K.P.R. AGROCHEM LIMITED CIN: U24129AP2007PLC052216

11th ANNUAL REPORT

2016-2017

Regd. Office. 8-256, Tata Nagar, Balabhadrapuram – 533343 East Godavari Dist., Andhra Pradesh Board of Directors

Mr. Kovvuri Papa Reddy Whole Time Director & Chairman, DIN: 01375140 Mr. Karri Venkata Mukunda Reddy Managing Director, DIN: 01574312 Mr. Kovvuri Rajasekhar Reddy Whole Time Director & Executive Director, DIN: 01808276 Dr. R. Srinivasan Independent Director DIN: 00003968 Ms. Jyothi Prasad Independent Director DIN: 06947488 Mr. Gannamani Venkateswara Rao Independent Director, Additional Director DIN: 00624612 Mrs. Padmaja Nandigana Independent (Woman) Director, Additional Director DIN: 07449642 Mr. W. Murali Krishna Independent Director, DIN: 01271559

Key Managerial Personnel:

Mr. P. Narayana Rao, Company Secretary FCS 943 Mr. B. Sathyanarayana Reddy Chief Financial Officer

Registered Office: Works 8-256, Tata Nagar Unit – 1 BALABHADRAPURAM – 533 343, R S.No. 24/2, Nallamilli Road, East Godavari District BICCAVOLU – 533 343 Andhra Pradesh East Godavari District Ph. 0 8857 237367 Andhra Pradesh Website: www.kpragrochem.com

Works Unit -2 : Unit – 3 : Dr. No. 8-256, Tata Nagar Sy.No.108 & 109 Balabhadrapuram-533 343 Halvarthy Village – 583 281 East Godavari District Koppal Tq & District Andhra Pradesh Karnataka

AUDITORS COST AUDITORS M/S MM Reddy & Co., CHAITANYA & Co., CHARTERED ACCOUNTANTS Cost Accountants FRN 010371S 16.2.19, Valluri vari st. G-8, Amrutha Ville Apts, Right Wing, Mandapeta 533308 Opp. Yashoda Hospital\ East Godavari Dt. Rajbhavan Road, Andhra Pradesh Somajiguda Hyderabad 500082

BANKERS Registrars & Transfer Agents ANDHRA BANK Karvy Computershare Pvt Ltd. RAYAVARAM 533346 Karvy Selenium Tower B, Plot 31-32, East Godavari Dt. Gachibowli Financial District, Nanakramguda, Andhra Pradesh Hyderabad 500 032 K.P.R.AGROCHEM LIMITED CIN: U24129AP2007PLC052216

C o n t e n t s

NOTICE of THE 11th ANNUAL GENERAL MEETING of Members of the Company Annexure

11th ANNUAL REPORT of THE BOARD OF DIRECTORS to the Members Annexure

INDEPENDENT AUDITORS’ REPORT to THE MEMBERS FY 2016-17 Annexure

FINANCIAL STATEMENTS (Stand alone)

BALANCE SHEET as at 31.03.2017 PROFIT & LOSS STATEMENT for the Financial year ended 31.03.2017 CASH FLOW STATEMENT for the Financial year ended 31.03.2017 Corporate Information Significant Accounting Policies and Notes on Accounts,

FINANCIAL STATEMENTS (Consolidated ) (With Subsidiary, Sri Sai Swarupa Seeds Private Ltd.)

BALANCE SHEET as at 31.03.2017 PROFIT & LOSS STATEMENT for the Financial Year ended 31.03.2017 CASH FLOW STATEMENT for the Financial Year ended 31.03.2017 Corporate Information Significant Accounting Policies and Notes on Accounts K.P.R.AGROCHEM LIMITED CIN: U24129AP2007PLC052216

Regd Office: 8-256, Tata Nagar, BALABHADRAPURAM 533343, Biccavole Mandal, East Godavari District, Andhra Pradesh, India.

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 11th Annual General Meeting (AGM) of the Members of the Company (K.P.R. Agrochem Limited) will be held on the 29th day of September 2017, Friday at 11-00 A.M at the Registered Office at Door No. 8-256, Tatanagar, Balabhadrapuram 533343, Biccavole Mandal, East Godavari District, Andhra Pradesh to transact the following Business::

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31st March 2017, the Statement of Profit & Loss for the financial year ended on that date, other financial statements Report of the Auditors thereon and the Report of Board of Directors for FY 2016-17.

2. To receive , consider and adopt the Consolidated Financial Statements consisting of Audited Balance Sheet of the Company as at 31st March 2017, the Statement of Profit & Loss for the financial year ended on that date, other financial statements(including that of Sri Sai Swarupa Seeds Private Limited , the subsidiary Company) and the Reports of the Auditors and the Board of Directors.

3. To appoint a Director in place of Mr. Kovvuri Rajasekhar Reddy Director, (DIN: 01808276) who retires by rotation under Section 152(6) of the Companies Act, 2013, and being eligible offers himself for reappointment and in this connection to consider and if deemed fit to pass the following Resolution as ordinary resolution:

“RESOLVED THAT Mr. Kovvuri Rajasekhar Reddy, having DIN: 01808276, retiring on rotation as Director be and is hereby re appointed as a Director of the Company, without interruption of his tenure as whole time Director and Executive Director of the Company, as approved by Members of the Company in EGM Dt. 31.03.2014 4. To appoint M/s M M Reddy& Co., Chartered Accountants, as Auditors of the Company from the conclusion of this AGM and in this connection to consider and if deemed fit to pass the following Resolution as an ordinary resolution:

"Resolved that pursuant to Section 139, Section 142, and other applicable provisions the Companies Act, 2013 and the Rules made thereunder, including any statutory modification(s) or re-enactment(s) thereof for the time being in force, the appointment of M/s. M. M. Reddy & Co.,, Chartered Accountants (Firm Registration No. 010371S) as Statutory Auditors of the Company to hold office from the conclusion of the 1th Annual General Meeting of the Company to the conclusion of the 15th Annual General Meeting to be held in 2020, on a remuneration as may be agreed upon by the Board of Directors and the Auditors, be and is hereby ratified."

SPECIAL BUSINESS:

5. To consider and if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 152, 161 and other applicable provisions of the Companies Act, 2013 (“the Act”) and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re- enactment thereof, for the time being in force), Mrs. Padmaja Nandigana (DIN: 07449642), who was appointed as an Additional Director under the Independent Category by the Board of Directors of the Company in their circular resolution passed on 21.03.2017 and who holds office as such up to the date of this Annual General Meeting be and is hereby appointed as a Director of the Company.”

6. Appointment of Mrs. Padmaja Nandigana as an Independent Director of the Company

To consider and if thought fit to pass with or without modification(s) the following resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed there under, read with Schedule IV to the Act, as amended from time to time, Mrs. Padmaja Nandigana (DIN: 07449642), a non-executive Director of the Company, who has submitted a declaration that she meets the criteria for independence as provided in section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company with effect from March 21st, 2017 upto March 20th 2022.”

7. To consider and if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 152, 161 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re- enactment thereof, for the time being in force), Mr. Gannamani Venkateswara Rao (DIN: 00624612), who was appointed as an Additional Director under the Independent Category by the Board of Directors of the Company in their meeting held on 29.05.2017 and who holds office as such upto the date of this Annual General Meeting be and is hereby appointed as a Director of the Company.”

8. Appointment of Mr. Gannamani Venkateswara Rao as an Independent Director of the Company

To consider and if thought fit to pass with or without modification(s) the following resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed there under, read with Schedule IV to the Act, as amended from time to time, Mr. Gannamani Venkateswara Rao (DIN: 00624612), a non-executive Director of the Company, who has submitted a declaration that he meets the criteria for independence as provided in section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company with effect from May 29th , 2017 upto May 28th, 2022.”

9. To approve remuneration of Cost Auditors of the Company:

To consider and if thought fit to pass with or without modifications, the following Resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to provisions of Section 148(3) of the Companies Act 2013 read with Companies (Cost Records and Audit ) Rules 2014 the remuneration payable to M/s Chaitanya & Co, Cost Accountants with Registration No. M 28183, appointed by the Board of Directors of the Company to conduct the audit of the cost records of the Company for the Financial Year 2017-18 amounting to Rs.1,00,000 together with applicable GST thereon as applicable and reimbursement of travelling and out of pocket expenses incurred by them in connection with the aforesaid audit, be and is hereby approved and ratified .”

10. Re-appointment of Mr. Kovvuri Papa Reddy, as Chairman and Whole Time Director:

To consider and if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and Rules made there under (including any statutory modification(s) or re-enactment thereof, for the time being in force), the relevant provisions of the Articles of Association of the Company and all applicable guidelines issued by the Central Government from time to time and subject to such other approvals, as may be necessary, consent of the Members be and is hereby accorded for the appointment of Mr. Kovvuri Papa Reddy (DIN: 01375140) as a Chairman and Whole-time Director of the Company for the period of 5 (five) years w.e.f., 01.10.2017 and he will be paid remuneration @ Rs.5,00,000/- (Rupees Five Lakhs only) per month for a period of five years or as may be decided or approved by the shareholders from time to time:

RESOLVED FUTHER THAT where in any financial year during his tenure of Mr. Kovvuri Papa Reddy, the company incurs a loss or its profits are inadequate, the company shall take approval of shareholders with prior approval of the Nomination and Remuneration Committee.

RESOLVED FURTHER THAT the perquisites that are exempted under Scheduled V of the Companies Act, 2013 be paid in addition to the remuneration mentioned above to Mr. Kovvuri Papa Reddy, Chairman and Whole-time Director.

RESOLVED FURTHER THAT the remuneration payable as mentioned above shall be subject to review and re-fixation from time to time and in case of any changes to the relevant provisions of the Act within the tenure.

FURTHER RESOLVED THAT Mr. Kovvuri Papa Reddy shall be subject to retirement by rotation during his tenure as the Whole-time Director of the Company. So long as Mr. Kovvuri Papa Reddy functions as a Chairman and Whole-time Director, he shall not be paid any fees for attending the meetings of the Board or any Committee(s) thereof of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed in this regard.

