Kaveri Seed Company Ltd Directors Report.

The Directors have pleasure to present their 33rd Annual Report and the audited Annual Accounts for the year ended 31st March 2020.

PERFORMANCE REVIEW

Your Companys performance during the year as compared with that during the previous year is summarized below::

(In Rs. Lakhs)

S . No. Particulars Standalone Consolidated
March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019
1 Revenue from operations 88325.60 76,898.90 93034.63 80,941.81
2 Profit before finance cost, depreciation and tax expense 28608.73 248,43.22 29879.56 25,463.78
3 Finance Cost 21.81 12.52 47.85 54.69
4 Profit before depreciation and tax expense 28586.92 248,30.70 29831.71 25409.09
5 Depreciation 2430.71 2,117.65 2566.38 2,295.20
6 Profit before exceptional items and tax 26156.21 22,713.05 27265.33 23,113.89
7 Exceptional items - - - -
8 Profit before Tax Expense 26156.21 22,713.05 27265.33 23,113.89
9 Tax Expense 1029.52 1240.19 1274.88 1373.43
10 Profit after Tax Expense 25126.69 21,472.86 25990.45 21,740.46
11 Non-controlling interests - 86.71 -4.61
12 Profit after tax expense after non-controlling interests 25126.69 21,472.86 25903.74 21,745.07
13 Add: Surplus at the beginning of the year 95681.44 96,492.00 95071.80 95610.16
14 Total Available for appropriation 120808.13 117964.86 120975.54 117355.23
Appropriations
15 Dividend including taxes 2283.17 2283.17 2283.17 2283.17
16 Transfer to general reserve 1000.00 1,000.00 1000.00 1,000.00
17 Utilized for Buyback 22986.77 18940.99 22986.77 18940.99
18 Transferred to Capital Redemption Reserve 56.00 59.26 56.00 59.26
19 Amortization of Interest on loan to employee trust 1216.23 - 10.71 -
Total Appropriations 27542.17 22283.43 26336.64 22283.43
20 Surplus carried to Balance Sheet 93265.96 95681.44 94638.89 95071.80

State of the Companys Affairs

During the year, the Company has recorded revenue of Rs.88325.60 Lakhs and net profit of Rs. 25126.69 Lakhs on a standalone basis. During the same period, the consolidated revenue was Rs. 93034.63 Lakhs and net profit after non-controlling interests was Rs.25903.74 Lakhs.

Future Prospects and Outlook

Indian Agriculture and our role:

Agriculture is pivoted to the growth of the Indian economy, both in terms of its contribution to the GDP as well as a source of employment for a majority of the countrys population. As per 2nd advanced estimate by Ministry of Agriculture, total food production for FY 2019-20 is estimated to be around 291.95 million tonnes, an increase of 2.5% over the previous year. India has emerged as the 5th largest seed market in the world. The active participation of both, public and private sectors, have played a vital role in laying a strong foundation for the industry. In India, there is a huge demand for good quality branded seeds. Over the last few years, rising awareness about the benefits of using certified/ quality seeds has increased the popularity of quality seeds among farmers.

Kaveri Seeds is one of the leading seed producing companies in India. With over three decades of industry experience, it has emerged as a premier multi-crop seed producing Company in India. Over the years, the Company has enhanced farmer trust by providing a complete seeds basket, comprising of Field and Vegetable crop seeds. Backed by its strong R&D program, the Company specializes in the production of crop seeds including maize, cotton, rice, pearl millet, mustard, wheat, sorghum, sunflower and a number of vegetables.

Your Companys dedicated team of researchers design and develop productive hybrids that excel in markets and meet the changing needs of farmers and consumers. It is consistently building a robust portfolio of field crops and vegetables to help enhance farm yield and actively engages with farmers to educate them about latest farming techniques.

Your Company has not only been successful in developing an innovative product range but, has also helped to meet previously unmet requirements of the farmer community. From providing complete crop solutions, across crops, terrains and seasons, to capitalizing on emerging opportunities, it has successfully reached out to farmers around the country.

