Our planet is home to 7.2 billion people; and the population is expected to touch 9.3billion by 2050. The result is a growing demand for food. However the constant depletionof arable land across the world will put added pressure on countries to raise theirproduction of food crops.
On the other hand farm acreage remains stagnant as expanding farmlands carry highenvironmental risks posed by the conversion of forests into agricultural lands.Therefore the critical need for India is to enhance the use of high-yielding qualityseeds to increase productivity.
Global crop output per acre is declining significantly owing to the disproportionateuse of resources.
At the same time water scarcity is driving enhanced research efforts to developabiotic stress-tolerant crops that consume less water in the fields. In India the demandfor high-quality seeds is expected to grow to enhance farm yield at a time when erraticrainfall patterns are becoming a concern for farmers.
At Kaveri Seeds we are committed to strengthen India's food and nutritional securityby consolidating our fundamental strengths. During the year we made significant progressin developing a clear framework for measuring and tracking our various operations.Initiatives such as better and timely production planning and focus on geographicdiversity for production have enabled us to minimise the production-related risk.
A prolonged period of volatility was created in the market in 2015 following severedrought across large parts of India. However a relatively better monsoon in 2016 enabledus to gain a favourable position backed by several effective interventions.
We reported a lower net sales of Rs. 669.89 Crores in 2016-17 compared to Rs. 716.52Crores 2015-16. Simultaneously our EBIDTA decreased to Rs. 172.23 Crores in 2016-17vis--vis Rs. 202.51 Crores in 2015-16. Our net profit stood at Rs. 78.47 Crores in2016-17 against Rs. 172.28 Crores in 2015-16 and our earnings per share stood at to Rs.11.36 in 2016-17 compared to Rs. 24.95 in 2015-16.
Our steady investments to bolster R&D initiatives have translated into encouragingoutcomes. We have launched new hybrids in our mandate crops. We have witnessed remarkablesuccess in major crops such as cotton maize rice bajra and vegetables. Our newbreeding strategies will enable us to strengthen our R&D efforts further. We willcontinue to excel in innovation and development of new products.
During the year we further fortified our position by penetrating into various marketsrelying on the performance of our products and catering to the requirements of customers.We are focusing on
India's predominantly agricultural belts to enhance our business opportunities.
At the same time we are engaging with farmers and providing them with criticalinformation to increase their farm productivity. We are also making them aware of thequality of our products. More initiatives like farmer incentive programmes merchandisedistribution decorated vans to educate farmers are waiting to be rolled out. Theseinitiatives will progressively strengthen our brand recall.
Our key crops comprise cotton rice maize and bajra. Despite the temporary marketslowdown due to demonetisation our market share in most of the crops grew significantly.
Our market share for cotton grew encouragingly owing to proactive initiatives such asengaging more with farmers and making them aware of our products and their advantages. Wereached out to the retailers extensively especially in the state of Maharashtra.
Maize showed promising growth in terms of volumes and market share. This wasparticularly because of identifying new markets in the western central and northernregions of India.
Although the hybrid rice didn't perform as we had expected we saw significant growthin our selection rice. The market for bajra remained stable; and we could introduce twonew products this year.
We strengthened our vegetable seed business with increasing investment in R&Dsupply chain marketing and the launch of new products. Vegetable seeds are low-volume andhigh-value crops and provide a new opportunity for Kaveri. In the coming years thisportfolio will help to diversify our risk and contribute to our growth.
Team and the community
In our drive to achieve holistic excellence on all fronts our team has always played apivotal role. The management has also adopted best-in-class employee engagement practicesto motivate team members and strengthen their capabilities.
I am sure that Kaveri Seeds has innovative skills creativity good expertise andexperience as well as the right product portfolio in different crops to fulfil theaspirations of farmers and consumers of India.
Our business initiatives primarily empower farmers and our community efforts are anextension of this corporate philosophy. Kaveri acts as a vehicle of social transformation.
We undertake several community outreach programmes in some of the most remote villagesof Telangana. Our area of operations includes education community development and farmerwelfare.
Our future priorities comprise
Improving customer experience and to grow market share Increasing investment in R&Dto develop products as per the changing needs of farmers
Enhancing footprint in markets where our presence is low currently Diversifying ourrisk by developing vegetable business and foraying into international market Creatingappropriate framework to achieve targeted goal in all the areas Developing talent in theorganisation to support growth On behalf of my colleagues on the Board I would like toexpress my sincere gratitude to all our customer employees suppliers business partnersshareholders for being with us throughout this transformational journey. I wouldparticularly like to thank all the employees of Kaveri Seeds for their dedication hardwork and commitment towards the Company. We look forward to another successful year aheadwith several new initiatives planned.
Chairman and Managing Director