11. Re-appointment of Mr. Karri Venkata Mukunda Reddy as Managing Director:

To consider and if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and Rules made there under (including any statutory modification(s) or re-enactment thereof, for the time being in force), the relevant provisions of the Articles of Association of the Company and all applicable guidelines issued by the Central Government from time to time and subject to such other approvals, as may be necessary, consent of the Members be and is hereby accorded to the appointment of Mr. Karri Venkata Mukunda Reddy (DIN: 01574312) as the Managing Director of the Company for the period of 5 (five) years w.e.f., 01.10.2017 and he will be paid remuneration @ Rs.5,00,000/- (Rupees Five Lakhs only) per month for a period of five years or as may be decided or approved by the shareholders from time to time:

RESOLVED FUTHER THAT where in any financial year during his tenure of Mr. Karri Venkata Mukunda Reddy, the company incurs a loss or its profits are inadequate, the company shall take approval of shareholders with prior approval of the Nomination and Remuneration Committee.

RESOLVED FURTHER THAT the perquisites that are exempted under Scheduled V of the Companies Act, 2013 be paid in addition to the remuneration mentioned above to Mr. Karri Venkata Mukunda Reddy, Managing Director. RESOLVED FURTHER THAT the remuneration payable as mentioned above shall be subject to review and re-fixation from time to time and in case of any changes to the relevant provisions of the Act within the tenure.

FURTHER RESOLVED THAT Mr. Karri Venkata Mukunda Reddy shall be subject to retirement by rotation during his tenure as the Managing Director of the Company. So long as Mr. Karri Venkata Mukunda Reddy functions as a Managing Director, he shall not be paid any fees for attending the meetings of the Board or any Committee(s) thereof of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed in this regard.

12. Re-appointment of Mr. Kovvuri Rajesekhar Reddy, as a Whole-time Director

To consider and if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and Rules made there under (including any statutory modification(s) or re-enactment thereof, for the time being in force), the relevant provisions of the Articles of Association of the Company and all applicable guidelines issued by the Central Government from time to time and subject to such other approvals, as may be necessary, consent of the Members be and is hereby accorded to the appointment of Mr. Kovvuri Rajasekhar Reddy (DIN: 01808276) as the Whole-time Director and Executive Director of the Company for the period of 5 (five) years w.e.f., 01.10.2017 and he will be paid remuneration @ Rs.5,00,000/- (Rupees Five Lakhs only) per month for a period of five years or as may be decided or approved by the shareholders from time to time:

RESOLVED FUTHER THAT where in any financial year during his tenure of Mr. Kovvuri Rajasekhar Reddy, the company incurs a loss or its profits are inadequate, the company shall take approval of shareholders with prior approval of the Nomination and Remuneration Committee.

RESOLVED FURTHER THAT the perquisites that are exempted under Scheduled V of the Companies Act, 2013 be paid in addition to the remuneration mentioned above to Mr. Kovvuri Rajasekhar Reddy, Executive and Whole-time Director.

RESOLVED FURTHER THAT the remuneration payable as mentioned above shall be subject to review and re-fixation from time to time and in case of any changes to the relevant provisions of the Act within the tenure.

FURTHER RESOLVED THAT Mr. Kovvuri Rajasekhar Reddy shall be subject to retirement by rotation during his tenure as the Whole Time Director of the Company. So long as Mr. Karri Rajasekhar Reddy functions as a Whole Time Director, he shall not be paid any fees for attending the meetings of the Board or any Committee(s) thereof of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed in this regard. For K.P.R. Agrochem Limited By Order of the Board Sd/- P. Narayana Rao Company Secretary

Place: Balabhadrapuram Dated: 24.08.2017

NOTES:

1) The Statements pursuant to Section 102(1) of the Companies Act, 2013 with respect to the Special Business set out in the Notice is Annexed.

2) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE AGM IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE IN THE MEETING INSTEAD OF HIMSELF/ HERSELF, AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

A Person can act as a proxy on behalf of not exceeding fifty (50) Members and holding in aggregate not more than Ten (10) percent of the total share capital of the Company.

3) Corporate Members intending to send their authorized representatives to attend the Meeting are requested to send a certified copy of the Board resolution to the Company, authorizing their Representative to attend and vote on their behalf at the Meeting.

4) The Instrument appointing the proxy, duly completed, must be deposited at the Company’s registered office not less than 48 hours before the commencement of the Meeting.

5) The Register of Directors and Key Managerial Personnel and their Shareholding, Register of Contracts in which Directors are interested, as maintained under Section 170 of the Companies Act, 2013, will be available for inspection by the Members at the AGM.

6) Subject to the provisions of the Companies Act, 2013, dividend as recommended by the Board of Directors, if declared at the Meeting will be paid within a period of 30 days from the date of declaration, to those Members whose names appear on the Register of Members as on the date of AGM, which is considered as the Record date.

7) Members whose shareholding is in electronic mode are requested to direct, change of address, notifications and updates of savings bank account details to their respective Depository Participants(s). Members are encouraged to utilize the National Electronic Clearing System (NECS) for receiving dividends.

8) The Securities and Exchange Board of India (SEBI) has mandated the submission of the Permanent Account Number (PAN) by every participant in the securities market. Members holding shares in electronic form are requested to submit their PAN to their Depository Participant(s). Members holding shares in physical form are required to submit their PAN details to the Company.

9) All documents referred in the Notice will be available for inspection at the Company’s registered office during normal business hours on working days up to the date of the AGM. K.P.R.AGROCHEM LIMITED CIN: U24129AP2007PLC052216

Regd Office: 8-256, Tata Nagar, BALABHADRAPURAM 533343, Biccavole Mandal, East Godavari District, Andhra Pradesh, India.

EXPLANATORY STATEMENT (Pursuant to Section 102 of the Companies Act, 2013)

ITEM NO.5 & 6:

Mrs. Padmaja Nadigana was appointed by the Board from 21.03.2017as a Non Executive (Independent) Director of the Company and her term expires by conclusion of this Annual General Meeting. In terms of section 149 and other applicable provisions of the Companies Act, 2013 she is hereby proposed to be appointed as an Independent Director for a term of five years.

A notice has been received from a member along with the deposit of requisite amount under section 160 of the Companies Act, 2013 proposing Mrs. Padmaja Nadigana as a candidate for the office of Independent Director of the Company. The Company has also received from her the consent in writing in Form DIR-2 pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rules, 2014, the disclosure of her directorship in Form MBP-1 and a disclosure to the effect that she is not disqualified under section 164(2).

In the opinion of the Board, Mrs. Padmaja Nadigana fulfils the conditions specified in the Act and the Rules made thereunder for the appointment of Independent Director of the Company and is independent of the management.

None of the Directors, except Mrs. Padmaja Nandigana and Key Managerial Personnel of the Company or their relatives are in any way concerned or interested, financially or otherwise, in the said Resolution.

The Board recommends Resolutions under Item No. 5 & 6 to be passed as ordinary resolution.

ITEM NO.7 & 8:

Mr. Gannamani Venkateswara Rao has appointed by the Board from 29.05.2017 as a Non Executive (Independent) Director of the Company and his term expires by conclusion of this Annual General Meeting. In terms of section 149 and other applicable provisions of the Companies Act, 2013 he is hereby proposed to be appointed as an Independent Director for a term of five years.

A Notice has been received from a member along with the deposit of requisite amount under section 160 of the Companies Act, 2013 proposing Mr. Gannamani Venkateswara Rao as a candidate for the office of Independent Director of the Company. The Company has also received from him the consent in writing in Form DIR-2 pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rules, 2014, the disclosure of his directorship in Form MBP-1 and a disclosure to effect that he is not disqualified under section 164(2).

In the opinion of the Board, Mr. Gannamani Venkateswara Rao fulfils the conditions specified in the Act and the Rules made thereunder for his appointment as Independent Director of the Company and is independent of the management.

None of the Directors, except Mr. Gannamani Venkateswara Rao and Key Managerial Personnel of the Company or their relatives are in any way concerned or interested, financially or otherwise, in the said Resolution.

The Board recommends Resolutions under Item No. 7 & 8 to be passed as ordinary resolution.

ITEM NO.9

To approve remuneration of Cost Auditors of the Company

The Company is required to appoint Auditors for Audit of the Cost Record of the Company for the Financial Year 2017-18 within 180 days of the commencement of the Year, as per Section 148 of the Companies Act read with Companies (Cost Records & Audit) Rules 2014.

M/s Chaitanya & Co, Cost Accountants, Mandapeta with Membership No. 28183 is the existing Cost Auditors.

The Board in the Meeting held on 29.05.2017 has approved the appointment of M/s Chaitanya & Co, Cost Accountants as Cost Auditors for conduct of the Audit of the Cost records of the Company for the Financial Year 2017-18.

The Company in General Meeting is required to approve remuneration to the Cost Auditor as per Section 148 (3) of the Companies Act, 2013.

The Board on recommendation of the Audit Committee recommends the approval of the remuneration as set out in the Resolution in the Notice.

The Board recommends resolution under Item No. 9 to be passed as a Special resolution.

None of the Directors or Key Managerial personnel is deemed to be concerned or interested in the Resolution.

ITEM NO.10

To approve re-appointment of Mr. Kovvuri Papa Reddy, as Chairman and Whole time Director.

Based on the recommendation of the Nomination, Remuneration and Compensation Committee, Mr. Kovvuri Papa Reddy was re-appointed as Chairman and Whole Time Director of the company with effect from 01.10.2017 to the hold office for a period of 5 years, subject to the approval of the Members. The re-appointment of Mr. Kovvuri Papa Reddy is appropriate and in the best interest of the Company. Thus, the Board recommend the Resolution as set out in Item no.10 of this Notice for your approval.

