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Directors Report of Kaveri Seed Company Ltd.

Mar 31, 2016

Dear Members,

Kaveri Seed Company Limited

The Directors have pleasure to present their 29th Annual Report and the audited Annual Accounts for the Year ended 31st March 2016.

FINANCIAL RESULTS

Rs, in Lakhs

Particulars

Year ended 31 March 2016

Year ended 31 March 2015

Total Income

Profit before Depreciation Profit before Tax Profit After Tax Transfer to General Reserve

86,491.17

20,775.49

18,282.46

17,712.20

1,000.00

1,13,117.74

32,171.88

30,944.00

30,184.30

1,000.00

PERFORMANCE REVIEW

In the face of low precipitation of monsoon condition and the consequent to severe competitive pressures, your company strengthened its presence in the Seed Industry and improved its marketing reach. During the financial year, your Company posted a net profit after tax of Rs, 17,712.20 Lakhs as compared to previous year PAT of Rs, 30,184.30 Lakhs (41.31% decline). An overall deficit monsoon in the Kharif season 2015 resulted in the Company''s turnover of Rs, 84,895.50 Lakhs compared to Rs, 1,11,555.51 Lakhs for the previous year (decline 23.89%)

During the financial year, the consolidated revenue from operations of Rs, 89,277.90 Lakhs against the previous year Rs, 1,16,094.47 Lakhs (23.09% decline) and the Consolidated net profit of Rs, 17,268.46 Lakhs compared to previous year PAT of Rs, 30,095.77 Lakhs (decline by 42.62%).

FUTURE PROSPECTS& OUT LOOK

Agriculture plays an integral role in India''s economy. Over 58% of rural households depend on agriculture as their primary means of livelihood. As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 15.35% of the Gross Value Added (GVA) during 2015-16 at 2011-12 prices. According to the Department of Industrial Policy and Promotion (DIPP), the Indian agricultural services and agricultural machinery sectors have cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about US$ 2,261 million from April 2000 to December 2015. The country''s agriculture sector is expected to grow by 6% in FY 2016-17 if normal monsoon prevails during the June-September, 2016.

India''s seed industry is growing at a compound growth rate (CAGR) of 8.4% in volume terms from FY 2009 to FY 2015 to reach 3.5 million tonnes in consumption (Source: ICRA). The industry is expected to increase significantly, on account of improved seed replacement ratio (SRR) and rising adoption of high-yielding hybrid seeds. The Government of India''s favourable policy environment, aimed at supporting the usage of seeds through the National Seeds Plan and bolstering agricultural productivity through the National Food Security Mission (NFSM) also augur well for the industry.

DIVIDEND

During the financial year 2015-16, your Company has declared and paid an Interim Dividend of Rs, 2.50 per equity share. Your Directors have not recommended any final dividend for the financial year 2015-16. An amount of Rs, 10.00 Crores has been transferred to general reserve as per the provisions of Companies Act, 2013 and Rules there under.

RESEARCH AND DEVELOPMENT

The Company''s R&D comprises state-of-the-art Biotechnology lab, modern seed testing lab, company owned central research farm for generation and evaluation of breeding material and several satellite farms for crop specific research, seed production research (SPR), breeder seed production (BSP) and GOT. Our R&D is recognized by the Department of Scientific and Industrial Research (DSIR) and is manned by a competent team of qualified breeders and trained technicians. The Company has large collection of crop specific germ plasm, well documented and conserved in Gene Bank.

Your Company has equipped with state-of-the-art Seed testing laboratory at Pamulaparthy plant for quick and reliable method of testing of seed lots. Seed lots are thoroughly checked by the quality control department for genetic and physical purity, germination. The company has set quality benchmarks based on Indian Minimum Seed Certification Standards(IMSCS) to supply quality seed of premier hybrids for ensuring better seedling emergence.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the provisions of the Companies Act, 2013 and the Accounting Standards AS-21 and AS-27 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2016, which forms part of the Annual Report.

SUBSIDIARY COMPANIES

The Company has 4 subsidiaries as of 31 March 2016. There was no material change in the nature of the business carried on by the subsidiaries. As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and is attached to the Financial Statements of the Company.

In accordance with the provisions of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are being made available on the website of the Company and are not attached with the Annual Accounts of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered Office of the Company and that of the respective subsidiary companies.

INDIAN ACCOUNTING STANDARDS -IFRS CONVERGE STANDARDS

The Ministry of Corporate Affairs vide its notification dated 16th February, 2015 has notified the Companies (Indian Accounting Standards) Rules, 2015. In pursuance of the said notification, the Company will adopt Indian Accounting Standards with effect from 01st April, 2016 with the comparatives for the period ending 31st March, 2015. The implementation of Indian Accounting Standards (IAS) is a major change process for which the Company has set up a dedicated team and is providing desired resources for its completion within the time frame. The impact of the change on adoption of said IAS is being assessed.

STATUTORY AUDITORS & AUDITORS'' REPORT

M/s. P.R.Reddy & Co. Chartered Accountants (Firm Registration No. 003268S) who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and recommended for re-appointment to audit the accounts of the Company for the financial year 2016-17. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. P.R.Reddy & Co., that their appointment, if made, would be in conformity with the limits specified in the said section.

The statutory auditor''s report is annexed to this report. There are no specifications, reservations, adverse remarks on disclosure by the statutory auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

INTERNAL AUDITORS

The Board of Directors of the Company has appointed a professional firm of M/s. M.Bhaskar Rao & Co., Chartered Accountants to conduct internal audit of the Company for the financial year ended 31 March 2017.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has laid down set of standards which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and Finance Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the internal Audit function reports to the Chairman of the Audit Committee.

INTERNAL FINANCIAL CONTROLS

The internal financial controls (IFC) framework at Kaveri Seeds encompasses internal controls over financial reporting (ICOFR) as well as operational controls that have been put in place across all key business processes of the Company. The internal controls are designed to facilitate and support the achievement of the Company''s business objectives and such controls do enable the Company to adapt to changing and operating environment, to mitigate risks to acceptable levels and to support sound decision making and good governance.

Details in respect of adequacy of internal financial controls with reference to the financial statements are briefly iterated below:

a. The Company maintains all its major records in ERP System.

b. The Company has appointed internal auditors to examine the internal controls, whether the workflow of the organization is being done through the approved policies of the Company. In every quarter, during the approval of financial statements, internal auditors present the internal audit report and the management comments on the internal audit observations; and

c. The Board of Directors of the Company has adopted various policies such as related party transactions policy, whistle blower policy, policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(C) of the Companies Act, 2013 your Directors confirm that:

i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.

ii) Such Accounting policies have been selected and applied consistently and judgments and estimates made when required that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

v) Proper Internal Financial Controls were in place to be followed by the Company and that the financial controls were adequate and were operating effectively.

vi) Proper systems devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DIRECTORS

Changes in Directors and Key Managerial Personnel: Resignation of Director:

Mr. R. Venumanohar Rao, tendered resignation as the Director and Whole time Director of the Company effective from 01 April 2016. Your directors place on record their sincere appreciation of the valuable contribution made by him during his tenure as Director of the Company.

