MIRA INFORM REPORT

Report Date :

02.12.2008

IDENTIFICATION DETAILS

Name :	KARUTURI GLOBAL LIMITED
Formerly Known As :	KARUTURI NETworks limited
Registered Office :	# 204, Embassy Centre, 11 Crescent Road, Bangalore – 560 001, Karnataka
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	26.12.1994
Com. Reg. No.:	08-16834
CIN No.: [Company Identification No.]	L01122KA1994PLC016834
TAN No.: [Tax Deduction & Collection Account No.]	Blrk01107b
PAN No.: [Permanent Account No.]	AAACK8275A
Legal Form :	Public Limited Company. The Company's shares are listed on the Stock Exchange.
Line of Business :	Provider of ISP Services Project Services and Software Development

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 19000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Director are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Payments are correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	# 204, Embassy Centre, 11 Crescent Road, Bangalore – 560 001, Karnataka
Tel. No.:	91-80-41138686
Fax No.:	91-80-22259782
E-Mail :	venu@karuturi.com sunitha@karuturi.com info@karuturi.com kotresh@karuturi.com karuturi@e-karnet.net
Website:	www.karuturi.com
Corporate Office:	#204,303 and 304, Embassy Centre, 11 Crescent Road, Bangalore – 560001
Tel. No.:	91-80-41512430 / 41518686
Fax No.:	91-80-22259782
E-Mail :	investorrelations@karuturi.com
Website:	www.karuturi.com
Factory 1:	95/1, Naranahalli Village, Doddabelavangala Hobli, Doddaballapur Taluk, Bangalore District – 561 203.
Tel. No.:	91-80-27655323
Fax No.:	91-80-27655323
E-Mail :	karuturi@e-karnet.net sujatha@karuturi.com
Website:	http://www.karuturi.com
Area :	35 Acres
Location :	Owned
Factory 2 :	#401, Embassy Centre 11 Crecent Road, Bangalore India
Tel. No.:	91-22257470
Fax No.:	91-80-22259782
E-Mail :	techteam@e-karnet.net
Area :	2000 sq. ft.
Location :	Rented
Branches :	Soluta, Holetta Village, Oromia Region, Adis Abbaba, Ethiopia
Tel. No.:	91-25191170299
Fax No.:	91-251116184256
E-Mail :	aniltumu@gmail.com
Area :	30 Acres
Location :	Leased
Food Processing Unit :	66 and 73/2 Belledhara Village, Tumkur- Madhugiri Road, Tumkur District-572106
ISP Division :	a) 1112, East Wing, Raheja Tower, M.G Road, Bangalore-560001. b) B-48, Sector 59, Noida. c) Plot No.126, Sector 44, Institutional area, Gurgaon. d) 508/509, 5th Floor, Limbini Rockdale, Khairatabad, Hyderabad
Overseas Office :	Ethiopian Meadows Limited # 132, Lease Office Building 16, Jabel All Free Zone, Dubai. Flower XPress FZE No. 118, Dubai Flower Centre, RO. Box 119900, Dubai. Sher Karuturi Limited Moi South Lake Road, RO.Box -729, Naivasha, Kenya. Ethiopian Meadows PLC Kebele 03/05, House No.2112 Addis Ababa Ethiopia.

DIRECTORS

Name :	Mr. K. S. Ramakrishna
Designation :	Chairman and Managing Director
Address :	#9/56, 8^th Main, 1^st cross, Upper Palace Orchards, Bangalore-560003
Date of Birth/Age :	40 Years/23-08-1965
Qualification :	B.E. (Mech.), MBA (Fin and Mis - USA)
Experience :	15 Years
Name :	Mrs. Anita Ramakrishna
Designation :	Director
Address :	#9/56, 8^th Main, 1^st cross, Upper Palace Orchards, Bangalore-560003
Date of Birth/Age :	31 Years/11-07-1974
Qualification :	B.E. (Electronics)
Experience :	10 Years
Name :	Mr. T. Anil
Designation :	Director
Address :	10-3-193, Mamillagudam, Khammam, Andra Pradesh.
Date of Birth/Age :	33 Years/ 23-03-1973
Qualification :	BE
Experience :	11 years
Name :	Mrs. Ashlesha Madappa
Designation :	Director
Address :	D8, Shanti Kiran Apartments 52 Nadi Durg Road, Bangalore-5600046
Date of Birth/Age :	51 Years
Qualification :	BSc
Experience :	25 Years
Expertise :	International Marketing and Consultancy
Other Directorships :	Managing Director of Triplem Consultants Pvt Ltd, Bangalore.
Name :	Mr. M. G. Dattathereya
Designation :	Director
Name :	Mr. Sai Ramakrishna Karuturi
Designation :	Chairman
Name :	Mr. Satish Caroli
Designation :	Director
Expertise :	Project Management
Other Directorships :	Managing Director of Dynagro India Pvt Ltd , New Delhi
Name :	Mr. Siddhartha Mukherji
Designation :	Director
Name :	Mr. Karuturi Surya Rao
Designation :	Chairman