The particulars of remuneration and other terms and conditions of Mr. Kovvuri Papa Reddy’s appointment as a Chairman and Whole Time Director are set out in the Resolution. Since the age of Mr. Kovvuri Papa Reddy exceeds 70 years the approval of the shareholders by way of special resolution in the general meeting is required, hence the board recommend the resolution for your approval.

None of the Directors, Key Managerial Personnel and their relatives other than Mr. Kovvuri Papa Reddy and his relatives are, in any way, concerned or interested in the said Resolutions.

Item No. 11

To approve re-appointment of Mr. Venkata Mukunda Reddy Karri, as Managing Director.

Based on the recommendation of the Nomination, Remuneration and Compensation Committee, Mr. Venkata Mukunda Reddy Karri was re-appointed as Managing Director of the company with effect from 01.10. 2017 to hold office for a period of 5 years, subject to the approval of the Members.

The re-appointment of Mr. Karri Venkata Mukunda Reddy as Managing Director is appropriate and in the best interest of the Company. Thus, the Board recommend the resolution as set out in Item no.11 of this Notice for your approval.

The remuneration and other terms and conditions of Mr. Venkata Mukunda Reddy Karri’s appointment as Managing Director as set out in the Resolution is subject to your approval.

None of the Directors, Key Managerial Personnel and their relatives other than Mr. Venkata Mukunda Reddy Karri and his relatives are, in any way, concerned or interested in the said resolutions.

Item No.12

To approve re-appointment of Mr. Kovvuri Rajasekhar Reddy, as Whole time Director and Executive Director.

Based on the recommendation of the Nomination, Remuneration and Compensation Committee, Mr. Kovvuri Rajasekhar Reddy was appointed as Whole Time Director of the company with effect from 01.10. 2017 to hold office for a period of 5 years, subject to the approval of the Members. The re-appointment of Mr. Kovvuri Rajasekhar Reddy is appropriate and in the best interest of the Company. Thus, the Board recommend the resolution as set out in Item no.12 of this Notice for your approval.

The remuneration and other terms and conditions of Mr. Kovvuri Rajasekhar Reddy for appointment as Whole Time Director as set out in the Resolution are subject to your approval.

None of the Directors, Key Managerial Personnel and their relatives other than Mr. Kovvuri Rajasekhar Reddy and his relatives are, in any way, concerned or interested in the said resolutions.

For K.P.R. Agrochem Limited By Order of the Board

Sd/- P. Narayana Rao Company Secretary

Place: Balbhadrapuram Dated: 24.08.2017 K.P.R.AGROCHEM LIMITED CIN: U24129AP2007PLC052216

Regd Office: 8-256, Tata Nagar, BALABHADRAPURAM 533343, Biccavole Mandal, East Godavari District, Andhra Pradesh, India.

DIRECTORS’ REPORT To The MEMBERS,

Your Directors have pleasure in presenting their 11th ANNUAL REPORT on the Business and Operations of the Company for the Financial Year 2016-17, ended on March 31, 2017.

1. Financial Highlights The Financial Highlights and performance of the Company, both standalone and consolidated for the Current Reporting Financial Year (FY 2016-17) under review, together with appropriations, corresponding figures for the previous reporting financial year are as under:

Standalone Consolidated Rs. Crores Rs. Crores Current Previous Current Previous Particulars Reporting Reporting Reporting Reporting Financial Financial Year Financial Financial Year ended ended Year ended Year ended March March31,2016 March March 31,2017 31,2017 31,2016

REVENUE from Operations 556.48 552.92 583.74 580.09 Other Income 7.53 1.57 6.96 1.32 TOTAL INCOME 564.01 554.49 590.70 581.41 EARNINGS ( EBIDTA) 99.61 99.23 102.29 101.88 Less : Finance Costs 53.84 49.79 54.99 50.91 Less : Depreciation 19.61 17.27 19.90 17.55

PROFIT BEFORE TAX (PBT) 26.14 32.17 27.41 33.42 Less : Tax Expenses 4.51 9.92 4.79 10.34

PROFIT AFTER TAX (PAT) 21.63 22.25 22.62 23.08 Add :SURPLUS (brought forward from Previous Year) 80.49 68.49 84.30 71.54 Less- Income Tax of earlier years 0 5.11 0 5.11

SURPLUS – Available 102.12 85.63 106.98 89.45 Appropriations from Surplus: Provision for Dividend 0 4.27 0 4.27 Tax on Dividend 0 0.87 0 0.87 Transfer to General Reserve 0 0 0 BALANCE Carried over to Balance Sheet 102.12 80.49 106.98 84.31 Basic Earnings per Share 2.53 2.60 2.65 2.70 Diluted Earnings per Share 2.53 2.60 2.65 2.70

2. Review of Operations:

Stand alone

During the Current Reporting Financial Year (FY) 2016-17 under review, your Company has earned revenue of Rs.564.01 Cores on Standalone basis (as against Rs.554.49 Crores of the Previous Reporting FY 2015-16).

Consolidated

During the Current Reporting FY 2016-17 under review ,the Company has earned revenue of Rs.590.70 on Consolidated basis ( including the Subsidiary Company Sri Sai Swarupa Seeds Private Limited ) as against Rs.581.41 Crores of the previous Reporting FY 2015-16.

3. Dividend

The company does not propose to declare any dividend for the year.

4. Internal Audit

The Company appointed M/s Kumar and Giri, Chartered Accountants, Hyderabad as Internal Auditors for the Financial Year 2016-17 and also for FY 2017-18. The scope of work of the Internal Auditors includes review of operational efficiency, effectiveness of systems & processes, compliances, suggestions for appropriate changes in the accounting policies and practices, and channelizing the internal controls in all the areas. The Internal Audit functions are regularly monitored by the Audit Committee

5. Subsidiary Companies

Sri Sai Swarupa Seeds Private Limited ( CIN: U01119AP2009PTC062869) , the Company specialized in Seeds Business is the Subsidiary Company to this Company (K.P.R Agrochem Limited ) from FY 2013-14 and continues to be a Subsidiary Company of your Company during the year under Report.

There are no other subsidiaries, joint ventures or associates of the Company requiring review.

However, 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 , associates and joint Ventures is prepared in Form AOC-1 and it forms part of Consolidated financial statements. (Refer Note No.47 of the Significant Accounting Policies and Notes to Audited Consolidated financial statements) 6. Performance and financial position of M/s Sri Sai Swarupa Seeds Private Limited,(the Subsidiary Company.) Rupees in Crores Particulars Current Reporting Previous Reporting Financial Year ended Financial Year ended March 31,2017 March 31,2016 REVENUE from Operations 29.42 28.49 EARNINGS ( EBIDTA) 3.25 2.90 Less : Finance Costs 1.17 1.37 Less : Depreciation 0.27 0.28 PROFIT BEFORE TAX (PBT) 1.26 1.25 Less : Tax Expenses 0.28 0.42 PROFIT AFTER TAX (PAT) 0.98 0.83 Add :SURPLUS (brought forward from Previous Year) 3.89 3.06 SURPLUS – Available 4.87 3.89 Appropriations from Surplus: 0.00 0.00 BALANCE Carried over to Balance Sheet 4.87 3.89 Earnings Per Share (EPS) Rs 10.94 9.23

7. Deposits

The details relating to Deposits, covered under Chapter V of the Act,- (a) accepted during the year;- NIL- (b) remained unpaid or unclaimed as at the end of the year; -NIL- (c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: (i) at the beginning of the year; -NA- (ii) maximum during the year; -NA- (iii) at the end of the year; -NA-

The details of deposits which are not in compliance with the requirements of Chapter V of the Act;-NIL-

8. Statutory Auditors

M/s. M. M. Reddy & Co. Chartered Accountants, Hyderabad were appointed by the Company in AGM held on 24.09.2016 as Independent Statutory Auditors for 5 years from FY 2015-16,, under Section 139(2) of Companies Act 2013 and other applicable provisions, subject to ratification of the Company every year in the AGM.

The Board recommends the ratification of M/s M.M Reddy & Co., Chartered Accountants in this AGM accordingly as provided in the Notice to the AGM. Auditors’ Report

The Report of the Statutory/Independent Auditors, M/s M M Reddy & Co., Chartered Accountants on the Accounts of the Company to the Members for the Financial year 2016- 17 is attached to the Financial statements. There are no qualifications, reservations or adverse remarks of the Auditors requiring comments or explanation by the Directors.

9. Share Capital

During the year under review, your Company did not issue any shares or other securities or options.

10. Extract of the Annual return

Extract of Annual Return of the Company (MGT-9) as on 31st March 2017 (end of the Current Reporting Financial Year) is annexed herewith as ANNEXURE I to this Report.

11. Conservation of energy, technology absorption and foreign exchange earnings and outgo

(A) Conservation of Energy:

Your Company is reviewing the Utilization of Electrical Motors and replacing regularly, deploying Capacitors and controlling Energy Losses. Your company is also deploying auto starters and introducing LED Bulbs, 5 stars rated ceiling fans etc., Your Company is also effectively utilizing the captive generation power plant to ensure optimum and economic utilization of energy in various plants.

(B) Foreign Exchange Earnings and Outgo

Particulars Current FY Previous FY 2016-17 2015-16 Rs Rs Foreign Exchange Earnings 5,67,59,404 - 3,70,19,832 Foreign Exchange Outgo 113,59,67,515 63,52,33,208

12. Corporate Social Responsibility (CSR) As per Section 135 of the Companies Act, 2013 and the Cos. (CSR ) Rules, our Company is covered by CSR provisions and CSR Committee has been constituted on 16.03.2015 and formulated CSR Policy , in pursuance of the stipulated guidelines

The Corporate Social Responsibility Committee of the Board (CSR Committee) as reconstituted on 29.05.2017 and continuing as such and during the year under report consists of the following Members:

SN Name Director Category Committee Position 1 Mr.K.Papa Reddy Whole Time Non-Independent Chairman Director & & Executive Chairman 2* Mrs. Jyothi Prasad Independent Independent & Member Director Non-Executive 3** Mrs. Padmaja Independent Independent & Member Nandigana Director Non-Executive 4 Mr.K.Rajasekhar Whole Time Non- Independent Member Reddy Director & Executive & Executive Director

During the year under report, Mrs. Jyothi Prasad, Independent Director Resigned with effect from 08.03.2017 and Mrs. Padmaja Nandigana, was Appointed on the Board with effect from 21.03.2017 as Independent Additional Director. Consequently the committee was reconstituted with effect from 29.05.2017 by inducting Mrs. Padmaja Nandigana in place of Mrs. Jyothi Prasad.