Re-appointment of MD & Whole Time Directors:

The re-appointments of Mr. G.V.Bhaskar Rao, Chairman cum Managing Director, Mrs. G.Vanaja Devi, Mr. C. Vamsheedhar and Mr. C.Mithunchand, Whole time Directors are being proposed at the ensuing Annual General Meeting.

Director(s) retiring by rotation:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Dr. G. Pawan, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment.

Appointment of Chief Operating Officer:

Mr. G. S. Satish, has been appointed as Chief Operating Officer of the Company with effect from 11 May 2015. He is an Agriculture graduate from G B Pant University of Agriculture and Technology with Management Education from Indian Institute of Management, (IIM) Ahmadabad, having more than two decades of experience in Seeds and Crop protection industry, working with leading seeds and crop protection multi-national companies.

APPOINTMENT/RESIGNATION OF CHIEF FINANCIAL OFFICER AND KEY MANAGERIAL PERSONNEL:

Mr. K. V. Chalapathi Reddy tendered resignation as the Chief Financial Officer of the Company effective from 10th May 2016 due to his personal reasons. Your Directors place on record their sincere appreciation of the valuable contribution made by him during his tenure as CFO of the Company.

Mr. G. Vijaya Kumar has been appointed as Chief Financial Officer of the Company effective from 10 May 2016. Mr. G.Vijay Kumar, a Chartered Accountant & Cost Accountant and has around 21 years of experience and in the past associated with reputed companies in senior positions.

DECLARATION FROM INDEPENDENT DIRECTORS

The independent directors have submitted the declaration of independence, as required pursuant to section149(6) & (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in subsection.

BOARD DIVERSITY

The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to diversify of the Board of Directors. The Board Diversity Policy is available on the Company''s website www.kaveriseeds.in

NOMINATION AND REMUNERATION COMMITTEE:

Your Company has a Nomination and Remuneration Committee and further details are set out in the Corporate Governance Report forming part of the Directors'' Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Persons (KMP), Senior Management and their remuneration. The Nomination and Remuneration Policy as adopted by the Board is placed on the Company''s website : www.kaveriseeds.in

CORPORATE GOVERNANCE:

A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Schedule V (C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as a separate section forming part of this report.

The Certificate issued by M/s. P. R. Reddy & Co., Chartered Accountants, Hyderabad, with regard to compliance of conditions of Corporate Governance as stipulated under Schedule V (E) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management''s Discussion and analysis Report for the year under review, as stipulated under Regulation 34(2)(e)of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business. There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The company has developed a Related Party Transactions frame work through standard operation procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also to be Board for approval. The particulars of contracts or arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 disclosed in Form No. AOC - 2 and is set out as Annexure and forms part of this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT - 9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - A and forms on integral part of this report

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s. L.D.Reddy & Co., a firm of Company Secretaries in Practice (C.P.No.3725) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - B and forms on integral part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) committee composed of Mr. G.V.Bhaskar Rao as Chairman, Mrs. G.Vanaja Devi and Mr. M. Srikanth Reddy as members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company, the Report on CSR Activities forms part of this Report as Annexure - C.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms part of this report as Annexure - D.

PARTICULARS OF EMPLOYEES

Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013, read with Rule5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company. The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of Section197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure - E and forms part of this Report.

PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2016 to the date of signing of the Director''s Report.

NUMBER OF MEETINGS OF THE BOARD

The details of the number of meeting of the Board and Committees held during the Financial Year 2015-16 forms part of the Corporate Governance Report.

PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS BY COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

WHISTLE BLOWER POLICY

The Board of Directors has adopted the Whistle Blower Policy, which is in compliance with Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015 to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the company. (www.kaveriseeds.in)

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the company and its future operations.

SHARE CAPITAL

During the year, the Paid-up Share Capital of your Company has been increased by Rs, 138,110,190/- due to the allotment of 158900 Equity Shares of Rs, 2/- each on exercise of Stock Options by the eligible employees under Employees Stock Options Scheme.

TRANSFER OF UN-PAID AND UN-CLAIMED AMOUNT TO IEPF

The dividends which remain un-paid/un-claimed for a period of seven years, have been transferred on due dates by the company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

EMPLOYEE STOCK OPTION SCHEME

Pursuant to the Employee Stock Option Scheme 2010, the 6,85,000 options were granted by the company to the eligible Employees of the Company at a price of Rs, 34/- per option. Each option entitles the holder thereof to apply for and be allotted an ordinary share of the Company of the nominal value of Rs, 2/- each, upon payment of the exercise price during the exercise period. Some of the employees are exercised their options and 1,58,900 equity shares of Rs, 2/- each were allotted during the year. Details of the options up to 31st March 2016 are set out in the Annexure - F to this Report, as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

PUBLIC DEPOSITS

Your Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

RISK MANAGEMENT POLICY

In today''s economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risk for the business. Your Company''s risk management is embedded in the business process. The Company has established Enterprise Risk Management process to manage risks with the objective of maximizing shareholders value.

ENVIRONMENTAND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company''s policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.

HUMAN RESOURCES

Your Company is well known for its execution capabilities, marketing and manufacturing strengths, product quality, and ability to keep to its commitment and deliver for its customers. At Kaveri, our consistent emphasis is on promoting teamwork and personalized training. Your Company has conducting specialized training and developmental programmes to sharpen our team''s communication, behavioral and managerial skills. The human resource department conducts periodic training programmes on motivation and interpersonal behavior; and to improve employee skills. Special training programmes are organized for research staff faculty to improve their skills in the frontier line of science. Scientists also attend seminars and workshops, where they interact with public and private sector organizations. Training initiatives are also undertaken for field staff on seed production, quality control, agronomy and plant protection, among others. This improves their technical knowledge in quality seed production, while for sales and marketing team to improve their skills in marketing. For the last two years, the company has been focusing on need-based training. We are taking feedback from managers to understand their specific requirements. Accordingly, we make a list of things that needs to be addressed and based on that, we organize training programmes. The company has introduced a reward programme to recognize top performers from various departments, including research and development, seed production, sales and marketing, among others.

AWARDS & RECOGNITION

The Company was honored the ''Bio-Excellence Asia Award 2015” from the Department of IT, BT and S&T, Government of Karnataka.

POLICY ON SEXUAL HARASSMENT

Your Company has constituted an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules there under. The Company has a policy on prevention of Sexual Harassment at work place with a mechanism of lodging complaints. The policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, no complaints have been received under the policy.

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Company''s growth. Your Company is grateful to the Distributors, Dealers, and Customers for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.

By Order of theBoard of Directors

For KAVERI SEED COMPANY LIMITED

Sd/- Sd/-

Secunderabad, G. V. BHASKAR RAO G. VANAJA DEVI

10 May 2016 Managing Director Whole time Director


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report of the Company together with the Audited Accounts for the financial Year ended 31st March 2014.

FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2013-14 2012-13

Gross Turnover 100241.39 71083.58

Profit before Depreciation, 22989.87 14576.69 Interest and Taxes.

