KWS SAAT SE & Co. KGaA

Annual Report • Oct 16, 2014

Annual Report 2013 2014

KWS SAAT AG

Key fi gures of the KWS Group Content

• 2 Foreword of the Executive Board
• 5 Report of the Supervisory Board
• 8 The KWS share
• 11 Spotlight topic
• 16 Sustainability
• 18 Corporate Governance
• 22 Management Report
• 32 Business performance
• 33 Earnings, fi nancial position and assets
• 34 Corn Segment
• 36 Sugarbeet Segment
• 38 Cereals Segment
• 40 Corporate Segment
• 41 Financial situation
• 44 Assets
• 45 Employees
• 50 Explanations regarding the Annual Financial Statements of KWS SAAT AG
• 50Report on events after the balance sheet date
• 50Opportunity and risk report
• 57Forecast report
• 59Other disclosures
• 63 Annual Financial Statements of the KWS Group
• 71 Notes

in € millio ns	/201 2013 4	2/20 131 201	/201 2011 2	/201 2010 1	9/20 200 10
Net sale s	1,17 8.0	1,14 7.2	986 .3	855 .4	754 .1
Ope ratin g in e (= EB IT) com	138 .4	152 .1	140 .9	116 .6	82.4
% o f ne les ( = R OS) t sa as a	11.8	13.3	14.3	13.6	10.9
Net Inco me	80.3	92.3	94.4	72.9	51.5
% o f ne les t sa as a	6.8	8.0	9.6	8.5	6.8
Ope rativ sh fl e ca ow	61.0	84.6	97.9	101 .2	27.4
Net h fro m in vest ing activ ities cas	–75 .4	–88 .9	–56 .6	–52 .4	–55 .4
Equ ity	637 .8	649 .7	603 .1	530 .3	492 .9
n % Equ ity ra tio i	50.5	53.3	55.2	58.8	57.5
Bala she tal et to nce	1,26 2.8	1,2 18.7	1,09 2.3	902 .0	857 .4
Retu uity in % rn o n eq	12.8	15.8	18.3	15.2	12.2
in % Retu sets rn o n as	7.3	9.0	10.7	8.8	7.1
Fixe d as sets	424 .5	396 .8	378 .2	290 .1	275 .2
Cap ital e ndit xpe ure	82.6	65.2	111 .5	49.3	58.4
Dep recia tion	45.8	38.4	28.4	27.6	22.0
Ave ber of e mpl rage num oye es	4,84 7	4,44 3	3,85 1	3,56 0	3,49 2
Pers el co sts onn	225 .8	209 .9	182 .5	165 .0	147 .2
Perf e of KW S sh in € orm anc ares
Divid end sha per re	3.00	3.00	2.80	2.30	1.90
Earn ings sha per re	11.6 9	13.4 7	13.8 9	10.6 4	7.5 1
Ope rativ sh fl sha e ca ow per re	9.24	12.8 2	15.7 9	15.3 3	4.15
Equ ity p hare er s	96.6 4	98.4 4	91.3 8	80.3 5	74.6 8

1 adjusted pursuant to IAS 19 (2011)

To our shareholdersForeword of the Executive Board

Hagen Duenbostel Corn, Investor Relations

Léon BroersResearch and Breeding

Eva Kienle

Philip von dem Bussche (CEO) Corporate Development & Communications, Human Resources

Peter HofmannSugarbeet, Cereals, Marketing

In the past fi scal year we again systematically pursued our growth path. That included orienting ourselves to long-term goals, not short-term business cycles. Our activities are always grounded in basic research and breeding work to develop competitive varieties.

By investing in state-of-the-art processing plants, we translate genetic potential into high-quality seed. Being close to farmers makes us their preferred supplier. Our employees put this strategy into action with their teamwork, sense of personal responsibility and entrepreneurial freedom. This approach has enabled the KWS Group to become a leading international seed company.

We were able to continue our growth and posted net sales of €1,178.0 million, a year-on-year increase of 2.7%. Although we narrowly missed our original target due to negative exchange rate developments in key markets, we were able to maintain our market position in important growth markets, such as the U.S. Our operating income (EBIT) was €138.4 million, below the fi gure for the previous year as expected; exchange rate developments likewise impacted our earnings negatively. However, our EBIT margin of 11.8% means we are still above our long-term target of 10%. We thus posted satisfactory earnings in fi scal 2013/2014 once more, following two exceptionally strong fi scal years.

We increased capital expenditure at the KWS Group by €17.4 million to a total of €82.6 million or 1.8 times the amount of depreciation. Among other things, we expanded our corn seed production capacities in France, Serbia and North America, modernized our sugarbeet seed production in the U.S. and created the distribution structures we need for future growth. More than 70% of our capital spending was outside Germany. Nevertheless, Germany remains a key foundation for our company's further development. That is also refl ected in the growth of our workforce: Of the 404 new jobs we created in 2013/2014, 87 are in Germany.

Apart from continuous product innovation, our highly motivated employees are vital in ensuring the sustained development of our company. With KWS' own blend of an intimate family atmosphere and its global orientation, we have now become an attractive employer. On behalf of the entire Executive Board, I would like to thank all our colleagues in more than 70 countries for the energy and commitment they show day in, day out to enable our company to stay successful.

We again increased the budget for our diverse R&D activities signifi cantly to €148.8 million in the year under review, or 12.6% of net sales, since our company's further development is founded on and driven by innovations in research and breeding. At the beginning of the current fi scal year, we began operations at a further research location in the U.S., which will enable us to expand our expertise in global plant research while also strengthening our presence in one of our key markets. Next year we will be able to launch our own operations in China with our joint venture there: After many years of examination by the Chinese authorities, we received permission for this strategic partnership this spring. It will give us direct access to a further international growth market for corn seed.

• Expansion of our international presence is thus proceeding alongside our efforts to secure and expand our core business. We expect the KWS Group to further grow its net sales in the current fi scal year 2014/2015
• by between 5% and 10%. The budgets for capital

spending and function costs are being increased to refl ect our growth strategy, so we likewise expect a return on sales of 10%. At the same time we intend to continue our proven dividend policy. The proposal by the Exe cutive Board and the Supervisory Board on the appropriation of the profi ts for fi scal 2013/2014 envisages an unchanged dividend of €3.00 per share, or a dividend payout ratio of 24.7%. We would also like to take this opportunity to inform you that the Executive Board and the Supervisory Board have decided to convert KWS SAAT AG into a European Stock Corporation – called KWS SAAT SE – subject to the approval of the Annual Shareholders' Meeting on December 18, 2014, thus underscoring KWS' international ambitions both at home and abroad.

I would like to make special mention of one new feature in this year's Annual Report: For the fi rst time, we are reporting on the sustainability of our business activities in a separate section. You can fi nd more information in our detailed Sustainability Report, which is being published for the seventh time this year.

After more than nine years on the Executive Board of KWS SAAT AG, I am leaving the company at the age of 65 at the end of 2014. My thanks go to all the colleagues around the world with whom I have had the honor of

working in a spirit of trust to make our company a success. And I expressly include our business partners, customers, shareholders and the Supervisory Board in these thanks. It was for me personally a great pleasure to be able to make a contribution to the successful development of this wonderful company.

Dr. Hagen Duenbostel will take over as Chief Executive Offi cer as of January 1, 2015. Dr. Peter Hofmann joined the Executive Board on October 1, 2014. He is responsible for the product segments Sugarbeet and Cereals and for Corporate Marketing, in which capacity he is backed by more than 20 years of successful management work for the company. As a result, the change on KWS' Executive Board refl ects our spirit of tradition and progress, true to the motto "Seeding the Future – Since 1856."

With best regards from Einbeck on behalf of the entire Executive Board,

Philip von dem Bussche Chief Executive Offi cer

Report of the Supervisory Board

The main task in the fi scal year under review was to expand the market position of KWS and to create the foundation for the company's future growth. To do that, the Supervisory Board approved considerable up-front costs that will reduce the company's current profi tability, but not excessively strain it. The overriding goal is to secure KWS' gratifyingly sustained earnings strength at an EBIT margin of at least 10% in the long term. With this in mind, we again took important steps in the past year.

The Supervisory Board discharged the duties incumbent on it in accordance with the law, the company's Articles of Association and the bylaws, regularly advised and monitored the Executive Board of KWS SAAT AG in its activities and satisfi ed itself that the company was run properly and in compliance with the law and that it was organized effi ciently and cost-effectively. The Supervisory Board decided on all signifi cant business transactions requiring its consent and carefully accompanied the Executive Board in all fundamental decisions of importance to the company. The Supervisory Board discussed the information and assessments that infl uenced its decisions together with the Executive Board. Both boards continued their seamless and constructive cooperation based on mutual trust. Among other things, this was demonstrated by the fact that, as is customary, the Supervisory Board was involved in all decisions of vital importance to the company at an early stage. The Supervisory Board was provided with the necessary information in written and oral form regularly, promptly and comprehensively. This included all key information on relevant questions of strategy, planning, the business performance and situation of the company and the KWS Group, including the risk situation, risk management and compliance. Business transactions requiring consent were submitted to and discussed and approved by the Supervisory Board in compliance with the bylaws for the Executive Board. The company's business policy, corporate and fi nancial planning, profi tability and situation, the general development of the various businesses, market trends and the competitive environment, research and product development and, along with important individual projects, risk

management at the KWS Group were also the subject of detailed discussions. The Chairman of the Supervisory Board continued the bilateral discussions with the Chief Executive Offi cer and individual members of the Executive Board in regular talks outside the meetings of the Supervisory Board. In addition, there were monthly meetings between the Chairman of the Supervisory Board and the Executive Board as a whole, where the company's current business development and, in particular, its strategy, occurrences of special importance and risk management were dealt with. The Chairman of the Supervisory Board informed the Supervisory Board of the results of these meetings. The Supervisory Board did not make use of its right to conduct an examination granted by Section 111 (2) AktG (German Stock Corporation Act) since the reporting by the Executive Board meant there was no reason to do so.

Focal areas of deliberations

The full Supervisory Board held fi ve regular meetings in fi scal 2013/2014. Its members participated in all of the meetings, with the exception of two members who

Andreas J. Büchting, Chairman of the Supervisory Board

prepared by the Executive Board, and to the consolidated fi nancial statements of the KWS Group, along with the Management Reports of KWS SAAT AG and the KWS Group. The fi nancial statements are thereby approved. The Supervisory Board also endorses the proposal by the Executive Board to the Annual Shareholders' Meeting on the appropriation of the net retained profi t of KWS SAAT AG after having examined it.

Corporate Governance

The Supervisory Board conducted its effi ciency review in accordance with Clause 5.6 of the German Corporate Governance Code for fi scal 2013/2014 accompanied and supported by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft. Recommendations and measures derived from it were implemented without exception.

The Supervisory Board regularly addressed the question of any confl icts of interest on the part of its members and those of the Executive Board. In the year under review, there were no such confl icts of interests that had to be disclosed immediately to the Supervisory Board and reported to the Annual Shareholders' Meeting.

Supervisory Board Committees The Audit Committee convened for two joint meetings in fi scal 2013/2014 and also held three telephone conferences, on all occasion with all its members in attendance. In its meeting on September 30, 2013, the Audit Committee discussed the 2012/2013 annual fi nancial statements and accounting of KWS SAAT AG and consolidated fi nancial statements of the KWS Group. Its deliberations also focused on the changes in consolidation practices at the KWS Group due to the fact that it will no longer be possible to consolidate joint ventures proportionately effective fi scal year 2014/2015. The Annual Compliance Report and the results of the auditing projects were on the agenda at its second meeting on March 27, 2014. The audit plan for fi scal 2014/2015 was also discussed and adopted. The quarterly reports and the semiannual report for fi scal 2013/2014 were discussed in detail in three telephone conferences and their publication was approved. In addition, the Audit Committee obtained the statement of independence from the auditor in accordance with Clause 7.2.1 of the German Corporate Governance Code, monitored the auditor's independence and

were each unable to attend one meeting. The meeting of the Supervisory Board to discuss the fi nancial statements on October 23, 2013, was devoted to examining and approving the fi nancial statements of KWS SAAT AG and the consolidated fi nancial statements of the KWS Group as of June 30, 2013. At that meeting, the Supervisory Board also dealt with the consequences of the recent changes to the International Financial Reporting Standard (IFRS 11) on consolidation practices at the KWS Group. The focus of the meetings on December 18 and 19, 2013, was the "Strategic Planning" of KWS, covering a timescale of the next ten years. At its meeting on March 27, 2014, the Supervisory Board heard reports on the progress made in breeding in all of KWS' product categories. In addition, the status of development in the most important research projects was discussed. Not least, the Supervisory Board made the decision at this meeting to establish a research center in the United States to complement the research location in Einbeck. The Supervisory Board also approved acquisition of the outstanding shares of KWS LOCHOW GMBH. On June 26, 2014, the agenda as usual included adoption of the corporate planning for fi scal 2014/2015, including medium-term planning up to 2017/2018. This comprised individual projects requiring the Supervisory Board's consent and relating to further expansion of the Einbeck location, extensive increases in capacity for our seed processing plants and additions to our IT structures. The survey of the Supervisory Board with the aim of avoiding and identifying fraud was also conducted. The Supervisory Board is not aware of any such acts. At its meeting on October 15, 2014, the Supervisory Board discussed changing KWS SAAT AG to an European stock corporation – KWS SAAT SE – and agreed on a corresponding proposed resolution for the Annual

Shareholders' Meeting.

Annual and consolidated fi nancial statements and auditing

Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Hanover, the independent auditor chosen at the Shareholders' Meeting on December 19, 2013, and commissioned by the Audit Committee, has audited the fi nancial statements of KWS SAAT AG that were presented by the Executive Board and prepared in accordance with the provisions of the German Commercial Code (HGB) for fi scal 2013/2014 and the fi nancial statements of the KWS Group (IFRS consolidated fi nancial statements), as well as the Management Report of KWS SAAT AG and the KWS Group Management Report, including the accounting reports, and awarded them its unqualifi ed audit certifi cate. In addition, the auditor concluded that the audit of the fi nancial statements did not reveal any facts that might indicate a misstatement in the declara tion of compliance issued by the Executive Board and the Supervisory Board in accordance with section 161 AktG (German Stock Corporation Act) with respect to the recommendations of the "Government Commission for the German Corporate Governance Code" (cf. Clause 7.2.3(2) of the German Corporate Governance Code).

The Supervisory Board received and discussed the fi nancial statements of KWS SAAT AG and the consolidated fi nancial statements and Management Reports of KWS SAAT AG and the KWS Group, along with the report by the independent auditor of KWS SAAT AG and the KWS Group and the proposal on utilization of the net profi t for the year made by KWS SAAT AG, in due time. Comprehensive documents and drafts were submitted to the members of the Supervisory Board as preparation; for example, all of them were provided with the annual fi nancial statements, Management Reports, audit reports by the independent auditors, Corporate Governance Report, Compensation Report and the proposal by the Executive Board on the appropriation of the profi ts. The Supervisory Board also held detailed discussions of questions on the agenda at its meet ing to discuss the fi nancial statements on October 15, 2014. The auditor took part in the meeting and reported on the main results of the audit and was also available to answer additional questions and provide further information for the Supervisory Board. According to the report of the independent auditor, there were no material weaknesses in the internal control and risk management system in relation to the accounting process. There were also no circumstances that might indicate a lack of impartiality on the part of the independent auditor. The small extent of services additionally provided by the independent auditor can be seen from the Notes.