Strong R&D Division: Kaveri Seeds successfully establishes itself as a market leader resting on its strong R&D team. Its research focuses on the development of quality hybrid and inbred seeds that offer higher yields. The Company has a fully equipped, state-of-the-art biotechnology laboratory and its R&D team comprises of about 145 personnel, including more than 40 scientists who strive hard to deliver exceptional results. Kaveri Seeds also has an enormous germplasm bank, built over a period of three decades, to sustain innovations in the seed market.

World Class Infrastructure: Kaveri Seed has about 120 Out Reach Trial centres across India for hybrid testing. The company also has 1 lakh+ loyal producers with 65000 acres of land area for seed production. It also has 07 Mega Seed Processing Plants equipped with modern equipment for pre-cleaning, grading, crop drying, storage and packing. WitRs.10 lakh sq. ft. cumulative warehouse space across India, the Company has climate-control godowns and 15000 MT cold storage capacities to support its world class infrastructure.

Strong Presence & Distribution Network in India: Kaveri seeds has a strong distribution network consisting of 40,000 dealers/distributors. It employs more than 1 lakh contract farmers, through farm engagement programs, for seed production.

Diversified Product Portfolio: Kaveri Seeds has consistently focused on building a robust portfolio of field crops and vegetables to help enhance farm yield. The Company has successfully launched best quality hybrid seeds to further diversify its offerings.

• Your Company possess a strong in-house R&D base, recognized since 2001 by the Department of Scientific and Industrial Research (DSIR) GoI.

Opportunities for your Company:

• With a growing market for agricultural seeds, in India and abroad, there is a huge demand for seeds export and Indias contribution is only 9% of the overall market. Kaveri Seeds with its expertise can tap the exports market and increase its market share globally.

• India has the potential to produce a significant amount of hybrid seeds, especially high value vegetable seeds, which can be produced at cheaper costs in comparison to other countries. Your Company, with its innovation focused R&D division, can produce hybrid vegetable seeds and offer them at competitive prices.

• Innovative and advanced seed designing is likely to be the future of this industry. To ensure higher yield across agro-climatic regions, seeds will be modified to suit varied agricultural conditions and will be designed to with stand biotic and abiotic stresses.

Research & Development:

Agricultural science is constantly evolving and is a dynamic field, fostering innovations and cutting-edge product developments. Your Companys advanced research and development capabilities enable the production of high yield seed varieties that immensely benefit farmers. Over the years, the Company has improved product yield, improved the quality of seeds and has successfully increased its tolerance to biotic and abiotic stresses.

As Indias leading seed Company, Kaveri Seeds focuses on combined use of conventional breeding techniques and biotechnology to increase and stabilize yields. Utilizing innovative processes, the Company adopted an integrated molecular breeding programme for accelerated crop production. State-of-the-art biotechnological tools were also employed to ensure precision breeding, which not only helped to save time but also focused on improving crops. We are also planning to work on phonemics to design plant ideotype that will be resilient to the effects of climate change. Our products are gaining acceptance among Indian farmers and in countries where we export our seeds

Your Companys robust R&D base has helped to develop new hybrids in cotton, maize, rice, bajra and vegetables and they have created a significant impact on farm yield. Kaveri Seeds has a reliable track record of launching many new products and have a strong pipeline of promising products tailored to meet the specific needs of the farming community. Your Companys experience of managing risk is enabling us to navigate the current volatility. We look at each crop through the eyes of the farmer, and we understand the farmers concerns and grievances.

Iconic seed technical innovations: The biotechnological interventions initiated by the Company ensure efficient quality checks. The Company strives to improve returns while accelerating the pace of innovation. With a strong commitment to innovate futuristic products, it has aligned with national and international institutions to augment its research capabilities. This has enabled the Company to meet the aspirations of farmers, consumers as well as the industry.

Plant Variety Protection: To safeguard the Companys products, a number of hybrids developed were registered with Protection of Plant Varieties and Farmers Right Act (PPVFRA).