Depreciation/Amortization 1437.03 1060.39

Interest 15.95 150.71

Profit before Tax 21536.89 13365.59

Provision for Tax/Deferred Tax 480.65 378.47

Net Profit 21056.23 12987.12

Balance brought forward from 21784.64 12353.99 Previous Year

Balance available for 42840.88 25341.11 appropriation

Appropriations:

Proposed Dividend including Tax 3869.05 2556.47

Transfer to General Reserve 1000.00 1000.00

Balance carried to Balance Sheet 37971.83 21784.64

REVIEW OF OPERATIONS

During the year your Company''s business has significantly improved in all aspects - revenues, operating income, profit before tax, and profit after tax, earnings per share. The consolidated revenue from operation was higher over the previous year by 42.38% at Rs.1020.85 Crores in the year under review as against Rs.716.97 Crores in the previous year. Consolidated net Profit is Rs.209.16 Crores was higher by 63.15% over Rs.128.07 Crores of the previous year. It is a new all time high for your Company translating to EPS of Rs.30.40 as compared to Rs.18.69 of last year.

FUTURE OUTLOOK

With the area under agriculture cultivation coming down across the world the focus is on producing more from limited land and resources. This is imperative to feed the ever increasing population in the globe. Despite growth in food production, hunger in it various forms are still prevalent in the world - a complex challenge the world is trying to overcome.

By 2050, the world requirement for food will double, driven by anticipated population of more than 9 billion and a demand for improved diets, particularly in developing countries like India. Farming community is in general under great stress to produce more from less. There is a need to increase productivity in a more accelerated way in order to ensure food and nutritional security to a growing population that is on the path of societal ascendency. Farms need to produce more year by year to provide food, feed and fiber to meet the demands of the population Anticipated and experiencing climate changes, dwindling natural resources and biodiversity pose additional challenges to improve farm productivity at required pace.

At Kaveri our relentless focus has been developing high quality seeds. Contribution of quality seeds to the total production is estimated to be 15-20% depending upon the crop. Our vision to be a benchmark seed company and our focus on research have enabled us to be one of the fastest growing seed company in India. In the long run, organised players and seed companies with a strong R&D and diversified portfolio of products will reap the benefit.

DIVIDEND:

Your Directors have proposed a final dividend of 120% i.e., Rs.2.40 per equity share and together with the interim dividend of 120% i.e. Rs.2.40 per equity share, the total dividend for the financial year 2013-14 comes to 240% i.e. Rs.4.80 per share on the equity shares of Rs.2/- each against 160% i.e. Rs.3.20 per share paid in the previous year.

The Dividend, if approved at the ensuing 27th Annual General Meeting, will be paid to those shareholders whose names appear on the register of members of the Company as on 16th September 2014. The Dividend would be tax- free in the hands of the shareholders.

SUBDIVISION OF EQUITY SHARES

During the year under review, your Company''s Equity Share has subdivided bearing the face value of Rs.10/- each into 5 (five) Equity Shares of the face value of Rs.2/- (Rupees Two) each into fully paid up Equity Shares. Consequent to stock split, your company''s paid up capital of 6,87,42,205 Equity Shares of Rs.2/- each.

SHARE CAPITAL

During the year, the paid-up share capital of your Company has been increased by Rs. 13,74,84,410/- due to the allotment of 2,31,285 equity shares of Rs.2/- each on exercise of stock options by the eligible employees under Employees Stock Option Scheme 2010.

SUBSIDIARIES COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The company had 2 subsidiaries on 31st March 2014. There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreements entered into with the Stock Exchanges, consolidated financial statements of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956. The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the company and its subsidiaries.

Pursuanttothe provisions ofsection212(8) ofthe Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents ofthe subsidiary companies with the balance sheet ofthe Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is included in the annual report. The annual accounts of these subsidiaries and the related information will be made available to any member of the company/its subsidiaries seeking such information and are available for inspection by any member ofthe Company/its subsidiaries at the registered office of the company. The annual accounts ofthe said subsidiaries will also be available for inspection at the registered offices ofthe respective subsidiary companies.

ACQUISITION:

Genome Agritech Private Limited

During the year your company has acquired 51% stake in Genome Agritech Private Limited. The total cash-flow for the acquisition was Rs.30,29,400/- . The Genome Agritech has a good research facility at Kantheru Village, Tadikonda Mandal, Guntur District and having an elite germplasm lines used in breeding program. Your company is on the same line of business had shown interest in the said proposal to invest/contribute towards the further issue of equity up to 51% of total post allotment paid up capital of Genome Agritech Pvt. Ltd. The acquisition was made by way of subscribing to invest 91,800 equity shares of Rs.10/- each at a premium of Rs.23/- per share in Genome Agritech Pvt. Ltd.,

Kaveri Microteck Private Limited

As you are aware, at present your Company is carrying on business in two segments ie., Seed Division and Microteck Division, The Microteck division is producing Micronutrient mixtures, Organic Products and Bio-Pesticides. Out ofthe total turnover of the Company less than 5% is from the Microteck Division and the nature of business activity is also different from Seed Division.

As a part of restructuring of operations for strengthening and enhancing the scope of the business of Microteck Division and to focus more attention on the said division, your Company was obtained members approval for transfer/dispose ofthe said Microteck Division to M/s. Kaveri Microteck Private Limited, which isa 100% Subsidiary of the Company, together with all its assets & liabilities, licenses, brands, permits, consents and approvals whatsoever as on 31st March 2013, for such consideration at Book Value of Rs. 14,52,63,600/- as per the Audited Balance Sheet and to receive the said consideration by way of allotment of 1,45,26,360 Equity Shares of Rs.10/- each at par value to Kaveri Seed Company Limited by the above said 100% Subsidiary Company ie., M/s. Kaveri Microteck Private Limited.

With effect from 1st April 2014 the Microteck Division shall start their operations separately in Kaveri Microteck Private Limited, which is 100% subsidiary of Kaveri Seed Company Ltd.,

DIRECTORS:

Sub-section (10) of Section 149 of the Companies Act, 2013 (effective 1 April 2014) provides that an Independent Director shall hold office for a term of up to five consecutive years on the Board of a Company; and shall be eligible for re-appointment on passing of a special resolution by the shareholders of the Company. Sub-section (11) of the same section states that no Independent Director shall be eligible for more than two consecutive terms of up to five years each. In addition, sub-section 13 of Section 149 states that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Act, shall not apply to such Independent Directors.

The new Clause 49 notified by the SEBI on April 17, 2014, most of which comes into effect from 1 October 2014, states in sub-clause II (B)(2) that any Independent Director "who has already served five years or more in a listed company as on 1 October 2014, shall be eligible for appointment, on completion of his present term, for one more term of up to five years only.

The appointment of Non-Executive Directors — whose sub-set comprise Independent Directors — under the Companies Act, 1956 was a defacto term of three years because one third of such fiduciaries were eligible for retirement by rotation.

Therefore, it stands to reason that those Independent Directors who would complete their present three-year term at the ensuing AGM of the Company in September 2014, and are eligible for re-appointment, may be considered by the shareholders for re-appointment for a term of up to five years. Therefore, the Board recommends reappointing the retiring Directors, Dr. Y.L.Nene and Mr. M. Srikanth Reddy for an additional period of five years each, respectively.

Further, the Board also recommends the appointment of Mr. RVaraprasad Rao, Dr. S. Raghuvardhan Reddy,

Dr. S.M.IIyas and Mr. K.Purushotham as Independent Directors under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, not liable to retire by rotation and to hold office for the period as stated in their respective resolutions and the explanatory statement forming part of the Notice of the AGM.

