#1kaveri seed company limited $ kaveri seeds" 14th November 2017 SEED Bombay Stock Exchange Ltd., 1st Floor New Trading Ring Rotimda Building P.J.Towers, Dalal Street, Fort, MUMBAI - 400 001 Scrip Code: 532899 Dear Sir, Sub: Investor Presentation - Reg. National Stock Exchange of India Ltd. Exchange Plaza, 5th Floor, Plot No.C/1, G Block, Bandra Kurla Complex, Bandra (E) MUMBAI - 400 0051 Scrip Code: KSCL Please find attached herewith the Investor Presentation of Kaveri Seed Company Limited for the purpose of IDFC Annual Investor Conference to be held on 15th November 2017 at Mumbai and the IIFL Roadshow. The same was displayed at our company's website: www.kaveriseeds.in This is for your kind information and record. Thanking you, Yours faithfully, For KAVERI SEED COMPANY LIMITED COMPA SECUNDERABAD! KAVER NY LE ни MITHUN CHAND *WHOLE TIME DIRECTOR Encls: a/a. Regd. Office : # 513-B, 5th Floor, Minerva Complex, S.D. Road, Secunderabad - 500 003. Telangana, India Tel: +91-40-2784 2398, 2784 2405 Fax: +91-40-2781 1237 e-mail: [email protected] WWL CIN L01120AP1986PLC006728 T in#2kaveri seeds Kaveri Seed Company Limited Investor Presentation - November 2017#3K Safe Harbour Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. Kaveri Seed Company Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements subsequent events or circumstances. to reflect 2#4K Contents Business Overview 5 Years Financial Performance Industry Backdrop & Outlook Quarterly Performance#543 BUSINESS OVERVIEW#6K о Industry Overview The Agriculture sector commands the largest share of the country's total land area at about 48% (or 156 million hectares) compared to USA's 18% (or 158 million hectares) and China's 15% (or 106 million hectares). While India has more arable land than China, its production is only half that of China The reasons for the lower productivity are low usage of high quality seeds, fertilizers, pesticides, lower farm mechanization, weak credit facilities, shortage of water and energy The organized Indian seed industry has been in existence since 30+ years; however the last decade has witnessed exponential and transformational growth The Indian Seed Industry is the 6th largest in the world in value terms accounting for about 4.5% of global industry preceded by the US (27%), China (22%), France (6%), Brazil (6%) and Canada (4.8%) In volume terms consumption has seen a CAGR of 8.4% from FY09 to FY15 to reach 3.5 million tonnes Use of branded seed and hybrid seed has been consistently increasing, Seed Replacement Rate (SRR) on the rise Corn, 9% Varietal Rice, 13% Hybrid Rice, 8% Europe, 26% Vegetable, 16% Crop Segment Wheat, 5% Soybean, 4% China, 41% Bajara, 3% Global Vegetable Seed Market/ North America,9 % Cotton, 36% Jowar, 2% Mustard, 3% Latin America, 7% Rest of APAC, 10% India, 7% Sunflower, 1% Source: ISF & Sathguru Analysis USD Bn Indian Seed Market Forecast 3.01 1.85 0.35 0.70 FY15 FY20E Vegatable Field (Rs/$ Exchange rate: FY15 at 65.42) 5#7K Industry Overview 9 Cotton Seed o High market penetration of hybrids o Growth a function of market share gains, High Density Planting and Mechanical Harvesting o Pricing subject to GOI's Price Control Order 。 KSCL is market leader o Company developed hybrids with only the pest control trait sourced under license Paddy ○ Paddy is the largest crop under cultivation in India and is the staple food for large population 。 Hybrid penetration at less than 10% o Farmers used saved seed; however branded and hybrids gaining increased acceptance o Market for both selection variety rice and hybrid rice growing rapidly Corn (Maize) o Maize is the most widely grown crop worldwide o India is the world's 6th largest producer and 5th largest consumer of maize o Maize acreage has grown in India over years as it is highly adaptable to different season, requires less water, easy to grow with good commodity price o Demand for Maize in India in expected to continue to grow due to demand from feed industry (accounting for ~50% of domestic maize demand) and export opportunity (seen a strong 24% CAGR in FY2005-14) Vegetables 。 Hybrid vegetable seed is one of the fastest-growing segments in India estimated to be around INR 2,000 crore o India is the second-largest producer of vegetables in the world, after China 。 