The CSR committee will formulate and recommend the CSR policy to the Board of Directors recommends the expenditure after taking in to account, the parameters prescribed by the law for the time being in force, monitors the implementation of the policy or scheme. The Company’s policy on Corporate Social responsibility is placed on the company’s website www.kpragrochem.com

During the year, the Company is required to spend Rs. 50,86,162/- as per Sec.135 of the Companies Act while a sum of Rs. 14,18,805/- has been spent during the current reporting financial year (Previous financial year Rs. 13,93,818/-) on CSR activities. The Annual Report on CSR activities with reasons for unspent amount is annexed herewith vide ANNEXURE II. The shortfall in spending is due to identifying long term projects under CSR activities in the local areas of our concerns, and small and misc projects have been hitherto undertaken. .

13. Nomination and Remuneration Committee In pursuance of Section 178 of the Companies Act 2013 read with Rule 6 of Companies (Meetings of Board and its Powers ) Rules 2014, the Board has reconstituted on 29.05.2017, a Nomination and Remuneration Committee which continued as such. Subject to following changes the Members of the Nomination and Remuneration Committee during the year under report are as follows:

SN Name Director Category Committee Position 1.* Dr. R. Srinivasan Independent Independent & Non- Chairman Director Executive 2** Mr. Gannamani Independent Independent & Non- Chairman Venkateswara Rao Director Executive 3 Mr.Waddiparthi Murali Independent Independent & Non- Member Krishna Director Executive 4*** Mrs. Padmaja Independent Independent & Non- Member Nandigana Director Executive

During the year under report, Mrs. Padmaja Nandigana who was appointed as independent additional director was appointed to the committee from 29.05.2017 in place of Mrs. Jyothi Prasad, who resigned. Mr. Gannamani Venkateswara Rao who was appointed as Independent Additional Director from 29.05.2017 was also appointed to the committee from 29.05.2017 in place of Dr. R. Srinivasan who resigned.

The Nomination and Remuneration Committee has formulated the policies and criteria for Directors, KMP’s & other employees under section 178 of Companies Act and recommended to the Board which has been approved in the Board Meeting dt. 24.08.2017

14. Directors:

The existing Directors in the Board of the Company are as follows:

Whole Time Directors:

1. Sri K. Papa Reddy, Whole time Director and Chairman. 2. Sri K. V. Mukunda Reddy, Managing Director 3. Sri K. Rajasekhar Reddy, Whole time Director and Executive Director

Independent Directors:

During the year Mrs. Jyothi Prasad, Independent Director resigned due to preoccupation with effect from 08.03.2017 and Mr. R. Srinivasan, Independent Director resigned due to his preoccupation with effect from 20.05.2017. The Board has filled the said vacancies by appointing Mrs. Padmaja Nandigana and Mr. Gannamani Venkateswara Rao as Additional Directors under the category of Independent Directors.

Mr. Murali Krishna, Non-Executive Independent Director continues during the year.

The new Independent Directors filed declarations to the effect that they meet the criteria of independence as provided in -section 149 of Companies Act, 2013 and rules there under. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

In accordance with the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Kovvuri Rajasekhar Reddy, Executive, Non- Independent Whole time Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. In view of the consistent efforts which have contributed to the growth of the Organization and the sincere service rendered for the better performance of the organization during his tenure as Whole time Director, the Board of directors on the recommendation of the Nomination and Remuneration Committee, has decided to recommend to the AGM his reappointment as Director on rotation basis and to continue his appointment as Whole time Director without interruption of his tenure as whole time Director as approved by the Company in EGM dt. 31.03.2014,

15. Key Managerial Personnel Mr. P. Narayanarao has been functioning as Company Secretary of this Company since 30.09.2010 and continued as such during this year under Report.

Mr B.Satyanarayana Reddy, has functioning as Chief Financial Officer of the Company since 13.08.2015 and continued as such during this year under Report. 16. Meetings of the Board of Directors:

During the Financial Year 2016-17 under review 5 (Five) meetings were held by the Board spread in all Quarters of the Financial Year.

17. Audit Committee

The Board has re constituted the Audit Committee on 29.05.2017 with Independent Directors forming majority, under the provisions of Section 177 of Companies Act. 2013 read with Companies (Meetings of the Board and its powers) Rules 2014.

The current Members for the year under Report of the reconstituted Audit Committee together with the members during the year under report are as follows:- SN Name Director Category Committee Position 1* Dr. R. Srinivasan Independent Independent & Chairman Director Non- Executive 2** Mr.Gannamani Independent Independent & Chairman Venkateswara Rao Director Non-Executive 3*** Mrs. Padmaja Nandigana Independent Independent & Member Director Non-Executive 4 Mr. K. Rajasekhar Reddy Whole Time Non- Independent Member Director & & Executive Executive Director

* Resigned with effect from 29.05.2017 **Appointed with effect from 29.05.2017 ***Appointed with effect from 21.03.2017

The Audit Committee has been entrusted with the duties and functions specified in Section 177 of the Companies Act besides those specifically entrusted by the Board from time to time.

18. Vigil mechanism for Directors and employees

The company has established Vigil mechanism and whistle blower policy under which, the employees can report the violation or breach of code of conduct or any other issue which is likely to threaten the independency of the board and management to the Chairman of the Audit Committee.. Sufficient safeguards are provided for the whistle blowers and the Company and the provisions are placed in the website of the Company. The Audit Committee is entrusted with overseeing the overall Vigil mechanism, including the matters specified in Section 177 of the Act and the Rules made there under, referred above. The vigil mechanism and whistle blower policy of the company include the safeguarded and disclosure policy. The Audit Committee will address the concerns of the Directors and employees as part of the vigil mechanism policy of the company.

19. Particulars of loans, guarantees or investments Particulars of loans given, investments made, guarantees given and securities provided (Sec 186 of Companies Act) are furnished in the standalone Financial statements of the Current Reporting Financial Year. (Please refer to Note No.41 of the Significant Accounting Policies and Notes to Audited Financial Statements of the standalone financials).

20. Contracts or arrangements with related parties All Contracts/arrangements/transactions entered by the Company during the current financial year with related parties were in the ordinary course of business and on arm’s length basis. However the related party disclosures and details are furnished in Notes 35 of the Notes to the Financial Statements of the Company for the current year.

21. Managerial Remuneration The Details of Managerial remuneration under Sections 196 and 197, of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished hereunder:

Sl. No Particulars of Remuneration Name of the MD/WTD Kovvuri Karri Kovvuri Papa Reddy Venkata Rajasekhar Total Mukunda Reddy Amount 1 Gross salary Reddy (Rs)

a). Salary u/S. 17(1) of ITA. 1961. 48,00,000 48,00,000 48,00,000 1,44,00,000 b). Value of perquisites u/s 17(2) of the ITA 1961 - - - -

c). Profits in lieu of salary u/s7(3) of ITA 1961 - - - -

Total 48,00,000 48,00,000 48,00,000 1,44,00,000

There was no employee who was in receipt of remuneration of Rs. 60 lacs &above during the current reporting financial year 2016-17.

22. Material Changes and Commitments

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. - Nil- 23. Secretarial Audit Report

The Board has appointed M/s Sambhu Prasad M and Associates, a whole time Company Secretary in practice, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith marked as ANNEXURE-III to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.

24. Risk management policy A Risk Management Committee continued as such but was re constituted on 29.05.2017. The Risk Management Committee assists the Board in overseeing the risks that the organization faces in the areas like, strategic, financial, credit recoveries, demand – supply gaps, competition, market, liquidity, , IT, legal, regulatory, and other risks and advising the management . As of now, there is no risk foreseen.

The members of the committee during the year under report are enunciated follows:

SN Name Director Committee Position

1* Dr. R. Srinivasan Independent Chairman

2** Mrs. Jyothi Prasad Independent Member

3*** Mr. W Murali Krishna Independent Chairman Additional Director 4@ Mrs. Padmaja Nandigana Independent Member Additional Director 5 Mr. Gannamani Venkateswara Independent Member Rao Additional Director * Resigned with effect from 29.05.2017 **Resigned with effect from 21.03.2017 ***Appointed with effect from 29.05.2017 @ Appointed with effect from 21.03.2017

25. Directors’ Responsibility Statement

The Directors’ Responsibility Statement referred to in clause (C) of sub-section (3) of Section 134ofthe Companies Act, 2013 is furnished hereunder

The Directors of the Company hereby state that: (a) in the preparation of the Annual accounts of the Financial Year 2016-17, the applicable Accounting Standards had been followed along with proper explanations relating to material departures;

(b) the Directors had selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit for the year ended 31.03.2017,

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the Assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the Annual accounts on a going concern basis; and, (e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. Cases filed against the Company

Details of Various Cases (Civil and Criminal ) filed against the Company relating to the Business of the Company are furnished in Note 27of the Notes in the attached Significant Accounting Policies and Notes to Financial Statements of the Current Reporting Financial Year.

27. The Company did not issue any equity shares with differential rights as to dividend or voting or otherwise.

28. Cost Audit

The Company is required to appoint Auditors to carry out the Cost audit of the Company’s records under Section 148(3) of Companies Act, 2013, M/s. Chaitanya & Co, Cost accountants, (Membership No. 28183) Mandapeta who were appointed as Cost Auditors for the Financial Year 2016-17, have conducted the Cost audit and submitted the Cost audit Report to the Company. The Board of directors appointed M/s. Chaitanya & Co., Cost Accountants, Mandapeta as Cost Auditors for the Financial Year 2017-18 on the recommendation of the Audit Committee, subject to approval of remuneration by the Company in the ensuing General Meeting.

29. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries 30. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future. 31. Stake holders relationship committee The Board has re - constituted, Stake holders relationship committee on 29.05.2017 and authorized stakeholders relationship activities as required under Companies Act, SEBI Act, Rules there under, to meet the Listing Agreement provisions and other applicable rules and regulations etc.,

The particulars of the Stakeholders Relationship Committee during the year under report as follows:

SN Name Director Committee Position

1* Mrs. Jyothi Prasad Independent Director Chairperson

2** Mrs. Padmaja Nandigana Independent Director Chairperson

3 Mr. K.V Mukunda Reddy Managing Director Member 4 Mr. K. Rajasekhar Reddy Executive Director Member

* Resigned with effect from 21.03.2017 **Appointed with effect from 21.03.2017

32. Board and Directors Evaluation The Board of Directors has carried out an Annual evaluation of its own performance, Board Committees and individual Directors, Independent Directors pursuant to Sec. 134 of the Companies Act and Rules there under and other applicable provisions.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria , such as the Board composition and structure, effectiveness of Board processes, proceedings, information, matters discussed, co ordination with committees, their functioning, etc.

The performance of the Committees was also evaluated by the Board after seeking inputs from the Committee Members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, matters discussed, advices given etc.

The Board, Nomination & Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Directors to the Board and Committee meetings , such as preparation on the matters to be discussed, meaningful and constructive contribution, inputs in meetings, etc. Further, the Chairman was also evaluated on the key aspects of his Role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated taking into account the views of the Executive Directors and non-executive Directors. In the Board Meeting that followed, the performance of the Board, its committees and individual Directors was also discussed. Performance evaluation of independent Directors was also done by the entire Board, excluding the independent Directors.

33. Other Policies, Code of Conduct etc., The Company formulated sexual harassment control policies , code of conduct and other material codes as part of good Corporate governance, policies, placed in the website and pursuing. 34. Acknowledgements Your Directors thank the Customers and Vendors of the Company for their continued patronage.

Your Directors also acknowledge the commitment and dedication shown by the Employees of your Company in discharge of their duties and thank them for extending their cooperation to the management of the Company.

Your Directors record their grateful thanks to Andhra Bank for their consistent support and encouragement from the inception, of the Company.

Your Directors appreciate the cooperation extended by various Government Departments of both Central and State Governments.

For and on behalf of the Board of Directors K.P.R.Agrochem Ltd. Sd/- K. Papa Reddy Chairman DIN:01375140 Place: Balabhadrapuram Date: 24.08.2017 K.P.R.AGROCHEM LIMITED CIN: U24129AP2007PLC052216

Regd Office: 8-256, Tata Nagar, BALABHADRAPURAM 533343, Biccavole Mandal, East Godavari District, Andhra Pradesh, India. ANNEXURE II DIRECTOR’S REPORT

Annual Report on Corporate Social Responsibility (CSR) Activities for the financial year 2015-16

1 A brief outline of the Company’s CSR Policy CSR Policy and including overview of projects or programs details furnished proposed to be undertaken below

2 Composition of the CSR Committee The Composition is stated in the Directors’ Report 3 Average Net Profits of the Company for the last Rs. 32,52,48,365 three financial years (FY 2014-15, 2015-16 and 2016-17) 4 Prescribed CSR expenditure Rs. 65,04,967 (2 % on the amount mentioned in item 2 above) 5 Details of CSR spent during Financial year 2016-17 : Rs. 14,18,805 Total Amount to be spent for the FY 2017-18 Rs. 50,86,162 Amount unspent, if any -- Manner in which the amount spent during the Rs. 14,18,805 Financial year 2016-17 is detailed below:

S. CSR project or Activity Sector in Project of Program Amount of Amount No Identified which the (1)Local Area or outlay Spent Direct project is Other (Budget)/ or through covered (2) State and Amount Implementin district where spent g Agency undertaken 1. Drinking water purification (v) of Local Direct plant Sch VII Singampalli E Godavari Dt. Andhra Pradesh 2. Garden Maintenance at (ii) of Local 1,64,500.00 Direct Samalkot RS Sch.VII Samalkot East Godavari dt. Andhra Pradesh 3. Rural development (x) of Sch. Local 4,24,929.00 Direct Projects (Drinking water, VII Rural areas Cement Benches, E Godavari Dt. Historical bldgs. Maint Andhra Pradesh Library books,Misc rural works) Rural development (x) of Sch. Local 1,84,035.00 Direct Projects (Sports,School VII Halavarthi Village Books,food Misc.Expenses Koppal taluka&dt in rural areas ) Karnataka Police Station, Deputy (x) of Sch. Local, Koppal 2,68,835.00 Direct Commissioners office and VII taluka & district, other Karnataka 6. Green belt development (iv) of Balabhadrapuram 3,76,505.00 Direct and maintenance at Fly Sch. VII E Godavari dt. over Rly Bridge. Andhra Pradesh Total 7. In case the Co. has failed Furnished in the to spend 2% of the average Board Report net profit of the last 3 FY or any part thereof, the Co. shall provide the reasons for not spending the amount in the Board’s Report 8. Responsibility Statement .

We (CSR Committee ) hereby confirm that the implementation and monitoring of CSR Policy is in compliance with CSR Objectives and Policy of the Company .

Sd/-

K. Papa Reddy Chairman-CSR Committee K.P.R.AGROCHEM LIMITED CIN: U24129AP2007PLC052216

Regd Office: 8-256, Tata Nagar, BALABHADRAPURAM 533343, Biccavole Mandal, East Godavari District, Andhra Pradesh, India.

C.S.R POLICY

PREAMBLE:

With the notification of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

The said Corporate Social Responsibility Committee shall formulate a policy on Corporate Social Responsibility Policy to the Board for adopting the same by the Board.

The Company, which is required to constitute a Corporate Social Responsibility Committee as stated in Section 135 of the Companies Act, 2013 shall spend in every financial year at least 2% of the average net profits of the Company made during three immediately preceding financial years. The amount of 2% as specified above shall be spent strictly as per the Corporate Social Responsibility Policy as approved by the Board in accordance with the recommendations received from the Corporate Social Responsibility Committee, duly constituted under Secretion 135 of the Companies Act, 2013.

PHILOSOPHY For K.P.R. Agrochem Limited, Corporate Social Responsibility is not just a statutory requirement under the Companies Act, 2013 but K.P.R. Agrochem Limited recognises it as its responsibility towards the society as a good corporate house.

Corporate Social Responsibility is strongly connected with the principles of Sustainability; an organization should make decisions based not only on financial factors, but also on the social and environmental consequences. Therefore, it is the core corporate responsibility of K.P.R. Agrochem Limited to practice its corporate values through its commitment to grow in a socially and environmentally responsible way, while meeting the interests of its stakeholders.

K.P.R Agrochem Limited recognizes that its business activities have wide impact on the society in which it operates, and therefore an effective practice is required giving due consideration to the interests of its stakeholders including shareholders, customers, employees, suppliers, business partners, local communities, society at large and other organizations. K.P.R. Agrochem Limited endeavors to make CSR a key business process for sustainable development. K.P.R. Agrochem Limited is responsible to continuously enhance shareholders wealth; it is also committed to its other stakeholders to conduct its business in a more accountable manner that creates a sustained positive impact on society. K.P.R. Agrochem Limited is committed towards aligning with nature; and has adopted eco-friendly practices.

K.P.R. Agrochem Limited believes that in the strategic context of business, enterprises possess, beyond mere financial resources, the transformational capacity to create game- changing development models by unleashing their power of entrepreneurial vitality, innovation and creativity. In line with this belief, K.P.R. Agrochem Limited will continue crafting unique models to generate livelihoods and environmental capital. Such Corporate Social Responsibility ("CSR") projects are far more replicable, scalable and sustainable, with a significant multiplier impact on sustainable livelihood creation and environmental replenishment. These initiatives are independent of the normal conduct of K.P.R. Agrochem Limited’s business. Programmes, projects and activities (collectively "CSR Programmes") carried out in this regard are the subject matter of this Policy.

As a corporate entity, K.P.R. Agrochem Limited is committed towards sustainability. Ongoing dialogues with shareholders provide valuable approach with an objective that each business decision takes into account it’s social and environmental impacts and plans.

CSR ACTIVITIES TO BE UNDERTAKEN BY K.P.R Agrochem Limited.

The Corporate Social Responsibility Committee Constituted for this purpose under Section 135 of the Companies Act, 2013 shall do all such acts, deeds and things to achieve the following objectives:

a. eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation, including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water: b. promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects; c. promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; d. ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water, including contribution to the Clean Ganga Fund setup by the Central Government for rejuvenation of river Ganga; e. protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts: f. measures for the benefit of armed forces veterans, war widows and their dependents; g. training to promote rural sports, nationally recognised sports, para olympic sports and Olympic sports; h. contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; i. contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government; j. rural development projects; k. slum area development; and l. such other activities as may be allowed under the provisions of the Companies Act, 2013 read with rules made there under.

IMPLEMENTATION:

At the beginning of every financial year the Board shall transfer an amount, which shall not be less than 2% of the average net profits of the Company made during three immediately preceding financial years to a separate account, which shall be specifically earmarked for the purpose of undertaking the Corporate Social Responsibility as enshrined in this Corporate Social Responsibility Policy.

The Investment in the Corporate Social Responsibility activity shall be project based or programs or activities (excluding activities undertaken in pursuance of K.P.R. Agrochem Limited’s normal course of business) as may be determined by the Board from time to time on the recommendation of the Corporate Social Responsibility Committee. The Board shall have absolute right to abandon any project/program/activity at any time, if it feels the project has lost it purpose.

The Board can undertake the Corporate Social Responsibility project/program or activity as approved by the Corporate Social Responsibility Committee on its own, through registered trust, through registered society or through any other form/means as may be allowed under the applicable laws.