In accordance with the fi nal results of its own examina-

tion, the Supervisory Board endorsed the results of the audit, among other things as a result of the vote by the Audit Committee, and did not raise any objections. The Supervisory Board gave its consent to the annual fi nancial statements of KWS SAAT AG, which were examined its qualifi cations. The Audit Committee also satisfi ed itself that the regulations on internal rotation pursuant to Section 319a (1) No. 4 HGB were observed by the independent auditor. The Audit Committee con- vened on September 29, 2014, to discuss the current annual fi nancial statements of KWS SAAT AG and KWS' consolidated fi nancial statements and accounting. The independent auditor explained the results of its audit of the 2013/2014 fi nancial statements and pointed out that there were no grounds for assuming a lack of impartiality on the part of the independent auditor in its audit. The Audit Committee also dealt with the proposal by the Executive Board on the appropriation of the net retained profi t of KWS SAAT AG and recommended that the Supervisory Board approve it. At this meeting the Audit Committee also heard a report on the audit relat- ing to the conversion of KWS SAAT AG into a European Company – KWS SAAT SE – in accordance with Article 37 (6) of the Council Regulation on the Statute for a European Company. This audit was likewise carried out by Deloitte & Touche GmbH Wirtschaftsprüfungsgesell- schaft, Hanover. In the year under review the Committee for Executive Board Affairs dealt with the question of the successor to Chief Executive Offi cer Philip von dem Bussche, who will leave the Executive Board of KWS SAAT AG at the end of 2014 aged 65. Dr. Hagen Duenbostel, who was KWS' Chief Financial Offi cer until mid-2013 and is cur- rently responsible for the Corn Segment, was appointed by the Supervisory Board as Chief Executive Offi cer as of January 1, 2015, at the proposal of the Committee for Executive Board Affairs. As part of that, the Supervisory Board extended his contract until December 31, 2019. The Supervisory Board appointed Dr. Peter Hofmann as a new member of KWS' Executive Board effective October 1, 2014, for an initial period of three years. He will assume responsibility from Philip von dem Bussche for the product segments Sugarbeet and Cereals, as well as for Corporate Marketing. Dr. Hofmann is 54 years old, has a degree in agricultural engineering and has been with KWS for 20 years. He has managed operational business at the Sugarbeet Segment since 2005. The Supervisory Board also appointed Eva Kienle as a full member of the Executive Board for a term of fi ve years as of July 1, 2014, at the proposal of the Committee for Ex- ecutive Board Affairs and additionally entrusted her with Human Resources effective January 1, 2015. In addition,

The KWS share remains stable in a narrow range

After its sharp rise in price in 2012/2013, the KWS share entered calmer waters in the year under review. That is refl ected by its fl uctuation within a relatively narrow range between €243.20 (low for the year) and €280.60 (high for

the Committee for Executive Board Affairs formulated a proposal to the full Supervisory Board regarding adjustment of Executive Board compensation; the proposal was accepted by the full body on June 26, 2014, and went into force on July 1, 2014 (see report on compensation on page 62).

The Nominating Committee dealt with the question of the composition of the Supervisory Board to be formed for KWS SAAT SE. In agreement with the full body, the sitting members of the Supervisory Board will be proposed to the Annual Shareholders' Meeting on December 18, 2014, for election to the Supervisory Board of the future KWS SAAT SE. The term of the fi rst Supervisory Board of KWS SAAT SE is to end with the completion of the Annual Shareholders' Meeting that will decide on

Supervisory Board Committees

Com mitt ee	Cha irma n	Mem bers
it Co Aud ittee mm	Hub ertu n Ba umb ach s vo	And J. B üch ting reas Jürg en B oldu an
Com mitt ee f or E utive Bo ard Affa irs xec	And J. B üch ting reas	Are nd O etke r Cat hrin a C laas -Mü hlha use r
Nom inat ing Com mitt ee	And J. B üch ting reas	nd O Are etke r Cat hrin a C laas -Mü hlha use r

the ratifi cation on the acts of the Supervisory Board of KWS SAAT SE for fi scal 2016/2017. That corresponds to the term of the current body.

The Supervisory Board expresses its thanks to the Executive Board and all employees of KWS SAAT AG and its subsidiaries in the KWS Group for their commitment and contributions to the successful continued performance of KWS in fi scal 2013/2014.

Einbeck, October 2014

Dr. Drs. h.c. Andreas J. Büchting

Chairman of the Supervisory Board

The KWS share

Expansive monetary policy drives capital markets

The capital markets continued to be swayed by economic and political uncertainties in the year under review. The expansive monetary policy of the central banks continued to ensure that the price trend was predominantly positive, a situation that was interrupted temporarily only by fears that the massive injection of liquidity into the markets would begin to be reduced.

Against this backdrop and driven by additional positive signals about economic trends in Europe, the German stock indexes posted new record highs. The DAX broke the 10,000 point mark for the fi rst time and closed just below it at 9,833 points on June 30, 2014. The DAX rose by 22.9% year on year. That performance was surpassed in the period under review by the SDAX, which soared by 27.2% to 7,385 points.

• the year). Overall, the KWS share fell by around 7.4% in
• the period from July 1, 2013, to June 30, 2014. The reasons for this are to be found in an overall more restrained
• mood on the global agricultural markets and the negative
• exchange rate effects that impacted the past fi scal year.

The KWS share is a fi rm part of the SDAX and the DAXplus Family 30 Index

On the basis of the share price development in the past fi scal year, KWS SAAT AG's market capitalization fell slightly to €1,700 million (previous year: €1,834 million) or, solely taking into account the free fl oat of 29.7%, €511.7 million (€552.0 million). The KWS share occupies a mid-range position in the SDAX, Germany's most important index for small caps. Measured in terms of free fl oat market capitalization, the KWS share ranked

17th in the index, which comprises 50 companies, at the relevant key date of June 30, 2014, and 26th in terms of trading volume over the past twelve months.

No change in the shareholder structure

KWS SAAT AG's shareholder structure remained practically unchanged in the past fi scal year. Only Tessner Beteiligungs GmbH increased its holdings by 0.4 percentage points to 14.2%.

in %

Shareholder structure at September 30, 2014

Great acceptance for our Employee Share Program

For more than 35 years we have offered our employees the chance to become a shareholder in the company and thus share in its success and identify more strongly with it. The structure of our Employee Share Program remained unchanged in the year under review. Our employees were able to buy up to 500 KWS shares at a price of €202.16, including a 20% bonus, which the individual employees must pay tax on. 401 employees (previous year: 384) took up this offer and purchased a total of 11,028 shares (previous year: 12,725), corresponding to an average stake per employee of 28 shares (previous year: 33). The acquired shares are subject to a lock-up period of four years. They cannot be sold, transferred or pledged during this period. As in previous years, the shares used for the Employee Share Program were acquired in accordance with the stipulations in Section 71 (1) No. 2 of the German Stock Corporation Act (AktG). A total of €2.8 million (previous year: €3.4 million) was used to buy back the company's own shares, giving an average purchase price per share of €257.00 (previous year: €265.20).

Spotlight topic

Who owns our planet's plant genetic resources?

The international community wants to regulate how benefi ts are shared between the donor countries and users

Decree" in 1756, under which he ordered the tuber from Peru to be grown in Prussia. And we would not only have to pay royalties for potatoes, but also for all major agricultural crops, since they mainly originate from the resource-rich centers of diversity outside Europe.

Dividend of €3.00 a share

At the Annual Shareholders' Meeting on December 19, 2013, the shareholders resolved to increase the dividend per share by €0.20 to €3.00. The number of shares remained unchanged at 6,600,000, giving a total amount distributed of €19.8 million (previous year: €18.5 million). The dividend payout ratio was thus 21.5% relative to the KWS Group's net income of €92.3 million for fi scal 2012/2013.

2012/20132010/20112011/20122009/20102008/2009

This interesting question was actually resolved in 1992, when the parties to the Convention on Biological Diversity (CBD) specifi ed that plant genetic resources are owned by their countries of origin. Until that time, it had been assumed that they were a common heritage of mankind. Since then, the question has been to fi nd a practicable way to ensure that benefi ts are shared between the donor countries and users. Should benefi t sharing extend to the past? That would mean Germany would have to pay royalties to Peru retroactively since Frederick the Great's famous "Potato Until now, the breeder's exemption has been regarded as an adequate means of sharing benefi ts. It states that every protected variety that is commercially available is allowed to be bred further, i.e. crossed, without the consent of the holder of the rights to the variety. That means donor countries also have free access to breeding progress. This open source system has proven its worth over many years, ensuring the lively international exchange of plant genetic resources and promoting both genetic diversity and breeding progress. Even small and inventive plant breeders were able to successfully share in the innovation process as a result.

Trend in dividend payouts

Proposal on the appropriation of the profi ts for fi scal 2013/2014

The Executive Board and Supervisory Board propose payment of a dividend of €3.00 for fi scal 2013/2014 to the Annual Shareholders' Meeting. This continues our proven dividend policy of an annual payout of between 20% and 25% of the KWS Group's net income for the year. The dividend yield of the KWS share based on its closing price on June 30, 2014, would thus be 1.1%.

In this context, it must also be kept in mind that the properties and performance our crops now exhibit have only been achieved through decades – no, centuries – of breeding work.

The breeder's exemption

Vavilov centers of diversity

Key fi gures for the KWS share

		/201 2012 3	3/20 201 14
Num ber of s hare s (J 30) une	in m illion s	6.6	6.6
Clos ing pric e (J 30) une	in €	277 .95	257 .50
Low	in €	200 .10	243 .20
High	in €	297 .10	280 .60
Mar ket italiz atio n (J 30) cap une	in € mil lions	1,83 4	1,70 0

Source: KWS LOCHOW GMBH breeding documentation, approval 1999

Breeding tree for the winter wheat variety "Dekan"

The wheat variety "Veery" is the product of 3,170 crosses between 51 parent varieties from 26 different countries. By way of comparison: KWS alone puts some 300 new varieties on the market every year. The upshot is an exponentially increasing deluge of data that no one can furnish or analyze properly. Last but not least, the Regulation even prevents hitherto free and unhindered access to commercially available varieties and breeding materials, unlike under the breeder's exemption.

A possible solution

Plant breeding companies, associations and scientifi c institutions support the goals of the Nagoya Protocol. A practicable alternative on the use of plant genetic resources is in principle offered by the FAO's International

ABS

The term "access and benefi t sharing" comes from the CBD (1992) and denotes global access to genetic resources coupled with ensuring that the countries of origin have a fair and equitable share in the benefi ts from their use. The current genetic diversity in commercial plant breeding may be suffi cient to achieve small progress in breeding year after year. However, global challenges, such as climate change, demand that hitherto

• Treaty on Plant Genetic Resources for Food and Agriculture. It likewise aims to ensure benefi ts are shared, while creating maximum legal security for all parties. However, the treaty does not cover all types of plants, so it is vital for it to be expanded. German plant breeders across all companies are in favor of this treaty being extended to cover all food and non-food crops so that the countries of origin of new genetic material share in the benefi ts from commercial use of future agricultural varieties. As part of that, it must not be forgotten that the "original material" for our crops has been enhanced considerably by many years of breeding. In view of the challenges of climate
• change and feeding the world's population, this work to produce innovation must also be rewarded fairly and equitably. Otherwise innovation will come to a standstill!

unexplored genetic resources be tapped and leveraged – and, as in the past, they are to be found in the wellknown centers of diversity.

The Nagoya Protocol

The Nagoya Protocol (Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefi ts Arising from their Utilization) enshrined in the Convention on Biological Diversity is now intended to regulate access to and use of genetic resources and fair and equitable sharing of benefi ts under international law. It aims to enable resource-rich developing and emerging countries to gain for the fi rst time a share of the commercial advantages that companies obtain from using genetic resources. The intention is therefore to create a genuine win-win situation that also establishes legal security. The Nagoya Protocol was adopted in 2010 and came into effect on October 12, 2014, after being ratifi ed by more than 50 parties to the convention. The participating countries were urged to enact legislation in their jurisdictions to make sure that the agreements in the Nagoya Protocol are implemented and observed. In April 2014, the European Union thus adopted Regulation No. 511/2014, under which the Nagoya Protocol is to be implemented in its jurisdiction.

The EU Regulation

However, the provisions of the EU Regulation go well beyond the requirements defi ned in the Nagoya Protocol. Users of genetic material will then not only be obliged to obtain a declaration of consent from the country of origin for them to access genetic material, but also to document the sources for the genetic material used to develop new varieties. That applies not only to plant genetic resources used in situ, i.e. directly from their natural habitat, but also to plant genetic material that is used ex situ for further breeding and comes from existing public and private collections. There would therefore be no cut-off point for the obligation to furnish proof of origin and provide documentation. Consequently, the origin of all variations used for a variety that already has market approval must be completely documented if that variety is used for further breeding to enable claims for royalties to be asserted. Such documentation as required by the EU Regulation is not feasible in practice, as the following example demonstrates.

Colorful mix: The genetic diversity of corn seed is clear to the naked eye during planting.

WINTER-HARDY Cold resistance in sugarbeet

Sugarbeets that are not sown in the spring but rather in the fall are called winter beet. They defy the cold during the winter months and have a well-developed foliage by the time spring comes around. As a result, the light intensity in this season can be used more effectively and the beets can store more sugar in their roots than would be possible in conventional cultivation. An increase in yields of 20%–30% is expected to result from extending the vegetation period to around a year, which also opens up diverse options for the entire value chain. KWS is applying the latest research and breeding methods to increase winter beet's frost tolerance.

attach great importance to extensive training and continuing education.

Society: Since the company was founded, KWS has strengthened and enhanced the attractiveness of its social environment by pinpointed donations and sponsoring in the regions where we operate. However, continuous, trust-building dialogue with our stakeholders is vital – and we also conduct such dialogue on critical issues. Environmental protection: We strive to surpass statutory requirements relating to the safety of our plants and processes, as well as to effi cient use of resources in the production process, such as water, energy, fertilizers and pesticides, as far as our infl uence allows.

Sustainability

The importance of sustainability for our company

Since being founded in 1856, we as a family-run business have developed a corporate culture and values that are based on a special sense of responsibility toward future generations and unite this responsibility with the mission of long-term commercial success.

The development of each new variety takes up to ten years. That requires proactive planning and action. We believe it is important to identify and anticipate the economic, ecological and social challenges of the future, i.e. to orient our company strategically and operationally on that basis.

We see our responsibility toward future generations in sustainable behavior toward people and nature.

We therefore address regularly and carefully external infl uences and the resulting risks and opportunities, now and in the future, in our business activities.