KEY EXECUTIVES

Name :	Mr. B S K Swamy
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Holding
A. Promoter's Holding
1. a) Indian Promoters	1810935	22.64
b) Foreign
2. Persons Acting in Concert
Sub Total	1810935	22.64
B. Non-Promoter Holding
3. Institutional Investors
a) Mutual Funds, UTI	110848	1.39
b) Banks, FIs, Insurance Companies, Trust, Central/ State Government Institutions, Non-Government Institutions.	32700	0.41
c) Flls	Nil	Nil
Sub Total	143548	1.79
4. Others
a) Bodies Corporate	1856364	23.20
i) Acquirers(s)
ii) Others
b) Foreign Investor	Nil	Nil
c) Indian Public	2874830	35.93
i) Acquirers(s)
ii) Others
d) NRIs	1314723	16.43
e) Others – Clearing Members	Nil	Nil
Sub Total	6045917	75.57
GRAND TOTAL

BUSINESS DETAILS

Line of Business :	Provider of ISP Services Project Services and Software Development
Products :	Floriculture
Brand Names :	“Karnet”
Agencies Held :	Bharti
Exports :
Countries :	UK, Germany
Imports from :
Countries :	Greece
Terms :
Selling :	Credit (30 days)
Purchasing :	L/C

GENERAL INFORMATION

Customers :

Wholesalers, End User

No. of Employees :

200

Bankers :

Ø UTI Bank

Sampige Road, Malleshwaram, Bangalore

Ø IDBI Bank

IDBI House, 58 Mission Road, Bangalore-560027

Ø Citi Bank

Prestige Meridian, MG Road, Bangalore

Ø Dashen Bank

Adis Abbaba

Facilities :

SECURED LOANS	31.03.2008 (Rs. In Millions)
Soft Loan from National Horticulture Board	10.000
Interest accrued and due	0.800
Term Loan (Secured Against fixed assets of food processinq plant)	27.000
Working Capital Loan (secured against Current assets)	43.984
Short Term Loan	549.492
Vehicle Loan (secured against vehicles)	5.673
Foreign Currency Loan	44.811
Total	681.760

Unsecured Loans	31.03.2008 (Rs. In Millions)
Foreign Currency Convertible Bonds (FCCB)	1920.600
From Related Party
Rhea Holding Pvt Ltd	274.613
From Directors
Sai Ramakrishna Karuturi	---
Total	2195.213

Banking Relations :

Satisfactory

Auditors :

Name 1:

Arun Upadhya K.M.

Chartered Accountants

Address :

No. 648, 8^th Cross, 6^th Main, Gokul llnd Stage, Triveni Road, Yeshwanthpur, Bangalore – 560 022.

E-Mail.:

kmarunupadhya@yahoo.co.in

Name 2:

R G N Price and Company

Chartered Accountants

Address :

1051, 2^nd Floor, 20^th Main, 5^th Block, Rajaji Nagar, Bangalore – 560 010, Karnataka, India

Associates/Subsidiaries :

Nil

CAPITAL STRUCTURE

AS ON 31.03.2008 :

Authorised Capital :