Round the year crop, safeguarding from crop shift patterns#8K The Kaveri Moat: Seeding Profitable Growth Strong P&L record, Cash rich, consistent dividend paying Diverse Product portfolio addressing crop rotation & shift Brand Salience: Preferred Choice for farmers, growers, distributors Farmer-centric Product Pipeline: Superior agronomic features Unrivalled farmer loyalty: Nurturing farmer relationships since decades Kaveri Seeds Leadership in key crops: Top 5 Rank Benchmark R&D: Comprehensive germplasm repository Market adjacent, Pan- India Operations with comprehensive distribution network; unmatched processing & storage capabilities High Entry Barriers, Indispensable industry Best placed to scale-up production 7#9K Company Profile Our Vision G །༩ Our With consistent performance in all functional areas of the Company, our endeavour is to make Kaveri a benchmark seed company with the best of research, innovation and product development. Our Mission To realise our vision, every member at kaveri will adopt consequential values of the Company and inculcate sustainable business practices. In our endeavour to reach the goal, team Kaveri would uphold all brand promises to its stakeholders. Reputation Our Expertise We have over three decades of experience in application of the science of genetics and principles of plant breeding in the evolution of crop hybrids, quality seed production, conditioning and processing and in building extensive distribution network with strong farmer relationship. We are serving Indian farmer consistently to improve their crop yields ever since inception. We have developed enduring relationships with farmers across India; and our 'Kaveri Seeds' brand enjoys wide reputation and loyalty, owing to our product range and quality commitment. 8#10K Board of Directors & Key Management 同 Mr. G. V. Bhaskar Rao Dr. G. Pawan Founder promoter, Chairman Vice Chairman-Non Executive & Managing Director Mrs. G. Vanaja Devi Founder Director Q Mr. C. Vamsheedhar Executive Director Mr. C. Mithun Chand Executive Director Dr. Y. L. Nene Board member Q Mr. M. Srikanth Reddy Board member Dr. S. Raghuvardhan Reddy Board member Mr. K. Purushotham Board member Q Dr. S. M. IIyas Board member o Mr. G S Satish Chief Operating Officer a Dr. P. Vara Prasad Rao Board member 6 Mr. G. Vijay Kumar Chief Financial Officer 9#11K Relevant facts 30+ Years Rich experience in Indian seed industry 50,000+ Land under seed + acres production across different agro-climatic zones 214 Number of filings to date 7 State-of-the-art seed technology, processing and storage plants 2,900MT/cycle Maize cob drying facility 100+ Developed high-quality hybrid and varieties across field crops and vegetables 30,000+ Loyal production growers, across 12 different agro- climatic zone 94 Product registrations with PPV to date 600,000 sqft Cumulative warehouse space at multiple strategic location across India 16 MT/day Environment-friendly cotton delinting capacity 3rd Largest producer of hybrid cotton seeds in India 15,000+ Customer touchpoints across India's 15 key states 16 Notified hybrids under CVRC-GOI ~ 130 MT/hour Total average throughput 750+ Motivated team members 1,000+ Field promoters, who work with farmers all the time 170+ Outreach trial centres 14,000MT Total cold storage capacity 8MT/day Ginning capacity 10#12K A 30 year Transformational Journey Seed production unit started by Shri G. V. Bhaskar Rao Kaveri Seed incorporated Initiated R&D programme Launched first hybrid Maize Seed conditioning plant launched at Kandlakoi, Telangana Received recognition from the Department of Scientific and Industrial Research for our R&D initiatives Commissioned seed conditioning Public offer plants at Gundla Pochampally and Eluru and listing in stock exchange Launched premier cotton Hybrid Jaadoo 1976 1986 1991 1997 2000 2001 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Commission ed seed conditioning plant at Pamulaparth i, Andhra Pradesh Listed the among Forbes 'Best under a Billion' in Asia Pacific Launched Kexveg, a new initiative for premium vegetables Listed among the