Inventory andreceivable of Florista India Pvt Ltd on Paripassu basis

Pari passu charge on current assets of Florista India Pvt Ltd

Charge on Current assets, land & building and other fixed assets ofKaruturi Foods Pvt Ltd Pari passu charge on current assets of Karuturi Flower Express PvtLtd

Commercial Bank OfEthiopia

Lion Bank of Ethiopia

Axis Bank, Dubai

2.7 A Details of Security of Short Term Borrowings. Name of Bank/Financial Instituition

Equitable mortgage of 25000 Ha of Land and Hypothecation ofVehicle at Karuturi Agro Products Plc

Hypothecation of Vehicles of Ethiopian Meadows PLC and KaruturiAgro Products PLC

Corporate Guarantee of Karuturi Global Ltd

ICICI Bank, India

Term Loan-Secured

UnsecuredInter Corporate DepositsLoans and advances from related parties

Total

Amount of oustanding (in INR Lakhs)Details of Security

2.11 Fixed Assets

ParticularsAs at 1 April2013 Additions

AdjustmentDisposal

OtherAdjustment Sub total Disposals

Adjustment(ForeignCurrencyTxn)

As at 31March 2014

As at 1 April2013

Depreciationcharge forthe year

Disposalthroughdemergers

Deductions/Otheradjustments FCTR

As at 31March 2014

As at 31March 2014

As at31 March 2013

Tangible AssetsLand 114,603.60 39,398.02 891.43 (778.76) 154,114.29 (21,640.60) 11,644.61 144,118.30 2,366.12 422.31 - 40.20 228.37 3,057.00 141,061.30 112,237.48Plantation 30,102.33 252.02 (82.22) - 30,272.13 (2,850.74) 1,744.90 29,166.29 657.21 - - - (529.91) 127.30 29,038.99 28,667.07Buildings 5,307.35 - - 0.51 5,307.87 - 401.73 5,709.60 508.69 84.10 - 1.36 315.71 909.86 4,799.74 4,798.68Green House 40,693.36 - - - 40,693.36 - 3,847.36 44,540.72 6,356.15 1,442.96 - - (365.90) 7,433.22 37,107.50 34,337.20Motor Vehicle 994.70 - - 35.53 1,030.23 - 59.16 1,089.39 379.56 88.45 - 4.35 163.76 636.13 453.26 615.14Office Equipment 4.48 1.63 - (0.69) 5.42 - 0.04 5.46 0.47 0.22 - (0.19) - 0.50 4.95 4.02Plant & Machinery 39,213.57 - - (593.75) 38,619.82 (50.00) 3,321.99 41,891.81 3,702.02 940.02 - 285.46 661.95 5,589.45 36,302.36 33,552.67Furniture & Fixtures 668.31 0.10 - (41.12) 627.29 - 43.76 671.05 207.38 43.93 - (3.99) 65.92 313.23 357.82 460.93Computers 260.62 4.30 - (2.06) 262.86 - 22.88 285.73 229.86 21.05 - (1.64) 115.86 365.13 (79.40) 30.76Others (Specify nature) 50.40 - - - 50.40 - 2.75 53.15 4.70 1.56 - 1.04 0.19 7.49 45.66 45.69Total 231,898.71 39,656.06 809.22 (1,380.34) 270,983.66 (24,541.33) 21,089.18 267,531.51 14,412.18 3,044.60 - 326.58 655.95 18,439.30 249,092.20 214,749.64Previous Year 197,023.82 18,735.54 (925.01) (733.33) 214,101.02 (2,463.99) 17,969.24 229,606.29 10,577.46 2,550.10 - (807.29) 2,061.58 14,381.86 224,494.20 186,446.37

Intangible AssetsGoodwill 4,397.84 - - (0.48) 4,397.36 - 800.55 5,197.91 1,449.24 842.98 - (0.48) 282.15 2,573.88 2,624.03 2,948.61Brands / Trademarks 26.93 - - (0.02) 26.92 - - 26.92 2.46 0.35 - (0.02) - 2.79 24.13 24.47Computers Software 5.88 0.67 - (0.63) 5.92 - - 5.92 3.27 1.29 - (0.63) - 3.93 2.00 2.61Total 4,430.65 0.67 - (1.13) 4,430.20 - 800.55 5,230.75 1,454.97 844.61 - (1.13) 282.15 2,580.60 2,650.15 2,975.69Previous Year 4,570.30 - - (15.95) 4,554.35 - (123.70) 4,430.65 739.53 745.99 - (12.65) (17.91) 1,454.96 2,975.69 3,830.77

