KAVERI SEED COMPANY - UPDATE

CHAIRMAN'S SPEECH IN 23 rd AGM

Dear Stakeholders,

Hearty welcome to you all. On behalf of the Board of Directors of Kaveri Seed Company Limited and on my own behalf it is my privilege and honour to extend a very warm welcome to the 23^rd Annual General Meeting.  At the outset, I am thankful to all the shareholders of the Company for their whole hearted support and cooperation in furthering the overall growth and progress of the Company.

I am sure, you all must have gone through the Annual Report of the Company for the year 2009-10.  Your Company’s performance for the year under review has been quite satisfactory despite aberrant weather- failure of monsoon leading to drought followed by devastating floods, factors that destabilize agriculture.  It is heartening to note your Company’s business has significantly improved on operational performance compared to yesteryear and records a positive financial growth.  The year’s Gross Turnover of Rs. 165.00 Crores enhanced a growth rate of 32% where as the profit after tax Rs.29.07 Crores improved the growth rate of 16.77%.  The accomplished financial growth sustains the Company’s business and help attaining market leadership in seed and agribusiness.  Your Company will Endeavour to show remunerative pathways to shareholders as well as taking care of well being of farmers.  Investors in Kaveri Seed Company Limited can confidently look forward for robust and sustainable growth in the years ahead.   

The Indian Seed Industry is vibrant and grown over the years to become the fifth largest in the world with an estimated value of 1500 million US $ and an annual growth rate of 12% to 13 %.  India is one among the few countries in the world where the seed sector is well positioned with the potential to become global seed production hub, if nurtured carefully.  With the food crisis looming large world over, it is evident that the future rests with countries wielding grain power and those in agri business realize quality seed is the key to such empowerment.

Investment in Agriculture R&D is the most effective way of ensuring food security and economic growth.  The pressing need is for quality seed of varieties and hybrids that are not only high yielding but resilient to less input- water, fertilizers etc.  Thus food security is interwoven with the seed security.  The Kaveri Seed Company’s R&D targeted its research for developing hybrids that excel in the market with quality assurance.   Your Company with vast experience in seed production of major agricultural crops backed by a very strong in-house R&D program for crops-maize, cotton, sunflower, bajra, sorghum, rice and several vegetable crops nurtured a competitive edge in seed and agribusiness.  With over 600 acres of farm land owned by the Company and dedicated team of researchers, the Company is conscious of the changing needs of farmers and consumers to design and develop productive hybrids that fetch rewarding returns.  Being India’s leading National Seed Company, the R&D focus centers round combined use of conventional breeding and biotechnology to advance the yield frontier and stabilize it through incorporation of genetic resistance to biotic and abiotic stresses.  During the year under report, our R&D strived hard to accelerate to new and sustained levels of innovation as exemplified by the performance of pipe line hybrids in All India Coordinated Trials and commercial launching of premier hybrids.

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

On the product front, the Company is successful in launching two of its premier Bt cotton hybrids in the brand names of Jadoo and Jack pot and a pearl millet hybrid, Super Boss.  Sampada (red gram) Sampoorna (paddy) are the newly launched varieties.  Based on the performance at National level, two of our maize hybrids, Kaveri 50 and KMH 25K60 along with bajra hybrid, MH 1553 were identified by Varietal Identification Committee for eventual notification.

Germplasm is the genetic wealth of the Company.  The vast collection of germplasm that accrued over the year has been streamlined for conserving in “Gene Bank” In order to establish legal ownership of the Company’s hybrids and their parental lines, efforts are underway to registering the lines with PPV & FR authority.  Till date, ~ 100 applications were filed with PPV & FRA.

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

 Your Company is fully dedicated to improve the field and vegetable crops continuously. Besides corn and sunflower, cotton, pearl millet, rice, grain sorghum, mustard and various hybrid vegetables are part of our extensive product portfolio in which the company enjoys a sizeable share in the Indian seed market. Our vegetable crops include tomato, okra, hot pepper, water melon, bitter gourd and coriander.  The Company had made its presence in the market by releasing high yielding hybrids of these vegetable crops. In addition, to these products the Company has extended its business of Micronutrients and Bio-products to produce chemical –free and eco-friendly pesticides, fungicides and yield enhancers and thereby augmenting the product assortment.

Your Company is on the ascending path to reach new heights in seed and Agri- Business.  Your Company has recognized One among the Top 39 Indian Companies in the world leading business magazine of “Forbes Asia” published under a list of 200 top-performing small and midsize Companies in “Asia’s Best Under A Billion”.

I express my sincere gratitude to our shareholders, farmers, dealers, bankers, employees, the Central and State Governments and other regulatory authorities/agencies for providing continuous support at all times and look forward to have the same in our future endeavors.   I wish to express my sincere appreciation to my colleagues on the Board for their continued support.  I am grateful to you all for your cooperation and the trust that you have reposed in us.

Best Regards,

Sd/-

G.V.Bhaskar Rao

Executive Chairman.