Germplasm: The germplasm bank is critical for sustaining breeding programmes. Your Company owns a vast gene pool of diverse germplasm to design and develop suitable varieties that fulfil the aspirations of farmers and consumers.

Central Varietal Release Committee: More than 20 hybrids were Released and Notified in the Central Varietal Release Committee (CVRC) GoI and few are to be released soon.

COVID 19 PANDEMIC:

The Government of India imposed lockdown from 25th March 2020 to curb the spread of the virus. The nationwide lockdown temporarily impacted the operations of the company due to the non-availability of labour, transportation, and supply chain disruptions. However, the Government classified seed business as "Essential Commodity" and granted certain relaxations and guidelines to carry on production, processing, and distribution of seeds. A major portion of the Companys production, processing, and supply chain facilities were operational during most of the lockdown period, following stipulated safety protocols. Thus, the impact of Covid-19 on the Company is minimal at this point of time. The Company has assessed the recoverability of receivables, inventories, certain investments, and other financial assets considering the available internal and external information as on date. Considering the nature of these assets, the Company expects to recover the carrying amount of these assets.

DIVIDEND:

The Board of Directors, at their meeting held on 13th August 2019, declared an Interim Dividend @ 150% on the paid-up Equity Share Capital i.e., H3.00/- per equity share for the financial year 31st March 2020 and the same was paid to the shareholders.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has approved and adopted the Dividend Distribution Policy and the same is available on the Companys website viz. http://www.kaveriseeds.in/images/ pdf/images/Dividend-Distribution-Policy.pdf and is also provided as annexure.

BUYBACK OF EQUITY SHARES

In line with the practice of returning free cash flow to the shareholders, during the financial year 2019-20 the Company has completed its Third buy-back of 28,00,000 Equity Shares at a price of Rs.700/- per Equity Share for an aggregate consideration of Rs.196.00 Crores. The offer size of the Buyback was 20.14% of the aggregate paid up equity share capital and free reserves of the Company and represented 4.44% of the total issued and paid up equity share capital of the Company. The buyback process was completed and the shares were extinguished on 23rd January 2020. The Companys Second buy-back was completed in the Financial Year 2018-19.

TRANSFER OF AMOUNT TO RESERVE

The Company has transferred Rs.10.00 Crores to the general reserve for the financial year ended 31st March 2020 under the provisions of Companies Act, 2013 and Rules there under.

STATUTORY AUDITORS & AUDITORS REPORT

The statutory auditors report is annexed to this annual report. There are no 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. Pursuant to Section 139(2) of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the Company at its 30th Annual General Meeting (AGM) held on 25th September 2017, had appointed M/s. M. Bhaskar Rao & Co., Chartered Accountants as Statutory Auditors to hold office from the conclusion of 30th AGM until the conclusion of 35th AGM of the Company, subject to ratification by shareholders every year, as may be applicable. However, the Ministry of Corporate Affairs (MCA) vide its notification dated 7th May 2018 has omitted the requirement under first proviso to section 139 of the Companies Act, 2013 and rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, regarding ratification of appointment of statutory auditors by shareholders at every subsequent AGM.

Consequently, M/s. M. Bhaskar Rao & Co., Chartered Accountants, continues to be the Statutory Auditors of the Company till the conclusion of 35th AGM, as approved by shareholders at 30th AGM held on 25th September 2017.

INTERNAL AUDITORS

The Board of Directors of the Company has re-appointed M/s. M. Anandam & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the financial year ended 31st March 2020. The Internal Audit reports are being reviewed by the Audit Committee of the Company.

SUBSIDIARY COMPANIES

The Company has 4 subsidiaries as of March 31, 2020. 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 Section 136 of the Companies Act, 2013, the consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the Company http:// www.kaveriseeds.in/images/pdf/images/material-subsidiary.pdf. 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.