GOVERNANCE

Every year, the Corporate Social Responsibility Committee will place for the Board's approval, a Corporate Social Responsibility Plan delineating the Corporate Social Responsibility Programmes to be carried out during the financial year and the specified budgets thereof. The Board will consider and approve the Corporate Social Responsibility Plan with any modification that may be deemed necessary. However the Board is empowered to make changes to such Corporate Social Responsibility Plan from time to time at the recommendation of the Corporate Social Responsibility Committee.

The Corporate Social Responsibility Committee will assign the task of implementation of the Corporate Social Responsibility Plan within specified budgets and timeframes to such persons or bodies as it may deem fit.

The persons/bodies to which the implementation is assigned will carry out such Corporate Social Responsibility Programmes as determined by the Corporate Social Responsibility Committee within the specified budgets and timeframes and report back to the Corporate Social Responsibility Committee on the progress thereon at such frequency as the Corporate Social Responsibility Committee may direct.

The Corporate Social Responsibility Committee shall review the implementation of the Corporate Social Responsibility Programmes once a quarter and issue necessary directions from time to time to ensure orderly and efficient execution of the Corporate Social Responsibility Programmes in accordance with this Policy.

Once every six months the Corporate Social Responsibility Committee will provide a status update to the Board on the progress of implementation of the approved Corporate Social Responsibility Programmes carried out during the six month period.

CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE

Corporate Social Responsibility expenditure will include all expenditure, direct and indirect, incurred by the Company, K.P.R Agrochem Limited on Corporate Social Responsibility Programmes undertaken in accordance with the approved Corporate Social Responsibility Plan. Moreover, any surplus arising from any Corporate Social Responsibility Programmes shall be used for Corporate Social Responsibility. Accordingly, any income arising from Corporate Social Responsibility Programmes will be netted off from the Corporate Social Responsibility expenditure and such net amount will be reported as Corporate Social Responsibility expenditure.

Sd/- Sd/- K.V.Mukunda Reddy K. Papa Reddy Managing Director Chairman-CSR Committee

Balabhadrapuram Dt. 24.08.2017 Sambhu Prasad M & Associates Company Secretary in Practice

49-9-10, Lalitha Nagar, Akkayyapalem, Visakhapatnam – 530016

Annexure - II

FORM MR-3 SECRETARIAL AUDIT REPORT (Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2017

To The Members of M/s. K.P.R. Agrochem Limited

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. K.P.R. Agrochem Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the Company's Books, Papers, Minute Books, Forms and Returns filed and other Records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the financial year commencing from 1st April, 2016 and ended 31st March, 2017, complied with the statutory provisions listed hereunder and also that the Company has proper Board process and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by M/s. K.P.R. Agrochem Limited (“The Company”) for the financial year ended on 31st March, 2017, according to the provisions of:

I. The Companies Act, 2013 (the Act) and the rules made there under for specified sections notified and came in to effect from 12th September, 2013 and sections and Rules notified and came in to effect from 1st April, 2014; II. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the Rules made there under; III. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under. IV. Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct Investment (FDI) and Overseas Direct Investment and External Commercial Borrowings;

V. The Securities and Exchange Board of India Act, 1992 ('SEBI Act').

VI. The Income Tax Act, 1961

VII. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

VIII. The Gratuity Act, 1952.

IX. The Minimum wages Act, 1948.

X. The Payment of Bonus Act, 1965

XI. The Industrial Dispute Act, 1947

XII. The Factories Act, 1948

XIII. Workmen Compensation Act, 1923

XIV. The Shops and Establishment Act, 1954

XV. Maternity Benefit Act, 1961

XVI. Law Relating to Contract Labour

XVII. The Payment of Wages Act, 1948, and all other labour laws

2. Provisions of the following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act) were not applicable to the Company as the company is an unlisted public company under the financial year under report:

i. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; ii. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; iii. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; iv. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; v. The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with client; vi. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 vii. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

3. We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by the Institute of Company secretaries of India under the provisions of Companies Act, 1956 and

4. During the financial year under report, the Company has complied with the provisions of the New Companies Act, 2013, to the extent applicable and the Rules, Regulations, Guidelines, Standards, etc., mentioned above subject to the following observations;

OBSERVATIONS:

 As per the information and explanations provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we report that

The provisions of the Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of:

 External Commercial Borrowings were not attracted to the Company under the financial year under report;

 Foreign Direct Investment (FDI) was not attracted to the company under the financial year under report;

 Overseas Direct Investment by Residents in Joint Venture/Wholly Owned Subsidiary abroad was not attracted to the company under the financial year under report.

As per the information and explanations provided by the company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, We report that the Company has not made any GDRs/ADRs or any Commercial Instrument under the financial year under report.

We further report that: (i) The Company is regular in deducting and paying TDS Under the income tax Act. (ii) The Company has paid PF and ESI to the respective authorities (iii) The Company has also collected stamp duty and service tax on behalf of the client and paid to the respective authorities.

Sd/- MHVSNS Prasad Practicing Company Secretaries Place: Balabhadrapuram C.P. No: 11723 Date: 24.08.2017 Sambhu Prasad M & Associates Company Secretary in Practice

49-9-10, Lalitha Nagar, Akkayyapalem, Visakhapatnam – 530016

Annexure A To The Members of M/s K.P.R. Agrochem Limited Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The secretarial Audit report is neither an assurance as to future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

Sd/-

MHVSNS Prasad Practicing Company Secretaries Place: Balabhadrapuram C.P. No: 11723 Date: 24.08.2017 MGT 9 Extract of Annual Return as on the Financial Year 31.03.2017 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN:- U24129AP2007PLC052216 ii. Registration Date 02/01/2007 iii. Name of the Company K.P.R.AGROCHEM LIMITED iv. Category / Sub-Category of the Company Company limited by shares/Non government company v. Address of the Registered office and contact 8-256, Tata Nagar Balabhadrapuram, Andhra details Pradesh – 533343 vi. Whether listed company Yes / No No vii. Name, Address and Contact details of Karvy Computer Share Pvt. Ltd. Hyderabad Registrar and Transfer Agent, if any

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- Sl. No. Name and Description of main products NIC Code of % to total turnover of the /services the Product / company service 1. NPK Mixtures 20122 28.15 2. DCP Animal Feed 20129 26.03 3. Pesticides 20211 16.30

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Sl. Name and Address of the CIN/GIN Holding/ % of Applic No. Company Subsidiary/ shares able Associate held Section 1. Sri Sai Swarupa Seeds U01119AP2009PTC062869 Subsidiary 100% 2(87) Private Limited Category of No. of Shares held at the beginning No. of Shares held at the end of the year %Chang Shareholders of the year e during the year Demat P Total % of Demat Physical Total % of h Total Total y Shares Shares si c a l A. Promoters

(1) Indian Demat P Total % of Demat P Total % of Demat h Total h Total y Shares ys Shares s ic i al c a l Individual/ 87,51,840 87,51,840 10.24 23,00,740 23,00,740 2.69 (7.55) HUF Promoter 4,41,08,220 4,41,08,220 51.76 4,79,65,660 5,05,59,320 59.15 7.39 Group Central Govt ------State Govt (s) ------Bodies Corp. 1,62,00,000 1,62,00,000 18.96 1,62,00,000 1,62,00,000 18.96 - - Banks / FI ------Any Other…. ------Sub-total (A) 6,90,60,060 6,90,60,060 80.80 6,64,66,400 6,90,60,060 80.80 11.91 (1) :- (2) Foreign a) NRIs – ------Individuals b) Other – ------Individuals c) Bodies ------Corp. d) Banks / FI ------e) Any ------Other…. Sub-total(A) ------(2):- Total share 6,90,60,060 6,90,60,060 80.80 6,64,66,400 6,64,66,400 80.80 holding of Promoter (A) = (A)(1)+(A)(2) B. Public ------Shareholding 1.Institutions a) Mutual ------Funds b) Banks / FI ------c) Central ------Govt d) State ------Govt(s) e) Venture ------Capital Funds

f) Insurance ------Companies g) FIIs ------h) Foreign ------Venture Capital Fund i) Others ------(specify) 2. Non Institutions a) Bodies ------Corp. i) Indian 1,64,03,940 - 1,64,03,940 19.18 1,64,03,940 - 1,64,03,940 19.18 - ii) Overseas ------b) Individuals ------i) Individual ------shareholders holding nominal share capital up to Rs. 1 lakh ii) Individual ------shareholders holding nominal share capital in excess of Rs 1lakh c) Others ------(specify) Sub-total ------(B)(2):- Total Public Shareholding( B)=(B)(1)+(B)( 2) C. Shares held ------by Custodian for GDRs & ADRs Grand Total 8,54,64,000 8,54,64,000 100.00 8,54,64,000 8,54,64,000 100.00 - (A+B+C)

(ii)Shareholding of Promoters Si. Shareholder’s No. of Shares held at the No. of Shares held at the end of the %Cha N Name beginning of the year year nge o during

the year Demat P Total % of Demat P Total % of Nil h Tota h Total ys l y ic si Shar al Shar c es es al

1. Kovvuri Papa 2021040 2021040 2.36 1178940 1178940 - Reddy 2 Karri Venkata 3397560 3397560 3.98 566260 566260 0.66 - Mukunda Reddy 3 Kovvuri 3333240 3333240 3.90 555540 555540 0.65 - Rajasekhar Reddy 4 Cresco 16200000 16200000 18.9 16200000 16200000 18.96 - Technologies 6 LLP 5 Kovvuri 3065520 3065520 3.59 4454370 4454370 5.21 - VinodaBala 6 Kovvuri 2478780 2478780 2.90 3867630 3867630 4.53 - Surayamma 7 Karri 3321060 3321060 3.89 3321060 3321060 3.89 - Satyanarayan a Reddy S/o KVRR 8 Kovvuri 2851620 2851620 3.34 2851620 2851620 3.34 - Jyothirmai seshu Kumari 9 KovvuriVijaya 2670720 2670720 3.12 2670720 2670720 3.12 - Reddy 10 Kovvuri 3507960 3507960 4.10 3507960 3507960 4.10 - Satyanarayan a Reddy S/o KRCR 11 Kovvuri 1529940 1529940 1.79 1529940 1529940 1.79 - Anjana Devi 12 Kovvuri 1398000 1398000 1.64 1398000 1398000 1.64 - Sudhatri 13 Karri Vijaya 2854800 2854800 3.34 5686100 5686100 6.65 - Lakshmi 14 Karri 3270720 3270720 3.83 545120 545120 0.64 - Satyanarayan a Reddy, S/o.KVMR 15 Karri Ghana - - - 2725600 2725600 3.19 - Sravya Reddy

