1.  Share Capital
 
 A) Out of the paid up capital 55,88,500 (47,29,834)equity shares of
 Re.1/- each were allotted as fully paid-up on exercise of grant under
 Employee Stock Option Scheme.
 
 B) During the year the company has allotted 21,87,00,000 equity Shares
 of Re.1/- each (Previous year 2,28,00,000) against Conversion of Share
 warrants.
 
 C) Share warrant application money pending allotment includes Rs Nil
 (Previous year Rs.6,963 lakhs) towards security premium.
 
 D) During the year the company has allotted 4,77,00,000 equity Shares
 of Re.1/- each (Previous year Nil) against Conversion of Global
 Depository Receipt. (GDR).
 
 E) During the year the company has made preferential allotment
 3,63,90,101 equity Shares of Re.1/- each (Previous year Nil).
 
 F) During the year the company has allotted 1,25,52,918 equity Shares
 of Re.1/- each (Previous year 3,63,96,250) against conversion of
 foreign currency convertible bond.
 
 G) Proceeds for GDR issue made during the year amounting to Rs.9,894.64
 lakhs (Previous year Nil) is utilised for investment in / advance to
 foreign subsidiaries to the extent of Rs.9,367.02 lakhs and for issue
 expenses Rs.527.62 lakhs.
 
 2.  Borrowings and Securities:
 
 b.  During the year under review, the Company has transferred its Food
 Processing Unit at Tumkur including all assets and liabilities as a
 going concern to Karuturi Foods private Limited, an 100% subsidiary of
 the Company. The liabilities transferred included Rs 150 lakhs of term
 loan from ICICI Bank which was secured by way of equitable mortgage of
 the said factory. The documentation regarding transfer of liabilities
 is under process.
 
 c.  Company during the previous year had given Corporate guarantee to
 Central Bank of India towards the working capital facility amounting to
 Rs 25 Lakhs given to Karuturi Flower Express Private Limited, an 100%
 subsidiary of the Company till 31st January 2011.The guarantee is
 continuing even after the sale of investment in the said Company.
 
 d.  The company had availed a Foreign Currency Loan from Banco Bilbao
 Vizcaya, Spain. The proceeds of this loan were used for procuring
 assets which are leased to Ethiopian Meadows PLC, a step down
 subsidiary of the company. As the funds are utilized by the subsidiary
 the corresponding interest cost is also borne by them.
 
 e.  Fixed deposits amounting to Rs 16.06 lakhs (Rs.20.70 lakhs) are
 pledged as security with banks against bank guarantees and other
 facilities availed.
 
 3.  Fixed Assets:
 
 a.  In accordance with Notification No. GSR 225(E) dated 31stMarch 2009
 issued by Ministry of Corporate.
 
 Affairs, the company, during the financial year ending 31st March 2009,
 has changed its Accounting policy with respect to accounting of Foreign
 Exchange Differences arising out of Foreign Currency borrowings used to
 fund Fixed Assets. Accordingly, an amount of Rs.3.47 lakhs (Rs. 25.49
 lakhs) was adjusted against the historical cost of Green house in fixed
 assets which was funded by an External Commercial Borrowing.
 
 b.  The title deeds in respect of lands acquired by the Company at a
 cost of Rs.291.82 lakhs are held in Trust in the name of an employee of
 a subsidiary Company. An irrevocable undertaking from him not to
 encumber or alienate the land has been recorded. As the Karnataka Land
 Reforms Act, prohibits ownership by persons other than individuals, he
 is holding the same as nominee of the Company.
 
 c.  Assets given on lease to Subsidiaries
 
 The details of assets given on operating lease to wholly owned
 Subsidiaries and lease rentals are as under :- A) Written down value of
 fixed assets given on operating lease to its subsidiaries (net of
 depreciation) is Rs.  826.35 lakhs (Rs1,196.09 lakhs).
 
 B) Depreciation recognized against assets given on lease is Rs.61.14
 lakhs (Rs.61.14 lakhs)
 
 C) The lease rental income from M/s Ethiopia Meadows Plc., is Rs.60.00
 lakhs(Rs 60.00 lakhs)
 
 D) The lease rental income from M/s Karuturi Foods Private Limited is
 Rs. 3.00 lakhs (Rs.12.00 lakhs)
 
 E) The Company has also leased certain fixed assets for a period of 6
 years commencing from 1st May 2008 to Karuturi Telecom Private Limited
 receiving Rs 350.00 lakhs as interest free security deposit.
 
 F) Future minimum Lease Rental Receivables:
 
 4.  Investments:
 
 Company has sold its entire investment in Karuturi Flower Express
 Private Limited on 31st January 2011 to for a consideration of
 acquiring 29,743 shares for Rs.100/- each to Florista Private Limited
 representing 42% holding in that Company.
 
