Kaveri Seed Company Ltd Directors Report.

Dear Members,

Kaveri Seed Company Limited

The Directors have pleasure to present their 32nd Annual Report and the audited Annual Accounts for the year ended 31st March 2019.

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, 2019 March 31, 2018 March 31, 2019 March 31, 2018
1 Revenue from operations 76,898.90 77,240.30 80,941.81 81,937.48
2 Profit before finance cost, depreciation and tax expense 248,43.22 24,170.11 25,463.78 24,548.73
3 Finance Cost 12.52 39.96 54.69 60.41
4 Profit before depreciation and tax expense 248,30.70 24,130.15 25409.09 24,488.32
5 Depreciation 2,117.65 2,335.19 2,295.20 2,507.73
6 Profit before exceptional items and tax 22,713.05 21,794.96 23,113.89 21,980.59
7 Exceptional items - - - -
8 Profit before Tax Expense 22,713.05 21,794.96 23,113.89 21,980.59
9 Tax Expense 1240.19 760.75 1373.43 839.54
10 Profit after Tax Expense 21,472.86 21,034.21 21,740.46 21,141.05
11 Non-controlling interests (4.61) 17.27
12 Profit after tax expense after non-controlling interests 21,472.86 21,034.21 21,745.07 21,123.78
13 Add: Surplus at the beginning of the year 96,492.00 84,230.30 95610.16 83,258.89
14 Total Available for appropriation 117964.86 1,05,264.51 117355.23 1,04,382.67
Appropriations
15 Dividend including taxes 2283.17 2,386.41 2283.17 2,386.41
16 Transfer to general reserve 1,000.00 1,000.00 1,000.00 1,000.00
17 Utilized for Buyback 18940.99 5,326.85 18940.99 5,326.85
18 Transferred to Capital Redemption Reserve 59.26 59.26 59.26 59.26
Total Appropriations 22283.43 8,772.51 22283.43 8,772.51
19 Surplus carried to Balance Sheet 95681.44 96,492.00 95071.80 95,610.16

STATE OF THE COMPANYS AFFAIRS

During the year, the Company has achieved revenue of Rs 76,898.90 lakhs and net profit of Rs 21,472.86 Lakhs on a standalone basis. During the same period, the consolidated revenue was Rs 80,941.81 Lakhs and net profit after non-controlling interests was Rs 21,745.07 Lakhs.

FUTURE PROSPECTS AND OUTLOOK

Indian Agriculture and our role:

India is agrarian country, vegetarian diet in habit. It is richly rewarded by nature with wealth of varied 12 agro-climatic zones for cultivation of diversified crops. Therefore enormous indigenous germ plasm is available , it will helped to produce a large variety of field and vegetable crops. Indian Seed industry has been an important partner in the growth of Indian agriculture in the past 3-4 decades. The agricultural sector is highly dependent on the availability and quality of seed in time for a productive harvest. Therefore, in order to increase the quantity and quality of produce, efforts are made to introduce enhanced varieties of seeds with the help of advance breeding technologies and modern agricultural methods. The overall out comes of agriculture of a nation is therefore dependent on the seeds the farmers of the nation use. Kaverys research focus on applying usage of advanced biotechnological tools in combination with conventional breeding to fast track the breeding procedures. So as deliver the right product for right place. We are also planning to work on phonemics so as to target to design the right plant ideotype to meet the future resilient climatic change and to combat any eventuality of global warming impacting agricultural productivity. So as to improve the farm yields and their by significantly improve the economic position of the farmers.

Indian farmers are small farm holders. To supply the seed necessary for five hundred thousand Indian villages is a big problem. We try to reach the farmers of nook and corner of villages and impart the knowledge on our products and various methods for disseminating the information on agriculture.

Kaveri Seeds is focusing its research efforts in field and vegetable crops by developing promising hybrids and varieties that are suitable for cultivation under different environmental situations. Our research collaborations with several national and international organizations help us design products that suit the needs of the market, while also being tolerant to biotic and abiotic stress factors. We are also equipped with modern R&D facilities in the advance science of biotechnology, plant breeding, quality control and seed technology innovations. We will focus our efforts to enhance sales across multiple crops and continue to improve our presence in the market, expanding our footprint into new geographies.