Forbes 'Best under a Billion' in Asia Pacific Listed among the Forbes 'Best under a Billion' in Asia Pacific Listed among the Forbes 'Best under a Billion' in Asia Pacific Listed among 'Fastest Growing Companies' by Outlook Business The Company achieved significant benchmark turnover of over 1,100 Crores. Won the 'Best CEO' award by Business Today Conferred the Bio-Excellence Asia Award by the Department of IT, BT and S&T, Government of Karnataka. Listed among the Forbes 'Best under a Billion' in Asia Pacific Kaveri Seeds completed 30 years of journey 11#13Diversified Seed Portfolio Field Crops Vegetables Cotton Maize Rice Tomato Okra Bajra Sunflower Mustard - Hot Pepper Watermelon Sorghum Pulses Wheat Gourd Eggplant 12#14K Diversified Seed Portfolio Wider acceptance of key products in the market place leading to significant increase in revenues High value premium hybrids of field and vegetable crops Market oriented & need focused breeding programs resulting in highly successful product portfolio High brand recall across product segments in farming community Access to a wide range of products owning to the well- established R&D set-up Capability to produce over 100 high quality hybrid seeds across commercial crops, food crops and vegetables 13#15Leadership Product Portfolio Kaveri's cotton seed volume break-up Top 5 rank in key crop segments Kaveri Market Share by H1 FY15 FY16 FY17 crop (in %) (m packets) FY15 FY16 FY17 FY18 Cotton 18.0 13.8 14.4 AP & Telangana 5.42 3.42 2.92 3.20 Maharashtra 1.33 1.12 1.49 2.23 Maize 10.1 10.2 10.8 Karnataka 1.26 0.45 0.42 0.68 Hybrid Rice 4.2 4.5 4.1 Gujarat 0.16 0.25 0.24 0.41 Pearl millet 12.0 10.0 9.2 Madhya Pradesh 0.16 0.16 0.19 0.21 Others 0.29 0.18 0.19 0.20 All India 8.63 5.59 5.44 6.93 Cotton seed revenue & volumes 86 Hybrid Rice seed revenue & volumes Kaveri is amongst the top three seeds companies in the cotton segment, and top five in the maize, paddy and pearl millet segments Combined, these crops account for more than 90% of revenues of the Indian hybrid seed industry Maize seed revenue & volumes 10.7 1.7 1.6 5.6 5.4 1.5 9.2 10.9 684 422 358 29 32 28 140 138 161 FY15 FY16 FY 17 FY15 FY16 FY17 FY15 FY 16 FY17 Net Revenues (Rs cr) Sales Volume (mn packets) I Net Revenues (Rs cr) Sales Volume ('000 tons) Net Revenues (Rs cr) Sales Volume ('000 tons) 14#16K Benchmark R&D One of the Largest Pools Of Germplasm in India Seed is most critical to output for a farmer: Performance ensures premium, repurchase Significant investments in the last five years for strengthening R&D Developed proprietary germplasm and Hybrids Over 600 acres of dedicated research farms with varying agro-climatic conditions State-of-the-art Biotech, Quality check and seed technology labs Cold DH storage for germplasm Multi-location breeding and trial stations Strong and highly motivated R&D team about 100 personnel, including more than 20 scientists Conjunct use of Bio and hybrid technologies in product development - Deployment of frontier technologies Doubled haploid breeding, MAS (Marker Aided Selection), MARS (Marker Assisted Recurrent Selection), RGA (Rapid Generation Advance), Inbred pool-heterotic bins, MPS (Multi-parent synthetics) and MAGIC (Multi-parent Advanced Generation Inter-cross populations О Research and Development facility recognized by Department of Science & Technology, Government of India Partnering with ICRISAT, Melinda Gates Foundation's Harvest Plus program, IRRI's Hybrid Rice Development Consortium, CIMMYT and USDA program on Heat Tolerant Maize for Asia (HTMA), DBT's Biotechnology Industry Research Assistance Program (BIRAP) and Asian Vegetable Research and Development Center (AVRDC) for Vegetables Collaboration with NARS (National Agricultural Research System) Institutes and All India coordinated crop improvement programs of ICAR 15#17K Supply Chain Management • Sales Forecast • Seed Production Planning • • Foundation Seeds Hybrid Seeds Planning Field Production Logistics 2 7 6 5 Seed Markets Logistic Storage • ⚫ Domestic • Exports ⚫ Outbound 4 Plant Processing • Inbound • Raw materials prevention QUALITY ASSURANCE Packing Material & Chemical Ambient storage - short term ⚫ Finished Goods