Merger of Kexveg India Private Limited with Kaveri Microteck Private Limited;

Kexveg India Private Limited a wholly-owned subsidiary of Kaveri Seed Company Limited, merged with Kaveri Microteck Private Limited, a wholly-owned subsidiary of Kaveri Seed Company Limited, effective from 1st October 2018 vide the Merger Order issued by Honble National Company Law Tribunal (NCLT) Hyderabad Bench dated 26th August 2019.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

No material related party transactions, during the year under review, with the Promoters, Directors or Key Managerial Personnel falls under the scope of Section 188(1) of the Companies Act 2013. The information on transactions for the year under review were on arms length basis and in the ordinary course of business with the related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form No. AOC-2 and the same forms part of this report. The company has developed a Related Party Transactions framework through standard operation procedures for the purpose of identification and monitoring of such transactions.

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 an integral part of this report. The same is available on https://www.kaveriseeds. in/investors/statutory-communications- announcements/#tab-mgt-9

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed M/s. L.D. Reddy & Co., a firm of Company Secretaries in Practice (C.P.No.3752) as Secretarial Auditors to conduct Secretarial Audit of the Company for the financial year ended 31st March 2020. The Secretarial Audit Report issued by M/s. L.D.Reddy & Co, Practicing Company Secretaries in Form MR-3 is annexed to this Boards Report as Annexure – B.

The Secretarial auditors Report does not contain any qualifications, reservation or adverse remarks.

BOARDS RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARKS OR DISCLAIMER MADE

There are no qualifications, reservation or adverse remarks made by the statutory auditors in their report or by the Practicing Company Secretary in the Secretarial Audit Report for the year ended 31st March 2020. During the year, there were no instances of frauds reported by auditors under Section 143(12) of the Companies Act, 2013.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors consists Mr. K. Purushotham (Chairman), Dr. S. Raghuvardhan Reddy, Dr. Bhaskar Venkataramany and Mr. C.Mithunchand. The Board has accepted all the recommendations made by the audit committee during the year. Further details can be seen in the chapter on Corporate Governance report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee presently consists of the following Directors namely Dr S. Raghuvardhan Reddy, Chairman, Mr. K. Purushotham and Mrs. M. Chaya Ratan as Members.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the relevant provisions of Section 133 of the Companies Act, 2013 and the Ind AS -110 on consolidated financial statements, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2020, which forms part of the Annual Report. The company has placed separately, the audited accounts of its subsidiaries on its website www.kaveriseeds. in in compliance with the provisions of Section 136 of the Companies Act, 2013.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has laid down a set of standards which enables implementation of internal financial controls across the organization and ensure that the same are adequate and operating effectively. The Board periodically reviews the findings and recommendations of the statutory auditors, internal & secretarial auditors and suggests corrective actions whenever necessary. The Audit Committee of the Board of Directors is also actively reviewing the adequacy and effectiveness of the internal control systems and suggest 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 are taken.

The Internal Audit team prepares annual audit plans based on risk assessment and conducts extensive reviews covering financial, operational and compliance controls. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management is presented to the Audit Committee of the Board.

The Audit Committee of the Board monitors the performance of the Internal Audit team on a quarterly basis through a review of audit plans, audit findings and speed of issue resolution through follow-ups. Each year, there are at least four meetings in which the audit committee reviews internal audit findings assurance and advisory function, responsible for evaluating and improving the effectiveness of risk management, control and governance processes. The internal audit team helps to enhance and protect organizational value by providing risk-based objective assurance, advice, and insight.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

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 Companys 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 right 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 organisation 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, Corporate Social Responsibility Policy, Dissemination of Material Events Policy, Documents Preservation Policy, Sexual Harassment Policy, Code of Conduct under Insider Trading Regulations, Code of Conduct for Senior Management, Nomination and Remuneration Policy, Board Diversity Policy, Dividend Distribution Policy, Risk Management Policy 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.