 5.  Quantitative particulars
 
 The Company is engaged in the business of sale of Floriculture products
 and Internet Service Provision.  The production and sale of such items
 are not capable of being expressed in any generic unit; and hence it is
 not possible to give the quantitative details of sales and the
 information as required under paragraph 3, (1) (a) and 4C of Part II of
 Schedule VI to the Companies Act, 1956.
 
 6.  Import of materials on C.I.F. Basis Rs 1.60 Lacs (Rs 5.64 Lacs)
 
 7.  Expenditure in Foreign Currency (on accrual basis)
 
 Traveling expenses Rs.7.51lakhs (Rs. 9.76 lakhs)
 
 Membership & Subscription Charges Rs.2.43 lakhs (Rs.1.27 lakhs)
 
 Statutory & Listing Fee Rs.13.44 lakhs (Rs.2.65 lakhs)
 
 GDR issue expenses of Rs. 527.62 lakhs (Rs. Nil)
 
 Divided remitted of Rs. 105.42 lakhs (Rs.118.77 lakhs)
 
 8.  Earnings in Foreign Currency (on accrual basis)
 Value of Exports on FOB Rs 2,201.39 lakhs (Rs.1,893.52lakhs) Lease
 Rental Income Rs.60.00 lakhs (Rs.60.00 lakhs).
 
 9.  Employee Benefits:
 
 Short term employee benefits such as salary, allowances and bonus are
 accounted on accrual basis of accounting and based upon the laws
 applicable. Termination benefits (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 it accrues.
 
 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 year are not determinable.
 
 10.  Interest cost capitalized during the year under review in
 accordance with Accounting Standard (AS)16 , Borrowing Cost Rs. 20.07
 lakhs (Previous Year Nil).
 
 11.  As per the information available with the company there are no
 sums due to Micro, Small, and Medium Enterprises.
 
 12. The equity share allotted on exercise of option to convert FCCBs
 and share warrants converted would rank pari passu with the existing
 share holders and consequently will be eligible to all rights and
 entitlement prospectively. Accordingly proposed dividend, recommended
 by Directors and provided for, stands enhanced in favour of conversion
 effected since the close of year to date, if any. However, as the
 company is unable to estimate for the conversion up to the record date
 set for determining the said liability i.e., (beginning of the
 conversion closer period), any further amount required to be
 distributed as dividend will be adjusted against balance in the profit
 and loss account carried forward to the subsequent financial year.
 
 13.  Managerial Remuneration :
 
 The Whole Time Directors have waived their remuneration for the year
 under review.
 
 14.  Balances appearing in some of the Sundry Creditors, Debtors,
 Advances and Deposits are subject to confirmation.
 
 15.  Accounting of Derivative Transactions:
 
 a.  The Company has during the prior year''s accounted loss (net)
 arising out of settlements of Derivative Options amounting Rs.996.41
 lakhs in Hedging Reserve (Options) Account in accordance with
 Accounting Standard–30 Financial Instruments: Recognition and
 Measurement issued by Institute of Chartered Accountants of India. The
 same was debited to a subsidiary where funds relating to the underlying
 financial liability is utilized at the time of derecognizing of
 underlying financial liability.
 
 b.  Hedging Currency Related Risks:
 
 16.  Dispute with National Horticulture Board :
 
 The suit filed by National Horticulture Board (NHB) against the Company
 for recovery of Rs.146.64 lakhs along with interest is pending before
 High Court of Karnataka. The Company has contested the computation of
 the claimed by NHB and has deposited Rs.111.45 lakhs in the High Court
 of Karnataka during May 2007 as per its order.
 
 The Loan amount of Rs.108.00 lakhs is shown as a liability and pending
 finalization of settlement, no provision is made for interest and other
 claims made by NHB. The amount deposited in the High Court of Karnataka
 is towards 50% of decree, grouped under security deposits and the
 balance 50% is disclosed as Contingent Liability.
 
 17.  Capital Commitment and Contingent Liabilities:
 
 A) Counter Guarantees given to banks and outstanding Rs. 16.07
 lakhs(Rs,20.19 lakhs)
 
 B) Corporate Guarantees given to Banks on Behalf of Subsidiaries/ erst
 while subsidiaries: Rs.19,294 lakhs (Rs.20,500 lakhs.)
 
 C) Pending Capital commitments Rs 405.00 lakhs (Rs.112.05 lakhs)
 
 D) Liability on account of National Horticulture Board loan which is
 pending before Hon''ble High Court of Karnataka is Rs. 108.00 lakhs(Rs
 111.45 lakhs).
 
 E) Disputed Income Tax Demand for the Assessment Year 2006-07 not
 provided for Rs.719.00 lakhs. The Company has filed an appeal on this
 issue before Commissioner of Income Tax (Appeals) and deposited Rs.500
 Lakhs (Rs 400lakhs) under protest which is grouped under loans and
 advances.
 
 F) Disputed Service Tax demand for the assessment year 2005-06 not
 provided for Rs. 172.62 lakhs (Nil).