Delivery • Cold storage - long term Drying . Processing • Packing • Finished Goods detection TESTING 16#18K Complete control over all stages of Product Cycle A 7-10 year cycle Seed production undertaken post comprehensive market trialing Practice benchmark production regimen throughout the cycle - Grower/ Breeder to Farmer Evaluating Needs Collecting Genetic Resources Developing New Hybrids Producing Seeds A 7-10 year Cycle Occasional Procurement / from Other Seed Producers Import Seed Production Chain | & | Or | X | A B F M Single Plant Selection Nucleus Seed Breeder Seed Production Foundation Seed Production Hybrid/Open Pollinated Seed Production Seed Processing, Conditioning and Packing Storage Rejects Marketing Partners By breeder Distribution (Regional Offices, C&F Agents, Distributors and Dealers) Marketing Partner/Distributor Sales to Farmer Quality testing & Packaging Distributing and Selling Seeds Stores Packing Material, Chemicals Quality Assurance (Field Inspection / STLS/GOTS) Feedback 17#19K Distribution Presence Molangoor Gatla Narsingapur Rajasthan Punjab Haryana Delhi Uttar Pradesh Bihar Jharkhand West Bengal Gowraram Pamulaparthi 2 Plants Gujarat Madhya Pradesh Gundla Pochampally Secunderabad Maharashtra Chhattisgarh Karnataka Tamil Nadu Bellary Telangana Andhra Pradesh Odisha Eluru - Presence Head Office - Plant - R&D Laboratory 18#20K Best-in-class, Market adjacent, Scalable Operations Strong Brand Equity in farming community . • Large production area across India with a loyal ´producer farmer' network 。 30,000+ loyal production growers across 12 different agro-climatic zones 。 1,000+ field promoters, who work with farmers all the time ~ 50,000 acres under seed production across different agro-climatic zones High credibility with the farmers Focused programmes to spread awareness amongst farming community on new products in market Amongst The Largest Processing Capacities Strong Warehouse Capabilities Pan India Presence • 7 Company owned plants across key locations in India with a combined processing capacity of 130 tonnes per hour • Modern equipment for pre-cleaning, grading, cob drying, storage, packing • Maize cob drying facility with a capacity of 2,900 tonnes per cycle • Green houses for screening, uniform blast nursery for disease/pest screening • Cotton delinting facility • Warehouses across India with combined storage space of ~600,000 sqft Dehumidified, climate-controlled storage facilities • Storage godowns of ~135,000 sqft. (cold) and ~280,000 sqft. (ambient) with holding capacity of ~25,000 MT • Network of more than 15,000 direct/indirect distributors across the country • More than 200 highly motivated marketing professionals on a pan India basis • Utilize more than 8,000 man-months of Promoters to communicate about farming best practices to farmers 19#21K High Entry Barriers: Brand Equity Paramount • Need for high investments in R&D for seeds Lead time from R&D to commercial launch is 7-8 years • Requirement of a wide • distribution network across India for a diverse portfolio of seeds considering the varied agro-climatic conditions across India A complex process of developing an effective hybrid (key skills required to choose the right kind of lines) • · Need for high degree of credibility with farmers Farmers will not jeopardize their years' worth of income and land arability on unestablished company seeds 20 20#22K Farmer-engagement Programmes Increased visibility and mindshare о Retailer reach and connect increased о Focused training of Field Assistants for educating farmers on advanced agronomic practices knowledge and product Revenue per employee of Cotton & Field Crop Sales increased by more than 25% YoY in FY17 On-farm technology demonstration о Conduct farmer education programmes across geographies to make them aware of new and high-yielding products; also educating them about best-inclass farming techniques to increase yield and income Strengthens the confidence and trust of farmers in the Kaveri brand Have increased the number of farm demonstrations for many of our pipeline products Multi Location Trials increased Krishi melas: Participate in and sponsor agricultural fairs at state and