Intangible assets under Capital WIP 9,744.55 634.59 - - 10,379.14 - 518.54 10,897.67 - - - - - - 10,897.67 9,744.55Total 246,073.92 40,291.32 809.22 (1,381.47) 285,792.99 (24,541.33) 22,408.27 283,659.93 15,867.15 3,889.21 - 325.45 938.09 21,019.90 262,640.03 227,469.89Previous Year 201,594.12 18,735.54 (925.01) (749.28) 218,655.37 (2,463.99) 17,845.54 234,036.94 11,316.99 3,296.09 - (819.94) 2,043.67 15,836.82 227,469.89 190,277.14

1. Capital Work in Progress consists of the expenditure incurred pertaining to the agriculture project at Gambella, Ethiopia. Since the project is not yet completed & commercial production has not started yet all the pre-operational expenses pertaining to the same are included in CWIP.2. Depreciation amounting to Rs. 334.66 lakhs has been capitalised since the same relates to the project not started commercial productions yet.3. In order to apply uniform depreciation rates, the depreciation on fixed assets of foreign subsidiaries has been recomputed adopting rates prescribed under Schedule XVI of Companies Act under straight line method, instead of rates as provided by the local laws4. The title in respect of free hold land acquired by the company at a cost of Rs.189.87 lakhs are held in the name of Mr. Anil Tumu, a relative of KMP person. An irrevocable undertaking from him not to encumber or alienate the land has been recorded. As the Karnataka Land Reforms Act,prohibits ownership by person other than individuals, he is holding the same as nominee of the company5. The registration of a vehicle owned by the company at a cost of Rs. 42.. Lakhs is registered in the name of the Managing Director of the Company.6. During the earlier year, the company has given an amount of Rs. 240.00 lakhs as lease deposit to the land owner Mrs. Vasundha T V for acquiring lease-hold land and incurred Rs. 51.82 lakhs as land development expenses and accounted the same as lease- hold land and carriedas opening balance. During the year, the company in accordance with the nature of the transaction, reclassified the lease-hold land as stated above into lease land deposit amounting to Rs.240 lakhs and balance Rs. 51.82 as deferred land development expenses. The deferred landdevelopment expenses are amortised over the lease period, i.e., 5 year from the FY 2013-14 and accounted accordingly.

Gross Block Accumulated Depreciation Net Block

2.12 & 2.15 NON CURRENT INVESTMENTS:31.03.2014 31.03.2013

National Savings Certificate - 0.01Investment in Govt Securities 0.57 -Kotak Mahindra Realty fund-HNI Fund 161.36 194.24

161.93 194.25

2.13 LONG TERM LOANS AND ADVANCES:31.03.2014 31.03.2013

Balance with Govenrment Authorities 929.89 928.00Prepaid Expenses 736.61 737.40Other receivable/advances 2.16 40.57

1,668.66 1,705.97

2.14: OTHER NON CURRENT ASSETS:31.03.2014 31.03.2013123.92 27.38240.00 -2.04 4.05

365.95 31.44

2.16 : INVENTORIES:31.03.2014 31.03.2013

1,425.34 2,452.00

597.23 367.31

104.48 403.38

16.17 5.012,143.23 3,227.71

2.17: TRADE RECEIVABLES:31.03.2014 31.03.2013

- -12,871.73 132.31494.89 -- 106.88

(494.89) (106.88)12,871.73 132.31

- -3,852.34 9,535.4886.72 168.34- -

(86.72) (168.34)3,852.34 9,535.4816,724.07 9,667.79

Balances in Parties' accounts are subject to reconciliation/confirmation consequent to such reconciliation, if any

2.18: CASH AND CASH EQUIVALENTS:31.03.2014 31.03.2013

29.14 42.72Balance with banks 134.78 96.72

Current Account 853.99 -Fixed DepositDeposits with maturity more than 3 months but less than 12 months 903.29 1,011.28Margin DepositDeposits with maturity more than 3 months but less than 12 months 1,388.97 871.16Unpaid Dividend account 28.09 36.49

3,338.26 2,058.37

2.19: SHORT TERM LOANS AND ADVANCES:31.03.2014 31.03.20132,963.64 3,288.68374.14 316.857,853.44 9,937.027.08 238.75313.51 170.62179.09 27.46553.83 620.992,787.59 3,925.6615,032.33 18,526.04

