Karuturi Global

The Directors have pleasure in presenting the Thirteenth Annual Report
 along with the audited accounts of the Company for the financial year
 ended 31st March, 2008.
 
 FINANCIAL RESULTS:
 
 On a consolidation basis, the financial results for the year under
 report of your Company stood as follows:
 
 FINANCIAL RESULTS:
 
                                                      (Rs. in lacs)
 Particulars                              2007-08          2006-07
 
 Total Income                            40049.87         10176.96 
 
 Profit before depreciation & tax        11500.21          4350.73 
 
 Less: Depreciation                       1123.66           391.08 
 
 Less: Provision for tax                   103.60            33.73
 
 Net Profit after Tax                    10272.95          3925.92
 
 COMPANY PERFORMANCE
 
 Your Company has, for yet another successive year, posted impressive
 results which was a result of successful integration of newly acquired
 companies i.e Sher Agencies & Estel Communications into Karuturi Group.
 The performance is even more satisfying when viewed in the light of the
 challenges thrown up in putting up and successfully bringing its food
 processing unit to commercial production within a short span of time.
 Your Companys plans for diversifying into the agricultural operations
 in Ethiopia have shown positive signs for a great future ahead.
 
 Gross Turnover of your Company grew by 294% to Rs.40050 lacs, Net
 profits has grown by 162% to Rs. 10273 Lacs. EPS has gone up by 118% to
 Rs. 35.70 per share.
 
 DIVIDEND
 
 The Board has pleasure in recommending a dividend of 20 % (Re.0.20 per
 equity share of Rs.1 each) are the fully paid up share capital for the
 financial year ended 31.03.2008.
 
 MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS.
 
 BUSINESS REVIEW: FLORICULTURE
 
 The Company has achieved the distinction of being the worlds largest
 grower of roses during the year on completion of the acquisition of
 Sher Agencies Limited, Kenya in October 2007. Now the Company has three
 main production bases, in India, Ethiopia and Kenya.  Proximity to the
 potential markets, availability of technology and skilled man power and
 availability of land for cultivation are the.  major precursors for
 selecting these hubs. Whilst Indian facility serves the South east
 Asia, Middle East Japan, and Australian Markets, Ethiopian and Kenyan
 Facilities cater to the Middle East, Europe(including Russia) and North
 American markets. Today your Company grows 40 species of roses in its
 Kenyan facility and exports 1.5 Million stems per day to Europe. The
 Ethiopian facility has around 100 hectares of land which is covered by
 54 Ha of green houses. Average annual out put is 150 stems per square
 meter of land. The Ethiopian facility specializes in growing Hybrid
 Tees. Nearly 90% of its production is of Hybrid Tees. The Indian
 facility has 10 hectars of land under cultivation which has the
 capacity to produce 18 Million stems per year. Indian facility grows 18
 varieties of roses of various colours. 40%. of the output from all
 these facilities are sold through auctions and the rest 60% is sold
 directly to various customers. The Company has been allotted a further
 385 Ha of Land in Wollisso, Ethiopia for expanding its rose cultivation
 in Ethiopia. This project is under speedy implementation with almost 50
 Ha of green houses already installed. 
 
 This entire wollisso land should come into full production by 2010-11
 with partial production starting by December 2008. With this Ethiopian
 facility will be much larger then the Kenyan facility and together by
 far more then 3 times of the 2nd largest grower in the world.
 
 AGRICULTURE
 
 During the year under review, the Company has initiated effective steps
 to diversify its focus from Floriculture to becoming a fully Integrated
 Agriculture Company. Series of forward moves were made into the
 cultivation of cereal crops, sugar cane vegetables and palm oil. The
 Company has completed acquisition of 100,000 acres of land in Ethiopia
 for the cultivation of above crops and additional 650,000 acres of land
 will be acquired shortly. The entire land mass will be brought into
 cultivation by 2014-15 which by statistics lead to meeting 10% of the
 food demand in African region. The Company is in the process of raising
 USD 100 Million to fund this expansion which is being opeimplemented
 through its overseas subsidiary.
 
 FOOD PROCESSING:
 
 Your Companys Endeavour to enter into the food processing industry has
 materialized during the year that has started with the commissioning of
 its food processing unit near Tumkur, Karnataka. The unit has commenced
 its commercial production with installed capacity of 6000 tones per
 annum. The unit was visited by many overseas buyers and these visits
 are materialized into substantial export orders which needs to be
 executed before the end of the current financial year. The unit is
 utilizing both imported and indigenous machinery for its operations and
 the Company has entered into contracts with local formers to ensure
 uninterrupted supply of Gherkins. The Company, in addition to Gherkins,
 has plans to process other vegetables like radish, beetroot, carrot,
 baby corn, jalapenos & green ball peppers, for which a huge global
 demand exists. The bottling of vegetables will be done in either acetic
 acid or vinegar medium based on the specifications of export orders.
 Bulk processing of Gherkins is done in acetic acid or brine medium
 based on the specifications of the customer and their requirements.
 Exports made to Europe and the USA has been well received in the
 market. Your Company has plans to spread its wings into markets in
 Russia, Middle East etc during this financial year. Your Company has
 plans for acquiring around 200 acres of land near Mysore for the
 cultivation of Gherkins and other vegetables, the produce of which will
 be supplied not only to its own unit but will also cater to the
 domestic demand for dressed vegetables.
 