No. of Shares	Type	Value	Amount
60000000	Equity Shares	Rs. 10/- Each	Rs. 600.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
33097500	Equity Shares	Rs. 10/- Each	Rs. 330.975 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
At commencement of the year			Rs. 120.000 millions
Add:	Issued during the year		Rs. 210.975 millions
	Of the above:
	12000000 bonus shares were issued @ Rs.10/- each on 30th April 2007, by capitalization of Security Premium Account.
	8112500 equity shares were issued @ Rs.10/- each at a premium of Rs.110 each byway of conversion of FCCB-1.
	685000 equity shares were issued @ Rs.10/- each at a premium of Rs. 280 each by way of conversion of FCCB-2.
	300000 equity shares were issued on a preferential
	Allotment each at Rs.10/- each at a premium of Rs. 155 per share. At the end of the year		Rs. 330.975 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		330.975	120.000	79.900
2] Share Warrants		1689.440	0.000	0.000
3] Reserves & Surplus		1591.600	567.435	203.300
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3612.015	687.435	283.200
LOAN FUNDS
1] Secured Loans		681.760	123.380	11.900
2] Unsecured Loans		2195.213	1106.600	9.400
TOTAL BORROWING		2876.973	1229.980	21.300
DEFERRED TAX LIABILITIES		11.395	6.241	0.000
TOTAL		6500.383	1923.656	304.500
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		207.537	182.592	95.900
Capital work-in-progress		77.728	34.482	0.000
INVESTMENT		6010.715	1355.890	85.400
DEFERREX TAX ASSETS		0.000	0.000	0.200
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5.427	0.745	0.200
	Sundry Debtors	122.941	220.288	82.800
	Cash & Bank Balances	64.308	121.824	28.800
	Other Current Assets	0.524	0.153	0.000
	Loans & Advances	101.355	50.174	173.200
Total Current Assets		294.555	393.184	285.000
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	22.731	12.857	139.900
	Provisions	67.860	30.485	23.700
Total Current Liabilities		90.591	43.342	163.600
Net Current Assets		203.964	349.842	121.400
MISCELLANEOUS EXPENSES		0.439	0.850	1.600
TOTAL		6500.383	1923.656	304.500

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		380.809	352.249	293.600
Other Income		10.092	8.258	1.600
Total Income		390.901	360.507	295.200
Profit/(Loss) Before Tax		127.251	132.213	115.000
Provision for Taxation		6.859	3.373	0.200
Profit/(Loss) After Tax		120.392	128.840	114.800
Import Value		4.410	71.510	NA
Export Value		258.633	280.104	NA
Expenditures :
	Cost of Goods Sold	152.243	175.943	NA
	Manufacturing Expenses	NA	NA	4.700
	Raw Materials Consumed	NA	NA	136.200
	Selling & Administrative Expenses	55.674	22.744	24.900
	Increase/(Decrease) in Finished Goods	[4.683]	[0.503]	0.400
	Salaries, Wages, Bonus, etc.	8.904	8.140	6.900
	Interest & Financial Charges	43.517	15.104	0.300
	Power & Fuel	1.646	1.360	1.200
	Depreciation & Amortization	5.940	5.026	2.900
	Other Expenditure	0.409	0.482	2.700
Total Expenditure		263.650	228.294	180.200

QUARTERLY RESULTS

PARTICULARS	30.06.2008	30.09.2008
Type	1^st Quarter	2^nd Quarter
Sales Turnover	119.100	95.600
Other Income	2.000	1.400
Total Income	121.100	97.000
Total Expenditure	76.600	52.500
Operating Profit	44.500	44.500
Interest	8.000	24.100
Gross Profit	36.500	20.400
Depreciation	1.900	2.500
Tax	0.500	0.600
Reported PAT	34.100	17.300

KEY RATIOS

Year	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	1.57	1.29	0.08
Long Term Debt-Equity Ratio	1.54	1.24	0.08
Current Ratio	0.36	2.60	2.04
TURNOVER RATIOS
Fixed Assets	1.65	2.06	2.62
Inventory	124.85	782.67	734.00
Debtors	2.22	2.32	3.97
Interest Cover Ratio	3.93	9.90	384.33
Operating Profit Margin(%)	46.40	43.87	40.26
Profit Before Interest And Tax Margin(%)	44.85	42.45	39.27
Cash Profit Margin(%)	33.17	38.61	40.09
Adjusted Net Profit Margin(%)	31.62	37.19	39.10
Return On Capital Employed(%)	5.09	13.47	50.64
Return On Net Worth(%)	9.23	26.99	53.70

LOCAL AGENCY FURTHER INFORMATION

Biodata:

Subject was blossomed on 26th December of the year 1994 as a Karuturi Floritech in Doddaballapur, near Bangalore with an annual capacity to process 12 million premium cut roses at its state-of-the-art facilities (a 100% EOU unit for floriculture). Subject is engaged in three businesses, such as floriculture, processing foods - gherkins, and information technology. Promoted by Ramakrishna Karuturi, the company has set up a wholly owned subsidiary in Ethiopia, Africa - Ethiopian Meadows Plc - to produce roses with a special focus on HT roses. And today with the combined production capacities of India and Ethiopia, Karuturi ranks amongst one the largest cut rose producers in the world with a strong global presence. In addition to cut roses, the company also supplies cut rose products such as rose plants, coco peat and coco cups to customers across over 15 countries including Holland, Germany, United Kingdom, Italy, Singapore, Taiwan, Bahrain, Muscat, Dubai, Australia, Japan, New Zealand, Brunei and across North America.  