district levels aimed at disseminating knowledge on new technologies and better farming techniques among farmers. These public gatherings are organised in collaboration with the State Department of Agriculture, SAU's and ICAR institutions. Other initiatives Provide financial assistance to farmers when needed Our team approaches farmers and provides time-critical farm assistance We have promoters who educate farmers about our products and agronomy practice to be followed in specific geographies We engage in several BTL and ATL branding initiatives for audiences targeted 21 21#23* Seeding Community Wellbeing As a responsible corporate citizen, we undertake several sustainability initiatives for the well-being of communities. Our interventions help farmers improve their lives and be a part of India's socioeconomic progress. We have adopted three villages (Gatla Narsingapur, Ramnagar and Bollone Pally) in Telangana, where we conducted the following programmes during the year: о о О о о Constructed new school buildings at Siddipet town and Gatla Narsingapur village in Karimnagar district Disbursed salaries of Vidya volunteers of Upper Primary School (UPS) and Zilla Parishad High School (ZPHS) at Gatla Narsingapur village, Built a mineral water plant at Gatla Narsingapur to supply potable water Distributed books and school bags among students of several UPS and ZPHS in Bheemdevarpally Mandal, Karimnagar district, for the academic year 2016-17 Made furniture for a school at Gatla Narsingapur village and several colleges in Karimnagar district О Funded school maintenance expenses like electricity charges of school buildings, upkeeping of canteens and arranged sports and cultural activities at UPS and ZPHS in Gatla Narsingapur village о о о Built new roads and improved the existing road and drainage facilities in the three villages De-silted a tank at Gatla Narsingapur to ensure better water storage facility Provided a school bus to Gatla Narsingapur village to facilitate smooth journey of the village children from home to school and back О Installed computers at the Gatla Narsingapur village school for students to learn the nuances of technology Donated funds to 'Swarna Bharath Trust' for rural development activities о 0 0 0 0 Constructed a community hall Led massive plantation drives in three villages under the 'Haritha Haram' programme Adopted three schools in three villages to ensure education and empowerment of school-going children Provided scholarships to school and college students from socially backward communities, encouraging them to pursue higher studies DONATED BY Kaveri Seed Company MINARAL WATER PLANT 22#24K 5 YEARS FINANCIAL PERFORMANCE 23#256,064 8,188 7,282 7,042 10,010 Revenues (mn) EBIDTA (mn) Net Profit (mn) EPS (Rs.) 1,444 2,299 3,222 2,025 1,130 K 5 Year Financial Highlights: Standalone Significant Growth Trajectory and Superior Return Profile 1,299 2,106 3,018 1,723 785 785 19.0 30.6 43.8 FY16 25.0 FY17 11.4 FY16 & FY17 turned out to be a difficult years for the seed industry, and the farmers " ■ Cotton Headwinds - Significant drop in volumes and acreage coupled with no price hikes and one of the shortest sales seasons Higher sales returns in non-cotton crops ROE (%) FY13 37.5% FY14 40.6% FY15 39.8% FY16 18.4% FY17 7.7% 24 ROCE (%) FY13 38.1% FY14 41.1% FY15 40.5% FY16 18.8% FY17 8.2%#26FY17 1,791 2,031 2,803 3,051 1.39 1.71 3,406 2.38 2.71 2.58 FY13 0.79 FY14 0.76 FY15 0.87 FY16 0.73 0.78 5 Year Financial Highlights: Standalone Significant Growth Trajectory and Superior Return Profile Revenue Days Gross Block Current ratio Inventory (Mn) (times) turnover (times) turnover (times) Fixed asset Receivable Days Non Cash Net Current Assets 3.77 FY14 4.23 FY15 4.11 FY16 2.45 FY17 2.08 FY13 29.3 FY14 29.6 FY15 29.8 FY16 41.1 FY17 36.2 FY13 113 FY14 157 FY15 193 25 25 FY16 355 FY17 410#27K INDUSTRY BACKDROP & OUTLOOK 26#28K Industry Backdrop Seed Industry Sales trend compared to last year Cotton Maize ++ Crop-wise area coverage during Kharif 2017: As on September 29, 2017 0 0 O O Hybrid Rice Selection Rice + ++ Bajra ++ Vegetables Overall rainfall was normal but with wide variation Dry spell in August impacted yield of crops