RESEARCH AND DEVELOPMENT (R&D)

Your Companys relentless pursuit of seed innovation has helped significantly improve the yield of farmers. We have developed a committed grower network are different agro-climatic zones of India. We focus on designing suitable hybrids, keeping in mind the farmers needs and consumers preferences. Our diverse portfolio caters to key crop segments and mitigates the risk of unanticipated shifts in crop rotation. Our products are gaining acceptance among Indian farmers and in countries where we export our seeds. Your Company possess a strong in-house R&D base, recognised since 2001 by the Government of Indias Department of Scientific and Industrial Research (DSIR). Company consistently invest in R&D as part of our sustainable growth strategy. To harness the potential of biotechnology in fostering and fortifying traditional breeding methods the Company has formulated an integrated programme for molecular breeding. Companys state-of-the-art biotechnology laboratory and state - of – the - art seed technology is well-equipped with sophisticated equipment and is supported by highly qualified personnel.

Innovation is The Engine of our Progress: Your Company focus on achieving higher profitability and outperforming the market, based on the strength of innovation. Company also engage with farmers to integrate their insights into the products that we make. Company objective is to create value for our customers through higher yields and optimal use of resources.

Your Company has a reliable track record of launching many new products and have a strong pipeline tailored promising products to meet the specific needs of the farming community. Kaveri is well placed in the emerging markets, having completed a period of extensive investments; and our long experience of managing risk is enabling us to navigate the current volatility. We look at each crop through the eyes of the grower, and we understand the growers concerns and grievances. Kaveris best-in-class infrastructure and scientists are driving a breeding strategy for the development of variety of crops, especially in cotton, maize, rice and bajra, in different agronomic conditions of our country. A clear road map has been prepared for the strategic breeding to accelerate the breeding process and to achieve the targeted goal in field and vegetable crops.

R&D developments

Kaverys new hybrids in cotton, maize, rice, bajra and vegetables made significant impact on the farm yield. Besides, a strong pipeline of hybrids is ready to be launched, which are tailored to yield in different environmental conditions. Your Company developed over 600 acres of dedicated research farms with varying agro-climatic conditions in and around Hyderabad. Company has invested in state-of-the-art biotechnological interventions to enable efficient quality check measures. Besides, our biotechnology lab (enabling smart breeding) has made us the most productive and innovative in the industry; and we continue to strengthen returns, while accelerating the pace of innovation.

Focus on germplasm:

Germplasm acts as a reservoir for further breeding programmes in frontier line of research to carve, augment and design the plant types according to the changing needs of different farmers across various crop segments. We have also enthused our germ plasm bank through international collaboration and acquired exotic germ plasm to blend with indigenous types so as to fit well under Indian situations.

Introduction for Our Product Sections

Over the years, your Company has innovated continually to be farmer centric and developed high quality hybrid seeds with a focus on better harvest. Our relentless pursuit of seed innovation has helped significantly improve the yield of farmers. Our diverse portfolio caters to key crop segments and mitigates the risk of unanticipated shifts in crop rotation. Our products are gaining acceptance among Indias farmers and in countries where we export our seeds. We are the only company to have a footprint across multi crop products.

Quality seed is the order of the day. Your Companys honest endeavour is to inculcate the highest level of quality management across functional domains. We will devote promotional efforts for promising products in the growth stage. We will add more sales locations to improve our visibility in the market, in tandem with our strategy to explore new geographies. We are continually receiving positive reviews from our hybrids in various countries. In the years to come, we expect to expand our export presence in the focused countries.

DIVIDEND

The Board of Directors at their meeting held on 14h November 2018 declared an Interim Dividend @ 150% on the paid-up Equity Share Capital i.e., Rs 3.00/- per equity share for the financial year 31st March 2019 and 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. www.kaveriseeds.in

BUYBACK OF EQUITY SHARES

In line with the practice of returning free cash flow to the shareholders, during the year the Company has completed its second buy-back of 29,63,000 Equity Shares at a price of Rs 675/- per Equity Share for an aggregate consideration of Rs 20000.25 Lakhs. The offer size of the Buyback was 20.24% of the aggregate paid up equity share capital and free reserves of the Company and represented 4.48% of the total issued and paid up equity share capital of the Company. The buyback process was completed and the shares were extinguished on 21st September 2018. The Companys first buy-back was completed in Financial Year 2017-18.