31.03.2014 31.03.201320.40 795.56

*Loans and advances to related parties are as follows:ParticularsSai Ramakrishna Karuturi

Security DepositsPrepaid ExpensesOther Receivables

Total

Advance For Business / Purchases / SuppliersStatutory ReceivablesSales Tax Refund

Cash on hand

Total

ParticularsLoans and advances to related parties*Advance to Staff

Unsecured, considered doubtfulUnsecured, considered good - Related partyLess: Provision for doubtful debts

Total

Particulars

Unsecured, considered good - Related partyLess: Provision for doubtful debts

Other debts (related parties)Secured, considered goodUnsecured, considered good

Total

ParticularsDebts outstanding for period exceeding six months from the date it became dueSecured, considered goodUnsecured, considered goodUnsecured, considered doubtful

Work-in-progress(Valued at Net realisable value basis)Finished goods(Valued at Net realisable value basis)stock in trade(Valued at Cost or market price which ever is lower using FIFO method)

FD Maturity more tan 12 monthsTotal

ParticularsRaw Materials and components(Valued at Cost or market price which ever is lower using FIFO method)

* During the earlier year, the company has given an amount of Rs. 240.00 lakhs as lease deposit to the land owner Mrs. Vasundha T V for acquiring lease-hold landand incurred Rs. 51.82 lakhs as land development expenses and accounted the same as lease- hold land and carried as opening balance. During the year, thecompany in accordance with the nature of the transaction, reclassified the lease-hold land as stated above into lease land deposit amounting to Rs.240 lakhs andbalance Rs. 51.82 as deferred land development expenses. The deferred land development expenses are amortised over the lease period, i.e., 5 year from the FY2013-14 and accounted accordingly.

Total

Particulars Trade and security Deposits/ land devp exps* Leasehold Land Deposits*

Particulars

Total

Particulars

176.59 347.282,449.65 2,145.84317.01 -2,963.64 3,288.68

2.20: OTHER CURRENT ASSETS:31.03.2014 31.03.2013275.63 110.2710.36 -- 232.300.08 0.15588.79 871.90874.86 1,214.62

2.21: REVENUE FROM OPERATIONS (NET)31.03.2014 31.03.201340,358.55 54,854.478,409.69 597.17188.97 617.97

Other Incomes (Rentals) 348.49 -49,305.70 56,069.62

* Flower, Agricultural products

2.23: OTHER INCOME:31.03.2014 31.03.2013

Dividend from Investment7.99 5.16

20.67 85.10- 112.33

189.09 46.2834.80 26.89- 8.9083.66 278.6240.21 60.80

2,067.82 86.502,444.23 710.57

2.24: COST OF MATERIAL CONSUMED:31.03.2014 31.03.2013

1,708.65 984.1911,052.82 12,755.701,692.32 1,708.6511,069.15 12,031.24

- 290.3211,069.15 12,321.56

2.25: PURCHASE OF STOCK IN TRADE:31.03.2014 31.03.20131,133.18 448.351,133.18 448.35

2.26: CHANGE IN INVENTORY OF FINISHED GOODS, WORK IN PROGRESS & STOCK IN TRADE:31.03.2014 31.03.2013

Opening stock1,175.47 343.89367.31 1,089.495.01 -

1,547.79 1,433.36Less: Closing Stock

10.59 1,175.47597.23 367.318.63 5.01

616.45 1,547.79Change In Inventory of finished Goods, WIP 931.34 (114.41)

31.03.2014 31.03.2013* Details of Opening stock of Finished Goods:

46.45 16.201,129.02 327.69

Sub-Total 1,175.47 343.89

2.08 46.458.50 1,129.0210.59 1,175.47

2.27: EMPLOYEE BENEFIT EXPENSES:31.03.2014 31.03.20133,255.94 4,687.3075.28 129.8094.87 156.38

3,426.09 4,973.47

2.28: FINANCE COST:31.03.2014 31.03.2013267.99 1,728.56

Salary, Allowances and Termination BenefitsContribution to Provided FundStaff Welfare Expenses

Total

ParticularsInterest on Bank Term Loans

Flowers

** Details of Closing stock of Finished Goods:Plant and Plant materialsOthersSub-Total

Particulars

Finished goods**Work-in-progressStock in trade

Particulars

Plant and Plant materials

Total

Particulars

Finished goods*Work-in-progress - Plant and AgriStock in trade

Less: Closing stockCost of Materials ConsumedCost of Services rendered

Total

Particulars

ParticularsRaw materials and Packing materials consumedOpening stockAdd: Purchases