Subject had established the first production facility near Bangalore after a year from incorporation for its production purpose. During the year 1999, the company had set up an Internet Auction Portal by the name Rose Bazaar.com to derive benefits of disintermediation through use of Internet. Also set up second production facility for roses near Bangalore taking the total size of rose farms to 10 hectares. In keeping with the changing focus, the company had changed its name from Karuturi Floritech Limited, to Karuturi.com Limited in the year 2000. During the period of 2001, subject had invested in a private Satellite Gateway and an IDC as a part of the Rose Bazaar initiative. As on 12th January of the year 2001, Karuturi.Com changed its name in to Karuturi Networks Limited. The Company also got Class .B. ISP licence from the Department of telecom as a statutory requirement for a private Internet Satellite Gateway and has since been renamed Karuturi Global Limited

To use surplus bandwidth capacity, the company had started selling VPN circuits and leased line circuits to quality conscious corporates with Ultimate selling point (USP) of near IPLC quality with 640 ms latency non shared bandwidth. The year 2003 was notable one; subject had emerged as the lowest cost rose grower and the largest rose producer in the country during the year 2003. In 2004, conceptualised the Ethiopian initiative and formulated a wholly owned subsidiary in Ethiopia, Africa, called Ethiopian Meadows Plc to produce HT cut roses. The company had forayed into processed foods gherkins in the year 2005 as the conceptualised the synergistic. subject had received the largest order for roses in its history from the latest retail chain at UK in the year 2006 and also embarked on setting up a gherkins bottling plant in the same year, The Company had forayed into gherkin production at the beginning of 2007-08 in Bangalore. The company had bagged substantial orders to fully utilize the plant capacity. Karuturi Networks Limited changed its name into Karuturi Global Limited on 3rd March of the year 2008. The company had acquired 1, 00,000 acres during the same year 2008 in Ethiopia to grow crops such as sugarcane, paddy, soyabean and oil palm.

To improve its production a capability in this segment, subject plans to take up in-house production of gherkins in addition to contract farming and also exploring the possibility of foraying into bottling of baby corn, jalapenos and green ball peppers, for which a huge global demand exists.

OPERATIONAL HIGHLIGHTS

Broad-basing their product basket ;

While their existing 100 hectares of land in Etlhiopia will be fully operational in FYOQ, of the additional 385 hectares acquired recently for roses, 25 hectares will become operational in FY09 and the rest in the FY 10-11. This is! expected to result in near doubling of rose revenuesinFY10-ll.

As mentioned earlier, they expect the re venues of their Ethiopian agricultural initiative, which marks their foray into the bigger agro-based products business, to start flowing in very soon, By FY 11-12, they expect the company's revenues from agriculture to be larger than the revenues from floriculture. j.

The company is planning to raise both debt and equity to finance this project. They are in the process of raising further $ 100 million by diluting stake in their wholly owned subsidiary in Dubai, which is an SPV set up to generate all overseas investments for the company in Kenya, Ethiopia, Europe and Dubai. ! It is their focused strategy to broad-base their product portfolio into a larger agro-based product basket and to access markets in newer geographies for the products that they plan to

Extending their footprints globally

While the acquisition of large tracts of land in Ethiopia has set the stage for its product expansion, another key acquisition of fiscal gone by has led to the company's emergence as the world's largest producer and exporter pf roses. With its acquisition of Sher Agencies Limited, Kenya, the world's largest rose farm the company has become the first truly multinational and fully integrated Indian company in the field of agriculture.

Company Performance 

The 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 and 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. The Company's plans for diversifying into the agricultural operations in Ethiopia have shown positive signs for a great future ahead. 

Gross Turnover of the Company grew by 294% to Rs.4005 millions, Net profits has grown by 162% to Rs. 1027.3 millions. EPS has gone up by 118% to Rs. 35.70 per share. 

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS: 

BUSINESS REVIEW: 

Floriculture: 
The Company has achieved the distinction of being the world's 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 the 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, 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: 

The Company's 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 and 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.

The Company has plans to spread its wings into market's in Russia, Middle East etc during this financial year. The 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 Private Limited 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 Private Limited 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, Subject has floated a new subsidiary i.e Karuturi Flower Express Private Limited into which the retail operations of the company was off loaded. Flower Xpress, 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 the Company in Floriculture, Technology to retailing across geographies, with the 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. 