The brief profile of all the Independent Directors is given in the accompanying notice of the annual report for reference of the shareholders.

Further, pursuant to the provisions of Section 152 of the Companies Act, 2013 (effective 1 April 2014), one-third of the retiring Board members (other than Independent Directors), shall retire every year and if eligible, can be re- appointed, by the shareholders at their meeting. Hence, approval of shareholders is also being sought for variation in terms of appointment of Mr. R.Venumanohar Rao, Whole time Director for making his office liable to retire by rotation. All other terms and conditions of his appointment shall remain unchanged.

The respective resolutions to the above referred matters are included in the notice convening the 27th Annual General Meeting scheduled on 18th September 2014.

STATUTORY AUDITORS

The statutory auditors of the Company, M/s. RR.Reddy & Co. Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office of the statutory auditors, if re- appointed.

Section 139(2) of the Companies Act, 2013 (effective 1 April 2014), mandates that a listed company or such other prescribed classes of companies shall not appoint or reappoint an audit firm as Statutory Auditors for more than two terms of five consecutive years each.

Further, the companies as aforesaid, whose Statutory Auditors has held office for a period of ten years or more are required to comply with these provisions, within three years from the date of commencement of these provisions i.e. 1 April 2014. For this purpose, the term of the audit firm before the commencement of these provisions shall be taken into account for calculating the period of ten consecutive years. Our auditors, M/s. RR.Reddy & Co. Chartered Accountants, are holding the office as Statutory Auditors since inception. Hence, they can only be re- appointed in transitional period up to three years, i.e. up to FY2017 (subject to ratification by the members at every subsequent AGM).

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. RR.Reddy & Co. Chartered Accountants as statutory auditors of the Company up to FY2017, for shareholders'' approval.

FIXED DEPOSITS:

Your Company has not accepted any deposits under

Section 58A of the Companies Act, 1956 and hence no amount of principal or interest was outstanding as on the date of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended, your Directors confirm as under:

In preparation of Annual Accounts, the applicable Accounting Standards has been followed along with proper explanation relating to material departures;

We have 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 2013-14 and of profit of the Company for that period;

We have taken properandsufficientcareforthe maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

We have prepared the annual accounts on an on-going concern basis

PARTICULARS OF EMPLOYEES:

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended are annexed to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Companies Act, 2013, the Company has constituted Corporate Social Responsibility Committee to monitor the CSR activities of the Company in terms of the provisions of the Companies Act, 2013.

EMPLOYEE STOCK OPTION SCHEME:

Pursuant to the Employee Stock Option Scheme, 6,85,000 options were granted by the company to the eligible Employees of the Company at a price of Rs.34/- per option, being below the market price. Each option entitles the holder thereof to apply for and be allotted an ordinary share of the Company of the nominal value of Rs.2/- each, upon payment of the exercise price during the exercise period. Some of the employees are exercised their options and 2,31,285 equity shares of Rs.2/- each were allotted during the year. Details of the options up to 31st March 2014 are set out in the annexure to this Report, as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

CORPORATE GOVERNANCE:

The certificate of the Statutory Auditor M/s. RR.Reddy & Co., confirming of compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is annexed.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed report on the Management Discussion and Analysis is provided as a separate section in this Annual Report.

HUMAN RESOURCES

Your Company is well known for its execution capabilities, marketing and manufacturing strengths, product quality, and ability to keep to its commitment and deliver for its customers. Over the year, organisational strengths have enabled your company to grow faster than the industry average in each of the year. The momentum continued during the year under review with a new high in volume sold, highest over revenues and profit after tax. Your company has been well served by all the employees.

SAFETY, HEALTH AND ENVIRONMENT

Company''s focus on Safety, Health and Environment continued during the year under review across all locations with all seed processing plants maintaining high safety standards. Company has put in place robust processes and performance indicators to track its Safety, Health and Environment performance. Your Company maintained high standards of environmental performances with all facilities operating well within norms.

INDUSTRIAL RELATIONS:

The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Company''s growth. Your Company is grateful to the Distributors, Dealers, and Customers for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.

For and on behalf of the Board

Sd/- Sd/-

Secunderabad, G.V. Bhaskar Rao G. Vanaja Devi

29th May 2014 Managing Director Whole time Director


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 26th Annual Report of the Company together with the Audited Accounts for the financial Year ended 31st March 2013.

FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2012-13 2011-12

Gross Turnover 71083.58 37244.32

Profit before Depreciation, 14576.69 7423.54 Interest and Taxes.

Depreciation/Amortization 1060.39 1000.94

Interest 150.71 327.12

Profit before Tax 13365.59 6095.48

Provision for Tax/Deferred Tax 378.47 285.12

Net Profit 12987.12 5810.36

Balance brought forward from 12353.99 8180.63 Previous Year

Balance available for appropriation 25341.11 13990.99

Appropriations:

Proposed Dividend including Tax 2556.47 637.00

Transfer to General Reserve 1000.00 1000.00

Balance carried to Balance Sheet 21784.64 12353.99

FINANCIAL HIGHLIGHTS:

Members would be happy to know that the revenues and net earnings were the highest in the history of the Company. During the year you company has reached a turnover of Rs. 71083.58 Lakhs during the year under review. The financial year 2012-13 was a significant improvement in all parameters like revenues, operating income, profit before tax, profit after tax and earnings per share. The gross turnover grew over 90.85% at Rs. 71083.58 lakhs which was augmented by our strategic initiatives taken by the company by high volume sale of seed. Net Profit after Tax of Rs. 12987.11 lakhs was higher by 123.51% over Rs. 5810.36 lakhs of the previous year. It is a new all time high for your Company translating to EPS of Rs. 94.78 as compared to Rs. 42.40 of last year.

REVIEW OF OPERATIONS:

Your Company made significant progress during the year under review gaining market presence, volume growth and visibility for its products in the addressable markets. Your Company has a well structured marketing team that is able to convert approvals into invoicing. The investment made in the market place and the expertise of the team will be leveraged to differentiate Kaveri from competition. Channels to market have been broadened to increase revenue.

These efforts allow the marketing team to better anticipate opportunities and shifts in the market and understand changing customer and farmer needs. With such knowledge, your company is able to effectively manage the product mix to achieve highest possible market share and margins. Your Company is pursuing the goal of becoming a leading seed company in the Indian seed market.

FUTURE OUTLOOK

The carrying capacity of spaceship earth and to sustain life on the planet is fragile and under increasing stress. Despite significant growth in food production over the past five decades more than a billion people suffer from hunger and even more from silent hunger. By 2050, the global food requirement will double, driven by anticipated population of more than 9 billion and a demand for improved diets, particularly in developing countries like India.

Agriculture ingeneral is under great pressure to produce more from less. There is a need to increase productivity in a more accelerated way in order to ensure food and nutritional security to a growing population that is on the path of societal ascendency. Farms need to produce more year by year to provide food, feed and fiber to meet the demands of the population

Anticipated and experiencing climate changes, dwindling natural resources and biodiversity pose additional challenges to improve farm productivity at required pace. Sustainable intensification of agriculture holds the key to tackle these challenges to achieve food sufficiency.As seed is the most critical renewable input in agriculture, seed the future with production of high quality hybrid seed of field and vegetable crops is the motto of Kaveri Seeds.

At Kaveri, we are also leveraging our strength in R&D with our unmatched expertise in agribusiness, to explore new opportunities in high value agriculture by way of protective cultivation of premium vegetables and herbs. The company has established a subsidiary company, Kexveg India Private Limited, to producing high value exotic vegetables and herbs. The subsidiary has started commercial cultivation of high value exotic Indian vegetables and European culinary herbs in an exploratory built up area of 5 hectares of mega green houses. During the year, the company cultivated full range of Indian vegetables- tomato, cucumber, melons, and bell pepper in its farm under drip. The company has plans to expand cultivation of green and colour capsicums, hybrid and cherry tomatoes, parthenocarpic cucumber, leafy lettuce, Iceberg lettuce and Basil; and culinary herbs which include chives, sage, cilantro and parsley to cater to the domestic and European market. For penetration to the export market, the Company is exploring new grounds.

DIVIDEND:

Your Directors have proposed a final dividend of 80% i.e., Rs. 8/- per equity share and together with the interim dividend of 80% i.e. Rs. 8/- per equity share, the total dividend for the financial year 2012-13 comes to 160% i.e. Rs. 16/- per share on the equity shares of Rs. 10/- each against 40% i.e. Rs. 4/- per share paid in the previous year.

The Dividend, if approved at the ensuing 26th Annual General Meeting, will be paid to those shareholders whose names appear on the register of members of the Company as on 19th September 2013. The Dividend would be tax-free in the hands of the shareholders.

SUBSIDIARIES:

During the year your Company has one subsidiary as on 31st March 2013 ie., Kexveg India Private Limited.

As per Section 212 of the Companies Act, 1956, the Company is required to attached the Directors'' Report, Balance Sheet and Statement of Profit and Loss of the Subsidiary of the annual report. The Ministry of Corporate Affairs, Government of India vide its circular No.2/2011 dated 8th February 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited publish the audited consolidated financial statements in their annual report. Accordingly, the annual report 2012-13 does not contain the financial statements of the subsidiary. The audited annual accounts are related information of the subsidiary, where applicable, will be made available for inspection during business hours at our registered office in Hyderabad, India.

The members, if desire, may write to the Company Secretary at Kaveri Seed Company Limited, 513-B, 5th Floor, Minerva Complex, S.D.Road, Secunderabad - 500 003, Andhra Pradesh to obtain a copy of the financial of the subsidiary company.

The consolidated financial statement, in terms of Clause 32 of the Listing Agreement and prepared in accordance with Accounting Standard 21 as specified in the Companies (Accounting Standards) Rules, 2006 also forms a part of this annual report.

ACQUISITION:

During the year the Company has acquired 70% stake in Partnership firm of Aditya Agritech. The total cash-flow for the acquisition was Rs. 77.00 Lakhs. The investment utilized for the purchase of stocks and seed business. The product profile of the said firm will exactly match with our Company''s products and therefore, the proposal will be more beneficial to enhance the share in the seed market. Further, the Board also proposed to convert the said firm into private limited company.

FIXED DEPOSITS:

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 and hence no amount of principal or interest was outstanding as on the date of this Annual Report.

DIRECTORS:

During the year, Sri K. Purushotham, appointed as an Additional Director of the Company with effect from 14th February 2013 in the casual vacancy caused by the expire of Sri K.V.D.Prasad Rao, pursuant to Section 262 of the Companies Act, 1956 read with Article 140 of the Articles of Association of the Company, liable to retire by rotation and subject to approval of members of the Company in the ensuing Annual General Meeting.

The Board has expressed deep condolence for sudden demise of Sri K.V.D.Prasad Rao, Non-Exectuve Independent Director of the Company and noted that his valuable service rendered to the Company is highly appreciated and deeply grieved for losing an eminent Director of the Company.

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association of the Company, Sri C.Vamsheedhar, Sri C.Mithun Chand, Sri P.Varaprasad Rao, Directors retire by rotation at the forthcoming Annual General Meeting scheduled on 24th September 2013 and being eligible offer themselves for re-appointment. The brief profiles of Sri C.Vamsheedhar, Sri C.Mithun Chand, Sri P.Varaprasad Rao and Sri K. Purushotham provided in the Report on Corporate Governance forming part of Annual Report.

AUDITORS'' & AUDITORS'' REPORT:

The statutory auditors'' report is annexed to this report. The notes on financial statements referred to in the Auditors'' report are self explanatory and do not call for any further comments.

M/s. P.R.Reddy & Co. Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment as Statutory Auditors of the Company for the financial year 2013-14.

COST AUDITORS:

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed an audit of cost accounting records in respect of seed business of the company. Based on the recommendations of the Audit Committee, and subject to the approval of the Central Government, the Board of Directors had appointed Mr.P.L.N.Sarma, Cost Accountants, as Cost Auditors of the Company for FY 2013. The cost audit report would be filed with the Central government as per timeline.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended, your Directors confirm as under:

i) In preparation of Annual Accounts, the applicable Accounting Standards has been followed along with proper explanation relating to material departures;

ii) We have 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 2012-13 and of profit of the Company for that period;

iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) We have prepared the annual accounts on an on-going concern basis

PARTICULARS OF EMPLOYEES:

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended are annexed to the Directors'' Report. However, as per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I forming part of this Report.

EMPLOYEE STOCK OPTION SCHEME:

Pursuant to the Employee Stock Option Scheme, the Company has granted 1,37,000 options on 28th January 2010 to the eligible Employees of the Company at a price of Rs. 170/- per option, being below the market price. Each option entitles the holder thereof to apply for and be allotted an ordinary share of the Company of the nominal value of Rs. 10/- each, upon payment of the exercise price during the exercise period. Some of the employees are exercised their options during the end of year, hence the allotment will be made in the month of April 2013 under the Scheme.

Details of the options up to 31st March 2013 are set out in the annexure to this Report, as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

CORPORATE GOVERNANCE:

The certificate of the Statutory Auditor M/s. P.R.Reddy & Co., confirming of compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is annexed.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed report on the Management Discussion and Analysis is provided as a separate section in this Annual Report.

HUMAN RESOURCES

Your Company is well known for its execution capabilities, marketing and manufacturing strengths, product quality, ability to keep to its commitment and deliver for its customers. Over the year, organisational strengths have enabled your company to grow faster than the industry average in each of the year. The momentum continued during the year under review with a new high in volume sold, highest over revenues and profit after tax. Your company has been well served by all the employees. Your company has appointed HR Consultants of M/s. Husys Consultants to execute and implement HR Agenda and actions within the organisation with the objective of enhance business performance and capability of employees under strong value based framework.

The consultants gives a broad direction and support initiation for talent management programs in line with short term and long term business imperative/organisational needs. As at 31st March 2013 employees on roll constituted 699 higher by 8.37% over 645 as on the previous year.

INDUSTRIAL RELATIONS:

The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Company''s growth. Your Company is grateful to the Distributors, Dealers, and Customers for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.

For and on behalf of the Board

Sd/- Sd/-

Secunderabad, G.V.Bhaskar Rao G.Vanaja Devi

23rd May 2013 Managing Director Whole time Director


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the 24th Annual Report of the Company together with the Audited Accounts for the financial Year ended 31st March 2011.

FINANCIAL RESULTS (Rs. in Lakhs)

2010-11 2009-10

Cross Turnover 23468.84 16402.68

Profit before Depreciation, interest and Taxes. 5486.67 3715.85

Depreciation/Amortization 1019.31 414,52

Interest 434.94 182,29

Profit before Tax 4032.42 3119,04

Provision for Tax/Deferred Tax 215.09 212.51

Net Profit 4247.51 2906.53

Balance brought forward from Previous Year 5366.68 3779.70

Balance available for appropriation 9614.19 6686.24

Appropriations:

Proposed Dividend including Tax 398,13 319,55

Transfer to General Reserve 1000.00 1000,00

Balance carried to Balance Sheet 8216.07 5366.68

FINANCIAL HIGHLIGHTS

During the year, your Company's business has significantly improved in all aspects - revenues, operating income, profit before tax, profit after tax and earnings per share. The gross turnover growth of over 43% at Rs 23468.84 lakhs was a reflection of success of our strategic initiatives for quantum jump in seed sales. Net Profit after Tax at Rs.4247.51 lakhs was higher by 46,13% over Rs.2906,53 lakhs than in the previous year. It isa new high for your Company Earning PerShare(EPS)@Rs, 31.00 compared to Rs.21.21of last year,

Your Company is striving hard for accelerated growth in revenues as well as earnings. Sustainable medium and long- term goals are being envisioned and pursued. Our customer focus will always be in tandem with our t stakeholder's interest. Investors in Kaveri can look forward for robust growth,

Your Company will always endeavor to leverage it's technological and product strength to enhance augmentation of the company. This sustainable growth model is being further augmented with innovation and initiatives that will further growth of the company.

REVIEW OF OPERATIONS

Your Company is makingall out efforts toensure that the products developed are in tune with the needsof the farmers and initiated several steps to mark its presence in the premium markets. Reducing the marketing lag and improve the reach of Company's products are some of the current initiatives that are expected to help the Company to be a cost effective producer that enable your Company to meet the challenges of competitive markets in the future.

Your Company continues to rein enviably in its product portfolio - both in number and performance. The Company's premier BT cotton hybrids - Jadoo and Jackpot, and bajra hybrid- Super Boss launched earlier are doing good in the seed market and in the farmer's fields. Sampada (red gram) Sampoorna (paddy) have also created niche markets, Based on National Evaluation process, the ICAR has identified Company's maize hybrid KMH 3712 for Punjab, Delhi, Haryana, Western U.P., Rajasthan, Gujarat, Madhya Pradesh, Bihar, and W. Bengal & Eastern LLP. Four of our paddy hybrids KPH216,KPH 371, KPH272&KPH 199 excelled in National trialsand advanced to next stage of evaluation. Ina similar vein, X 563 (Bajra) and KSH 950 (Jowar) are the hybrids of promise and likely to hit the market soon. Some success has been achieved in vegetable breeding; Tomato hybrids- KTH 104, KTH 204, Okra hybrids - Kaveri Nadia Kaveri Leena hold promise and hope for the Company's business. Significant progress has been made in breeding yellow vein mosaic virus resistant Okra hybrids.

Germplasm or the genetic wealth is the most vital asset of the Company. The vast collection of germplasm that accrued over the years has been streamlined for conserving in" Gene Bank" built in as part of the newly commissioned cold storage unit and Seed Bank at Pamulaparty. Realizing the importance of multi environment evaluation of Company's hybrids, the Company strengthened the system of out reach evaluation tlvrough organizing multi location trials. In order to establish legal ownership of the Company's hybrids and their parental lines, efforts are underway to registering the lines with PPV&FR authority. Till date, ~"I4Q applications were Hied with PPV&FRA of which twenty cleared through DUS testing.

OUTLOOK

To augment finite natural resources -land and water, the Company has embarked on plans to bring more area for seed production of Foundation seed with judicious use of rain water. Towards this goal, more farm area has been brought under plough for commercial production of seed and intensified efforts on rain water harvest for use in new cropped area.

The twin challenges in current agriculture is to increase the production and productivity of field crops through a green growth strategy. Concurrently, your company is giving emphasis to high value agriculture by way of protective cultivation of premium vegetables. Demand for vegetables at home and for export is increasing. In view of the demand for higher quality and more variety in vegetables, the Company is laying new thrust on vegetable breeding with emphasis on tomato, okra and chilly. Your Company has plans to grow high value vegetables for export. Despite stiff opposition to GM technology, environmental, quality and production efficiency benefits will eventually tilt in favour of wide adoption of the transgenic crops in the country. Deregulation of Blbrinjal is on the cards. With Btbrinjal getting clearance soon for commercial planting, a host of GM crops follow suit, ushering an era of biotech crops. Biotechnology is destined to steer the breeding process in the near future. Realising this, your Company has built state of the art transgenic containment hays and put into operation at Pamulaparthy. Building of mega greenhouses for Flori and Olericulture are in progress as the Company is loo king forward for business in overseas markets. Hybrid rice with huge tradeoff is still the major attraction for the Company's investment. Production problems of quality seed production of Hybrid paddy seed are being tackled. Your company's R&D is geared to absorb and adopt new technologies in crop breeding. Being India's leadingSeed Company, the focus centers round conventional breeding and breeding by design using biotechnology to advance the yield frontier and stabilize through incorporation of genetic resistance to biotic and abiotic stresses. Your Company is striving for new and sustained levels of recognition exemplified by the performance of pipe line hybrids in All India Coordinated Trials and commercial launching of premier cotton, bajra and maize hybrids. Conjunct use of Breeding and Biotechnology is on the anvil for developing biotic resistant rice hybrids,

RESEARCH & DEVELOPMENT

Three years after the food crisis in 2007, the prices of basic food items are again rising rapidly, fueling new concerns about the food security of developing countries. The international prices of maize and wheat have almost doubled in 201 tl -2011 India's biggest challenge is to ensure food and nutritional security to its masses. Investment in Agriculture R&D is the effective way of ensuring food security and economic growth. There is emphasis for another green revolution through sustainable intensification of agriculture. This implies a green growth strategy (GSS) that ensures productivity growth through a sustainable path consistent with long term environmental safety. Seed is the key player in this endeavour. Being the carrier of genetic potential, contributes to productivity increase thereby creating revenue pathways to farmers. The pressing need is for quality seed of varieties and hybrids that are not only high yielding but resilient to less inputs-water,fertilizersetc.Thusfood security isinterwoven with the seed security.

The Kaveri Seed Company's R&D targeted its research for developing hybrids that excel in the market with quality assurance. Genetically enhanced premium quality seed has been the hallmark of Kaveri for more than three decades, The Company with vast experience in seed production of major agricultural crops backed by a very strong in-house R&D programme for crops-maize, cotton, sunflower, bajra, sorghum, rice and several vegetable crops nurtured a competitive edge in seed and agribusiness. With over 600 acres of farm land owned by the company and dedicated team of researchers, the company is conscious of the changing needs of farmers and consumers to design and develop productive hybrids that fetch rewarding returns. Being India's leading Seed Company, the R&D focus centers round conventional breeding and breeding In design using biotechnology to advance the yield frontier and stabilize through incorporation of genetic resistance tobiotic and abiotic stresses. During the year under report, our R&D strived hard to accelerate to new and sustained levels of innovation as exemplified by the performance of pipe line hybrids in All India Coordinated Trials and commercial launching of premier hybrids.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.2.50/- per Equity Share of Rs.10/- each (25%) for the financial year 2010-11. The dividend, on approved at the ensuing Annual General Meeting, will be paid to the shareholders whose names appear in the register of the Company as on 24th September 2011. The dividend would be tax-free in the hands of the shareholders.

CORPORATE GOV ERNANCE

The certificate of the Statutory Auditor M/s. P.R. Reddy & Co., confirming of compliance of conditions of Corporate Governance as stiputa ted under Ctause49 of the Us ting Agreement with theStockExchaugesin India is annexed.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided in a separate section elsewhere in this Annual Report.

FIXED DEPOSITS

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 and hence no amount of principal or interest was out standing as on date of this Annual Report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association of the Company, Dr. G. Pawan, Dr. Y.L. Nene and Sri M. Srikanth Reddy, Directors retire by rotation at the forthcoming Annual General Meeting scheduled on 27th September 2011 will be eligible for re-appointment. The brief profiles of Dr, C. Pawan, Dr. Y.L. Nene and Sri M. Srikanth Reddy are given in the Corporate Governance section of the Annual Report for information.

The Board of Directors at their meeting held on 10th August 2011 had re-appointed Sri G,V. Bhaskar Rao, Managing Director designated as Chairman, Smt. G, Vanaja Devi, Sri R, Venu Manohar Rao, Sri C Vamsheedhar and Sri C Mithun Grand, Whole time Directors of the Company for a further period of five years with effect from 15th Movember 2011. These re-appointments are subjected to shareholder's approval and (he resolutions to this effect have accordingly been included in the notice convening 24th Annual General Meeting scheduled for 27th September 2011, A brief profile of the above said Directors are provided in the section on Corporate Governance.

AUDITORS

The term of Statutory Auditors of the Company M/s. P.R. Reddy & Co. Chartered Accountants, expires with the ensuing Annual General Meeting. However, they expressed willingness to serve as Statutory Auditors for another year. The Audit Committee and the Board of Directors recommend reappointment of M/s. P.R, Reddy & Co., Statutory Auditors of the Company for the financial year 2011-12 for shareholder's approval.

RECONCILIATION OF SHARE CAPITAL AUDIT

A Reconciliation of Share Capital Audit for the year 2010-11 was carried out hy Mr. A.N. Sarma, Practicing Company Secretary. The said Reconciliation of Share Capital audit confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 19%, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1996 and all the regulations of SEBI as applicable to the Company, including the Securilies and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992,

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended, your Directors confirm as under:

i) In preparation of Annual Accounts, the applicable Accounting Standards has been followed along with proper explanation relating to material departures;

ii) We have 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 2010-11 and of profit of the Company for that period;

iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of tire Company and for preventing and detecting fraud and otherirregularities;

iv) We have prepared the annual accounts on an on-going concern basis

PARTICULARS OF EMPLOYEES

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended are annexed to the Directors' Report. However, as per the provisions of Section 219(1) (b) (iv)of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I which forms part of this Report.

EMPLOYEE STOCK OPTION SCHEME

The Members of the Company through Postal Ballot on 9th January 2009 have approved formulation of Employee Stock Option Scheme 2009 (KSCL ESOP 2009) to the eligible employees of the Company. Further, the modification was approved by the members in their Annual General Meeting held on 22nd September 2009. Pursuant the Scheme, the Company has granted 1,37,000 options on 28th January 2010 to the eligible Employees of the Company at a price of Rs.170/- per option, being below the market price. Each option entitles the holder thereof to apply for and be allotted an ordinary share of the Company of the nominal value of Rs.10/- each, upon payment of the exercise price during the exercise period. During the year, no employee was exercised the options, hence, there is no options were allotted under the Scheme. Details of the options granted and lapsed up to 31st March 2011 are set out in the Annexure II to this Report, as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and count on them for the accelerated growth of the Company.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere appreciation for the dedication and commitment of the employees at all levels and their significant contribution to your Company's growth. Your Company is grateful to the Distributors, Dealers, and Customers for their trust, support and encouragement, Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward for renewed support in all our future endeavors.

For and on behalf of the Board

sd/- sd/-

Secunderabad, G VANAJA DEVI G.V. BHASKAR RAO

10th August 2011 Whole-time Director Managing Director






Mar 31, 2010

The Directors have pleasure in presenting the 23rd Annual Report of the Company together with the Audited Accountsforthe financal Year ended 31 st March 20IO.

FINANCIAL RESULTS: (Rs. in Lakhs)

Gross Turnover 16402.68 12434.42

Profit before Deprecation, Interest and Taxes 3715.85 3226.81

Depreciation/Amortization 414.52 321.94

Interest 182.29 191.85

Profit before Tax 3119.04 2713.02

Provision for Tax/Deferred Tax 207.14 239.45

Net Profit 2911.90 2473.57

Balance brought forward from Previous Year 3779.70 2810.16

Add / Less : Provision for Deferred Tax (5.37) 15.40

Less: Provision for diminution in value of Investments - 198.81

Balance available for appropriation 6686.24 5100.32

Appropriations:

Proposed Dividend including Tax 319.55 320.61

Transfer to General Reserve 1000.00 1000.00

Balance earned to Balance Sheet 5366.68 3779.71

REVIEWOF OPERATIONS AND OUT LOOK:

Your Companys performance for the year under review has been quite satisfactory despite the monsoon playmg truant during the Kharif season. Your Companys business have significantly improved on operational performance compared to previous year and also record a strong financial performance, Gross turnover of Rs. 16402.68 Lakhs improved a growth rate of 32 percent, while the profit after tax is Rs.2906.53 Lakhs improved a growth rate of 16.77 percent.

The financial strength continues to successfully sustain your Companys business model, which is centered on attaining market leadership in its chosen areas of competence at competitive level.

Your Company will always endeavor to leverage ,ts product, technological and people strength to enhance share owner value. Th,s sustainable growth model is being further strengthened with new initiative that will add to the Companys fundamentals.

Your Company has made strategic investment in setting up a new plant at Pamulaparthi Village, Wargal Mandal, Medak District with the state of an art facility for utilizing cob drying, seed processing and cold storages on owned farmland o f29 Acres which has commenced commercial production in the year 2010.

Your Company is also ensunng that its marketing efforts stay tuned to the needs of the farmers and has initiated steps to develop its presence in quality conscious premium markets and reduce marketing lag and improve the reach for your Companys products. The present initiatives also include converting the Company into a cost effective producer. Th,s will enable your Company to meet the challenges of competitive markets in the future.

Your Company is working towards accelerated growth, both in revenues as well as its earnings. Sustainable medium and long-term goals are be,ng pursed. Our customer focus will always be matched by our efforts to meet the stakeholder interest. Investors in Kaveri can look forward to robust growth.