like maize, soybean and other short duration crops Late rains impacted crop in many areas Late withdrawal of monsoon helped moisture build up for Rabi season Tamil Nadu recovered from last year drought O Vegetable market has been challenging for industry in H1 Commodity prices have remained flat Area in lakh hectare Crops 2017 2016 YoY Change % Cotton 122.6 102.8 19.3 Maize 80.5 84.2 (4.4) Rice 379.1 382.4 (0.9) Bajra 71.8 70.4 2.0 Pulses 142.0 147.5 (3.7) Oilseeds 173.4 190.3 11.7 27 27#29Industry Backdrop - All India Rainfall 68 76' 80 545 (535) 2% 92 96 36 721 385 (825) (492) -13% SW Monsoon Rainfall June-September 2017 (Real Time) 1199 -22% 346 (1229) (466) -26% 531 -2% 366 (769) 2040 (2006) 2% 1572 (1768) -11% (263) 39% 31% 566 648 (898) 937 (616) -28% $1028) -8% -9% 796 970 995 1133 738 546 (1051) 1092 (915) (477) 9% (876) (1168) 1615 (1793) -10% 1871 (1497) 25% -24% 21.0% -16% 1039 35% 732 1153) 1052 (955)-10% (1150) 642 23% -9% 853 (683) 657 3206 (729) (755) (2915) 10% 17% 523 (506), 3% -13% 663 (581) 506 (398) 14% EXCESS (>19%) 2596 (3084) -16% 670 27% (660) 2% 1108 1857 (999) (2040) 11% -9% 414 (317) 31% 00 NORMAL (-19% TO +19%) DEFICIENT (-20% TO -59%) SCANTY(<=-60%) All India Areaweighted Rainfall Actual Normal %Dep 841.3 887, 5 -5 Excess: 05 Deficient: 06 Normal 25 Scanty :00 84 1526 (1683) -9% Source: IMD 28#30K Industry Backdrop - All India Rainfall Percentage Departure from LPA 35.0 Week by Week Progress of All India SW Monsoon Rainfall: 2017 25.0 15.0 17.6 11.8 Weekly RF Cumulative RF 21.9 20.8 11.3 23.9 12.0 5.0 -5.0 -15.0 -25.0 -35.0 -10.7 -4.7 7-Jun 14-Jun 21-Jun 28-Jun 5-Jul -18.8 -27.0 -28.6 -15.8 -21.0 -23.6 -31.3 -10.2 2-Aug 9-Aug 16-Aug 23-Aug 30-Aug 6-Sep 13-Sep 20-Sep 27-Sep WEEK ENDING Source: IMD 29 22#31-10 RAINFALL SOLP) 10 - 5 8 8 8 UPY-b ury-T 7-Jun 10-Jun UPYI 16-Jun 19-Jun 22-Jun 25-Jun 28-Jun דיורו 50 74 10 Ju 13-Jul 10-lu 15 Ju 22-Jul 25-Ju 28-d RAINFALL (mm) 400 500 300 200 100 D 1 Jun + 4-Jun 7-Jun 10-Jun 1000 900 BOO 500 200 13-Jun 16-Jun- 19-Jun- 22-Jun- 25-Jun- 28 Jun 1-Jul- 4 Jul 7-Jul 10-Jul- 13-Jul- 16-Jul 4-Jun 7-Jun 10-Jun 13-Jun 16-Jun 19 Jun 22-Jan 25-Jun 2B-Jun 1-Jul 4-Jul 7-Jul 10- K Industry Backdrop - All India Rainfall HAINFALL (mm) 10 14 12 10 DAILY MEAN RAINFALL (mm) OVER THE COUNTRY AS A WHOLE (2017) ACTUAL NORMAL: 1951-2000 13-Jul 16-Jul 19-ul 25-Jul 28-Jul CUMULATIVE ACTUAL (TILL SEP.30]: 841.3 mm CUMULATIVE NORMAL (51-2000) TILL SEP.30: 887.5 mm CUMULATIVE RAINFALL (mm) OVER THE COUNTRY AS A WHOLE (2017) 19-Jul- 22-Jul- 25-Jul 2-Jul- 31-Jul- 3-Aug- -Iny g iny- CUMULATIVE RAINFALL (% DEP) OVER THE COUNTRY AS A WHOLE CUMULATIVE % DEP. (TILL SEP.30): -5.2 % iny-c ΠΕΤΕ any-g 9-Aug 12-Aug 15-Aug 18-Aug 21-Aug 24-Aug 27-Aug 30-Aug 2-Sep 5-Sep B-Sep 11-Sep 14-Sep 17-Sep 20-Sep 23-Sep 26-Sep 29-Sep 30 12-Aug- 15-Aug- iny-12 Inyat 24-Aug 27-Aug Joy-de 2-Sep 1 Source: IMD 5-Sep 8-Sep- 11-Sep 1 14-Sap 17-Sep- 20-Sep 23-Sep- 26-Sep 29-Sep Inv 6-Aug Inye 12-Aug 15-Aug 2ny-IZ InvBT M4-Aug 27-Aug Any-of dag- 5-Sep dagg 11 Sep dǝs t 17-Sep 20-Sep das G dag-oz dǝs Ez#32K Industry Backdrop - Cotton Area coverage during Kharif 2017 as on September 29, 2017 Area in lakh hectare One of the best year for cotton Sowing happened much earlier than last year in Central and South India North Cotton market growth was much higher than All India on the back of good crop last year Use of Illegal Herbicide Tolerance was found in few states September rains impacted quality and quantity for early picking Pink Bollworm reported in few places. Prophylactic spray by farmers to prevent damage by pink bollworm has gone up Commodity prices are at lower levels compared to last year. However, Cotton still the most profitable crop as compared to other crops O о о YoY Change State 2017 2016 % Andhra Pradesh 6.1 4.4 40.1 Telangana 19.1 12.4 54.4 Gujarat 26.4 24.0 9.6 Karnataka 4.9 4.4 12.8 Madhya Pradesh 6.0 6.0 0.0 Maharashtra 42.1 38.1 10.4 Haryana 6.6 5.2 27.1 Punjab 3.9 2.6 50.4 Rajasthan 5.0 3.8 30.8 Others 2.6 2.0 32.5 Total 122.6 102.8 19.3 Source: Directorate of Cotton Development, Nagpur Ο 31#33Industry Backdrop - Maize Area coverage during Kharif 2017 as on September 29, 2017 Area in lakh hectare Telangana