STOCK SPLIT: 

Keeping in view the requirements of majority of the investors, the face value of the Company's 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 Limited and National Stock Exchange of India Limited with new face value of Re.1 per share.

WHOLLY OWNED SUBSIDIARIES: 

During the year, the Company has floated three new Indian subsidiaries viz Karuturi Floritech Private Limited, Karuturi Foods Private Limited and Karuturi Flower Express Private Limited In view of the expansion and future growth requirements as also to have better management focus, the existing division's of floriculture, food processing and retail is being moved to these new subsidiaries. The Company has already transferred its ISP business into its fourth wholly owned subsidiary i.e Karuturi Telecom Private

COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE

Subject does believe and practice Good Corporate Governance. The Company's essential character is shaped by the very value of transparency, customer satisfaction, integrity, professionalism and accountability. The Company continuously endeavors to improve on these aspects the management follows the principle of fair representation and full disclosure in all its dealings and communications. The Board views Corporate Governance in its widest sense. The main objective is to create and adhere to a corporate culture of conscience and consciousness, transparency and openness and to develop capabilities to attain the goal of value creation.

Contingent Liabilities:

a) Guarantees given by banks and outstanding as at Balance Sheet date is Rs. 1.807 millions (Rs, 1.200 millions)

b) Contracts pending execution on Capital accounts is not provided for Rs.5.000 millions (Rs.12.000 millions).

c) Liability on account of NHB Loan which is pending before Hon'ble High Court of Karnataka is Rs. 11.144 millions

FIXED ASSETS

· Leasehold Land,

· Buildings,

· Green House,

· Plantation,

· Cold Storage,

· Irrigations Systems,

· Generator,

· Electrical Installation,

· Furniture and Fixtures,

· Office Equipments,

· Computers,

· Motor Vehicles,

· Tools and Equipments,

· Web Site Development,

· SDC - Gateway Equipment,

· SDC- Network Equipment,

· SDC- Air Conditioner,

· SDC – Computers,

· SDC - Office Equipments,

· SDC - Office Renovation,

· SDC - Racks and Almaraih,

· SDC – Dps, Borewell

Trade References:-

BHARTI Televenture Limited

Ground Floor

Maruti Infotech Centre

Koramangala

Intermedia Ring Road

Banglore-560071

Contact Person : Mr. Badarinarayana Deshpande

Badari.deshpande@bharti.com

Tel No.: 91-80-51265041

Fax No.: 91-80-51265040

Emnvee Logistcs Private Limited

#601 A, 3^rd Cross

Near MSIL Cold Storage

Konena Agrahaaara

Bangalore-560017

Contace Person : Mr. Nagesh

emenveelogistics@sify.com

Tel No.: 91-80-2523077

Fax No.: 91-80-25230778

SRI Lankan Airlines

Pelican Air Private Limited

GSA Sriankan Airlines Limited Cargo

No 7/8 2^nd Floor, Konena Agrahara

Opp MSIL Cold stronge

Bangalore – 560017

Contact Person : Mr. Suresh

Pelican_as@vsnl.net

Tel No: 91-80-25222732

Fax No: 91-80-25222732

Malasian Airlines

Tel No: 91-25220863

Reliance Infocom Limited

No.2 Asha Chambers

Venkataswamy Raju Road

Kumarapark West

Bangalore-560020

Contact Person: Mr. Ashok Kumar C.

Ashok_c_kumar@relianceinfo.com

Tel No.: 91-9341950820

Flori Agrochem

Near Panduranca Temple

Saraki Village

Bangalore – 560078

Contact Person : Mr. Ranade

Tel No: 91-80-26645370

Camson Biotechnologies Limited

No 223 1^st main Road

Domlir 2^nd stage

Bangalore –560071

Contact person : Mr. Dhirendra Kumar

info@camsonbiotechnologies.com

Tel No: 91-80-25355138

Fax No: 91-80-25352232

WEBSITE Details:-

history

1995: Incorporated Karuturi Floritech - a 100% EOU unit for floriculture.

1996: Established first production facility near Bangalore

1999: Set up an Internet Auction Portal by the name Rose Bazaar.com to derive benefits of disintermediation through use of Internet. Set up second production facility for roses near Bangalore taking the total size of rose farms to 10 hectares.