Group-wide analysis of core sustainability issues

We conducted a materiality analysis this year for the fi rst time ever, as part of which we asked various stakeholders, including farmers, suppliers, scientists, investors and NGOs, about what they expect from KWS regarding sustainability. The results will enable us to address key sustainability issues even more purposefully and entrench them more deeply in our strategy. Issues of particular relevance were:

Seed quality: Our customers trust in the quality of our seed, which we ensure by extensive testing. Product innovations: New plant varieties are geared toward market needs. By steadily improving the yield performance of our products, we help improve resource effi ciency in the agricultural production process. Only by doing that can we effectively tackle the challenges of climate change and growing demand as a result of global population growth.

Modern breeding methods: By using leading-edge breeding methods, we create progress in yields of 1% – 2% a year. In addition, the essence of plant breeding is to promote preservation of genetic diversity by new crossings.

Variety protection: We are committed to appropriate variety protection. We can only refi nance our high expenditures on research and development if our varieties are adequately protected.

Product safety: Our products must not endanger people's health or the environment – irrespective of whether the variety is ecological, conventional or genetically modifi ed. Extensive trials and analyses are conducted in accordance with offi cial requirements in order to prove their safety.

Economic performance: A clear focus on core business and fi nancial independence, liquidity and profi tability have contributed to the company's positive economic development. Our aim is to ensure that that remains so. Employment, social and environmental standards: As a responsible, internationally growing company we have to defi ne values, rules, guidelines and standards in the fi elds of employment, protection of the environment and social welfare and ensure they are put into practice at all subsidiaries and associated companies. We must also establish them for our business partners in the supply chain and prevent violations of them.

Compliance: We have to ensure compliance with the law and company requirements in a growing group of companies by means of effective compliance management. Employees: KWS is positioned worldwide as one of the leading seed companies. We tackle the challenge of acquiring and keeping qualifi ed employees by tailored employer branding measures and talent sourcing activities. The difference between KWS and other market players is refl ected in a personal and down-to-earth culture based on communication across hierarchies. We also

Reporting on sustainability and outlook

Since 2008 we have published our annual Sustainability Report in accordance with the criteria specifi ed by the Global Reporting Initiative. We have adapted our sustainability reporting this year on the basis of the materiality analysis and geared the report's structure and content

• to the results of that analysis. In order to increase transparency regarding the development of key sustainability issues, we are working to expand our sustainability
• reporting in conjunction with Group-wide data capture and analysis. The medium to long-term objectives are to extend sustainability reporting to the entire KWS Group and to integrate it in our Annual Report.

The results of the analysis will also give us a basis for reviewing the strategic and operational action our company needs to take and to derive potential for improvement.

Corporate Governance

KWS SAAT AG's successful development since 1856 is founded on thinking for the long term and acting in terms of sustainability. Corporate Governance is entrenched at the company and enables us to ensure responsible, value-creating management and control of the company, in particular by the Executive Board and Supervisory Board. We create trust by heeding the interests of our customers and employees, the capital markets and our national and international business partners – and that makes a key contribution to our lasting success.

We live up to our responsibility and take into account the relevant legal requirements regarding management and supervision of German stock corporations in our decisions. We also intensively address the acknowledged standards of good and responsible Corporate Governance, in particular the German Corporate Governance Code. The Executive Board and the Supervisory Board regularly discuss different aspects of Corporate Governance and make a major contribution to its continuous further development.

You can fi nd detailed information on Corporate Governance in our Corporate Governance Report (which is also the declaration on Corporate Governance in accordance with Section 289a of the German Commercial Code (HGB)), which is available on our website at www.kws.com> Company > Investor Relations > Corporate Governance. The Compensation Report, which is presented on pages 60 to 62, contains details on the compensation system and the individual remuneration of the members of the Executive Board and the Supervisory Board.

Compliance declaration in accordance with Section 161 AktG (German Stock Corporation Act) 2013/2014

The Executive Board and the Supervisory Board of KWS SAAT AG declare in compliance with Section 161 AktG (German Stock Corporation Act) that the company has complied with the recommendations of the German Corporate Governance Code in the version

dated May 13, 2013, since the last compliance declaration in October 2013, and with the recommendations of the code in the version dated June 24, 2014, since its publication in the offi cial section of the Federal Offi cial Gazette, and does now comply and will comply with them in the future, with the following exceptions.

In accordance with Clause 5.4.3 Sentence 1 of the German Corporate Governance Code, elections to the Supervisory Board are to be made on an individual basis. The Supervisory Board and the Executive Board will propose to the Annual Shareholders' Meeting that the company be converted into a European Company (SE), with the shareholder representatives of the fi rst Supervisory Board of KWS SAAT SE being appointed pursuant to the Articles of Association in accordance with Article 40 (2) Sentence 2 of the Council Regulation on the Statute for a European Company. There is not to be any change in the persons representing the shareholders as a result of the conversion; the term of offi ce for members of the fi rst Supervisory Board of KWS SAAT SE is also not to exceed their remaining term for which they hold their seat on the Supervisory Board at KWS SAAT AG.

Clause 7.1.2 Sentence 4 of the German Corporate Governance Code states that the consolidated fi nancial statements shall be publicly accessible within 90 days of the end of the fi scal year and interim reports within 45 days of the end of the reporting period. KWS SAAT AG publishes its consolidated fi nancial statements and interim reports within the period of time defi ned in the regulations for the Prime Standard of the German Stock Exchange. The company's seasonal course of business means that it cannot ensure compliance with the periods recommended in the German Corporate Governance Code.

Einbeck, October 2014

The Supervisory Board The Executive Board

vital in achieving a high adjusted sugar yield.

20 Corporate Governance Corporate Governance 21

SOMETIMES DRY IS GOOD

COST SAVINGSDry-down effect in grain corn

Dent corn varieties have a further, extremely positive property in addition to their high yield: They can release water from their grain particularly well and quickly – what is called the dry-down effect. This has a major impact on the cost of drying corn. The less water a variety contains when harvested, the less energy is needed to dry the corn before storing it and getting it ready for the market. This lower energy consumption has a positive environmental effect – and cuts costs. Initial grain corn varieties with especially good maturation have been bred by KWS and have already obtained approval from the German Federal Offi ce of Plant Varieties – innovations from KWS.

Management Report of the KWS Group for 2013/2014 Fundamentals of the KWS Group

Breeding as a growth driver

We have geared our operational business activities to providing modern agriculture with competitive varieties to grow feed and food and regenerative raw materials to produce renewable energy. As part of that, we deliver products that can be used for all kinds of farming systems: conventional, ecological and genetically improved. Genetically modifi ed varieties, which are distributed particularly in North and South America, now contribute 34% (32%) of our net sales.

With our extensive breeding activities for all types of crops, we lay the foundation for the KWS Group's longterm growth. The main drivers of continuous innovation and optimization of our varieties are our employees' great expertise and close cooperation with other companies and research institutions. We have our own selection and testing locations in all key markets and are able to produce top-quality seed seasonally and contra-seasonally in our processing plants.

Group structure and business activity

The KWS Group is one of the world's leading vendors of high-quality seed. We have specialized in developing, producing and distributing seed for agriculture since 1856. From its origins as a sugarbeet breeder, our company has evolved into an innovative provider with a broad portfolio of crops thanks to its strong focus on research and breeding of new, high-yielding varieties. We cover the complete value chain of a modern seed producer – from the breeding of new varieties, multiplication and processing to marketing and consulting for farmers.

Extensive product portfolio

We supply our customers, the farmers, with crops tailored to the different climatic conditions in their regions. They include corn and sugarbeet, the cereals wheat, rye and barley, oil plants such as rapeseed, sunfl ower and soybean, as well as potatoes, mainly for the moderate climatic zone. We expanded our portfolio to include varieties for subtropical regions by moving into Brazil in2012.

Global footprint

The KWS Group maintains its own breeding and distribution operations in more than 70 countries. We generate 19% of our net sales in Germany and 38% in other European countries. Another 38% of our revenue is from North and South America, with the remaining 5% coming from other foreign countries.

In view of the long development and approval cycles for new varieties, we pursue a sustainable approach in our research and breeding activities. The section "Research and development" on page 27 contains an overview of the main focus of our activities in this area last fi scal year.

Three operating units

KWS SAAT AG is the parent company of the KWS Group. It multiplies and distributes sugarbeet seed, breeds a broad range of crops and provides its subsidiaries with new varieties every year for the purpose of multiplication and distribution. It also assumes the function of a holding company and manages the Group with its 64 subsidiaries and associated companies operationally

• and strategically. An overview of the subsidiaries and associated companies included in the consolidated
• fi nancial statements of the KWS Group is provided in the Notes on page 82.

Distribution of value added (around 30% of the total output)

61%

Our plant breeders tackle this key challenge by supplying newly developed varieties so that agriculture can achieve signifi cant increases in yield and thus continuously improve yield per unit area. Our goal is to supply our customers, the farmers, in many regions of the world with seed that meets the very highest requirements in terms of quality and performance. As a guide for our strategic decisions and everyday activities in our operational business, we have developed guiding principles that help us pursue our strategic objective at all times.

Our guiding principles are based on four core activities:

• We increase genetic potential through outstanding research and breeding programs.
• We supply our farmers with the very best seed.
• Farmers trust us as a strong partner throughout their value chain.
• We create entrepreneurial freedom and help people unfold their talents. As a result, we give individuals the same freedom of action that is a distinguishing feature of our company.

The KWS Group's operational business is divided into the three segments Corn, Sugarbeet and Cereals.

The Corn Segment is the KWS Group's largest division, accounting for 61% of net sales. Apart from corn production and distribution, this segment also contains our activities in the fi elds of oil and fi eld seed, which include rapeseed, soybean, sunfl ower and sorghum. The most important markets are still the U.S. and Europe, where we are one of the top 3 vendors of corn seed measured in terms of cultivation area (7% in the U.S. and 19% in the EU). The lion's share of our corn revenue comes from regions where sowing is not carried out until the spring, with the result that the segment's operating performance is shaped by the seasonal course of its business. The segment generates only about 15% of its revenue in the fi rst half of our fi scal year from July to December, mainly from winter rapeseed in Europe and corn varieties in Latin America.

The Sugarbeet Segment generates 30% of the KWS Group's net sales. Around 90% comes from the production and distribution of sugarbeet and 10% from seed potatoes. The strongest sales market for our sugarbeet seed is North America. Genetically improved, herbicidetolerant sugarbeet varieties are used almost exclusively in this region. KWS began marketing its Roundup Ready® sugarbeet in 2007, and since then it has been far and away the leading vendor of these innovative special products. We are the undisputed leader in the fi eld of sugarbeet, with a market share of 40% in the EU and 45% worldwide. Farmers begin sowing sugarbeet in the fi rst quarter of a calendar year, meaning the predominant share of net sales is generated in the second half of our fi scal year.

The Cereals Segment handles the production and distribution of rye, wheat, barley and rapeseed. Cereals business is our third-largest segment and accounts for

9% of the KWS Group's net sales. We generate 52% of net sales in this segment from rye, around 34% from wheat and barley, and almost 16% from other crops. Our core markets for cereals seed are Germany, Poland, the UK and France. Farmers sow most of the cereal varieties in the fall, which means we generate net sales in this segment mainly in the fi rst half of our fi scal year (July to December).

Apart from the three operating segments, the Corporate Segment, in which our research activities are bundled, supports long-term development of competitive products. Cross-segment, strategic administrative functions are also grouped there. Its relatively low net sales come solely from farms. The segment's income is usually negative due to the high function costs and research expenditure.

Objectives and strategies

The KWS Group's corporate strategy is based on longterm, proactive activities. Our goal with this core framework for our values and objectives is to achieve sustainable and profi table growth for our customers, employees and investors. Particular cornerstones of our business model are intensive research work, development of new, high-yielding varieties and continuous expansion of our global footprint so that we are able to operate locally in regional agricultural markets with their special climatic conditions.

Guiding principles with a clear focus

One of the major challenges of the 21st century is to supply a growing world population with suffi cient food and regenerative raw materials despite the fact that these resources are growing scarcer. While more than seven billion people now have to be provided with food and raw materials, the arable land available worldwide cannot be increased at will. Consequently, it is falling in terms of area per capita. That makes it necessary to keep on increasing production on the area available.

Research and development of new varieties

Our core competence is plant breeding. It is at the beginning of the value chains for food and feed production and all forms of regenerative raw materials. Modern variety breeding is a process that extends over a period of about ten years. This time span is necessary to develop a plant with new properties into a variety that can be awarded approval and is ready for marketing.

Progress in plant breeding is refl ected in varieties that produce higher and higher yields and are adapted better to environmental and climatic conditions. We want to offer our customers progress in yields averaging 1% to 2% a year from new varieties. To do that, we invest between 12% and 15% of our consolidated net sales in research and development every year.

Adapting varieties and species to different environmental conditions brought about by climate change is increasingly playing a key role in breeding. Our most important objectives in plant breeding, across all crops, are to increase yield, resistance to pests, weeds and various diseases, and the technical quality of seed. We also strive to conserve genetic resources.

The KWS Group's medium- and long-term objectives

• Profi table growth Increase in consolidated net sales by an average of 5% to10% p.a.
• EBIT margin > 10%
• Research & development R&D intensity of 12% to 15% of consolidated net sales • 1% to 2% annual progress in yields for our customers and development of tolerances and resistances
• Foreign sales > 80%
  • Expansion of the portfolio of varieties for subtropical markets
• Sustainability Integration of the international subsidiaries
• Dividend payout ratio of 20% to 25% of net income of the KWS Group for the year

Internationalization

Dividend

fi scal year is made at the end of each quarter. In this way, we ensure that we can respond quickly to the latest information and knowledge. At the end of each fi scal year, all the segments and functions conduct a detailed variance analysis of the budgeted and actual results. That serves to optimize our internal planning processes and further enhance the already high quality of our forecasts.

Corporate Controlling is responsible for coordinating and documenting all planning processes and our current expectations. It monitors compliance with adopted budgets and analyzes the effi ciency and cost-effectiveness of business processes and measures. The Controlling team also advises decision-makers on economic optimization measures. The respective heads of the individual areas of responsibility are responsible for the contents of their planning and current forecasts. They include in particular the heads of the three segments, the heads of R&D activities, central functions and the regional Heads of Sales.

The Executive Board uses various indicators for planning, controlling and monitoring the business performance of the KWS Group and its operating units. The two main indicators are net sales and return (EBIT margin) – in each case at the Group and segment levels. The development of these two key metrics in fi scal 2013/2014 can be found in the economic report.

Expanded internationalization

The KWS Group has its own breeding and distribution units in more than 70 countries. Although we already generate more than 80% of our net sales abroad, our strategic objective is still to keep on pushing ahead with the internationalization of our company. Important milestones on that path are our extensive commitment in Brazil, as well as approval from the China's Ministry of Agriculture for the joint venture with our longstanding partner Beidahuang Kenfeng Seed Ltd. We will be able to start business operations in the key Chinese market as of fi scal 2015/2016.