Creditors Written BackInsurance ClaimMiscelleneous incomeSubsidy/ Export Incentive

Purchase of Traded goods

Rental & Other Income

Sale of agricultural produce*Sale of trading productsSale of services

Total

Particulars

Dividend Income from Long term investments

Exchange GainTotal

Total

Particulars

Deferred Land Development ExpensesForward Contract Receivable AccountAccrued Income

InterestFrom Fixed Deposits, Income tax, other interestProfit on sale of investments

Subsidy / Export incentive accrued

Karuturi Real Estate PlcSher Karuturi BV

Total

Others

Others

Particulars

5.35 32.521,624.93 1,388.2178.39 336.78

Interest on Corporate Deposits 6.05 5.22Interest or Amortisation of FCCB* 5,241.50 -

5.07 -32.40 0.36

7,261.68 3,491.66

2.29: OTHER EXPENSES:31.03.2014 31.03.2013

Advertisement Expenses 329.50 255.00Auction Exps/other manufacturing exps 2,418.39 2,896.83Auditors Remuneration 28.23 19.91Business Promotion Expenses 29.99 26.28Commission & Brokerage 3.94 8.37Custodian & Exchange Listing fees 17.52 3.97Directors Sitting Fees 5.75 7.37Exchange Loss 175.69 -Freight, Clearing & Forwarding Charges 12,873.44 11,129.56General Expenses 341.20 2,150.02Insurance 65.81 110.22Loss on sale of assets - 334.04Power Charges Others 402.36 605.72Printing & Stationery 19.48 22.34Professional charges and Membership Fee 144.01 478.39Provision for bad debt written off/Bad Debts 189.12 254.39Rates & Taxes 26.03 44.35Rent 65.71 233.93Repairs & Maintenance - Machinery 43.28 2.10Repairs & Maintenance - Others 28.83 94.09Telephone, Postage & Courier Charges 28.07 43.60Traveling and conveyance 85.16 184.40Unpacking & Clearing Charges 2,830.83 2,135.85Vehicle Maintenance 2.80 40.74

20,155.15 21,081.45

2.30: EXCEPTIONAL ITEMS:31.03.2014 31.03.20132,037.79 -

2.32: PRIOR PERIOD ITEMS:31.03.2014 31.03.2013

- 1,061.441,232.03 2,369.70

- 1,212.21130.44 0.231,362.47 4,643.58

3.0 OTHER DISCLOSURES:3.1 Contingent liabilities and commitments (to the extent not provided for)

31.03.2014 31.03.2013

17,805.61 16,043.80172.60 172.62

57.50 -6.41 11.86- 341.89

18,042.12 16,570.17

d) The Income Tax Department has seized 17 bank accounts of the company during the year.e) In the absence of sufficient information in the financials of subsidiaries the commitment has been disclosed in the consolidated financial statements.

3.2 EMPLOYEE BENEFITS:a) Defined Contribution Plan:-During the year the Company has recognized the following amounts in the Statement of Profit And Loss:-

31.3.2014 31.3.2013 75.28 9.31

c) The Company has entered into a sale agreement with Convergent Technologies Pvt Ltd., for sale of one of its wholly owned subsidiary Karuturi Telecom Pvt.Ltd., where as the Company is suppose to receive Rs.330 lakhs out of which the company has reveived a sum of Rs.57.50 Lakhs only and have failed to settle thebalance amount of Rs.272.50 lakhs. In this regard the Company has filed a case against Convergent Technologies Pvt Ltd. and case is pending before the High Courtof Karnataka

ParticularsEmployer’s contribution to Provident Fund

Disputed Cases (refer note c below)Disputed Entry taxOther Contingent Liabilities

Totala) The Company has received a demand for Rs. 863.44 Lakh for AY 2005-06, Rs. 1850.91 Lakh for AY 2007-08, Rs. 6902.34 Lakhs (outstanding Rs. 5979.80 Lakhs) forAssessment year 2008-09 and Rs. 3254.27 for Assessment order for 2009-10, Rs. 5064.47 Lakhs for Assessment year 2010-11 due to certain additions anddisallowances made by the Assessing Authorities. The same has been disputed by the Company before the Appellate Authorities and is confident of obtaining afavorable response in the appeal.b) The Commissioner of Appeals Bangalore upheld the contention of the Company relating to a demand of Rs 792.71 Lakhs for the Assessment Year 2006-2007made by the Assessing Authorities and deleted the additions and hence demand. The department has filed an appeal contesting the decision of the Commissionerof Appeals Bangalore before the Income Tax Tribunal Bangalore.