16 Karri Lakshmi 2326080 2326080 2.72 2326080 2326080 2.72 - Kantham 17 Kovvuri 1985850 1985850 2.32 1985850 1985850 2.32 - Mangayamma 18 Kovvuri 3598650 3598650 4.21 4440750 4440750 5.20 - Satyanarayan a Reddy, S/o. KPR 19 Kovvuri 2095680 2095680 2.45 2937780 2095680 2.45 - Lalitha 20 Kovvuri 901380 901380 1.05 901380 901380 1.05 - Mahalakshmi 21 Kovvuri 992520 992520 1.16 992520 992520 1.16 - Sridevi 22 Tetala 1805520 1805520 2.11 1805520 1805520 2.11 - Manikyamma 23 Tetali Naveen 1849200 1849200 2.16 1849200 1849200 2.16 - Reddy 24 TetaliVanaja 1929060 1929060 2.26 1929060 1929060 2.26 - 25 Sathi Venkata 667680 667680 0.78 667680 667680 0.78 - Lakshmi

(iii)Change in Promoters’ Shareholding ( please specify, if there is no change): Sl. Shareholder’s Shareholding at the beginning of Share holding at the end of the year No. Name the year 1. Kovvuri Papa No. of % of total shares of the No. of Shares % of total shares of the Reddy Shares company company At the 2021040 2.36 1178940 1.37 beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 11789401 1.37 11789401 1.37 the year Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. s Name the year 2. Karri Venkata No. of % of total shares of the No. of shares % of total shares of the Mukunda Shares company company Reddy At the 3397560 3.98% 566260 0.66% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 566260 0.66% 566260 0.66% the year

Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. Name the year 3. Kovvuri No. of % of total shares of the No. of shares % of total shares of the Rajasekhar Shares company company Reddy At the 3333240 3.90% 555540 0.65% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 555540 0.65% 555540 0.65% the year Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. Name the year 4. Karri No. of % of total shares of the No. of shares % of total shares of the Satyanarayan Shares company company a Reddy, S/o. KVMR At the 3507960 4.10% 545120 0.64% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 545120 0.64% 545120 0.64% the year Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. Name the year 5. Karri Vijaya No. of % of total shares of the No. of Shares % of total shares of the Lakshmi Shares company company At the 2854800 3.34% 5686100 6.65% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 5686100 6.65% 5686100 6.65% the year Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. Name the year 6 Karri Ghana No. of % of total shares of the No. of Shares % of total shares of the Shrvya Reddy Shares company company At the Nil Nil 2725600 3.19% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 2725600 3.19% 2725600 3.19%

the year Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. Name the year 7 Kovvuri No. of % of total shares of the No. of Shares % of total shares of the Vinod Bala Shares company company At the 3065520 3.59% 4454370 5.21% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 4454370 5.21% 4454370 5.21% the year Sl Shareholders’ Shareholding at the beginning of Shareholding at the end of the year No. Name the year 8 Kovvuri No. of Shares % of total shares of No. of Shares % of total shares of the Surayamma the company company At the 2478780 2.90% 3867630 4.53% beginning of the year At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Transfer At the End of 3867630 4.53% 3867630 4.53% the year

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sl. Share holder Name Shareholding at the Share holding at the end No. beginning of the year of the year No. of % of total No. of Shares % of Shares shares of The total company shares of the compan y 1. Velagala Srinivasa Reddy 2750580 3.22 2750580 3.22 2. Tetala Venkata Reddy 19,22,520 2.25 19,22,520 2.25 3. Gudimetla Basivi Reddy 18,02760 2.11 18,02760 2.11 4. Gidimetla Vijaya Bhaskar Reddy 17,69,340 2.07 17,69,340 2.07 5. Karri Venkata Dhana Sekhar Reddy 11,91,660 1.39 11,91,660 1.39 6. Karri Venkata Dhana Reddy 11,91,660 1.39 11,91,660 1.39 7. Karri Adi Reddy 11,01,660 1.29 11,01,660 1.29 8. Karri Sudhakar Reddy 11,01,660 1.29 11,01,660 1.29 9. Kovvuri Bhaskara Raghurami Reddy 10,10,520 1.18 10,10,520 1.18 10. Velagala Subba Lakshmi 10,01,520 1.17 10,01,520 1.17 11. Kovvuri Sri Devi 9,92,520 1.16 9,92,520 1.16 12. Sathi Rama Reddy 5,67,540 0.66 5,67,540 0.66

(v) Shareholding of Directors and Key Managerial Personnel: Sl. For Each of the Shareholding at the beginning Cumulative Shareholding during the No. Directors and KMP of the year year

1. Venkata Mukunda No. of shares % of total No. of shares % of total shares of Reddy Karri shares of the the company company At the beginning of the 3397560 3.98% 566250 0.66% year Date wise Increase / Transfer Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc) At the End of the year 566250 0.66% 566250 0.66% 2. KovvuriRajasekhar No. of shares % of total No. of shares % of total shares of Reddy shares of the the company company At the beginning of the 3333240 3.90% 555540 0.65% year Date wise Increase / Transfer Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): At the End of the year 555540 0.65% 555540 0.65% 3. Kovvuri Papa Reddy No. of shares % of total No. of shares % of total shares of shares of the the company company At the beginning of the 1178940 1.37 2021040 2.36% year Date wise Increase / Transfer Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): At the End of the year 1178940 1.37 1178940 1.37

V. INDEBTEDNESS: Indebtedness of the Company including interest outstanding/accrued but not due for payment Indebtedness at the Secured Loans Unsecured Deposits Total Indebtedness beginning of the excluding Loans financial year deposits i)Principal Amount 102,65,49,526 18,89,28,192 -- 121,54,77,718 ii) Interest due but not 71,31,562 ------71,31,562 paid iii) Interest accrued but not due 25,02,578 --- -- 25,02,578 Total (i+ii+iii) 1036183666 188928192 --- 1225111858 Change in Indebtedness during the financial year

Addition

Reduction (34,19,69,950) --- (34,19,69,950) Net Change (34,19,69,950) --- (34,19,69,950) Indebtedness at the end of the financial year

i) Principal Amount 68,45,79,576 7,93,99,777 --- 76,39,79,353 ii) Interest due but not 2,30,28,970 ------paid iii) Interest accrued but not due 14,12,778 ------Total (i+ii+iii) 70,9021,324 7,93,99,777 ---- 78,84,21,101

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Sl.no Particulars of Remuneration Name of WTD: Total Amount . (per annum) MD WTD WTD Man ager (K (K Papa (K Venkata Reddy) Rajasekha Mukund r Reddy) a Reddy 1. Gross salary 48,00,000 48,00,000 48,00,000 -- 1,44,00,000

(a) Salary as per provisions contained in section 17(1)of the Income-tax Act,1961

(b) Value of perquisites u/s17(2) Income-tax Act,1961

(c) Profits in lieu of salary under section 17(3) Income Tax Act, 1961 2. Stock Option Nil Nil Nil Nil Nil 3. Sweat Equity Nil Nil Nil Nil Nil 4. Commission - as % of profit- Nil Nil Nil Nil Nil Others, specify… 5. Others, please specify Nil Nil Nil Nil 6. Total (A) 48,00,000 48,00,000 48,00,000 Nil 1,44,00,000 7. Ceiling as per the Act

B. Remuneration to other directors: Not Applicable Sl. Particulars of Remuneration Name of Director Total Amount no. Jyothi R. Murali Prasad Srinivasan Krishna 3. Independent Directors Fee 60,000 1,40,000 80,000 2,80,000 for attending board / committee meetings Commission Others, please specify Total (1) 60,000 1,40,000 80,000 2,80,000

4. Other Non-Executive - - - - - Directors · Fee for attending board / committee meetings · Commission · Others, please specify - - - - - Total (2) - - - - - Total (B)=(1+2) - - - - 2,80,000 Total Managerial - - - - 1,46,80,000 Remuneration Overall Ceiling as per the Act - - - - -

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD Sl. Particulars of Remuneration Key Managerial Personnel no. Company Chief Financial Total Secretary Officer 1. Gross salary(a) Salary as per Provisions contained in section 17(1) of the Income-tax Act, 9,72,000 24,00,000 33,72,000 1961 Nil (b) Value of perquisites u/s17(2) Income-tax Act, 1961

(c) Profits in lieu of salary Nil Nil Nil under section17(3) Income-tax Act, 1961 2. Stock Option Nil Nil Nil 3. Sweat Equity Nil Nil Nil 4. Commission- as % of profit- Nil Nil Nil others, specify… 5. Others, pleasespecify2 Nil Nil Nil 6. Total 9,72,000 24,00,000 33,72,000

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of Brief Description Details of Authorit Appeal made, the Penalty y[RD / if any(give Companie /Punishment/ NCLT/ Details) s Act,1956 Compoundin COURT g fees ] imposed A. COMPANY Penalty Nil Nil Nil Nil Nil