INDIAN ACCOUNTING STANDARDS – IFRS CONVERGE STANDARDS

The Ministry of Corporate Affairs vide its notification dated 16th February 2015 notified under Section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules, 2015. In pursuance of the said notification, your Company has prepared the financial statements to comply in all material respects, in accordance with the applicability of Indian Accounting Standards.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms:

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

ii) that the Directors have selected such Accounting policies and consistently applied 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 31st March 2020 and of the profit of the Company for that period.

iii) that the Directors have taken proper and sufficient care 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) that the Directors have prepared the annual accounts on a going concern basis.

v) that the Directors have laid down Internal Financial Controls to be followed by the Company and that the financial controls were adequate and were operating effectively and

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

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Company is managed and controlled by a Board comprising an optimum blend of Executive and Non-Executive Directors. As on date the Board of Directors comprises of nine (9) Directors consisting of Four Executive Directors including the Chairman & Managing Director, one non-executive non independent Director and Four Independent Directors including one Women Independent Director.

The composition of the Board is in conformity with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 and the relevant provisions of the Companies Act, 2013. The Directors possess requisite qualifications and experience in general corporate management, strategy, finance, administration and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.

Pursuant to the provisions of Section 203 of the Companies Act, 2013 the Key Managerial Personnel (KMP) of the Company as on March 31, 2020 are: Mr. G.V. Bhaskar Rao, Chairman & Managing Director, Mrs. G.Vanaja Devi, Mr. C. Vamsheedhar and Mr. C. Mithunchand, Whole time Directors, Mr. K.V. Chalapathi Reddy, Chief Financial Officer & Mr. V.R.S.Murti, Company Secretary. There have been no changes in the key managerial personnel during the year.

Changes in Directors

The Board has expressed deep condolence for sudden demise of Dr. V. Bhaskar, 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.

Director(s) retiring by rotation:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association, Mr. C. Vamsheedhar (DIN : 01458939), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. A resolution seeking shareholders approval for his reappointment forms part of the Notice.

Declaration from Independent Directors

The independent Directors have submitted the declaration of independence, as required pursuant to section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulations 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

During the year under review, the non-executive independent directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committees of the Company.

Registration of Independent Directors in Independent Directors Databank

All the Independent Directors of the Company have been registered and are members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs.

COMMITTEES OF THE BOARD

The details pertaining to the composition of the Board and its Committees are included in the Corporate Governance Report, which is a part of this report.

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of the Independent Directors was held under the Chairmanship of Mr. K. Purushotham, Independent Director on 5th February 2020, inter-alia, to discuss evaluation of the performance of Non- Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and Non-Executive Directors and the evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties. The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.

Familiarization Programme for Independent Directors

The details of the familiarization programme for the Independent Directors is reported in the Report on Corporate Governance, which is attached to the Boards Report.

NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board were held during the year. The dates on which the Board meetings were held are 27th May 2019, 13th August 2019, 24th September 2019, 13th November 2019 and 05th February 2020. The details of attendance of Board meetings and Committee meetings held during the Financial Year 2019-20 forms part of the Corporate Governance Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There was no change in the nature of business of the company or any of its subsidiaries.

FIXED DEPOSITS:

Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013. Accordingly, no disclosure or reporting is required in respect of details relating to deposits.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the guidance Note on Board Evaluation issued by the SEBI on 5th January 2017, 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 of the Board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.,

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings etc.,

In a separate meeting of independent directors, performance of non-independent directors, the chairman of the company and the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the nomination and remuneration committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and valuable inputs in meetings etc.,

In the board meeting that followed the meeting of the independent directors and meeting of nomination and remuneration committee, the performance of the board, its committees, and individual directors was also discussed. 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.

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 the Board of Directors. The Board Diversity Policy is available on the Companys website www. kaveriseeds.in

APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY

The assessment and appointment of board members is based on a combination of criterion that includes ethics, personal and professional stature, domain expertise, gender diversity and specific qualifications required for the position. A potential board member is also assessed on the basis of independent criteria defined in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations. In accordance with Section 178(3) of the Companies Act, 2013, Regulation 19(4) of SEBI (LODR) Regulations and on recommendations of the companys Nomination and Remuneration Committee, the Board adopted a remuneration policy for directors, KMP, senior management and other employees. The Policy is placed on the Companys website: http://www.kaveriseeds.in/images/pdf/images/ Nomination-and-Remuneration-Policy.pdf and further details are set out in the Corporate Governance Report forming part of this annual report.