Other ExpensesTotal

ParticularsContingent LiabilitiesDisputed Income tax dues (refer note a & b below)Disputed Service tax dues

Treatment of Foreign Currency Monetary Translation Reserve (FCMTR)During the year Company converted part of loans and advances made to Karuturi Overseas Ltd (KOL), Dubai a wholly owned subsidiary to Equity investmenttotal amounting to Rs.6,798.66 lakhs (USD 125.00 lakhs). Consequently, the company has transferred an amount of Rs.2,037.79 lakhs from FCMTR to Profit and lossaccount and disclosed as exceptional item. This treatment is given as per Accounting Standards-11 "The effects of changes in foreign exchange rates", consideringthe fact that this amount is no longer remains as monetary item and is also in line with matching principles.

ParticularsForeign Exchange Gain/Loss on account of Borrowing costForeign Exchange gain/lossReversal of Exchange Gain for Prior Years

Total

ParticularsExceptional items

Particulars

Foreign exchange Gain/Loss on account of Borrowing costInterest on Working Capital Loan/BorrowingsOther Bank Charges

Interest on Finance Lease ObligationOther Finacial Charges

Total * Additional Borrowing cost on Foreign Currency Convertible Bonds accounted as per the explanations given in note no 2.3B in accordance with Accountingstandard 16

75.28 9.31

31.3.2014 31.3.2013 31.3.2014 31.3.2013

8.22 9.06 3.52 - - -

0.50 0.63 0.25 - - -

0.84 0.43 0.10 - - - - - -

(9.59) (2.82) 0.89 2.88 (1.65) (2.06) 2.86 5.65 0.64 0.93

The amounts recognized in Balance Sheet:31.3.2014 31.3.2013 31.3.2014 31.3.2013

2.86 5.65 0.64 0.93 - - - - (2.86) (5.65) (0.64) (0.93) - - - - - - - - (2.86) (5.65) (0.64) (0.93)

31.3.2014 31.3.2013 31.3.2014 31.3.2013

0.84 0.43 - 0.10 - - - -

0.50 0.63 - 0.25 - - - - - - - - - - - -

2.88 (1.65) - (2.06) 4.22 (0.60) 3.49 (1.70)

Percentage Percentage8.25% 8.25%8.25% 8.25%

0% 0%

2013-14 2012-1358 years 58 yearsIALM (2006-08) dulymodified

LIC (1994-96) dulymodified

20% 20%Actuarial Valuation of Karuturi Global Ltd, has been considered here.

c) Amounts for the current and previous periods are as follows:2013-14 2012-13 2011-12 2010-11 2009-10

28.60 56.54 90.67 7.79 5.550 0 0 0 0

28.80 -16.53 -9.27 -0.25 -0.7228.80 -16.53 -9.27 -0.25 -0.72

0 0 0 0 0

0 9.34 35.22 28.66 00 0 0 0 00 -20.6 -6.22 0 00 -20.6 -6.22 0 00 0 0 0 0

Grant Date 17th August 2007

Method of Accounting Intrinsic ValueVesting Plan Graded vesting over 12 year period from the date ofExercise Period 12 years from the date of grant.

Particulars Current Year (Previous year)Number of Options to be Vested 60,00,000 (60,00,000)Number of Options vested till 31.3.2013 55,88,500 (55,88,500)

Experience adjustments in plan liabilitiesExperience adjustments in plan assetsIn case of provision for employee benefits amounting to Rs. 51.11 lakhs (PY 43.87 lakhs) pertaining to employees in subsidiaries outside India has not beendetermined by Actuarial Valuation. However, the same has been arrived based on management estimate.

3. 3 EMPLOYEE STOCK OPTION:Under the Employee Stock Options Scheme 2008 (ESOS-2008), the Company has granted 60,00,000 Options to its eligible employees, the details of which are asfollows:A) Employee Stock Options Scheme:

Experience adjustments in plan liabilitiesExperience adjustments in plan assetsCompensated absencesDefined Benefit ObligationPlanned asset(Surplus)/Deficit

The company does not have any Gratuity Fund and in view of this and other external and internal factors, estimates of the amount of funding for the ensuing yearare not determinable.