2000: In keeping with the changing focus, the Company changed its name from Karuturi Floritech Limited, to Karuturi.com Limited

2001: Invested in a private Satellite Gateway and an IDC as a part of the Rose Bazaar initiative. The Company also got Class .B. ISP licence from the Department of telecom as a statutory requirement for a private Internet Satellite Gateway and has since been renamed Karuturi Global Limited To use surplus bandwidth capacity, the Company started selling VPN circuits and leased line circuits to quality conscious corporates with Ultimate selling point (USP) of near IPLC quality with 640 ms latency non shared bandwidth.

2003: Emerged as the lowest cost rose grower and the largest rose producer in the country.

2004: Conceptualised the Ethiopian initiative and set up a wholly owned subsidiary in Ethiopia, Africa, called Ethiopian Meadows Plc to produce HT cut roses.

2005: Conceptualised the synergistic foray into processed foods gherkins.

2006: Received the largest order for roses in its history from the latest retail chain in UK. Embarked on setting up a gherkins bottling plant.

Company Profile

Floriculture
The company was initially set up as Karuturi Floritech in Doddaballapur, near Bangalore with an annual capacity to process 12 million premium cut roses at its state-of-the-art facilities.

Promoted by Ramakrishna Karuturi, the company has set up a wholly owned subsidiary in Ethiopia, Africa – Ethiopian Meadows Plc - to produce roses with a special focus on HT roses. And today with the combined production capacities of India and Ethiopia, Karuturi ranks amongst one the largest cut rose producers in the world with a strong global presence.

In addition to cut roses, the company also supplies cut rose products such as rose plants, coco peat and coco cups to customers across over 15 countries including Holland, Germany, United Kingdom, Italy, Singapore, Taiwan, Bahrain, Muscat, Dubai, Australia, Japan, New Zealand, Brunei and across North America.

Processed foods – gherkins

Having consolidated its presence in floriculture, Karuturi has now expanded into the fast growing agro-based and food processing business sector to export bulk and bottled gherkins to international processed food firms and super markets in major consuming nations such as the US, Europe and Russia, which are also the company's key rose markets.

Information technology

The company has also diversified into IT and network solutions under which it provides bandwidth to multinational companies and also develops software for the auction portal in its floriculture business.

Rosebazaar.com
The synergy between their two business divisions – floriculture and IT - is apparent in www.rosebazar.com , their Portal website for floriculture which is conceptualised, designed, developed and hosted by the combined efforts of the two divisions.

Board of Director

Mr. K.S.Ramakrishna, Managing Director

A Bachelor of Mechanical Engineering from Bangalore University with a rank and MBA on the Deans Honors list from Case Western Reserve University, CleveL and, OHIO, (USA). He soon plunged into the business and was actively involved in building a state-of-the-art production facility for Deepak Cables India Limited, and managed the business actively till 1994. From 1995 he was actively involved in Karuturi Global Limited, as Managing Director. As a President of South India Floriculture Association for four years, he conceptualized an agri-produce marketing system for India by setting up an auction on the Dutch model in Bangalore in 1997.

Mrs. K.Anitha, Director

A Bachelor of Computer Engineering, she is the co-promoter is actively involved in the Administration, statutory compliance and financial aspects of the Company.

Mr. Anil Tumu, Director

A Bachelor of Computer Engineering, Mr Tumu has been involved with the growth of the company since inception and is currently based out of Addis Ababa as a resident Director managing the Ethiopian project.

Mrs. Aslesha Madappa, Director

Managing Director of M/s.Triplem Consultants Private Limited, and Proprietrix and President of M/s.ABC International. Mrs Madappa.s Consultancy Company Tripliem Consultants has been in Agri Business and Management Consultancy and her International Marketing Company M/s. ABC International has been in export over the last 20 years. As such, both the Companies which are headed by Mrs.Madappa are exposed to agri business and exports of Gherkins.

Mr. Karuturi Surya Rao

He has a vast experience of over 25 years in various fields of floriculture, horticulture and cable business. He was appointed as Chairman of the Board and is currently looking after identification and implementation of new projects in Ethiopia.

Mr. Siddhartha Mukharji

He was appointed as Independent and Non Executive Director of the company . He is a post graduate in management and a research scholar from IIT Delhi. He is the Managing Director of Sunblossom Florals Limited, Delhi which produces and distributes cut flowers

Mr. Satish Caroli

He is a post graduate in commerce from German university and is the Managing Director of Dynagro India Private Limited which deals in manufacturing and distribution of agri based products.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.50.09
UK Pound	1	Rs.76.68
Euro	1	Rs.63.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions