FUTURE KAVERI SEED Chairmans Speech

Dear Shareholders


Our planet is home to 7.2 billion people; and the population is expected to touch 9.3 billion by 2050. The result is a growing demand for food. However, the constant depletion of arable land across the world will put added pressure on countries to raise their production of food crops.


On the other hand, farm acreage remains stagnant as expanding farmlands carry high environmental risks, posed by the conversion of forests into agricultural lands. Therefore, the critical need for India is to enhance the use of high-yielding quality seeds to increase productivity.


Global crop output per acre is declining significantly owing to the disproportionate use of resources.


At the same time, water scarcity is driving enhanced research efforts to develop abiotic stress-tolerant crops that consume less water in the fields. In India, the demand for high-quality seeds is expected to grow to enhance farm yield at a time, when erratic rainfall patterns are becoming a concern for farmers.


Our performance


At Kaveri Seeds, we are committed to strengthen India''''s food and nutritional security by consolidating our fundamental strengths. During the year, we made significant progress in developing a clear framework for measuring and tracking our various operations. Initiatives, such as better and timely production planning and focus on geographic diversity for production have enabled us to minimize the production-related risk.


A prolonged period of volatility was created in the market in 2015, following severe drought across large parts of India. However, a relatively better monsoon in 2016 enabled us to gain a favorable position, backed by several effective interventions.


We reported a lower net sales of Rs, 669.89 Crores in 2016-17, compared to Rs, 716.52 Crores 201516. Simultaneously, our EBIDTA decreased to Rs, 172.23 Crores in 2016-17 vis-a-vis Rs, 202.51 Crores in 2015-16. Our net profit stood at Rs, 78.47 Crores in 2016-17 against Rs, 172.28 Crores in 2015-16 and our earnings per share stood at to Rs, 11.36 in 2016-17, compared to Rs, 24.95 in 2015-16.


Holistic excellence


Our steady investments to bolster R&D initiatives have translated into encouraging outcomes. We have launched new hybrids in our mandate crops. We have witnessed remarkable success in major crops, such as cotton, maize, rice, bajra and vegetables. Our new breeding strategies will enable us to strengthen our R&D efforts further. We will continue to excel in innovation and development of new products.


During the year, we further fortified our position by penetrating into various markets, relying on the performance of our products and catering to the requirements of customers. We are focusing on India''''s predominantly agricultural belts to enhance our business opportunities.


At the same time, we are engaging with farmers and providing them with critical information to increase their farm productivity. We are also making them aware of the quality of our products. More initiatives like farmer incentive programmes, merchandise distribution, decorated vans to educate farmers are waiting to be rolled out. These initiatives will progressively strengthen our brand recall.


Our key crops comprise cotton, rice, maize, and bajra. Despite the temporary market slowdown due to demonetization, our market share in most of the crops grew significantly.


Our market share for cotton grew encouragingly owing to proactive initiatives, such as engaging more with farmers and making them aware of our products and their advantages. We reached out to the retailers extensively, especially in the state of Maharashtra.


Maize showed promising growth in terms of volumes and market share. This was particularly because of identifying new markets in the western, central and northern regions of India.


Although the hybrid rice didn''''t perform as we had expected, we saw significant growth in our selection rice. The market for bajra remained stable; and we could introduce two new products this year.


We strengthened our vegetable seed business with increasing investment in R&D, supply chain, marketing and the launch of new products. Vegetable seeds are low-volume and high-value crops and provide a new opportunity for Kaveri. In the coming years, this portfolio will help to diversify our risk and contribute to our growth.


Team and the community


In our drive to achieve holistic excellence on all fronts, our team has always played a pivotal role.


The management has also adopted best-in-class employee engagement practices to motivate team members and strengthen their capabilities.


I am sure that Kaveri Seeds has innovative skills, creativity, good expertise and experience, as well as the right product portfolio in different crops to fulfill the aspirations of farmers and consumers of India.


Our business initiatives primarily empower farmers and our community efforts are an extension of this corporate philosophy. Kaveri acts as a vehicle of social transformation.


We undertake several community outreach programmes in some of the most remote villages of Telangana.


Our area of operations includes education, community development and farmer welfare.


Our future priorities comprise


Improving customer experience and to grow market share


Increasing investment in R&D to develop products as per the changing needs of farmers


Enhancing footprint in markets where our presence is low currently


Diversifying our risk by developing vegetable business and foraying into international market


Creating appropriate framework to achieve targeted goal in all the areas


Developing talent in the organization to support growth


On behalf of my colleagues on the Board, I would like to express my sincere gratitude to all our customer, employees, suppliers, business partners, shareholders for being with us throughout this transformational journey. I would particularly like to thank all the employees of Kaveri Seeds for their dedication, hard work and commitment towards the Company. We look forward to another successful year ahead with several new initiatives planned.


Sincerely,


G.V.Bhaskar Rao


Chairman and Managing Director

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