Apart from the attractiveness and potential of these markets – in particular for our corn business – there is a further aspect of importance for us: While our main revenue drivers, corn and sugarbeet, are not sown until the spring in our core markets, farmers in South America have different sowing and harvesting cycles. As a result, we can cushion the highly seasonal nature of our business in the medium term.

High quality for our customers

The quality of seed, fairness toward each other and expert consulting are key factors for farmers when they choose varieties. Our goal as a trusted partner, specialist and consultant to agriculture is to always supply high-quality, innovative seed for producing food and feed as well as regenerative raw materials. The KWS Group is a powerful partner at all stages in the value chain of modern plant breeding: in research and development, as part of the approval process for new varieties, in multiplying and processing seed, in distribution and service, and when it comes to providing onsite consulting.

Entrepreneurial freedom for employees

We believe qualifi ed and motivated employees are the key to our commercial success. We offer our employees the opportunity to shape their place of work and working environment. All employees at the KWS Group can develop their strengths and pursue their own ideas. The foundation for that is open dialogue, which is a fi rm part of the culture of our organically grown and innovative family business and offers a maximum of fl exibility. The objective is for all employees to have substantial entrepreneurial freedom, offering them prospects for their individual development. Employees assume individual responsibility, which fosters their personal initiative.

Sustainable and profi table growth

We create the basis for profi table growth by investing in research and the development of new varieties. Our objective is to increase the KWS Group's net sales by 5% to 10% p.a. and achieve a minimum return (EBIT margin) of 10%. The economic report beginning on page 32 contains information on how our key performance indicators developed in fi scal 2013/2014. In compliance with the principles of our long-term corporate strategy, we use years in which our profi tability is well above our targets to undertake additional investments, acquisitions and to increase spending, in particular on research and breeding and to expand our distribution structures. In this way we strengthen the KWS Group's potential and lay the foundation for our further growth.

Control system

The KWS Group's long-term corporate strategy is formulated by the Executive Board and defi ned by the Supervisory Board. The overriding objective is to ensure the company's sustainable and long-term growth. Detailed annual and medium-term operational plans are used to control the Group and the three segments Corn, Sugarbeet and Cereals. The medium-term plan covers the time frame of the annual plan plus three further fi scal years. In turn, the medium-term plan is derived from our strategic corporate planning, which covers a timescale of ten years.

The basic assumptions for planning are arrived at on the basis of the regional economic and legal situation, anticipated market trends and assessments of the company's position in the market and potential product performance. In a subsequent bottom-up process, these premises are used to defi ne targets for sales volumes and net sales, production capacities and quantities, the allocation of resources (including capital spending and personnel), the level of material costs and internal charge allocations and the resultant balance sheet data, along with the fi nancial budget. A fi rm part of the planning documentation is an opportunity/risk assessment which every manager must conduct for his or her unit.

The planning is compared every quarter with the company's actual business performance and the updated assessments of the underlying general conditions, and suitable countermeasures are initiated and adjustments made if necessary. A detailed forecast for the current

Management and control

• As a listed stock corporation, KWS SAAT AG has a system of dual management, consisting of its Executive Board and its Supervisory Board. Both bodies have strictly separated authorities and different members. While the Executive Board is responsible for managing the company, the Supervisory Board monitors the company and the Executive Board's activity. This proven form of dual management is to be retained after the company is converted to an SE. The declaration on Corporate Governance in accordance with Section 289a of the German Commercial Code (HGB) contains detailed informa-
• tion on the extensive and close cooperation between the Executive Board and the Supervisory Board and has
• been published at www.kws.com > Company > Investor Relations > Corporate Governance.

Research and development

• Our company's long-term success is founded on research and the breeding of new varieties. Research and development expenditures in the past fi scal year
• were €148.8 (140.4) million 6.0% above the level of the previous year. As a result, we plowed 12.6% of
• the KWS Group's total net sales back into our diverse R&D activities. At June 30, 2014, we employed 1,836
• (1,768) people worldwide in research and development, or almost 38% of the total workforce. The success of our R&D is refl ected in the number of product approvals we were awarded worldwide, among other things. We obtained 336 (276) marketing approvals for new KWS varieties across all our crops in fi scal 2013/2014. As a result, the product pipeline for our international markets is well-fi lled.

Key fi gures for R&D

		2012 /201 3	201 3/20 14	+/–
R&D ploy em ees		1,76 8	1,83 6	78
1 Rati o of R& D em ploy ees	in %	39.8	37.9
R&D end iture exp	in € mil lions	140 .4	148 .8	6.0%
R&D inte nsity 2	in %	12.2	12.6
Mar ketin als f arie ties g ap prov or n ew v		276	336	% 21.7

1 Ratio of R&D employees to the total workforce at June 30 2 Ratio of research and development expenditure to net sales

Genome sequences decoded: Sugarbeet and bread wheat

After more than ten years of intensive research work, the genome sequence of sugarbeet was able to be completely decoded and published in the journal "Nature" in December 2013. Since this research strand, which involves public and private participation, was launched in the year 2000, KWS has played an active part and, among other things, provided its own sugarbeet parent line as the basis for creating a genome-wide reference sequence. In the course of the project, we were able to use parts of this sequence for our own research and development work. Completion of the work means we have a high-quality sequence with a great deal of additional biological information. On the basis of this, interesting genes can be pinpointed directly in the genome and converted into molecular markers, which in turn enable faster decisions on selection and may thus signifi cantly increase the success of breeding.

An important milestone was also achieved in research into the wheat genome. The International Wheat Genome Sequencing Consortium (IWGSC), in which KWS is one of 22 partners, has published a draft sequence of the bread wheat genome in the journal "Science." It gives scientists and breeders new insight into the structure and organization of the large and very complex genome of bread wheat. It also marks an important step in conserving a complete reference sequence of the world's most widely grown cereal crop.

Work starts on our own corn breeding station in Peru Winter breeding gardens in the southern hemisphere offer ideal conditions for conducting breeding work on corn throughout the year so that our breeding programs can be optimized and sped up. In Peru, where we have cooperated to date with external local providers, we are currently establishing our own effi cient breeding station that will enable us to grow three generations a year. Corn was sown for the fi rst time in July and August 2014; the station is expected to be completed by the end of the year.

Success in sunfl ower breeding

After moving back into sunfl ower breeding fi ve years ago, we have now achieved a key milestone with the completion of our new breeding station for sunfl ower and corn in Kozármisleny near Pécs, Hungary. We now have the necessary special seed, harvesting and processing technologies and can maintain our testing capacities at a competitive level. The candidates tested

Establishment of a research center in North AmericaIn view of the strategic decision to increase the international orientation of our research activities, we began to establish a new research center in North America in the spring of 2014. At the Bio-Research & Development Growth Park (BRDG Park) in St. Louis, Missouri (U.S.), where we are surrounded by universities, other institutions and a wide range of companies from our industry, we can leverage a top-class infrastructure for plant research and have access to an excellent talent pool. Our two research centers in Einbeck, Germany, and the U.S., which work closely together and benefi t from each other, will enable us to develop new products for the global market more effi ciently and further strengthen our position in international plant research.

Shedding light on things: The sugarbeet's genome was completely decoded in December 2013.

Increasing importance of powerful information technologies

The amount of valuable data available is increasing at a terrifi c pace in plant breeding, just as it is elsewhere. Fields such as genome research, marker technologies or the automated assessment of plant traits (phenotyping) generate huge volumes of heterogeneous data, which is used as the basis for making sound decisions in breeding. We are therefore investing in high-performance IT infrastructures and innovative bioinformatics solution concepts that enable data from different areas of research to be linked together and important interconnections to be identifi ed. Customized development of smart database architectures that are tailored specifi cally to R&D requirements, as well as data storage, processing and analysis standards for all crops enable us to make pinpointed use of this big data in our breeding process.

in the network have already achieved a good level of performance in terms of yield and agronomic characteristics, with the result that four of them have been able to be registered for the offi cial variety tests, a process that will last several years.

Premiere in Canada: Two hybrid rye varieties registered

We succeeded in registering two hybrid rye varieties in Canada for the fi rst time in the spring of 2014. An increase in yield of more than 20% was achieved in the local quality controls. That gives us a good springboard on which to breed and market continuously improved varieties that are specially adapted to this region.

The Bio-Research & Development Growth Park in St. Louis, Missouri (U.S.), the home of KWS' second research center.

A GOOD DEFENDER

FIGHTING AGAINST FUNGUSErgot resistance in hybrid rye

In recent years, varieties with resistance to the ergot fungus have been planted to an increasing extent. By far the most important contribution here is made by PollenPlus® technology from KWS's Cereal Segment. The decline in ergot infestation is primarily due to a clever choice of the planted variety by farmers and illustrates how breeding progress is successfully transferred to practice. Ergot has hardly been a topic in the last few years thanks to the direct effectiveness of PollenPlus® technology.

Earnings

Selected key earnings fi gures

		/201 2012 3	3/20 201 14	+/–
Net sale s	in € mil lions	1,14 7.2	1,17 8.0	2.7%
EBIT DA	in € mil lions	190 .5	184 .2	% –3.3
EBIT	in € mil lions	152 .1	138 .4	–9.0 %
Retu les ( EBIT rgin ) rn o n sa ma	in %	13.3	11.8	–11 .3%
Net inco for t he p erio d me	in € mil lions	92.3	80.3	–13 .0%

Sales increase by 2.7%

The KWS Group grew its net sales in fi scal 2013/2014 by 2.7% to €1,178.0 (1,147.2) million, despite negative exchange rate effects. This growth was mainly driven America, followed by slight increases in our European markets. The regional spread of sales hardly changed adjustment for exchange rate effects, net sales would have been €1,228.5 million and thus up 7.1% over the previous year.

year. The R&D intensity was thus 12.6% (12.2%). General and administrative expenses increased by 11.2% to €76.7 (69.0) million, mainly as a result of projects aimed at further expansion of our business activities.

Operating income (EBIT) of €138.4 million

The balance of other operating income (€60.7 million) and other operating expenses (€56.2 million), the individual items of which are presented in detail in the Notes on

Business performance

In fi scal 2013/2014 we continued the implementation of our proven, long-term corporate strategy and, as planned, invested more in research and breeding new varieties and in the further expansion of our distribution structures. In this way we are creating the foundation to tap into new markets for the KWS Group and keep on growing our earnings strength with high-yielding varieties. Apart from higher expenditures on product development and distribution of €21.9 million, the growing strength of the euro compared with important currencies for us, such as the US dollar, the Russian ruble, the Ukrainian hryvnia, the Brazilian real, the Argentinean peso and the Turkish lira, had a signifi cant impact on our operating income. Negative exchange rate effects impacted the KWS Group's net sales in the year under review by about €51 million and its operating income (EBIT) by just over €4 million.

by the positive performance of the Sugarbeet and Corn Segments. We achieved the strongest growth in South year on year due to the signifi cant currency effects. After 4.3% increase in gross profi t Gross profi t in the year under review rose from €540.2 million to €563.5 million. License and material costs were only slightly higher and resulted in a below-proportionate increase in the cost of sales by 1.2% to €614.5 (607.0) million. The gross margin thus rose to 47.8% (47.1%). R&D and distribution budgets increase as planned The planned expansion of our international distribution structures, the goal of which is to enable us to keep on offering high-quality, tailored consulting for customers as we continue to grow, caused selling expenses to increase by 7.1% to €204.0 (190.5) million. The ratio of selling expenses to net sales was thus 17.3% (16.6%). The continuous expansion of our R&D activities is refl ected in our research and development expenditure, which was €148.8 (140.4) million, 6.0% above the previous pages 103/104, fell to €4.5 (11.8) million. The decline is in part due to negative exchange rate infl uences, as well as to amortization and write-downs in potato business. Operating income (EBIT) thus fell by 9.0% to €138.4 (152.1) million in the year under review. The return on sales (EBIT margin) accordingly fell by 1.5 percentage points to 11.8% (13.3%). After adjustment for exchange rate effects, we would have generated an EBIT of €142.6 million. Additional interest expenses for the funding of our expanding business in South America and for tax back payments meant that net fi nancial income/ expenses fell to € –12.5 (–10.3) million. Earnings before taxes (EBT) were thus €125.9 (141.8) million. Income taxes in fi scal 2013/2014 were €45.6 (49.5) million. As a result, they were higher than the previous year in relation to income. This was due to extraordinary effects such as losses that cannot be recognized against tax and tax payments relating to previous periods. As a result, the tax rate increased by an additional 5 percentage points over what we had anticipated. The tax rate was 36.2% and, as in the previous year (34.9%), well above our long-term average. It is still mainly impacted by the rates in regions where we post strong earnings. Western Europe, with an average effective tax rate of 33%, and North America (38%) account for almost 60% of the current tax expense. The contribution to earnings from our growth markets in South America and Southeastern Europe will not perceptibly reduce the tax rate for the Group until subsequent fi scal years.

At the beginning of our 2013/2014 fi scal year, we forecast that net sales for the KWS Group would increase by just over 5% and EBIT would fall by approximately €10 million to around €141 million (–6.6%). The exchange rate issue mentioned above made us a little more cautious, despite the positive trend in our operational business in the fi rst three quarters, with the result that we revised our forecasts slightly downward. At the end of the third quarter, we assumed that we would grow net sales by 2.4% and that operating income would fall by 10.8%. However, we were able to surpass this forecast slightly by the end of the fi scal year thanks to the positive development of our Corn and Sugarbeet Segments. Sales ultimately grew by 2.7% and EBIT fell by 9.0%.

Forecast versus actual business performance

KWS Gro up	Fore for cast 2013 /201 41	Adju duri stm ent ng the y ear2	Res ults for 2013 /201 4
Net sale s	% > 5	App % 2.4 rox.	2.7%
EBIT	Ab out –7%	App –11 % rox.	–9.0 %
Cor n
Net sale s	10%	App 4% rox.	1.9%
EBIT	8%	App 2% rox.	9.4%
Sug arb eet
Net sale s	+/–0 %	App 1% rox.	6.8%
EBIT	–10 %	App –6% rox.	–5.1 %
Cer eals
Net sale s		App –3% rox.	–3.9 %
EBIT	–20 %	Ap . –3 0% prox	–36 .4%

1 Forecasts taken from the respective Annual Reports

2 Adjustment of the forecast with publication of the 3rd Quarterly Report for the period from July 1, 2013, to March 31, 2014

The KWS Group's net income for the fi scal 2013/2014 was €80.3 (92.3) million. Of this, €3.2 (3.4) million was attributable to minority interests and €77.1 (88.9) million to the shareholders of KWS SAAT AG. Given that the number of shares remained the same, earnings per share were €11.69 (13.47).

Earnings, fi nancial position and assets

We were able to continue our steady growth in Europe. Building on our strong market position as a corn breeder in Germany, all regions contributed to this positive trend. Our business in Ukraine remained at a low level as a result of the country's political destabilization, coupled with currency risks and farmers' poor liquidity.

We continued to invest highly in seed production in the period under review with regard to expanding our distribution activities. That includes setting up a new seed plant for corn and sunfl ower in the climatically favorable part of Serbia (Vojvodina). Further large investments

Corn Segment

Key fi gures for the Corn Segment

		/201 2012 3	3/20 201 14	+/–
Net sale s	in € mil lions	701 .7	714 .9	1.9%
EBIT	in € mil lions	92.2	100 .9	9.4%
EBIT rgin ma	in %	13. 1	14. 1	7.6%
Cap ital e ndit xpe ure	in € mil lions	23.6	42.0	78.0 %

Net sales up by 1.9%, earnings rise aboveproportionately by 9.4%

KWS MELHORAMENTO E SEMENTES LTDA (research and development). However, we largely used the income from operational business to build our structures in the region. As in North America, genetically engineered corn varieties are also increasing in importance in South America. were made at our production sites in the U.S., Southern France and Turkey, where we expanded capacities for storage, drying and packaging. At the end of the period under review, we were given offi cial approval from China's Ministry of Agriculture

In fi scal 2013/2014, the Corn Segment increased its net sales slightly by 1.9% to €714.9 (701.7) million. Its continuing good operating performance was sharply impaired by unfavorable exchange rate infl uences. The US dollar zone and Brazil, Argentina, Turkey, Romania, Russia and Ukraine were hit especially hard. After adjustment for these negative exchange rate effects totaling €28 million, the segment's net sales would have been €742.9 million (+5.9%). Regionally, a slight increase in net sales (3.2%) was achieved in Europe, although the strongest relative growth was in South America, particularly Brazil (43.2%).

Although our expenditures on research and development and on expanding our international distribution structures were again above the level of the previous year as planned (7.2%), segment income (EBIT) rose more strongly than net sales. EBIT grew by 9.4% to €100.9 (€92.2) million, giving a return on sales (EBIT margin) of 14.1% (13.1%). However, earnings for the previous year were reduced by revaluation of a put/call option in connection with our acquisitions in Brazil.

Record harvests lead to a decline in the price of corn for consumption

General conditions in the global market for corn for consumption changed signifi cantly in fi scal 2013/2014 compared with the previous year. Record harvests were recorded in many regions of the world, while periods of heat and drought had reduced harvests in the previous year. The high level of supply thus resulted in a dramatic decline in the price of corn for consumption

to establish our corn production and distribution joint venture there. Together with our longstanding partner

Kenfeng, one of the largest national seed companies, we will now create the necessary structures and make investments in production facilities. The start of operations is scheduled for fi scal 2015/2016.

Net sales from oil seed rise further

While rapeseed and sunfl ower are marketed predominantly in Europe, demand in North and South America focuses on soybean. Oilseed contributed a total of €82.2 (71.4) million to the segment's net sales.

on the Chicago Mercantile Exchange (CME). The price in January 2014 was around 40% below the previous year's level of €286 a ton. The consequences of this for the global corn seed market and our 2013/2014 sales season were an easing in the supply situation as well as rather muted demand, especially in markets where farmers were able to switch to protein crops such as soybeans. The prices for these crops did not come under such severe pressure as those for corn for consumption, with the result that many farmers decided to grow these alternative crops to a greater extent.

Report from the regions: Strong performance in South America

According to the United States Department of Agriculture (USDA), corn cultivation area in North America fell year on year by 4% to around 37 million hectares. Nevertheless, we were able to consolidate our market position as the third-largest corn breeder in the U.S. with AGRELIANT, our North American joint venture with the French company Vilmorin & Cie. AGRELIANT's net sales fell by 5% to €509 (537) million due to exchange rate effects. There was still large demand for genetically improved varieties with resistance to herbicides and insects.

KWS had an especially successful fi scal 2013/2014 in South America. We were able to improve our market share signifi cantly in both Brazil and Argentina. Sales volumes of corn seed rose year on year by just over 20% in Argentina and by more than 45% in Brazil. As a result, we were able to benefi t perceptibly from the increasing integration of our Brazilian companies RIBER KWS SEMENTES (production and distribution) and

Whether as feed, food or a regenerative raw material – corn is still on the rise worldwide.

production plants in Oregon. We are also opening up further growth opportunities for the future with our goal of continuing to improve quality and by expanding capacities.

We were able to benefi t from our good results in variety performance in the EU 28, and net sales rose to €137.0 million compared with €127.7 million the year before. Net sales remained stable in Germany, where cultivation area was constant, while there was a slight increase in net sales in France, where cultivation area grew. In Central Europe, we posted higher net sales in Poland in particular. Good variety performance resulted in a sharp increase in net sales in the Netherlands and Belgium, enabling us to further expand our leading market position in Northern Europe.

Net sales outside the EU 28 increased to €181.5 (170.1) million, in particular on the back of strong business in North America. That more than compensated for the lower level of business in China and Russia as a result of the decline in cultivation area there. In Turkey we benefi ted from our own local seed production, thanks to which we were able to increase net sales despite a decline in area.

Sugarbeet Segment

KWS sugarbeet varieties achieved a sugar content of more than 18% for the fi rst time in Germany.

Innovations as a response to lower cultivation areas

In the 2014 growing season, high stockpiles of sugar and good harvests, coupled with falling world market prices, again resulted in a reduction in sugarbeet cultivation area worldwide by 3% to 4.1 million hectares. Nevertheless, the KWS Group was able to grow its net sales from sugarbeet seed again in fi scal 2013/2014 by 7.0% to €318.5 (297.8) million. This performance is driven by our longstanding, excellent expertise in the fi eld of breeding. A key cornerstone of our research and development activities is our exclusive cooperation project with Bayer CropScience. Our joint research in developing ALS-tolerant sugarbeet has already produced two patents. These innovative varieties, which are based on conventional breeding methods, have a natural resistance to highly effective herbicides. We expect them to be launched on the market in fi scal 2017/2018. Our innovative strength is also refl ected in the expansion of our portfolio of varieties. In the year under review, we were awarded marketing approvals for 174 (130) new sugarbeet varieties and two new potato varieties in 30 countries.

Report from the regions: North America contributes 40% of net sales

The North American region remained one of the growth regions for sugarbeet, along with Northern Europe and Turkey, in fi scal 2013/2014. We now generate almost 40% of our net sales from sugarbeet, or €127.0 (115.8) million, in North America. In order to safeguard our positon in North America, where we are far and away the market leader, we are currently modernizing our existing

Seed potato business with a clear focus

After the sale and licensing-out of our specialty business, we continued to sharpen the focus of our seed potato business in the year under review. The portfolio of our subsidiary KWS POTATO comprises varieties for the processing industry for making chips and French fries and to satisfy demand for ware potatoes in export markets. This focus of the segment is now also refl ected in the internal organization of our potato business. The emphasis in our seed potato production at present is not only on increasing volumes, but in particular on ensuring and enhancing quality at our younger production sites, for example in Russia. Establishment of the potato breeding station in Emmeloord in the Netherlands was concluded in the year under review with completion of the greenhouse. Net sales from our seed potato business were €32.6 (30.8) million. The necessary up-front and start-up costs meant that it did not make a positive contribution to income in fi scal 2013/2014 either. The annual impairment test for our potato business also revealed the need for a write-down. Consequently, the capitalized goodwill and intangible assets of KWS POTATO were written down to a total amount of €6.3 million.

Key fi gures for the Sugarbeet Segment

		/201 2012 3	3/20 201 14	+/–
Net sale s	in € mil lions	328 .6	351 .1	6.8%
EBIT	in € mil lions	73.9	70. 1	% –5.1
EBIT rgin ma	in %	22.5	20.0
Cap ital e ndit xpe ure	in € mil lions	22.4	18.5	–17 .4%

Higher investments in R&D, production and distribution

The Sugarbeet Segment, at which our seed potato business is also consolidated, recorded net sales of €351.1 (328.6) million in fi scal 2013/2014, an increase of 6.8%. After adjustment for negative exchange rate effects of €13.4 million, the segment's net sales would have been €364.5 million. In the core markets of North America and the EU 28, we were again able to grow our net sales on the back of our portfolio of high-yielding varieties and further expand our leading market position in the sugarbeet product segment. Sugarbeet seed business accounted for €318.5 (297.8) million and seed potato business for €32.6 (30.8) million of total net sales here.

As planned, we increased spending on research and development, modernized and expanded our production facilities and further expanded our distribution structures so as to ensure sustainable further development of our operations and create the foundation for securing our market leadership in sugarbeet seed business. As part of the fundamental realignment of our seed potato business, we recognized write-downs in connection with the streamlining of our portfolio of varieties, as well as amortization of the capitalized goodwill. That reduced KWS POTATO's income by a total of €6.3 million. Consequently, the segment's income (EBIT) fell slightly by 5.1% to €70.1 (73.9) million. The return on sales (EBIT margin) declined to 20.0% (22.5%).

both winter and summer barley had a positive impact. Rye remains the main contributor to the segment's net sales, followed by wheat, barley and rapeseed.

The fall in net sales from rye, as well as expansion of our breeding and distribution activities as planned, impacted the segment's income (EBIT) in fi scal 2013/2014. EBIT consequently fell by 36.4% to €17.1 (26.9) million and the return on sales (EBIT margin) dropped accordingly to 15.9% (24.1%).

At the end of fi scal 2013/2014, KWS SAAT AG acquired the remaining 18.9% of shares in KWS LOCHOW GMBH from the previous family shareholders. At the same time, the company continued the integration efforts it initiated fi ve years ago and established the independent name KWS GETREIDE to enhance its external visibility. As a result, all the segments of the KWS Group have a consistent look and name. The legal name of the company is still KWS LOCHOW GMBH.

Extensive investment in developing new cereal varieties

We continued our growth strategy in the year under review and again increased spending in our national and international programs to develop new cereal varieties. Our diverse breeding programs in the core markets of Germany, the UK, Poland, France, Russia and the U.S. again produced good results. In fi scal 2013/2014, we obtained a total of 42 (43) marketing approvals for new varieties in 6 (7) countries at the Cereals Segment.

Over 40% of farmers in the UK now select a wheat variety from KWS.

Cereals Segment

Lower prices for cereals for consumption cause demand for seed to fall

After an extremely good previous year, net sales in the Cereals Segment fell by 3.9% to €107.3 (111.7) million. The decline was due in particular to a drop in demand for hybrid rye in Germany and Poland, since lower market prices induced farmers to grow other crops. As a result, net sales in our rye business fell by a total of

The focus of farmers in Germany was on ergot resistance in rye. We were able to maintain our share in a declining market thanks to good results in the approval tests for our rye varieties for the 2013 harvest and the very good ergot resistance they exhibited. Apart from continuous optimization of yields, our breeding strategy also comprises very long-term projects, such as establishment of hybrid breeding for wheat and barley. We are also developing specially optimized rye and wheat varieties for the regions of Eastern Europe and North America. Our goal for Eastern Europe is to adapt our rye varieties to the continental weather conditions and thus to tap additional market potential in the medium term. In the U.S. we are focusing on developing special winter wheat varieties (Soft Red Winter). In Canada we obtained the fi rst offi cial approvals for two rye varieties.

Report from the regions: Less use of certifi ed seed

The general conditions in Germany for using certifi ed seed worsened as a result of much lower prices for cereals for consumption than in the previous year. The share of cultivation area on which certifi ed seed was used fell to 50% (53%). However, we were able to maintain our market share. The Polish market displayed a similar trend in the year under review. There was continued large demand for rye seed from our PollenPlus® varieties, which are highly tolerant to infection by the toxic ergot fungus. In the UK we obtained approval for new, high-yielding wheat varieties. As a result, we were able to maintain our leadership with a market share of 43%. Sales of rye and wheat increased in Scandinavia, while net sales in France were down slightly overall from the previous year.

Key fi gures for the Cereals Segment

		2012 /201 3	201 3/20 14	+/–
Net sale s	in € mil lions	111 .7	107 .3	–3.9 %
EBIT	in € mil lions	26.9	17. 1	–36 .4%
EBIT rgin ma	in %	24. 1	15.9	–34 .0%
Cap ital e ndit xpe ure	in € mil lions	7.3	6.8	% –6.8

10.3%. In general, there was less demand on the part of farmers for certifi ed seed from breeders in view of the lower prices for cereals for consumption at the time of the 2013/2014 winter sowing season, meaning they increasingly used farm saved seed. Consequently, net sales from wheat and rapeseed likewise declined. However, we were able to post further growth in barley, where our good quality and variety performance for

Financial situation

Selected key fi gures on the fi nancial situation

		2012 /201 3	201 3/20 14	+/–
Cas h an d ca sh e quiv alen ts	In € mil lions	202 .4	155 .0	.4% –23
Cas h pr eds from ratin tiviti oce ope g ac es	In € mil lions	84.6	61.0	–27 .9%
Net h us ed i n inv estin tiviti cas g ac es	In € mil lions	88.9	75.4	–15 .2%
Net h fro m fi cing ivitie act cas nan s	In € mil lions	27.2	–31 .5

Net cash of €61.0 million from operating activities

Cash earnings in fi scal 2013/2014 were €110.4 (109.5) million, with lower net income for the year and higher depreciation, amortization and write-downs, and were at the level of the previous year. The net cash from operating activities (operating cash fl ow) was €61.0 (84.6) million. The decline is due largely to the increase in working capital: Net working capital in the year under review rose to €268.0 (238.0) million, mainly to increase inventories so as to ensure our ability to deliver seed. Net cash used in investing activities was €75.4 (88.9) million, €8.7 million of which relates to higher payments for tangible fi xed assets, whereas in the previous year the acquisition of shares in consolidated companies reduced the cash fl ow by €23.0 million. The net cash from fi nancing activities includes not only the dividend payout for fi scal 2012/2013 of €19.8 (18.5) million and the repayment of loan install-

Corporate Segment

Key fi gures for the Corporate Segment

The overriding objective of fi nancial management at the KWS Group is to secure the company's fi nancial strength for the long term and maintain its fi nancial independence by ensuring it has suffi cient liquidity. With this approach we can shape the company's further growth fl exibly and exploit opportunities as and when they arise. The fi nancial management organization is controlled in the Group centrally from Einbeck. A balanced mix of different fi nancing, investment and hedging instruments is used. Derivative fi nancial instruments are used only to hedge the risk of interest rate changes and currency risks. KWS: A stock corporation since 1885 and now on the way to becoming an SE (Societas Europaea). ments, but also the price paid to acquire the remaining shares in KWS LOCHOW GMBH. Net cash from fi nanc- ing activities, which was impacted last year by the raising of a borrower's note loan with a volume of €50 million, fell in the period under review to € –31.5 million. Cash and cash equivalents on the balance sheet date June 30, 2014, were a comfortable €155.0 (202.4) million. Capital spending increases by 36.5% In fi scal 2013/2014 our Group invested a total of €82.6 (65.2) million, 26.7% more than in the previous year. One focus of our investments was expanding our corn production capacity. Among other things, we began building a new corn processing plant in Serbia at a total cost of €27.5 million. We invested an additional €7.6 million in modernizing sugarbeet production in North America. The Corn Segment accounted for 51.8% (39.8%), the Sugarbeet Segment for 22.8% (37.7%) and the Cereals Segment for 8.3% (12.3%) of our invest-

		2012 /201 3	201 3/20 14	+/–
Net sale s	in € mil lions	5.2	4.7	% –9.6
EBIT	in € mil lions	–40 .9	–49 .7	–21 .5%
Cap ital e ndit xpe ure	in € mil lions	6.1	13.9	127 .9%

Net sales at the Corporate Segment, which come mainly from revenue from our farms, were €4.7 (5.2) million in the year under review. All cross-segment costs, including the higher expenses for all central functions of the KWS Group and for long-term research projects, are allocated to this segment, which means that its income is regularly negative. Its income (EBIT), due particularly to the in creased expenditure for research and development, was € –49.7 (–40.9) million.

ments. The Group-wide investments were spread over the regions as follows: 28.8% (26.8%) of the invest ments went to Germany, 33.7% (28.0%) to the rest of Europe, 35.0% (37.3%) to North, Central and South America and 2.5% (7.9%) to the rest of the world. Depreciation and amortization in fi scal 2013/2014 were €45.8 (38.4) million and, due to the increase in spending on property, plant and equipment and necessary write downs in our potato business, were above the level of the previous year.