DescriptionGratuityDefined Benefit ObligationPlanned asset(Surplus)/Deficit

Expected Rate of return on plan assets Demographic Assumptions:ParticularsRetirement AgeMortality Table

Attrition rate

ParticularsInterest RateDiscounting RateFuture Salary increase are considered taking into account inflation, seniority promotions and other relevant factors. 5.00% 5.00%

Expected return on plan assetsCurtailment costSettlement costNet actuarial (gain) / loss recognized in the periodExpenses recognized in the statement of profit and loss under employee costsActuarial Assumptions:

Particulars Gratuity (Unfunded) Compensated absence (Unfunded)Current Service CostPast Service CostInterest Cost

Fair Value of plan assets as at the end of the periodFunded StatusExcess of actual over estimatedUnrecognized actuarial (gains) / lossesNet Asset/(Liability) recognized in balance sheet

Expense recognized in the Statement of Profit and Loss:

Actuarial (gain)/loss on obligationPresent Value of Obligation as at the end of period (31 st March 2014)

Particulars Gratuity (Unfunded) Compensated Absence (Unfunded)Present Value of obligation as at the end of the period

Interest CostPast Service CostCurrent Service CostCurtailment CostSettlement CostBenefits Paid

Change in present value of obligation:

Particulars Gratuity (Unfunded) Compensated Absence (Unfunded)Present value of obligation as at the beginning of the period (1 st April 2013)Acquisition Adjustment

Total

b) Defined Benefits Plan:-Short term employee benefits such as salary, allowances and bonus are accounted on accrual basis of accounting and based upon the laws applicable. Terminationbenefits (Gratuity) is provided on the basis of actuarial valuation. The actuarial gain or loss is considered in the Profit and Loss Account of the period in which itaccrues.

B) Movement of Options Granted:

As at 31.03.2014 As at 31.03.2013 6,909.18 10813.57

Nil NilNil Nil

6,909.18 10813.57 0.85 1.34 0.85 1.34 0.85 1.34 0.85 1.34

3.4 LEASES:Finance Lease : Where the company is a lessee:The minimum lease payments and present value of minimum lease payments:

31.3.2014 31.3.2013 31.3.2014 31.3.2013 - 54.33 - 48.1

8.45 8.76 7.43 7.848.45 63.09 7.43 55.94

Less: Finance charges 1.02 7.15 - -Present Value of Minimum Lease Payments 7.43 55.94 - -Disclosed Under:Long term Borrowings (Refer Note:2.3) - - 8.45 8.76Other Current Liabilities (Refer Note: 2.5) - - - 54.33

- - 8.45 63.09

3.5 EARNINGS PER SHARE:In accordance with the Accounting Standard (AS-20) on "Earnings per Share"Computation of Basic and Diluted Earnings Per Share is as under:

2013-14 2012-136,909.18 10,813.56

809,634,501 809,726,648 808,979,232

- 747,416- 655,269- -

809,726,648 809,634,501809,726,648 809,634,501

0.85 1.340.85 1.34

0.85 1.340.85 1.34

Re 1/- Re 1/-

3.6 RELATED PARTY TRANSACTIONS:

Anita Reality Private Limited KMP interested company.

Horticulture Synergies KMP Interested FirmPremier Tobacco Packers Pvt. Ltd. KMP interested company.

Rhea Holdings Private Limited KMP interested company.

A)     As per Accounting Standard-18 (AS-18)- Related Party Disclosures’, as notified by the Rules, the disclosures of transactions with the related parties as definedin the accounting standard are given below.Name of Party Nature of relationshipSai Ramakrishna Karuturi KMPAnita Karuturi KMP

-          Basic (Rs.)-          Diluted (Rs.)d) Earnings Per Share – After Extra-ordinary Items-          Basic (Rs.)-          Diluted (Rs.)e) Face Value Per ShareDiluted EPS on the FCCB has not been considered due to pending confirmation of the proposed restructure plan (also refer Note 2.3B)

iii) Weighted average shares alloted during the year iv) Number of potential equity shares v) Weighted Average for:-          Basic Earnings Per Share-          Diluted Earnings Per Sharec) Earnings Per Share – Before Extra-ordinary Items

Total

Particularsa) Net Profit for Basic Earnings Per Share as per Profit & Loss a/cb) Weighted average number of Equity shares for Earnings Per Share computation: i) Number of Equity shares at the beginning of the year ii) Number of Shares alloted during the year