CORPORATE GOVERNANCE:

A detailed Report on Corporate Governance systems and practices of the company is given in a separate section forming part of this annual report.

The Certificate issued by M/s. L.D.Reddy & Co., Practicing Company Secretaries, Hyderabad, with regard to compliance with the conditions of Corporate Governance is attached to the chapter on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS:

Managements 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.

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 Dr. S. Raghuvardhan 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."

The Company has incorporated a separate company in the name of ‘Kaveri Bhaskar Rao Charitable Trust under Section 8 of the Companies Act, 2013 to undertake CSR and other charitable activities. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR Policy is available on http://www.kaveriseeds.in/images/pdf/ images/csr_policy.pdf

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.

EMPLOYEE STOCK OPTION SCHEME

The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.

Kaveri Seed Employee Stock Option Plan – 2018 (ESOP Plan)

On 19th July 2018, pursuant to the approval by the shareholders by way of Postal Ballot, the Board/Nomination and Remuneration Committee has been authorized to introduce, offer, issue and grant the share-based incentives to eligible employees of the Company and its subsidiaries under the ESOP Plan. The Kaveri Employee Stock

Option Plan 2018 (ESOP Plan) to be implemented through the Kaveri Employees Trust (Trust) with an objective of enabling the company to attract and retain talented human resources by offering them the opportunity to acquire a continuing equity interest in the Company, which will reflect in their efforts to sustain the growth and profitability of the Company.

The ESOP Plan involves acquisition of shares, not exceeding 30,00,000 equity shares, from the secondary market through Barclays Wealth Trustees (India) Private Limited as Trustees of Kaveri Employees Trust for implementation and administration.

As on 31st March 2020 a total of 8,79,491 Equity Share (Eight Lakhs Seventy Nine Thousand Four Hundered Ninety One Only) options were available in the Trust account.

The Nomination and Remuneration Committee (NRC), is empowered to formulate detailed terms and conditions of the ESOP Plan 2018, and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion. Further, the Nomination and Remuneration Committee is empowered to determine the eligible employees of subsidiary companies, whether existing or future, whose employees will be entitled to stock options under this Scheme.

The Nomination and Remuneration Committee has granted 6,29,516 options @ 315/-. per option to the eligible employees of the Company during the year under ESOP Plan. The number of options outstanding as at the year–end was 2,49,975.

The granted options would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee.

The ESOP Plan is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the Companys website at https://www. kaveriseeds.in/images/pdf/images/sept20/Disclosure_pursuant_ Regulation_14_SEBI_Regulations_2014.pdf

STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013 , read with Rule 5(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 (cs@kaveriseeds.in) of the Company. The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197(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.

INSURANCE

All properties and insurable interests of the Company have been fully insured.

BUSINESS RESPONSIBILITY REPORT

A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in this Annual Report.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, top 500 listed Companies based on market capitalization is required to formulate a Dividend Distribution Policy. In compliance with the said requirement, the Company has formulated the Dividend Distribution Policy, the details of which are available on the Companys website at http:// www.kaveriseeds.in/images/pdf/images/Dividend-Distribution-Policy. pdf and is also provided as Annexure - 1.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2020 to the date of signing of the Directors Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company makes investments or extends advances to its subsidiaries for business purposes. The details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements provided in this annual report.