42 43

Financial situation

Management Report of the KWS Group for 2013/2014

Financial situation

Management Report of the KWS Group for 2013/2014

A FORTIFIER FOR IN-BETWEEN

KWS ACKERFITCatch crop mixtures from KWS

Farmers' greatest asset is their land. Measures to improve soil are vital to ensure that it continues to produce high yields. KWS has developed a new product line for catch crops to enable that. KWS AckerFit are catch crop mixtures that fl ourish after the main crop has been harvested and before the next crop is sown. They offer many benefi ts for the soil and the plants subsequently grown in it: They promote soil life and fertility, their extensive root systems improve the soil structure, they absorb valuable nutrients and restrict their leaching, increase biodiversity in the fi eld and make crop rotation more fl exible.

Headcount increases again

The KWS Group combines the values of a company that has a tradition of family ownership with an attractive and open international working environment. We are committed to fairness and respect toward each other, as well as to fostering openness and mutual support. That has helped to establish a culture of closeness and trust at our company.

Working together in teams that refl ect the diversity of a global and modern company enables us to come up with unconventional, creative ideas and fi nd innovative solutions. We specifi cally encourage all employees to develop their abilities and make their own contributions. We therefore consciously delegate responsibility and foster the entrepreneurial spirit of every employee.

Assets

Abridged balance sheet

		2012 /201 3	201 3/20 14	+/–
Ass ets
Non ent ts curr asse	in € mil lions	447 .5	476 .8	6.5%
Cur rent ets ass	in € mil lions	771 .2	786 .0	1.9%
Equ ity a nd l iabi litie s
Equ ity	in € mil lions	649 .7	637 .8	–1.8 %
Lon rm b wing g-te orro s	in € mil lions	229 .3	254 .2	10.9 %
Sho rm b wing rt-te orro s	in € mil lions	339 .7	370 .8	9.2%
Tota l as sets	in € mil lion s	1,2 18.7	1,26 2.8	3.6%

The KWS Group's total assets increased in the fi scal year by €44.1 million to €1,262.8 (1,218.7) million, mainly due to expansion of the KWS Group's business and the associated investments.

Noncurrent assets increased year on year to €476.8 (447.5) million, mainly as a result of investments in property, plant and equipment. Current assets increased by €14.8 million to €786.0 (771.2) million. As part of that, inventories at the balance sheet date rose by €48.5 million to €193.0 (144.5) million and ensure our ability to deliver seed for the next sowing season. Cash and cash equivalents fell to €155.0 (202.4) million, mainly due to acquisition of the remaining shares in KWS LOCHOW GMBH. After deduction of fi nancial liabilities, net liquidity was €–12.1 (70.6) million.

On the other side of the balance sheet, the KWS Group's equity fell slightly by 1.8% to €637.8 (649.7) million.

This refl ects the exchange rate effects of €19.2 million, which are not recognized in the income statement, as well as effects from our takeover of the minority interests in our cereals business. However, we still have solid fi nancing, with an equity ratio of 50.5% (53.3%). Equity at the balance sheet date fully covers noncurrent assets. Long-term borrowings increased by €24.9 million to €254.2 (229.3) million and short-term borrowings by €31.1 million to €370.8 (339.7) million. This increase is mainly due to the greater need for capital as a result of the share acquisitions and expansion of business in the growth markets of South America.

The KWS Group's workforce continued to grow as planned in fi scal 2013/2014. In fi scal 2013/2014, we had an average of 4,847 (4,443) employees worldwide, an increase of 9.1%. Despite our considerable growth over the past years, the average length of service in Germany has remained constant at the high level of 13.9 years – a trend that underscores KWS' attractiveness as a modern and fair employer.

Personnel costs rose below-proportionately relative to the increase in headcount by 7.6% to a total of €225.8 (209.9) million. Of that, €180.3 (167.4) million went to compensation and €45.6 (42.5) million to social security contributions, expenses for pension plans and benefi ts.

Employees by region

	2012 /201 3	201 3/20 14	+/–
Ger man y	1,67 6	1,76 3	5.2%
Euro pe ( ludin g G any) exc erm	1,13 9	1,22 3	7.4%
Ame ricas	1,50 5	1,7 11	13.7 %
Res t of ld wor	123	150	22.0 %
l Tota	4,44 3	4,84 7	9.1%

Employees by function1

	/201 2012 3	3/20 201 14	+/–
Res h & dev elop t earc men	1,76 8	1,83 6	3.8%
Dist ribu tion	1,13 2	1,24 1	9.6%
Prod ucti on	956	1,13 6	18.8 %
Adm inist ratio n	587	634	8.0%
Tota l	3 4,44	4,84 7	9.1%

1 on average for the year

Employees

Further elements of employee development are the "KWS On Board" conference, in which new executive employees provide extensive insight into our corporate strategy, our culture and our expectations, as well as the Orientation Center, which offers valuable suggestions for employees' personal and professional development. In order to promote the sharing of knowledge and experience regarding leadership and cooperation and to strengthen coaching skills, we also continued the proven Sparring Circles for executive employees this year.

KWS as a family-friendly company

We want our employees to be able to balance their career and private lives in every phase of their life. We support them in that with fl exitime models and company agreements on child care allowances, as well as giving employees leave or reducing their working time so that they can look after dependents who need caring for.

KWS – an attractive employer

Our employees are the foundation of our business success. To secure that foundation, we have to remain attractive as an employer. We take an approach that enables us to fi nd new talents – career starters and experienced professionals alike – as well as to develop the existing workforce with its diverse skills.

One focus of our activities is on modern online communications and participation in selected career fairs. At the same time we have intensifi ed our recruiting activities, strengthening our cooperation with relevant universities and organizations in Germany and abroad. As part of our plans to open a second research location in St. Louis, Missouri (U.S.), a main focus of our recruiting was to position KWS as an attractive employer in the eyes of biologists and biotechnologists in the region and universities in and around Missouri.

Throughout the Group, we have continuously expanded the opportunities we offer students to work as an intern at KWS or write their degree theses in cooperation with us. 76 students took up this offer in the year under review. In Germany, KWS also offers the option of pursuing a dual course of study and obtaining a scholarship, including a Germany Scholarship funded by the German Ministry of Education and Research. We were able to increase the number of people KWS sponsored by means of a Germany Scholarship from fi ve to twelve in the past fi scal year. We have also actively expanded our offering to students to visit KWS, to get to know the wide range of activities of a modern plant breeding company and to learn more about their professional prospects in person.

Successful career start at KWS

In addition to sound, in-depth technical training, our career starters are given extensive insight into our international business processes. We also attach particular importance to developing the personal and social qualifi cation of our trainees. In the year under review we employed 98 (92) trainees in six business administration, agricultural science and industrial vocations. Around 120 trainers at the KWS Group ensure a high quality of knowledge transfer.

We offer university graduates our proven trainee program. 37 (43) university graduates made use of this attractive means of starting their career in fi scal 2013/2014. In addition, KWS offers career starters wishing to become a plant breeder practical internal training as part of its "Breeders Academy."

Employee development is of key importance

The continuing personal development of our employees in a dynamically changing global environment, characterized by continuous innovation, customer focus and modern communication, is one of the key objectives of our human resources work. The foundation for that is a Group-wide personnel development landscape that is systematically optimized and expanded. In general, we emphasize on-the-job training in conjunction with targeted internal and external training measures to suit needs.

In the year under review, the fi rst group completed the International Development Program (IDP), which is oriented toward the requirements of a global business environment. By establishing the IDP, we have created a special offering to help experts, young talents and managers develop their skills. One focus is also on directly imparting KWS' typical management and leadership style through our executives.

KWS Healthy Working World

The Works Council, the HR departments in the KWS Group and the German service companies have jointly developed the initiative "KWS Health Working World" to address the issue of work and health. As part of this initiative, a Health Day was held in Einbeck at the end of May 2014. More than 600 employees took the opportunity to learn more about the various facets of health – and not only at work – at an interactive fair during their working time.

Expansion of the global HR strategy

In fi scal 2013/2014 we continued the international establishment and further development of HR to meet global requirements. We increased resources at the regional service companies as planned and also commenced preparations to open two more HR departments at the planned service companies in North and South America. A professional software product will enable us to process, manage and aggregate all organizational and personal data even more effi ciently and thus address the company's growth over the past years in this fi eld as well.

Key fi gures for employees (in Germany)

		/201 2012 3	3/20 201 14	+/–
Num ber of e mpl es in Ge oye rma ny		1,67 6	1,76 3	5.2%
of w hich Nu mbe r of -tim ploy part e em ees		350	350	+/– 0%
Rati o of me n	in %	49	50
Rati o of wo men	in %	51	50
Num ber of tr aine es		92	98	6.5%
Trai rati nee o	in %	5.5	5.6
(in rs) Ave rage age yea		40.4	40.2
Len gth of s ervic e (in rs) yea		13.9	13.9

Übersetzung

TREASURE TROVE OF TALENT

THE GENETIC POOLThe basis of product development

Every plant has different "talents." Characterizing the various genotypes, choosing them by traits and combining them in new ways by means of selective crossing – that is the essence of plant breeding. Every restriction to biodiversity therefore reduces the possibilities when it comes to breeding agricultural crops. Conserving plant genetic resources is a key concern in our industry.

strength in this context is the number of newly approved varieties. In approval processes, our varieties compete directly with competitors' products in the performance tests conducted by the authorities. More detailed information on this and on our research and development activities is available on page 27 of this Annual Report.

Market opportunities also result from our intensifi ed activities in subtropical regions. With our corn activities in Brazil and China, in the mid- or longer term we can tap additional sales potential for the KWS Group in these – for us – young markets by developing varieties adapted exactly to the right climatic conditions. Particularly in the strongly fragmented Chinese corn market there is a good chance of playing a role in the emerging consolidation.

Investments in the expansion of our production capacities and the modernization of our seed processing facilities offer additional opportunities for further growth. The continued development of our portfolio of varieties and the expansion of our capacities go hand in hand with the expansion of our international distribution structure since they enable us to inform and advise our customers even more intensively and individually about the use of our seed and, in this way, to fi nd further sales potential. In addition, the KWS Group has opportunities to increase its productivity and optimize its cost structures through continuous process optimization. Short-term opportunities can also result from changing relationships among exchange rates.

Risks

Objectives and strategies in risk management

Risk management at the KWS Group is based on an approach that is oriented toward our corporate culture. The foundation for that is trust in employees and the experience that they act responsibly toward themselves, their colleagues and the company as a whole. Training measures enable our employees to assess risks on their own at all times.

Explanations regarding the annual fi nancial statements of KWS SAAT AG

The annual fi nancial statements of KWS SAAT AG are prepared in accordance with the provisions of the German Commercial Code (HGB). Operational business relating to the production and marketing of sugarbeet seed was expanded slightly in fi scal 2013/2014. However, the central costs for administration and all other costs of the Corporate Segment were not covered by the income from corn business, which comprises sales of basic seed and royalties. Consequently, the operating income (EBIT) of KWS SAAT AG in the year under review was €–14.3 (11.8) million, well below the previous year's fi gure despite a slight increase in net sales of 2.5% to €270.1 (263.5) million. Net fi nancial income/expenses is mainly from income from investments within the group and was €37.9 (35.5) million. Accordingly, net income for the year was €23.8 (35.7) million. Taking into account the profi t of €0.2 million carried forward from the previous year and an allocation of €4.0 million to the revenue reserves, the net retained profi t is €20.0 million (20.0 million).

Report on events after the balance sheet date

At the beginning of September 2014, KWS SAAT AG issued a further borrower's note loan for €100 million at very low interest rates. Parts of the last issue with higher interest rates were replaced by longer-term loans at a lower rate. Part of the new borrower's note loan has a variable interest rate. In this regard, KWS SAAT AG has concluded long-term interest rate hedges to limit the risk of changes in interest rates.

Apart from that, there were no signifi cant events that the Executive Board expects might have an impact on the KWS Group's earnings, assets and fi nancial position.

Opportunity and risk report

As an international seed company, the KWS Group operates in a dynamically changing environment. We aim to identify the resultant opportunities and risks early on so that we can reduce or avoid negative effects by means of proactive strategies to counter risks and seize opportunities systematically as and when they arise. The opportunity and risk management system we have implemented helps us to achieve our goal of operating on the global market with lasting success.

Opportunities

At the KWS Group, opportunity management is an integral component of the established controlling system between the subsidiaries, associated companies and company management. The Management of our three product segments – Corn, Sugarbeet and Cereals – is responsible for identifying, analyzing and making the most of operational opportunities. Targeted measures are formulated together with the Executive Board so that strengths can be leveraged and strategic growth potential tapped. Strategic opportunities of major importance are handled by the Executive Board. Extensive strategic planning covering a 10-year time frame is the basis for opportunity management. In keeping with our established growth strategy, we exploit the industry-specifi c and strategic opportunities that arise by means of pinpointed investments in production capacities, research and development and acquisitions.

We see numerous opportunities to continue developing the KWS Group in keeping with our strategy. To ensure that we achieve sustainable and profi table growth in the future as well, it is especially important that we maintain and even increase our innovative strength. In the seed business, that strength is refl ected in continuous yield increases in new varieties. That involves either boosting the yield potential of the plants or improving their resistance to detrimental infl uences of all kinds. It is our goal to offer our customers new varieties representing yield increases of between one and two percent each year. For that reason, we continuously expand our research and development activities. One measure of our innovative

A responsible approach to risks is supported by an extensive risk management system and an internal control system. A risk here denotes a potential future event or future development that may result in monetary consequences and thus lead to a negative deviation from forecasts or targets. Risk management is defi ned at KWS as the totality of all organizational regulations and measures to enable prompt identifi cation, assessment, control,

• communication and monitoring of the relevant risks. The objective of risk management at the KWS Group is to ensure that all regulatory requirements demanded of the risk management system are fully complied with throughout the Group and company value-added is generated for decision-making processes.
• Structure of the risk management system

Our risk management system is also based on strategic planning and investment controlling, continuous operational controlling and the quality and process monitoring systems. Central responsibility for risk management lies with the Executive Board. It is supported by Corporate Finance – Treasury and Risk Management, Corporate Law & Compliance, Corporate Responsibility Affairs and Corporate Controlling, as well as a permanent Risk Committee (Corporate Management Circle) (see fi gure). The Risk Committee consists of the two top management

levels (Executive Board and Heads of Departments/Segment) and convenes regularly.