 INTERNET SERVICE PROVIDER (ISP):
 
 The ISP Division of the Company now transferred to its wholly owned
 subsidiary i.e Karuturi Telecom Pvt. Ltd has seen steady growth in
 turnovers and profits. The Company has taken over an All India ISP,
 Estel Communications Private Limited, which was a JV of a NASDAQ Listed
 company and Delhi based group giving it a Pan India presence with a
 robust network and clientele. This company was renamed as Karuturi
 Telecom Pvt. Ltd. This reflects the emphasis of the Company in getting
 larger reach in the market and providing Broadband Services to both
 Corporate and Consumers. The ISP division apart from providing Internet
 bandwidth services has moved up the value chain in terms of providing
 end to end solutions to the customers from a system integration
 perspective.  The Company services across the country large and medium
 sized companies including MNCs.
 
 The Company has entered into a strategic alliance with one of the
 Tier-1 Voice aggregators in the USA for providing quality VOIP services
 to its clients. These include Voice terminations across the Globe and
 also other Hosted Contact center solutions which is available on a
 single window. The company is also exploring the partnership
 opportunity for data business with them in terms of providing
 International Private Leased circuits (IPLC) and Multi point Leased
 Circuits (MPLS).
 
 On the Technology division, the Company has become an Independent
 Software vendor for IBM. This enables the Company to develop software
 applications based on the IBM Platform. This relationship also helps
 the Company in getting Sales and marketing support from IBM and
 enhances the reach for its offerings.
 
 The Technology division has developed a successful E
 -procurement/Tendering software. The E-Procurement product has been
 developed for one of the large Organization under Govt of Karnataka.
 With many Government organizations proposing to conduct its business in
 a transparent manner, these products have tremendous value and have
 good potential in the country both in the Public and in large Private
 organizations. It has also developed Reverse auction System/Forward
 English Auction system/Forward Dutch auction system to meet the
 requirements of cross section of customers. The Technology division
 also offers Application Specific Software catering to Business Process
 Management, Industrial Automation, Control and Data Acquisition.
 
 The Company continues to aim at inorganic growth opportunities in this
 sector as well.
 
 RETAIL:
 
 Pursuing the forward integration initiatives of the company, Karuturi
 global ltd has floated a new subsidiary i.e Karuturi Flower Express Pvt
 Ltd into which the retail operations of the company was off loaded.
 FlowerXpress, the brand registered by the company for its retailing
 activities is already a house hold name in Bangalore.  The company
 currently have 23 retail outlets in and around Bangalore and planning
 to expand its network Pan India. The company is adopting the franchise
 model for its expansion activities and has already tied up with top
 retailing networks which has presence across the country to roll out
 its retailing operations.
 
 OUTLOOK:
 
 Management is focused on growing Karuturi into an integrated Global
 Player in agriculture and therefore increasingly focuses on vast
 agricultural opportunities in Africa especially, Ethiopia.
 
 Substantial work, planning and execution have already been done to
 bring Karuturi to a position where it has the required growth platform
 to leverage emerging growth opportunities.
 
 Management believes that most of the future growth of the Company
 revolves around expansion of the following operations:
 
 1.  Expand presence into new geographical markets, particularly, North
 America.
 
 2.  Improve distribution set up to strengthen presence across the value
 chain Agricultural operations.
 
 3.  Operationalize 100,000 hectares in Ethiopia.
 
 4.  Optimize utilization rates to improve per unit output over time
 Expanding farm size.
 
 The Kenyan facility which was acquired during FY08 will contribute its
 full year profits to the Company in FY09. Smooth integration of the
 facility into Karuturi and resulting synergies are expected to become
 visible in FY09.
 
 CHANGE IN THE NAME OF THE COMPANY
 
 To represent the global presence of your Company in Floriculture,
 Technology to retailing across geographies, with your consent and based
 on the approval of the Ministry of Corporate Affairs, Government of
 India, the name of the Company was changed to KARUTURI GLOBAL LIMITED
 during the year under report. The script is traded with new name on the
 exchanges from 6.05.2008.
 
 INCREASE IN PAID UP CAPITAL
 
 The total paid up capital of the Company as on 31.03.2008 was
 Rs.33,09,75,000. This increase in capital is pursuant to conversions of
 FCCBs to the extent of USD 22 Million from the FCCB issue of USD 25
 Million and USD 5 Million from the FCCB issue of USD 50 Million. Your
 Company has also converted 3 lakhs warrants(of Rs10/-) in to Equity
 Shares and the total warrants pending for conversion is 1.32 crores
 warrants(of Re. 10/-) as on 31.03.2008.
 