Particulars Minimum Lease Payments Present Value of Minimum

Not later than one yearlater than one year and not later than five yearsTotal

Less: Compensation Expenses under ESOP as per Fair ValueNet Profit (Fair Value Basis)Basic Earnings Per Share (As Reported) – Rs./ShareBasic Earnings Per Share (Fair Value Basis) – Rs./ShareDiluted Earnings Per Share (As Reported) – Rs./ShareDiluted Earnings Per Share (Fair Value Basis) – Rs./Share

Fair Value of Vested Rs. 4.31 (Rs. 4.31)Had the compensation cost for the stock options granted under ESOP-2008 been determined, based on fair-value approach, the Company’s Net Profit and EarningsPer Share would have been as per the Performa amounts indicated below.

ParticularsNet Profit (As reported)Add: Compensation Expenses under ESOP included in the Net

Expected Volatility 30.40% (30.40%)Expected Dividend Yield 14.18% (14.18%)Exercise Price Re.1/- per share (Re.1/- per share)

Particulars Current Year (Previous year)Risk Free interest rate 8.25%(8.25%)Expected Life 12 Years (12 Years)

Nil (4,11,500)Nil (Nil)

C) Fair Value of Option:The fair value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are as follows:

Options Unvested at the end of the yearOptions Exercisable at the end of the year

Nil (Nil)Nil (Nil)9,30,918 (9,30,918)

9,30,918 (16,78,334)Nil (Nil)Nil (Nil)

Options Outstanding at the beginning of the year.Vested during the yearExcised during the yearLapsed during the yearAllotted during the yearOptions Outstanding at the end of the year

Exercise Price of the Option (Rs.) Re.1/- (Re.1/-)Expected life of Option 12 years

Current Year (Previous Year)

Grant Price (Rs. Per Share) Re.1/- per ShareMarket Price on the Date of Grant of Option Nil (Rs.4.13)

Particulars

(KMP = Key Management Person).

Year Op. Balance Taken Repaid Cl. Balance2013-14 (309.10) 2,056.24 878.27 (1,487.07)2012-13 (654.53) 389.10 734.53 (309.10)2013-14 (2,020.11) 1,484.84 2,533.82 (971.13)2012-13 (752.84) 1,725.16 457.89 (2,020.11)

Year Op. Balance Taken Repaid Cl. Balance2013-14 (0.00) - - -2012-13 8.08 8.23 0.15 (0.00)2013-14 (40.83) - 40.83 -2012-13 (40.83) - - (40.83)

Year Op. Balance Taken Repaid Cl. Balance2013-14 36.79 - - 36.79 2012-13 36.79 - - 36.79

Year Op. Balance Taken Repaid Cl. Balance2013-14 2,585.74 2,585.74 2012-13 2,585.74 - - 2,585.742013-14 (7.20) 0.46 (6.74) 2012-13 - 7.20 - (7.20)

Expenses/(Income)

2013-14 - - 103.61 - 105.78 (505.14)2012-13 - - 103.61 500.00 97.64 (505.97)

3.7 SEGMENT INFORMATION:

2013-14 2012-13

3,206.47 4,077.1646,099.24 51,992.4649,305.70 56,069.62

2,835.68 3,601.67303,143.19 261,286.10305,978.87 264,887.77

47,623.86 43,766.4972,219.99 57,672.02

119,843.84 101,438.54

31.03.2014 31.03.2013 31.03.2014 31.03.201360.0998 54.3893 60.4962 54.4442

3.1159 2.9546 3.2030 3.03320.6946 0.6427 0.7056 0.6396

82.5711 69.5438 81.0831 70.09093.6750 3.6750 3.6750 3.6750

As Per our Report of even date attachedFor YCRJ & Associates For and on behalf of BoardChartered AccountantsFirm Regn. No. 006927S

Yashavanth Khanderi Sai Ramakrishna Karuturi Anitha Karuturi B.S SridharaPartner Managing Director Director Company SecretaryM. No. 029066

Place : Bangalore Place : BangaloreDate : 14/02/2015 Date : 14/02/2015

KshsEuro

AED (to USD)3.9 Previous year’s figures have been reworked, regrouped, rearranged and re-classified wherever necessary. Figures in bracket relates to previous year.

In the Consolidated Financial Statements, there are five currencies consolidated.