TRANSFER OF AMOUNT TO RESERVE

The Company has transferred Rs 10.00 Crores to the general reserve for the financial year ended 31st March 2019 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 5 subsidiaries as of March 31, 2019. 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. 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.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There are 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 frame work 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 on integral part of this report.

SECRETARIAL AUDITOR

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.3725) as Secretarial Auditors to conduct Secretarial Audit of the Company for the financial year ended 31st March 2019. 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 2019. 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. Dr. Bhaskar venkataramany was appointed as member of Audit Committee on 14th November, 2018. Mr. P. Varaprasad Rao resigned on 14th November, 2018. The Board has accepted all recommendations made by the audit committee during the year. Further details can be seen in the chapter on Corporate Governance report.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the relevant provisions of Section 133 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, 2019, 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 set of standards which enables to implement internal financial control 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 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 appraised of the internal audit findings and corrective actions 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 are presented to the Audit Committee of the Board. The Audit Committee of the Board monitors the performance of Internal Audit team on a periodic basis through 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 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 31st March 2019 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 were in place 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

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

Mr. P. Varaprasad Rao, tendered the resignation from the office of Independent Director of the Company with effect from 20th December 2018, due to his pre occupations, there is no other material reason, other than those provided by him. The Board members of the company profound thanks to Mr. P. Varaprasad Rao for valuable services and significant contribution to the organization in different aspects of the company is highly appreciable the services rendered by him and the Board be instructed to convey its gratitude for the services rendered during his tenure.

Appointment/re-appointment of Independent Directors :

On recommendation of the Nomination and Remuneration Committee, the Board of Directors have appointed Dr. Bhaskar Venkataramany (IAS Rtd.) (DIN: 03558571) was appointed as an Additional Director (Independent) with effect from 14th November 2018 for a term of 5 years, subject to the approval of the shareholders at the ensuing Annual General Meeting.

Your Directors on the recommendation of the Nomination and Remuneration Committee have re-appointed Dr. Raghuvardhan Reddy Suravaram (DIN: 01992206), Dr. Syed Mohammed Ilyas (DIN: 03542011) and Mr. Purushotam Kalakala (DIN: 01540645) as Independent Directors of the Company w.e.f. 18th September 2019 for second term of five consecutive years is proposed at the ensuing AGM for the approval of the members by way of special resolution(s). Pursuant to the provisions of Section 149 of the Companies Act, 2013, the independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Companies Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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.

Director(s) retiring by rotation:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association, Dr. G. Pawan (DIN : 00768751), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Brief Profile of Dr. Raghuvardhan Reddy Suravaram, Dr. Syed Mohammed Ilyas and Mr. Purushotam Kalakala and Dr. G.Pawan are given in the Corporate Governance and the Notice convening the 32nd AGM for reference of the shareholders.

Appointment/Resignation of Chief Financial Officer and Key Managerial Personnel:

Mr. G.Vijaya Kumar tendered resignation as the Chief Financial Officer of the Company with effect from 14th February 2019 due to his personal reasons. Mr. K.V.Chalapathi Reddy has been appointed as Chief Financial Officer of the Company effective from 14th February 2019. Mr. K.V.Chalapathi Reddy, a Chartered Accountant (Membership No.29364) with over 3 decades of varied experience in all areas of Financial Management, Accounts, Auditing, Taxation, and Treasury functions of the Company and in the past associated with reputed companies in senior positions. Pursuant to the provisions of Section 203 of the Companies Act, 2013 the Key Managerial Personnel (KMP) of the Company as on March 31, 2019 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.

COMMITTEES OF THE BOARD

The details pertaining to the re-constitution of all Board Committees are included in the Corporate Governance Report, which is a part of this report.

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 sub section (6) of Section 149.

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of the Independent Directors was held under the Chairmanship of Mr. K. Purushotham, Independent Director on 14th February 2019, 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 24th May 2018, 09th August 2018, 14th November 2018, 20th December, 2018 and 14th February 2019. The details of attendance of Board meetings and Committee meetings held during the Financial Year 2018-19 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 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 of 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: www.kaveriseeds.in 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 the 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."