 STOCK SPLIT
 
 Keeping in view the requirements of majority of the investors, the face
 value of the Companys shares was subdivided from Rs.10 per share to
 Re. 1 per share. With effect from 11.04.2008, the shares of the Company
 are traded on Bombay Stock Exchange Ltd and National Stock Exchange of
 India Ltd with new face value of Re.1 per share.
 
 WHOLLY OWNED SUBSIDIARIES
 
 During the year under review, your Company has floated three new Indian
 subsidiaries viz Karuturi Floritech Pvt Ltd, Karuturi Foods Pvt Ltd and
 Karuturi Flower Express Pvt Ltd. In view of the expansion and future
 growth requirements as also to have better management focus, the
 existing divisions of floriculture, food processing and retail is
 being moved to these new subsidiaries. Your Company has already
 transferred its ISP business into its fourth wholly owned subsidiary
 i.e Karuturi Telecom Pvt Ltd.
 
 Other particulars of subsidiary companies are furnished as annexure to
 this Report.
 
 DIRECTORS
 
 Your Directors, Mrs.Ashlesha Madappa and Mr Satish Caroli retire by
 rotation and being eligible, offer themselves for re-appointment.
 
 In the process of broad basing of the Board, your Company has inducted
 two new independent and non executive Directors into its Board i.e
 Mr.Satish Caroli and Mr.Siddhartha Kumar Mukharji. Mr.Siddhartha
 Mukharji is a post graduate in management and a research scholar from
 IIT Delhi. He is the Managing Director of Sunblossom Florals Ltd, Delhi
 which produces and distributes cut flowers .
 
 Mr.Satish Caroli is a post graduate in commerce from German university
 and is the Managing Director of Dynagro India Pvt Ltd which deals in
 manufacturing and distribution of agri based products.
 
 Mr T Anil, Director for long time, has opted not to seek reappointment
 being based in Ethiopia overlooking the business of your Company. In
 view of the various requirements of Corporate Governance Code and being
 not able to attend any of the Board Meetings, he has expressed his
 intention that he would continue to support the Company in every way
 and that he would step down from the Board. The Board places on record
 its deep appreciation for the services rendered by Mr Anil.
 
 PERSONNEL
 
 Your Directors wish to place on record their appreciation of the
 services rendered by the employees of the company at all levels.  None
 of the employees employed during the year was in receipt of
 remuneration in excess of the prescribed limit specified in Section 217
 (2A) of the Companies Act, 1956.
 
 EMPLOYEE STOCK OPTION PLAN ( ESOP)
 
 The Company has commissioned its maiden Employees Stock Option Plan
 during the year 2006. The details of options granted / vested under the
 2006 Stock Option Plan are as follows,
 
 Total Grants authorized by the plan.     3,00,000 options
 
 Pursuant to 1:1 bonus during 2007 
 and stock split 60,00,000 options
 during 2008 total No of 
 options as per the plan
 
 Total No of options 
 granted on 17.08.2007.                  42,03,000 options
 
 Employees receiving 5%+ of the 
 total number of                         Mr.Anil Tumu (47.58%)
 options granted during the year.        Mr.Manoj Kumar Agarwal (14.27%)
                                         Mr.Sreenivasa Rao (23.79%)
 
 Employees granted options 
 equals to or exceeding                  Nil
 1 % of the paid up 
 capital of the company.
 
 Total No of options 
 exercised during the year               Nil
 
 Diluted EPS on issue of shares 
 on exercise calculated                  NA
 in accordance with AS .
 
 DEPOSITS
 
 Your Company has not accepted any deposits from the public falling
 under the purview Section 58A of the Companies Act, 1956.
 
 AUDITORS
 
 Messrs R.G.N Price & Co, Chartered Accountants, Bangalore, Auditors of
 the Company retire at the Annual General Meeting and being eligible,
 offer themselves for reappointment. Your Directors recommend their
 reappointment.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO:
 
 The Company earned Rs.25,86,32,903 in Foreign Exchange during the year.
 The outflow in Foreign Exchange was Rs.44,10,157
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the listing agreements with the Stock
 Exchanges, CEO & CFO certification on the financials of the Company,
 Report on Corporate Governance, and Auditors report on compliance with
 the Corporate Governance requirements have been included as Annexures
 to this report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Directors state:
 
 i) that in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanations
 relating to material departure;
 
 ii) that the Directors had selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent, so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and the
 profit of the Company for the period;
 
 iii) that the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities.
 
 iv) that the Directors had prepared the annual accounts on a going
 concern basis.
 
 ACKNOWLEDGEMENTS
 
 Your Directors acknowledge with gratitude the confidence reposed on the
 Company by the Shareholders, Bankers, Statutory Authorities, Customers,
 Vendors and all others who deal with the Company and also wish to thank
 all the employees both India and Overseas for their sincere and
 unstinted support extended and expects the same for the years to come
 by. Special thanks are placed on record for all those who have
 uniformly helped the Company in its endeavours in Ethiopia, Kenya,
 Europe and the Middle East.
 
                                          By the Order of the Board
                                        For Karuturi Global Limited
 
 Place : Bangalore    Sai Ramakrishna Karuturi      Anitha Karuturi
 Date  : 25th August 2008    Managing Director             Director