VIGIL MECHANISM /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 Audit Committee Chairperson is the chief ombudsperson. The policy also provides access to the Chairperson of the Audit Committee for raising concerns. The Whistle Blower Policy has been posted on the website of the company. (http:// www.kaveriseeds.in/images/pdf/images/whistle-blower-policy.pdf)

RISK MANAGEMENT

Pursuant to the requirement of SEBI (LODR) Regulations 2015, the Company has a risk management committee of the Board consisting of Director Mr. Dr. S.Raghuvardhan Reddy, Independent Director and Chairman of the Committee Mr. C.Vamsheedhar and Mr. C. Mithunchand as members of the Committee. The Risk Management Committee frames, implements and monitors the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report and the Policy has been posted on the website of the company viz., http://www.kaveriseeds. in/images/pdf/images/Risk-Management-Policy_final.pdf

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS OR TRIBUNALS

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

LISTING ON STOCK EXCHANGES

The Companys shares are listed on BSE Limited and the National Stock Exchange of India Limited.

TRANSFER OF UN-PAID AND UN-CLAIMED AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, declared dividends which remained unpaid or unclaimed for a period of seven years have been transferred by the company to the IEPF, which has been established by the Central Government.

The above-referred rules also mandate transfer of shares on which dividend are unpaid or unclaimed for a period of seven consecutive years to IEPF. The company has issued individual notices to the shareholders whose equity shares are liable to be transferred to IEPF on due dates, advising them to claim their dividend within the stipulated time.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner that ensures safety of all concerned, compliance to environmental regulations and preservation of natural resources.

HUMAN RESOURCE MANAGEMENT

At Kaveri Seeds, employees are considered ‘valued assets for the organization. We aim to foster an inclusive and diverse workplace that motivates and encourages our people to chart aspirational career paths. Our HR philosophy revolves around the 3 Cs of Culture, Commitment, and Competency.

Culture

We create a congenial atmosphere to ensure performance amidst challenging circumstances. At Kaveri, we also have an established Rewards and Recognition program to acknowledge and appreciate our people. We also nurture transparency in communication, allowing our employees to share feedbacks and opinions to improve our practices.

Commitment

The commitment to productively contribute towards the attainment of organizational goals enable our employees to improve performances significantly. We conduct varied employee engagement programs to motivate and engage people through sports, celebrations and other events.

Competency

A constantly evolving agricultural landscape calls for competencies to easily adapt and learn new practices. At Kaveri, we believe in empowering our employees with necessary skill sets. As a result, we invest in trainings and skill upgradation programs to continuously enhance capabilities and develop adequate competencies. While our scientists participate in national and international symposiums, seminars, and workshops, our marketing team is trained to understand various markets and its requirements. Similarly, our supply chain is well versed with effective production techniques to ensure seamless delivery of products.

The Company also plays a vital role to ensure healthy and conducive working environment for its employees. The total number of employees in the Company, as on 31st March, 2020 are 1073.

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 for lodging complaints. The policy provides protection against sexual harassment of women at workplace and ensures prevention and redressal of such complaints. During the year under review, no complaints have been received under the policy. The said policy is available on the website of the company. https://www. kaveriseeds.in/images/pdf/images/sexual-harrasment-policy.pdf

SHARE CAPITAL

During the year, there was change in the Paid-up Share Capital of your Company due to Buy-back issue of the Company.

During the year under review the Company bought back an aggregate of 28,00,000 Equity Shares out of 6,31,29,133 Equity Shares from the Shareholders of the Company. After successful completion of Buy-back, the Paid-up Share Capital of the Company was decreased from 6,31,29,133 Equity Shares to 6,03,29,133 Equity Shares of H2/- each.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

INSIDER TRADING CODE

In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (‘the PIT Regulations) on prevention of insider trading, your Company has revised its Code of Conduct for regulating, monitoring and reporting of trading by Designated Persons, in line with the recent amendments brought by SEBI in the PIT Regulations. The said Code lays down guidelines, which advise Designated Persons on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances. Your Company has also updated its Code of practices and procedures for fair disclosures of unpublished price sensitive information by including a policy for determination of legitimate purposes.

INDUSTRIAL RELATIONS:

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

ACKNOWLEDGEMENTS:

The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results. Your Company is grateful to the Distributors, Dealers, Customers and farming community 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.