The principles of our risk management are enshrined in the "Rules, Guidelines & Procedures (RGPs)". These are published on the intranet, which can be accessed throughout the Group. With these RGPs, which are continuously revised and adapted to refl ect changes to the regulatory framework, we have created a shared understanding for risk management within the KWS Group. Core contents include principles relating to early detection and the communication and handling of risks.

Internal control and risk management system with regard to the accounting process

The internal accounting control and risk management system for the fi nancial statements of KWS SAAT AG and the KWS Group comprises all suitable measures, structures and processes designed to make sure that all business events and transactions are included in accounting promptly, consistently and correctly. It is intended to ensure compliance with the statutory standards, accounting regulations and internal accounting control policies that are binding on all consolidated companies. The focus of regular internal examinations to optimize processes is on, among other things, the completeness of fi nancial reporting, the Group's uniform accounting, measurement and account allocation stipulations, and the authorization and access regulations for IT systems used in accounting. Proper, complete elimination of intra-Group transactions as part of consolidation is also examined. The consolidated accounting process is controlled at KWS SAAT AG by the corporate units Group Accounting and Group Controlling.

Structure of risk management at the KWS Group

Cor Fina ate por nce	Cor Con trol ling ate por
• R isk c ol m atrix ontr • E arly dete ctio n of risk s • M inim irem ents um requ • In tere st a nd c t urre ncy man age men • In sura nce • E xter nal a udit s • IT urity sec	• E arly dete ctio n of risk s ing / • P lann bud get • C ion nt e ctat urre xpe
Cor sibi lity Affa irs ate Res por pon	Cor & C lian ate Law por omp ce
, Gu • R ules ideli & P dure nes roce s	• C – C oRA lianc e Ri sk A nt omp sses sme

• Integrated Management System

• Internal audits

• (self-assessment approach)
• Compliance training
• External audits
• Examinations

KWS' risk management system is organized on the basis of the internationally recognized COSO model (Committee of Sponsoring Organizations of the Treadway Commission). As part of its audit of the fi nancial statements for the fi scal year 2013/2014, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft also audited KWS SAAT AG's system for the early detection of risks with regard to its compliance with requirements under the German Stock Corporation Act. The auditors came to the conclusion that the system meets all the necessary statutory requirements.

Risk management process

The risk management process at KWS consists of fi ve phases that build on each other: identifi cation, assessment, control and monitoring of risks and risk reporting. These phases form a closed and continuous control loop.

Risk identifi cation is at the beginning of the risk management process. We understand this to be the identifi cation of current and future risks, as well as potential risks, by the persons responsible for an area of risk. All the identifi ed risks are plausibilized and summarized in a risk control matrix. The risk control matrix presents the results of the identifi cation phase and documents the systematic entirety of all individual risks at the KWS Group (risk inventory). Around 100 key risks and ways to control them are currently contained in the risk control matrix.

Risk identifi cation is followed by risk assessment, i.e. the qualitative and quantitative assessment of all identifi ed individual risks. Risks are assessed on a net basis, i.e. allowing for control and monitoring instruments. Their materiality (upper risk limit) is evaluated on the basis of their possible effect on operating income (EBIT) or specifi c qualitative indicators. As part of this, the individual

risks are assessed with their individual likelihood of occurrence and potential level of damage and classifi ed according to a traffi c light system.

As part of risk controlling, we defi ne suitable instruments for tackling the identifi ed and assessed risks and deploy them accordingly. The objective of risk controlling is to infl uence risks actively. Risk controlling comprises selecting and carrying out measures to tackle and reduce risks, as well as constant in-process monitoring of risks and risk transfer. The effectiveness of the instruments used for controlling and monitoring the main risks is systematically reviewed as part of our internal control system (ICS).

The prime tasks of the ICS include documentation of the effectiveness of the controls and standardized reporting to the Audit Committee. The adequacy and proper functioning of the controls must be examined once a year by the persons responsible for them at the respective business segment or by a commissioned third party. We ensure with this process that the risk control measures actually do unfold their full effect. A control can only be termed effective if it is adequately designed and works properly. We assess the effectiveness of the controls by means of regular tests using random samples. The results of the effectiveness tests are documented and reported annually to the Audit Committee. Any weaknesses identifi ed in the control process are eliminated promptly and fully. External audits conducted by experienced auditors are an essential part of the ICS by ensuring that our internal controls function properly.

As part of risk reporting during the year, the Risk Committee is informed quarterly of the current risk situation for the KWS Group and its fi elds of business.

Main areas of risk

In the following we describe the main risks to which we as an international company are exposed in our everyday business and that may have a signifi cant negative impact on our business situation, assets, fi nancial position and earnings, our share price and our reputation. The KWS Group is subject to the usual economic and political risks in the countries and regions in which it and its subsidiaries operate. The order in which the risks are listed does not refl ect their importance. Unless otherwise specifi ed, the risks apply to all segments of the KWS Group. Development of the individual risks is reported on regularly in the Risk Committee.

Strategic risks

We press ahead continuously with the Group's strategic further development. That comprises permanent optimization of effi ciency, strengthening our core areas, product portfolio management and investment in research and development. The success of the related decisions is subject to a risk regarding forecasting future (market) developments.

Overview of the signifi cant individual risks

Risk	Exa mple s
Mar ket risks	• P olitic al ris ks • S ales vol d pr ices ume s an • M ic ris ks acro eco nom	• C risks urre ncy • R isk o f ch es in inte rest rate ang s
Prod ucti isks on r	• W eath lated risk er-re s • O e of duc tion utag tem pro sys s	• Q ualit y ris ks • In t ris ks vest men
Proc risks ent urem	• D nde plier epe nce on sup s • D ivers ifi ca tion	• A chn olog ies ss t o te cce
Liqu idity risk s	• C ash / ca sh fl ow • C redi t line s (w ith b ank s)	• R ivab les m ent ece ana gem
Leg al ris ks	• A ntitr ust risks • C ptio n ris ks orru • C apit al m arke t ris ks	s / t ks / • In fring nt o f pa tent rade eme mar kno w-h ow • D ata prot ecti on
Env iron tal r isks men	• P ollut ion of a ir, so il an d w by dus ater ts, and dan te w ater aste was gero us w	• T of h rdou ods port rans aza s go • G tic m ixing ene
Pers el ris ks onn	nt / • R itme dev elop t ecru men • W ork safe ty	/ old • W orki ng t ime sion -age pen s
IT ris ks	• H igh ilabi lity ava • IT urity sec	• A utho rizat ion t con cep

Currency risks arise in particular from existing receivables and liabilities denominated in foreign currency due to fl uctuations in exchange rates. There are interest rate risks as a result of potential changes to market interest rates. Variable-interest fi nancial instruments may result in fl uctuations in interest payments and thus have a positive or negative impact on earnings. The risk of interest rate changes and currency risks are addressed through the usual standardized hedging instruments, which in turn may have an infl uence on the KWS Group's earnings and assets situation. The KWS Group aims to minimize fi nancial risks resulting from its business, such as currency and interest-rate risks, through systematic management. This is done primarily with derivatives and other fi nancial instruments such as forward exchange dealings.

Production risks

The agricultural production process of breeding and multiplying seed depends to a large extent on the weather. We counteract the risk of production losses stemming from bad weather by distributing seed multiplication over various locations in Europe and North and South America. Our presence in various markets around the world also means that we can cope with fl uctuations in demand in individual regions as part of our global production network. Contra-seasonal multiplication is carried out in the winter half-year in Chile and Argentina if there are bottlenecks in seed availability, for example.

We counter the risk of outages of production facilities with regular maintenance and Group-wide business interruption insurance. In addition, our products are subjected to regular and extensive quality checks on the fi elds used for multiplication and during processing so as to reduce quality-related risks. In this way, we ensure the high quality of our products through stringent internal quality standards and monitoring.

Market risks

In the strongly regulated international agricultural industry, political risks have a signifi cant impact on our business development. Uncertainty about what will happen in Ukraine and the effects of sanctions on Russia, which are diffi cult to assess, may have a negative impact on our business activities in these two countries. We generated net sales totaling €50.6 million in the two countries in fi scal 2013/2014. The lack of statutory regulations may also represent a risk. One unavoidable risk for our corn business is still the possibility of the adventitious presence of genetically modifi ed organisms (GMOs) in conventional seed. In the absence of a standardized legal threshold value, a number of European countries practice a policy of zero tolerance. Thanks to an extensive quality assurance system, only two suspicious seed samples were identifi ed in international offi cial tests in fi scal 2013/2014.

A further risk lies in the uncertain regulatory framework for growing energy plants. Extensive government market incentive programs and speculation on the agricultural commodity markets have meant that this sector of agricultural production is currently being called into question as a whole. In principle, what is needed here is a careful analysis of what form of cultivation of energy plants represents an economically sensible and sustainable alternative form of producing energy. This must take into account increases in effi ciency in energy plant cultivation and the fact that the prices for fossil fuels will tend to rise.

The medium-term sales risk depends on product performance and the competitive situation. We address this challenge with systematic analyses of the market and the competition and by constantly developing higher-quality seed for innovative, high-yield plants.

Procurement risks

We minimize risks that might arise from procurement of seed by means of international diversifi cation of our production locations and suffi cient stockpiling. Moreover, supply risks related to sources no longer being able to deliver are largely reduced by means of continuous classifi cation of risks. As part of that, we observe the creditworthiness of important business partners, among our customers and suppliers alike. To keep on improving our supply and reduce any other risks, the entire area of purchasing is currently being improved by the Corporate Procurement department.

Liquidity risks

We address liquidity risks with professional cash management and suffi cient long-term borrower's note loans and syndicated credit lines. As in the previous year, full use was not made of the variable credit lines in fi scal 2013/2014. Our loan agreements include fi nancial covenants, compliance with which has been ensured at all times to date. KWS uses extensive trade credit insurance to minimize the risk of losing receivables in risky regions and business segments. To enable this, we pursue an active receivables management policy so that impending payment defaults can be identifi ed at an early stage.

Legal risks

The KWS Group faces risks from legal disputes and offi cial procedures both nationally and internationally as part of its operations. Such legal disputes may arise in particular with suppliers, dealers, customers, employees or investors. They may result in payment obligations or other commitments. In fi scal 2013/2014 there were no pending legal proceedings that might result in signifi cant risks for the KWS Group. In order to prevent any violations of the diverse tax, environmental and competition and other regulations and laws, we obligate all employees to abide by our compliance policies. The Code of Business Ethics and the compliance policies based on it contain provisions stipulating that all KWS employees must act in accordance with KWS' corporate values and comply with the law, contracts and internal rules.

The greatest risk for a plant breeding company is the loss of its innovative strength. KWS and its more than 1,800 R&D employees see innovativeness as a huge opportunity.

Forecast report

KWS Group: Net sales expected to rise by 5% to 10%

We will stick to our proven, long-term corporate strategy in fi scal 2014/2015 and focus on tapping young sales markets and developing high-yielding new varieties. Consequently, we intend to increase our spending on distribution activities and research and development sharply again.

That will be accompanied by extensive investments in property, plant and equipment – in particular, we need to expand our seed processing capacities in order to handle our planned growth in the coming years. Especially in our growth regions of North and South America, Eastern Europe and China, there is hardly any possibility of having seed production carried out by third parties, meaning we will establish our own plants. In addition, we are expanding our research facilities at Einbeck and continuing to set up our new research center in St. Louis, Missouri (U.S.) Our expansion strategy will also lead to growth in our international workforce. As far as can be seen at present, the number of employees at the KWS Group will grow by around 300 to approximately 5,200 by the end of the fi scal year.

Environmental risks

The Integrated Management System and environmental policies, which employees are obligated to implement under our internal regulations, in conjunction with the requirements defi ned by environmental protection law, form the foundation for all our strategic and operational measures in protecting the environment. The organization of processes and operation of plants and systems, including documentation, in the various areas of the company is regulated in the management system, which complies with the DIN EN ISO 9001:2008 (quality) and DIN EN ISO 14001:2004 (environment) standards. The working order and effectiveness of this system is examined regularly by internal audits and reviews and confi rmed by an external certifi er. This minimizes possible risks of pollution of the air, soil and water by dusts, waste water and hazardous waste.

Personnel risks

Our success builds on the individual skills and knowledge of our employees. We encourage the workforce to expand and transfer knowledge through targeted continuing education and development programs. We minimize the risk of losing knowledge when people retire by means of intensive and subject-specifi c qualifi cation and timely succession planning. In addition to our specifi c vocational training and trainee programs, we initiated the "Breeders Academy" with the aim of training young people in the fi eld of research and breeding.

IT risks

Ensuring the security of our information systems is of great importance to us. We address risks, such as unauthorized access to sensitive electronic company data and information as a result of hacking or computer viruses, with an IT security organization, IT security policies and the use of state-of-the-art fi rewall and antivirus programs. Due to the rapid pace of technological development, there is a residual risk to IT security which can be minimized but not completely controlled.

Overall statement on the risk situation by the Executive Board

The rising share of our business in foreign currency, particularly in emerging countries, means there will be additional currency risks. Nevertheless, and taking into account our countermeasures, we assess the potential fi nancial impact of currency risks as being moderate.

The risks presented above do not jeopardize the existence of the KWS Group, neither individually nor in their entirety. All in all, the risk situation did not change signifi cantly in fi scal 2013/2014. The main risks for us are still related to production and the market. We feel sure that, thanks to our global footprint, our innovativeness and the high quality of our products, we can seize opportunities and successfully counter risks as they arise. However, we cannot rule out the possibility that further factors of which we are not currently aware or which we do not at present assess as signifi cant may impact the continued existence of the KWS Group in the future.

Change in risks in fi scal 2013/2014

Like lihoo d of occ urre nce	ntial fi na ncia l Pote impa ct	Cha nge
Pos sible	Sign ifi ca nt
Pos sible	Sign ifi ca nt
Unli kely	Sign ifi ca nt
Pos sible	Sign ifi ca nt
Pos sible	Sign ifi ca nt
Pos sible	Sign ifi ca nt
Unli kely	Mod erat e
Unli kely	Mod erat e

No change Increase

• Operationally, the KWS Group's Executive Board expects net sales to rise by between 5 and 10% with an EBIT margin of at least 10% in fi scal 2014/2015. We are thus sticking to our long-term objective. This planning is based on net sales of €1,178 million for fi scal 2013/2014. As far as can be seen at present the further increase in research and development expenditure will result in an R&D level of 13%. We intend to continue our dividend policy, which is based on a payout ratio of 20% to 25% of the net profi t of KWS.
• As already announced last year, the presentation of the companies consolidated in the KWS Group will change signifi cantly due to an amendment to the International
• Financial Reporting Standard (IFRS 11). Since the beginning of fi scal 2014/2015, we cannot include net sales and costs of our 50:50 joint ventures in the KWS Group by way of proportionate consolidation. The earnings contributed by these companies will instead be carried as a sum total under net fi nancial income/expenses.
• However, we will present our business activity as usual at the segment level so as to ensure there is no impairment to the transparency of our operational development.