and Karnataka constitute more than 1/3 of organized market in Kharif Hybrid Maize seed sales Telangana and Karnataka contributed to nearly 2/3 of KSCL's Kharif maize sales in FY17 Farmer down traded in few states due to tough market conditions Karnataka market recovered in the second half of the season due to late sowing. However, market still lower than last year Productivity impacted due to weather fluctuation о о о State 2017 2016 YOY Change % Madhya Pradesh 13.2 12.6 4.3 Rajasthan 9.1 9.3 (2.4) Karnataka 11.3 12.8 (12.0) Maharashtra 9.1 9.2 (0.9) Uttar Pradesh 7.3 7.8 (7.0) Telangana 4.5 5.9 (22.9) Bihar 4.1 4.3 (5.3) Gujarat 3.1 3.2 (5.2) Himachal Pradesh 2.9 3.0 (1.0) Jharkhand 2.8 2.9 (0.7) Orissa 2.3 2.3 0.4 Chhattisgarh 2.3 2.3 0.4 Jammu and Kashmir 2.0 2.0 (0.5) Punjab 1.4 1.5 (6.9) Andhra Pradesh 1.0 0.8 25.6 Others 3.3 3.3 1.2 Total 80.6 83.9 (4.0) Source: Department of Agriculture Cooperation & Farmers Welfare 32 32#34K Outlook Industry O Rains in September and late withdrawal of monsoon lead to soil moisture build up which will be helpful for a good Rabi season Vegetable sale expected to pick up in H2 Demand for seed production likely to up in Rabi as industry likely to build up inventory Maize area in Bihar looks positive O O O KSCL Rabi Maize acreage and export volumes looks positive Plans in place for scaling up rabi seed production Returns received well in time. Inventory profile is much better and discard likely to be lesser than previous years 33 33#35K Growth Strategy - Initiatives FY18 Diversification Non cotton business stronger - reducing dependence on cotton О Cotton growth has been more ○ than other crops this quarter but the strategy is to grow non cotton business as well Selection Rice volume increased by more than 40% 。 Hybrid Rice and Bajra looking positive with new product contribution going up Nurturing Vegetables business о О Increased investment in R&D Demonstration of more than 50 different product in farmer field Spreading geographical footprint о Focused on strengthening distribution network beyond South and Central India, to northern, eastern and western geographies | | | | Bihar >50% growth Jharkhand >100% growth Orissa >50% growth West Bengal >200% growth Gujarat >50% growth Maharastra >50% growth Organizational Capability Human Capital О Appointed new R&D head, significantly strengthening the core team - had appointed Supply Chain, Marketing heads for Field Crop and Vegetable in last two years о Beefed up mid-level talent across verticals Increased resourcing in R&D Built exclusive Vegetables sales team of more than 25 dedicated employees from 4 same time last year Processes о Human Resource Management System being implemented for efficient management SAP implementation in progress Increased number of multi- locational trials in R&D for product evaluation Infrastructure О Purchased 24 acre land in Telangana for R&D and future expansions Increased visibility and mindshare Farmer Connect о Increased number of demonstration of pre commercial products о Increased number of below the line activities to connect with farmers Channel Engagement 。 Mapping of retailer and focus on key retailers o Improved engagement with Channel partners with more meetings Supply Chain Deliver volumes as per growth plan О Cotton planting completed in four strategic location as per plan О Rabi scale up plan in place Establish Vegetable seed production О Increased vegetable seed production area for catering to FY19 plan Improve efficiency in operations o Improved recovery rates of selection rice in new Mulangoor plant • Leverage Mulangoor plant to handle higher thru-put Improve seed quality о Reduced raw seed failure compared to last year in Maize and Cotton. Reinforce cotton leadership Expanding footprint outside of Telangana/Andhra Pradesh and Karnataka 。 Significant growth and market share gain in Gujarat and Maharastra Increased R&D effort in North New Products 。 