Particulars Closing Rates Average Rates

DollarBirr

Segment Liability Within India Outside India Total Liability3.8 Foreign Currency Translation Reserve: The assets and liabilities of overseas non-integral operations are translated at the closing exchange rates and the items ofincome and expenses at average exchange rate and resulting exchange difference amounting credit Rs 13,723.38 Lakhs (Previous Year debit Rs. 937.07/- Lakhs) isdebited / credited to Foreign Currency Translation Reserve until the disposal of such operations.

Total Revenue

Segment Assets- Within India- Outside IndiaTotal Assets

Premier TobaccoPackers Private

The Company's predominant income is from a single segment namely agriculture and hence disclosure of primary segment wise information is not applicableunder Accounting Standard 17 "Segment Reporting" (AS-17).Segment Information:Segment Revenue - External Turnover- Within India- Outside India

Rhea Holdings Private Ltd.

KMP Interested company

Name Year Sale Lease Rental

Income Loan Taken Loan Repaid Closing

Anitha Realty Private Ltd.

Anil Tumu

KMP Interested FirmName

Horticulture Synergies

KMP Interested CompanyName

Name

Sai Ramakrishna

Anitha Karuturi

Relative of KMPName

Nagesh Karuturi

Nagesh Karuturi Relative of KMPAnil Tumu Relative of KMP

B)      Karuturi Global Ltd has transactions with concerns/ companies wherein the directors are interested. Summary of the transactions with the above relatedparties is as follows: (Negative Figures indicates credit balance).

KMP

KARUTURI GLOBAL LIMITED

Registered office: # 204, Embassy Centre,11 Crescent Road, Bangalore, 560001

CIN: L01122KA1994PLC016834

Form No. MGT-11

PROXY FORM [Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies

(Management and Administration) Rules, 2014]

Name of the member(s): Registered address: E-mail Id: Folio No/ Client Id : DP ID :

I/We, being the member (s) of …………. shares of the above named company, hereby appoint.

1. Name :……………………………………………………… Address : …………………………………………………… E-mail Id : ……………………………………………………

Signature :…………….,

or failing him

2. Name :……………………………………………………… Address : …………………………………………………… E-mail Id : ……………………………………………………

Signature :…………….,

or failing him 3. Name :………………………………………………………

Address : …………………………………………………… E-mail Id : ……………………………………………………

Signature :…………….,

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 19th Annual general meeting of the company, to be held on the 20th day of March 2015 At 11:00 A.M .at Wadiyar Hall, Century Club, # 1, Sheshadri Road, Bangalore-560001 and at any adjournment thereof in respect of such resolutions as are indicated below :

ResolutionNo.

Description

Type of

resolution (Ordinary / Special)

I / We assent to the resolution (For)

I / We dissent to the resolution (Against)

1. Adoption of Financial Statements for the year ended March 31, 2014.

Ordinary

2.

To Re appoint Mrs. Anitha Karuturi who retires by rotation and being eligible offers herself for reappointment.

Ordinary

3.

Appointment of Mr. Bhat & Associates, Chartered Accountants, as the Auditors of the Company.

Ordinary

4.

To appoint Mr. Man Mohan Agrawal as an Independent Director

Ordinary

5. To appoint Mr. Mahendra Kumar Sunkara as an Independent Director.

Ordinary

6. Increase in Authorized Share Capital of the Company

Special

7.

Alteration of Capital Clause of Memorandum of Association of the Company

Special

8. Alteration of capital clause in Articles of Association of the Company

Special

9 Preferential Allotment of Convertible Warrants Special

10 Preferential issue of fully convertible debentures

Special

11 To approve resolution to Authorize board to enter into Related party transaction.

Special

Signed this __________day of __________________2015 Signature of Shareholder:____________________________ Signature of Proxy Holder(s):_________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affix Re 1

Revenue Stamp

 

KARUTURI GLOBAL LIMITED 

Registered Office: # 204, Embassy Centre, 11, Crescent Road, Bangalore‐560001  

        Attendance Slip 

I/We hereby record my/our presence at the Nineteenth Annual General Meeting of the Company at Wadiyar Hall,  

Century Club, # 1, Sheshadri Road, Bangalore‐560001 at 11.00 AM on 20th March 2015 and at any adjournment thereof. 

Name________________________________________________________________________________ 

Address______________________________________________________________________________ 

Regd Folio. NO_______________________ ________________________________________________ 

No of shares held________________________________________ 

Client I.D NO____________________________________________ 

__________________________________________DP.ID.NO_____________________________ 

Name of the Proxy/Representative, if any________________________________________________________ 

Signature of the shareholder(s)/ Proxy/ Representative_____________________________________________