RESEARCH & DEVELOPMENT:

Investment in Agriculture R&D is the most effective way of ensuring food security and econom,cgrowth. There ,s a growing consensus for another green revolution through sustainable intensification of agriculture. Seed is the key player in this endeavour. Be,ng the repository of genetic potential, evolved through hybridization and selection, seed contributes to productivity increase thereby creating revenue pathways to farmers. The pressing need is for quality seed of varieties and hybrids that are not only high yielding but resilient to less inputs- water, fertilizers etc. Thus food security is interwoven with the seed security. The Kaveri Seed Companys R&D targeted its research for developing hybrids that excel in the market with quality assurance. Genetically enhanced premium quality seed has been the hallmark of Kaveri for more than three decades, The Company w,th vast experience in seed production of major agricultural crops backed by a very strong in-house R&D programme for crops-ma,ze, cotton, sunflower,,bajra, sorghum, rice and several vegetable crops nurtured a competitive edge in seed and agribusiness. With over 600 acres of farm land owned by the company and dedicated team of researchers, the company is conscious of the changing needs of farmers and consumers to design and develop productive hybrids that fetch rewarding returns. Being Indias leading seed company, the R&D focus centers round combined use of conventional breeding and biotechnology to advance the yield frontier and stabilize it through incorporation of genetic resistance to biotic and iotic stresses. Dunng tyear under report, our R&D srnved hard to accelerate to new and sustained levels of innovation as exemplified by the performance of pipe line hybrids in All India Co-ordinated Trials and commercial launching of premier hybrids.

Vegetable consumption, Nation wise is increasing along with seed volume and value. In view of demand for higher quality and more variety in vegetables, KaveriR&D is laying newthrustto vegetables with emphasis on tomato, okra and chilly. All of us anticipated approval for BT brjnjal in India that is not to be. Regardless of this development, commercialization of CM vegetables, particularly in developing countries like ours, is inevitable. Despite current public opposition to CM technology, environmental, quality and production efficiency benefits will eventually tilt in favour of wide adoption of the technology in the country. Once the way is paved for Bt Brinjal, CM rice, maize, wheat and a number of vegetable crops follow the suit, heralding an era of biotech crops. As biotechnology steers the breeding process in the near future, our R&D is being geared up by strengthening human resources and expanding the infrastructure. Abattery of transgenic containment units are getting ready at Gowraram and plans are afoot to build mega greenhouses for Flori and Olericulture. Fortifying BT cotton with herbicide tolerance (HT) and drought tolerance (DT) is on our research agenda. After BT cotton it is the turn of hybrid rice with huge market potential. Whatever may be the current production problems, we need to over come to sustain the technological option for increasing food production

On the product front, the company ,s successful in launching two of its premier BT cotton hybrids in the brand names of jadoo and jack pot, and a pearl millet hybrid, Super Boss. Sampada (red gram) Sampoorna (paddy) are the newly launched varieties. Based on the performance at National level, two of our maize hybrids, Kaveri 50 and KMH 25K60 along with bajra hybrid, MH 1553 were identified by varietal identification committee for eventual notification.

Germplasm is the most vital asset of the company. The vast collection of germplasm that accrued over the years has been streamlined for conserving in" Gene Bank" built in as part of the newly commissioned cold storage un,t and Seed Bank at Gowraram. In order to establish legal ownership of the Companys hybrids and their parental lines, efforts are underway to reg,ster,ngthe lines with PPV&FR authority, Till date, ~ 100 applications were filed with PPV&FRA

To augment natural resources-land and water, the Company has embarked on plans to bring more area under plough and judicious use of scarce water. Towards this goal, farm area to the tune of nearly 120 acres has been brought under cultivation of crops for commercial production of seed. The rain water harvest is in place for use in new cropped area. In addition, drip irrigation has been extended to cover more area in Gundla Narasingpur farm and elsewhere.

DIVIDEND:

Your Directors are pleased to recommend a Dividend of Rs.2/- per Equity Share of Rs. 10/- each (20%) for the financial year 2009-10. The Dividend, if approved at the ensuing Annual General Meeting, will be paid to those shareholders whose names appear on the register of members of the Company as on Book closure date.

CORPORATE GOVERNANCE:

A detailed Report on Corporate Governance system and practices of the Company are given in a separate section in this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed report on the Management D,scuss,on and Analysis is provided as a separate section in this Annual Report.

FIXED DEPOSITS:

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 and hence no amount of principal or interest was out stand,ngasonthedateofth,s Annual Report.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association of the Company, Sri C.Vamsheedhar, Shri C.Mithun Chand and Sri P.Varaprasad Rao retire by rotation and be,ng el,g,bleofferthemselvesforre-appo,ntmentasD,rectorsofthe Company.

In accordance with Clause 49 of Listing Agreement your Board was constituted with the total strength of twelve Directors. Apart from this the Board also constituted mandatory/statutory committees and non- statutory committees as mentioned in the Report on Corporate Governance.

AUDITORS:

The Statutory Auditors of the Company M/s. P.R.Reddy & Co. Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office of Statutory Auditors, if reappointed. The Audit Committee and the Board of Directors recommend reappointment of M/s. P.RReddy & Co., Statutory Auditors of the Company for the financial year 2010-1 I for shareholders approval.

SECRETARIALAUDIT REPORT:

A Secretarial Audit for the year 2009-10 was carried out by Mr. A.N.Sarma, Practicing Company Secretary. The sa,d Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, Secunrities Contracts (Regulation) Act, 1996 and all the regulations of SEBI as applicable to the Company, including the Securities and Exchange Board oflnd,a(Substant,al Acquisition of Shares and Takeovers) Regulations, 1997 and the Securities and Exchange Board oflnd,a(Proh,b,t,onoflns,derTrading) Regulations, 1992.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended, your Directors confirm as under:

i) In preparation of Annual Accounts, the applicable Accounting Standards has been followed along with proper explanation relatmg to material departures;

ii) We have selected such accounting polices and applied them consistently and made judgments and estimates that are reasonable and prudent so as to g,ve a true and fair v,ew of the state of affairs of the Company at the end of the financial year 2009-10 and of profit of the Company for that period;

iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detectmg fraud and other irregularities;

iv) We have prepared the annual accounts on an on-go,ng concern basis

PARTICULARS OF EMPLOYEES:

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217(2A; of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended are annexed to the Directors Report. However, as per the provisions of Section 219( l)(b)(,v) of the Companies Act, 1956, the Report and Accounts are be,ng sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information in accordance with the provisions of Section 217 (I) (e) of the Companies Act, 1956 read with the Companies (disclosure of Particulars in the Report of Board of Directors) rules, 1988 is given in Annexure forming part of this Report.

INDUSTRIAL RELATIONS:

The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation and acknowledge with gratitude the support and co- operation extended by farmers, dealers, Banks, financial institutions, Central and State Governments, customers and others and thank the shareholders for their continued confidence reposed in the Company.

For and on behalf of the Board

Sd/- Sd/-

Secunderabad G.VBHASKAR RAO G.VANAJA DEVI 3rd August 2010 Managing Director Whole time Director



 
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