Punishment Nil Nil Nil Nil Nil Compoundin 192 Non submission of 25,00,000 NCLT Nil g disclosure of Interest 295 Giving collateral 50,000 NCLT Nil security without obtaining C. Govt approval 297 Entered contracts with 2,68,000 NCLT Nil other group companies without obtaining C. Govt approval B. DIRECTORS Penalty Nil Nil Nil Nil Nil Punishment Nil Nil Nil Nil Nil Compoundin 192 Non submission of 15,00,000 NCLT Nil g disclosure of Interest 295 Giving collateral 1,50,000 NCLT Nil security without obtaining C. Govt approval 297 Entered contracts with 8,04,000 NCLT Nil other group companies without obtaining C. Govt approval C. OTHER OFFICERS IN DEFAULT Penalty Nil Nil Nil Nil Nil Punishment Nil Nil Nil Nil Nil Compoundin 192 Non submission of 5,00,000 NCLT Nil g disclosure of Interest 295 Giving collateral 50,000 NCLT Nil security without obtaining C. Govt approval For and on behalf of M/s. K.P.R. AGROCHEM LIMITED Sd/- K. Papa Reddy Chairman DIN: Place: Balabhadrapuram 01375140 Date: 24.08.2017 ANNEXURE - IV

FORM NO. AOC.2 Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. Details of contracts or arrangements or transactions not at arm's length basis – Not Applicable

(a) Name(s) of the related party and nature of relationship

Sl.No Name Relationship (i) Sri Sai Swarupa Seeds Private Limited Subsidiary Company

(ii) Key Management Personnel Shri.Kovvuri Papa Reddy Chairman Shri.KarriVenkataMukunda Reddy Managing Director Shri.KovvuriRajasekhar Reddy Executive Director Shri.P Narayana Rao Company Secretary Shri.B.Sathyanarayana Reddy Chief Financial Officer

(iii) Others Cresco Technology LLP Directors Interest KPR India Private Limited Directors Interest K.P.R. Universal Holdings Private Limited Directors Interest K.P.R. Industries (India) Limited Directors Interest Sri Lakshmi Egg Farming Private Limited Directors Interest Mega Encon Private Limited Directors Interest KPR Foundation Directors Interest

(b) Disclosure of Transactions between the Company and the Related Parties and the status of outstanding as on balance sheet date:

SRI SAI SWARUPA SEEDS PVT LTD Particulars 31st March 2017 31st March 2016

Transactions during the Year Sale of Goods to 13,16,101 9,23,030 Purchase of Goods from (2,03,94,197) (1,25,27,966) Amount paid for expenses of 1,26,15,112 1,31,15,598 Interest Received 57,94,214 25,56,197 Advance given during the year (Net) - - Amounts Outstanding at Balance Sheet Date Investments in Equity of Sri Sai Swarupa Seeds Pvt Ltd 1,25,99,580 1,25,99,580

Amount Receivable/(Payable ) for Purchases, Sales & Expenses - (78,39,895) Amount Receivable from Sri Sai Swarupa Seeds Pvt Ltd 3,65,57,770 3,72,26,540 -

K.P.R. Universal Holdings Private Limited Particulars 31st March 2017 31st March 2016

Transactions during the Year Amount of Loan repaid - 2,99,47,254 Amount paid for Expenses of K.P.R. Universal Holdings - - Amounts Outstanding at Balance Sheet Date Amount Receivable /(Payable) - - K.P.R.Industries (India) Limited Particulars 31st March 2017 31st March 2016

Transactions during the Year Amount Advance Given - - Amounts Outstanding at Balance Sheet Date Investments in Equity of K.P.R Industries (India) Limited 10,56,86,000 10,56,86,000 Amount Receivable /(Payable) - -

Cresco Technology LLP Particulars 31st March 2017 31st March 2016 Transactions during the Year Amount of Loan( received)/Paid during the year 15,27,57,052 19,99,12,948 Amount paid for Expenses - - Amounts Outstanding at Balance Sheet Date Amount Receivable /(Payable) - (15,27,57,052)

KPR India Private Limited Particulars 31st March 2017 31st March 2016 Transactions during the Year Advances Paid/(Amount Received) (72,75,752) 10,23,705 Amount paid for Expenses - - Sale of goods to K.P.R India Private Limited 1,37,26,451 93,04,129 Purchase of goods From K.P.R India Private Limited 55,02,231 (1,03,31,664) Amounts Outstanding at Balance Sheet Date Amount Receivable /(Payable) 9,44,638 (3,830) SRI K.PAPA REDDY, CHAIRMAN Particulars 31st March 2017 31st March 2016 Transactions during the Year Directors Remuneration 48,00,000 48,00,000 Amount paid for expenses - 12,97,800 Amount paid against Remuneration 48,03,202 68,,63,979 Amount of Unsecured Loan Repaid during the year - - Payment for Shares purchased - - Amounts Outstanding at Balance Sheet Date Amount Receivable /(Payable) - (3,202) SRI KARRI VENKATA MUKUNDA REDDY, Managing Director

Particulars 31st March 2017 31st March 2016 Transactions during the Year Directors Remuneration 48,00,000 48,00,000 Amount paid for expenses - 13,02,960 Amount paid against Remuneration 48,50,000 68,14,603 Amounts Outstanding at Balance Sheet Date Amount Receivable /(Payable) 50,000 (5,68,283) SRI KOVVURI RAJA SEKHAR REDDY, Executive Director Particulars 31st March 2017 31st March 2016

Transactions during the Year Directors Remuneration 48,00,000 48,00,000 Amount paid for Expenses 5,06,403 13,02,960 Amount paid against Remuneration 71,98,909 (4,38,408) Loans (Received)/Payable (1,90,00,000) - Amounts Outstanding at Balance Sheet Date Amount Receivable/(Payable) (2,00,64,357) (39,69,669) SRI LAKSHMI EGG FARMING PRIVATE LIMITED Particulars 31st March 2017 31st March 2016 Transactions during the Year Sale of Goods 93,72,000 61,56,000 Amount Received 1,22,95,749 60,07,500 Amounts Outstanding at Balance Sheet Date Amount Receivable/(Payable) (21,15,249) 8,08,500 KPR FOUNDATION Particulars 31st March 2017 31st March 2016

Transactions during the Year 27,82,419 14,31,534 Royalty Amount Outstanding at Balance Sheet Date Amount Receivable/(Payable) (40,70,800) (14,31,534)

MR. P. NARAYANA RAO – Company Secretary Particulars 31st March 2017 31st March 2016 Transactions during the Year Remuneration paid 9,72,000 8,52,000 Amounts Outstanding at Balance Sheet Date Amount Receivable/(Payable) the company. (64,800) (64,800) MR. B. Sathyanarayana Reddy – CFO Particulars 31st March 2017 31st March 2016 Transactions during the year Remuneration Paid 24,00,000 15,22,581 Amounts Outstanding at Balance Sheet Date Amount Receivable/(Payable) (1,71,100) (2,565)

(d) Salient terms of the contracts or arrangements or transactions including the value, if any (e) Justification for entering into such contracts or arrangements or transactions (f) date(s) of approval by the Board (g) Amount paid as advances, if any: (h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188

2. Details of material contracts or arrangement or transactions at arm's length basis – Not Applicable

(a) Name(s) of the related party and nature of relationship (b) Nature of contracts/arrangements/transactions (c) Duration of the contracts/arrangements/transactions (d) Salient terms of the contracts or arrangements or transactions including the value, if any: (e) Date(s) of approval by the Board, if any: (f) Amount paid as advances, if any:

For and on behalf of the Board M/s. K.P.R. AGROCHEM LIMITED

Sd/- Place: Balabhadrapuram K. Papa Reddy Date: 24.08.2017 Chairman DIN: 01375140 Form No. MGT-11

Proxy form

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN: U24129AP2007PLC052216 Name of the company: K.P.R.AGROCHEM LIMITED

Registered office: Door No. 8-256 Tata Nagar Balabhadrapuram, Andhra Pradesh - 533343

Name of the member(s): Registered Address: E-mail Id: Folio No./Client Id: DP ID: s of the above named company, hereby appoint

1. Name : ……………………

Address :_ E-mail Id : Signature: ……………., or failing him

2. Name : …………………… Address: E-mail Id : Signature: ……………., or failing him

3. Name : ………………… Address: E-mail Id: Signature: ……………. as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 11thAnnual General Meeting of the Company, to be held on Friday, 29.09.2017 at 11.00 A.M at Door No. 8-256 Tata Nagar Balabhadrapuram, Andhra Pradesh – 533343 and at any adjournment thereof in respect of such resolutions as are indicated below: Resolution No.

1. Approval of financial statements for the year ended 31.03.2017. 2. Approval of consolidated financial statements for the year ended 31.03.2017 3. Appointment of Sri. K. Rajasekhar Reddy as Director who retires by rotation. 4. Appointment of statutory auditors and fixation of their remuneration Affix 5. Regularisation of Smt. Padmaja Nandigana as Director. Revenue 6. Regularisation of Sri. G. Venkateswara Rao as Director. Stamp 7. Appointment of Smt. Padmaja Nandigana as Independent Director 8. Appointment of Sri. G Venkateswara Rao as Independent Director 9. Appointment of M/s. Chaitanya & Co., as Cost Auditors 10. Re appointment of Sri. K. Papa Reddy as Chairman and Whole Time Director. 11. Re appointment of Sri. K. Venkata Mukunda Reddy as Managing Director. 12. Re appointment of Sri. K. Rajasekhar Reddy, Whole Time Director and Executive Director.

Signed this …..… day of………… 2017 Signature of shareholder Signature of Proxy holder(s) Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting. ------

K.P.R. Agrochem Limited U24129AP2007PLC052216 Door No. 8-256 Tata Nagar Balabhadrapuram, Andhra Pradesh - 533343

(Please present this slip at the Meeting venue)

ATTENDANCE SLIP

I hereby record my presence at the Annual General Meeting of the members of the company being held on Friday on 29.09.2017 at 11.00 A.M.at the Registered Office of the Company at Door No. 8-256 Tata Nagar Balabhadrapuram, Andhra Pradesh – 533343.

Shareholders/Proxy‘s Signature______

Shareholders full name______

Proxy‘s full name______

Folio No. / Client ID______

No. of Equity shares held______

Note:

Shareholders attending the meeting in person or by proxy are required to complete the attendance slip and hand it over at the entrance of the meeting hall.