Money Maker ramp up positive О New product contribution up from 7% to 17% 34#36K QUARTERLY PERFORMANCE 35 55#37K Q2 FY18 Performance Review Standalone Profitability impacted by: Strong topline growth contributed to by sales across both cotton and non cotton Other income lower as a result of lower redemptions Rs. lakhs Net Sales H1 FY18 H1 FY17 Growth (%) Q2FY18 Q2FY17 Growth (%) 66,015.91 56,177.32 17.51 6,960.04 6,776.43 2.71 Cost of Production Gross Profit 33,184.60 32,831.31 24,603.14 31,574.18 5.10 2,470.39 4,121.47 (40.06) 33.44 4,489.65 2,654.96 69.10 Gross Margin (%) 49.73 43.80 13.56 64.51 39.18 64.64 Employee cost 2,348.70 1,859.54 26.31 1,167.89 784.70 48.83 Cost of production lower as a result of significantly lower write offs Other Expenses 8,321.06 6,580.07 26.46 1,847.99 1,532.71 20.57 Other income 2,069.05 2,248.56 (7.98) 1,640.31 1,704.70 (3.78) EBITDA 24,230.60 18,412.09 31.60 3,114.08 2,042.25 52.48 EBITDA Margin (%) 36.70 32.77 11.99 44.74 30.14 48.46 Depreciation 1,236.06 1,504.39 (17.84) 605.91 724.51 (16.37) Finance Cost 30.68 3.72 724.73 6.63 2.20 201.54 PBT 22,963.86 16,903.98 35.85 2,501.54 1,315.54 90.15 PAT 22,328.30 16,211.35 37.73 2,090.62 774.45 169.95 PAT Margin (%) 33.82 28.86 17.21 30.04 11.43 162.83 36#38K Consolidated Balance Sheet Summary Rs. Lakhs Shareholders Fund Long-term Debt Fixed Asset Turnover (times) Current Assets / Current Liabilities (times) As on Sep. 30, 2017 As on Sep. 30, 2016 110,924.63 102,577.95 163.86 163.86 1.94 1.83 3.12 3.82 Total cash on books of Rs. 422 crore as on 30 September, 2017 Rs. Lakhs Inventories Trade Receivables As on Sep. 30, 2017 As on Sep. 30, 2016 37,292.64 34,703.79 25,558.27 25,017.57 Trade Payables 21,747.17 17,969.25 Other current liabilities 4,702.01 5,728.18 Non Cash Net Current Assets (No. of Revenue Days) 411.82 569.10 37 57#39K Cash investments as on 30 September 2017 Rs.in Lakhs All figures based on cost Fund House Liquid Plus FMPS Short Term Medium Term Total ASK 2,616 2,616 BIRLA 2,215 2,700 4,915 HDFC 4,905 3,800 8,705 ICICI 1,132 780 2,750 3,703 8,366 IDFC 1,286 1,100 2,386 IIFL 2,500 2,500 KOTAK 4,000 350 4,350 RELIANCE 1,253 5,300 6,553 TATA 297 297 UTI Total 500 7,968 5,685 5,465 500 22,069 41,188 Total cash on books of Rs. 422 crore as on 30 September, 2017 38#40K о О О Q2 & H1 FY18 Operational Highlights Cotton Kaveri volumes grew by 28% in H1 Gained cotton seed market share in Gujarat, Maharastra, Karnataka Maize volumes dropped by 12 % YoY in H1, Q2 volumes up by 13%% Market dropped in key Kaveri states of Telangana and Karnataka Government business volumes dropped compared to last year Hybrid Rice volumes increased by 8% in H1 inspite of drop in govt business Introduction of new hybrid helped Contribution of new product went up from 1% to 15% of volume о Selection Rice volumes grew by 42% in H1 о Contribution of new products went up from 3% to 12% Bajra - Volume has dropped but new product contribution is up - New product contribution has gone up from 6% to 14% of volume 。 Sunflower volume has doubled in H1 FY18 compared to H1 FY17 Cotton seed revenue & volumes Hybrid Rice seed revenue & volumes о о о О О 2 new cotton hybrids launched and 2 new cotton hybrids under demonstrations with farmers Performance of Money Maker appreciated by farmers 3 new hybrids launched in maize for kharif season. 2 new hybrids in maize to be launched in rabi season 2 new maize hybrids under demonstration 4 new hybrids in pearl millet in kharif season under demonstration 1 new hybrid launched in hybrid rice and 4 new products launched in selection rice KPH 468 13x growth. Consistent performance across geography. Plan in place to ramp up in coming year 1 new hybrid in hybrid rice and 2 new products in selection rice under demonstration Maize seed revenue & volumes 5.6 5.4 6.9 1.7 1.6 1.7 6.3 8.2 7.2 411 349 462 30 29 31 71 105 94 HIFY16 HIFY17 HIFY18 HIFY16 HIFY17 HIFY18 HIFY 16 HIFY17 HIFY18 Net Revenues (Rs cr) Sales Volume (mn packets) Net Revenues (Rs cr) Sales Volume ('000 tons) Net Revenues (Rs cr) Sales Volume ('000 tons) 39#41K Investor Contacts For further information, please contact: G. Vijay Kumar CFO, Kaveri Seeds Tel: +91 40 4919 2345 Fax: +91 40 2781 1237 [email protected] # 513 B, 5th Floor, Minerva Complex, S.D.Road, Secundrabad - 500 003 www.kaveriseeds.in Gavin Desa +91 22 6645 1237 CDR India gavin@cdr-india Vikram Rajput CDR India +91 22 6645 1223 vikramr@cdr-india 40 40#42THANK YOU K 41