Dr. S. Raghuvardhan Reddy appointed as a member of the CSR Committee on 14th November, 2018 and Mr. P. Varaprasad Rao resigned on 14th November, 2018.

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 www.kaveriseeds.in

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 Board of Directors of the Company at its meeting held on 24th May 2018, formulated the Kaveri Employee Stock Option Plan 2018 (ESOP 2018) to be implemented through the Kaveri Employees Trust (Trust) both are approved by the shareholders through Postal Ballot on 19th July 2018 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 their efforts in building the growth and the profitability of the Company. The ESOP Plan involves acquisition of shares from the secondary market through Barclays Wealth Trustees (India) Private Limited as Trustees of Kaveri Employees Trust for implementation and administration the Trust. A total 6,55,250 (Six Lakhs Fifty Five Thousand Two Hundred Fifty Fifty) options were available for grant to the eligible employees of the Company under the ESOP Plan. The ESOP Plan is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. Details are available on the companys website.

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 at the Registered Office 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, requires that the top 500 listed Companies based on the market capitalization to formulate 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 www.kaveriseeds.in and is also provided as

Annexure - 1

MATERIALCHANGESANDCOMMITMENTSAFFECTING 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, 2019 to the date of signing of the Directors Report.

PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS

The Company makes investments or extends advances to its subsidiaries for the 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.

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. (www.kaveriseeds.in)

RISK MANAGEMENT

Pursuant to the requirement of SEBI (LODR) Regulations 2015, the company has a risk management committee of the Board consisting the Directors of Mr. Dr. S.Raghuvardhan Reddy, Independent Director and Chairman of the Committee Mr. C.Vamsheedhar and Mr. C. Mithunchand, members of the Committee. Risk Management Committee to frame, implement and monitor 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.

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.

TRANSFER OF UN-PAID AND UN-CLAIMED AMOUNT TO 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 lying 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 time.

ENVIRONMENTAND 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, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.

HUMAN RESOURCES

Kaveri Seeds is home for the diverse, talented and motivated people are key to our business success. Our employees underline the successful implementation of our strategies backed by our commitment. Our team consists of functional heads with more than 15+ years of experience in the relevant fields. Based on their experience and intellectual capabilities, they were inducted to leadership roles across functions. Our thrust is creating a congenial work atmosphere that will allow team to excel in their performance under challenging situations. Over a period of 30+ years, Kaveri Seed has seen transformation that has brought the Company to the helm of market leadership. Our investment in information and technology is to keep pace with the dynamic operational environment. Our Human Resource (HR) team ensures that the employee benefits form an integral part of our work culture. Group insurance schemes, Mediclaim benefits and gratuity (linked to life insurance) schemes were in vouge. As a part of our team building culture, we identify high-potential personnel, rewarding them every year. Along with several development programmes to enhance managerial skills, we organize training programmes to improve the behavioral and communication skills of our people. We are also participating in several national and international workshops, where our scientists and marketing personnel participate to exposure and knowledge. Our ‘Utkrista Puraskar award programme continues to incentivize employees to achieve sustainability objectives, recognizing top performers from various departments such as R&D, Seed production and Sales and Marketing, among others.

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.

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 29,63,000 Equity Shares out of 6,60,92,133 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 6,60,92,133 Equity Shares to 6,31,29,133 Equity Shares of Rs 2/- each.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

In terms of Section 118(10) of the Companies Act, 2013, the Company complies with Secretarial Standards 1 and 2 relating to the Board Meetings and General Meetings respectively as specified by the Institute of Company Secretaries of India and approved by the Central Government. The Company has also voluntarily adopted the recommendatory Secretarial Standard 3 on dividend and Secretarial Standard 4 on Report of the Board of Directors 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 of 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 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 Companys 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 the Board of Directors
For KAVERI SEED COMPANY LIMITED
Sd/- Sd/-
Date: 13.08.2019 G.V.BHASKAR RAO G.VANAJA DEVI
Place: Secunderabad Managing Director Whole time Director