The KWS family will grow to more than 5,000 employees worldwide for the fi rst time in fi scal 2014/2015.

Other disclosures

Takeover-related disclosures

Disclosures in accordance with Section 315 (4) HGB (German Commercial Code) and explanatory report in accordance with Section 176 (1) AktG (German Stock Corporation Act)

Composition of the subscribed capital

KWS SAAT AG's subscribed capital comprises 6,600,000 no-par bearer shares. Each share confers one voting right.

Restrictions relating to voting rights or the transfer of shares

Apart from the statutory restrictions on exercising voting rights in accordance with Section 136 of the German Stock Corporation Act (AktG) or Section 28 of the German Securities Trading Act (WpHG), there are no other restrictions relating to voting rights. Transfer of shares is merely restricted by a four-year holding period under the annual Employee Share Program. Only a small part of the shares is affected by this regulation. For example, our employees acquired 11,028 shares as part of the program in 2014. You can fi nd more information on our Employee Share Program in the section "The KWS share" on page 10 of this report. Apart from that, the Executive Board is not aware of any agreements between shareholders relating to voting rights or the transfer of shares.

Direct or indirect participating interests in excess of 10% of the voting rights

The company has been informed of the following direct or indirect participating interests in the capital of KWS SAAT AG in excess of 10% of the voting rights in accordance with Section 21 and Section 22 of the German Securities Trading Act (WpHG) or elsewhere.

The voting shares, including mutual allocations, of the members and companies of the families Büchting, Arend Oetker and Giesecke listed below each exceed 10% and are 56.1%:

• Dr. Drs. h.c. Andreas J. Büchting, Germany
• Christiane Stratmann, Germany
• Dorothea Schuppert, Germany
• Michael C.-E. Büchting, Germany
• Annette Büchting, Germany
• Stephan O. Büchting, Germany
• Elke Giesecke, Germany
• Christa Nagel, Germany
• Bodo Sohnemann, Germany

Corn Segment: Return to our former growth

While growth in the Corn Segment was somewhat more restrained in the year under review, mainly due to exchange rate effects, we expect net sales to increase again by double digits in fi scal 2014/2015. The regions of North and South America and Southern, Southeastern and Eastern Europe are expected to make major contributions to that. We also intend to make further progress in France, where we were able to become the market leader last year for the fi rst time. The Corn Segment's anticipated income will inevitably be impacted by the high up-front costs on ensuring our future growth. As far as can be seen at present, we nevertheless expect an EBIT margin of 11% to 12%.

Sugarbeet Segment: Stable at the ambitious level of the previous year

We expect at best a stable level of net sales and income for the Sugarbeet Segment with its two product areas of sugarbeet seed and seed potatoes in fi scal 2014/2015. Despite declining sugarbeet cultivation area, we managed to break the €300 million mark for net sales for the fi rst time last year. Whether we can repeat this success

in the forecast period depends mainly on our business performance in our most important sales market of North America. Our goal is to defend our exceptionally high market share there. In the countries covered by the European Sugar Market Regime, we also posted record net sales last fi scal year. Given that there are now expected to be declines in area due to good harvests and low sugar prices, we do not see any potential for growth at the moment. The good potato harvest in the 2014 growing season will also exert pressure on prices and result in lower demand for seed potatoes. Nevertheless, we still expect an EBIT margin of 20% in the Sugarbeet Segment.

Cereals Segment: Again greater cultivation of rye

The further decrease in prices for cereals for consumption means that no increase in cereal cultivation area can be expected next growing season. However, we assume that there might be a slight shift in the variety mix and that the share of rye in cereal cultivation might increase slightly again. Overall, we anticipate that the segment's net sales and income will be at the level of the previous year.

• Matthias Sohnemann, Germany
• Malte Sohnemann, Germany
• Arne Sohnemann, Germany
• AKB Stiftung, Hannover, Germany
• Zukunftsstiftung Jugend, Umwelt und Kultur, Einbeck, Germany
• Dr. Arend Oetker, Germany
• Kommanditgesellschaft Dr. Arend Oetker Vermögensverwaltungsgesellschaft mbH &. Co., Berlin, Germany

The voting shares, including mutual allocations, of the shareholders stated below each exceed 10% and are 14.2%.

• Hans-Joachim Tessner, Germany
• Tessner Beteiligungs GmbH, Goslar, Germany
• Tessner Holding KG, Goslar, Germany

Regulations and provisions regarding the appointment and removal of members of the Executive Board and changes to the Articles of Association Section 84 (1) of the German Stock Corporation Act (AktG) specifi es that members of the Executive Board are appointed or removed by the Supervisory Board. Under Section 6 of the Articles of Association, the Executive Board consists of at least two persons. The Supervisory Board is responsible for defi ning the number. In compliance with Section 179 (2) Sentence 2 of the German Stock Corporation Act (AktG), Section 18 of KWS SAAT AG's Articles of Association specifi es that resolutions, and thus changes to the Articles of Association as well, are adopted by the Annual Shareholders' Meeting by a simple majority of the votes cast or with the simple majority of the capital stock represented in adoption of the resolution. Mandatory statutory provisions that stand in the way of this arrangement are not affected by it. The power to make amendments to the Articles of Association that only affect the wording has been conferred on the Supervisory Board pursuant to Section 179 (1) Sentence 2 AktG in accordance with Section 22 of KWS SAAT AG's Articles of Association.

Compensation agreements in the event of a takeover bid

In the event of a takeover, there are agreements for the members of KWS SAAT AG's Executive Board which comply with the provisions of the German Corporate Governance Code (Clause 4.2.3). They specify a commitment to pay a maximum of three year's compensation if an Executive Board member's activity is terminated

A good outlook – because growth is our core competence.

The compensation of members of the Executive

Board was set by the Supervisory Board and approved by the Annual Shareholders' Meeting. It is based on the size and activity of the company, its economic and fi nancial situation and the level and structure of compensation for managing board members at comparable companies.

The "total compensation" of the Executive Board comprises fi ve components:

• 1. A basic fi xed annual salary
• 1. a variable payment in the form of a performance-related bonus
• 1. a variable payment in the form of a long-term incentive based on the KWS stock price
• 1. any special payments
• 1. Other remuneration and pension awards.

The basic annual salary, bonus payment and other remuneration, including any special payments, are also jointly termed "cash compensation" in the following. Payments for duties performed in subsidiaries and associated companies are offset against the performance-related payment. The cash compensation is limited to an absolute amount of €750,000 per fi scal year. If the company generates sustainable average net income of more than €70 million a year in two successive fi scal years, this limit will be subsequently increased to €800,000 and, in the case of sustainable average net income of more than €100 million a year in two successive fi scal years, to €900,000. It has been agreed that this arrangement does not apply in fi scal 2013/2014 to the members of the Executive Board Dr. Léon Broers

prematurely as a result of a change of control. At the same time, the payment does not exceed the compensation to be paid for the remainder of the contract of employment.

The other circumstances specifi ed in Section 315 (4) of the German Commercial Code (HGB) do not apply at KWS SAAT AG, so no disclosures can be made in this regard.

Declaration regarding Corporate Governance

The declaration on Corporate Governance in accordance with Section 289a of the German Commercial Code (HGB) (which is also the Corporate Governance Report) is available on our website at www.kws.com > Company > Investor Relations > Corporate Governance. Among other things, it contains the declaration in accordance with Section 161 of the German Stock Corporation Act (AktG) (declaration of compliance), which is also reproduced on page 18 of this report, relevant disclosures on Corporate Governance practices and a description of the working practices of the Executive Board and the Supervisory Board.

Compensation Report

The Supervisory Board's compensation was set by the Annual Shareholders' Meeting on December 17, 2009. It is based on the size of the company, the duties and responsibilities of the members of the Supervisory Board and the company's economic situation. The remuneration and Dr. Hagen Duenbostel. The limit of €750,000 therefore remains for them.

The basic gross annual salary is €216.000. The Chief Executive Offi cer receives an extra "CEO bonus" of 25% on top of the basic annual salary. The variable payment (performance-related bonus) for our Executive Board members depends on the Company's performance over several years. It is calculated on the basis of a percentage of the average net income of the KWS Group for the past three fi scal years. This percentage is reduced if net income for the year exceeds certain thresholds. There is also a stock-based incentive program intended to act as a long-term incentive. Every member of the Executive Board is obligated to invest a freely selectable amount ranging between at least 20% and at most 50% of the gross performance-related bonus payment in KWS shares. A long-term incentive (LTI) is paid in the form of cash compensation after a holding period of fi ve years. This payment is calculated on the basis of the share's performance over the holding period and on the average return on sales, measured as the ratio of operating income to net sales (ROS). However, it is capped at a maximum of two-and-a-half times the payments made by the Executive Board member as part of his or her own investment. One third of the LTI before taxes must be reinvested in KWS shares after it is paid out.

The basic compensation is paid as a monthly salary. Apart from these salaries, there is also non-monetary compensation, such as a company car or a phone. There are also accident insurance policies for the members of the Executive Board.

includes not only a fi xed payment of €28 thousand p.a. and payment for work on committees, but also a performance-related component, which is oriented toward the company's sustainable development. The members of the Supervisory Board receive €400.00 for each full €0.10 by which the average net income per share before minority interests, as disclosed by the consolidated fi nancial statements, exceeds €4.00 for the fi scal year for which the compensation is paid and for the two prior fi scal years. The performance-related payment is limited to the amount of the fi xed payment.

The Chairman of the Supervisory Board receives three times and his or her deputy one-and-a-half times the total compensation of an ordinary member. There is currently no extra compensation for them for work on committees. The Chairman of the Audit Committee receives €25 thousand. Ordinary members of the Supervisory Board receive €5 thousand for their work on the Committee for Executive Board Affairs and €10 thousand for their work on the Audit Committee. The members of the Supervisory Board are reimbursed for all expenses – including value-added tax – that they incur while carrying out the duties of their position.

The total compensation for members of the Supervisory Board amounts to €516 thousand (€516 thousand), excluding value-added tax. In all, 46% (46%) or €238 thousand (€238 thousand) of the total compensation is performance-related.

Supervisory Board compensation in 2013/2014

		Wor k on c om	Perf or man ce
in €	Fixe d	mitt ees	relat ed	Tota l
Dr. A ndre as J . Bü chtin g1	84,0 00.0 0	0.00	84,0 00.0 0	168 ,000 .00
Dr. A rend Oe tker 2	42,0 00.0 0	0.00	42,0 00.0 0	84,0 00.0 0
3 Hub ertu n Ba umb ach s vo	28,0 00.0 0	25,0 00.0 0	28,0 00.0 0	81,0 00.0 0
Jürg en B oldu an	28,0 00.0 0	10,0 00.0 0	28,0 00.0 0	66,0 00.0 0
Cat hrin a C laas -Mü hlha use r	28,0 00.0 0	5,00 0.00	28,0 00.0 0	61,0 00.0 0
Dr. B erth old Nieh off	28,0 00.0 0	0.00	28,0 00.0 0	56,0 00.0 0
	238 ,000 .00	40,0 00.0 0	238 ,000 .00	,000 .00 516

1 Chairman

2 Deputy Chairman 3 Chairman of the Audit Committee

Supervisory Board compensation in the previous year

		Wor k on c om	Perf or man ce
in €	Fixe d	mitt ees	relat ed	Tota l
Dr. A ndre as J . Bü chtin g1	84,0 00.0 0	0.00	84,0 00.0 0	168 ,000 .00
Oe 2 Dr. A rend tker	42,0 00.0 0	0.00	42,0 00.0 0	84,0 00.0 0
3 Hub n Ba umb ach ertu s vo	28,0 00.0 0	25,0 00.0 0	28,0 00.0 0	81,0 00.0 0
Jürg en B oldu an	28,0 00.0 0	10,0 00.0 0	28,0 00.0 0	66,0 00.0 0
Cat hrin a C laas -Mü hlha use r	28,0 00.0 0	5,00 0.00	28,0 00.0 0	61,0 00.0 0
Dr. B erth old Nieh off	14,0 00.0 0	0.00	14,0 00.0 0	28,0 00.0 0
Dr. D ietm ar S tahl (un til D mbe r 20 12) ece	14,0 00.0 0	0.00	14,0 00.0 0	28,0 00.0 0
	238 ,000 .00	40,0 00.0 0	238 ,000 .00	516 ,000 .00

1 Chairman2 Deputy Chairman

3 Chairman of the Audit Committee

• 64 Statement of comprehensive income
• 65 Balance sheet of the KWS Group
• 66 Statement of changes in fi xed assets
• 68 Statement of changes in equity
• 70 Cash fl ow statement of the KWS Group
• 71 Notes for the KWS Group 2013/2014
• 112 Auditors' Report

Annual Financial Statements of the KWS Group 2013/2014

Executive Board compensation in 2013/2014

in €		Cas h co ion nsat mpe				l Tota
	Bas ic co m atio pens n	Othe r emo lume nts	Perf orm ance - relat ed	Tota l	Fair Valu e
he1 Phil ip vo n de m B ussc	270 ,000 .00	17,8 76.8 2	566 ,123 .18	854 ,000 .00	235 ,178 .36	1,08 9,17 8.36
Dr. L éon Bro ers	216 ,000 .00	21,1 04.5 8	512 ,895 .42	750 ,000 .00	186 ,895 .18	936 ,895 .18
Dr. H n Du enb l oste age	216 ,000 .00	19,4 88.1 6	514 ,511 .84	750 ,000 .00	187 ,819 .26	937 ,819 .26
Eva Kien le	200 ,000 .00	26,5 48.4 9	290 ,263 .21	516 ,811 .70	0.00	516 ,811 .70
	902 ,000 .00	85,0 18.0 5	1,88 3,79 3.65	2 ,870 ,811 .70	609 ,892 .80	3,48 0,70 4.50

1 CEO

Executive Board compensation in the previous year

in €		Cas h co ion nsat mpe				l Tota
	Bas ic co m atio pens n	Othe r emo lume nts	Perf orm ance - relat ed	Tota l	Fair Valu e
he1 Phil ip vo n de m B ussc	270 ,000 .00	18,5 19.3 8	515 ,480 .62	804 ,000 .00	271 ,844 .32	1,07 5,84 4.32
Dr. C hrist oph Am berg er	216 ,000 .00	22,8 82.0 3	511 ,117 .97	750 ,000 .00	135 ,128 .84	885 ,128 .84
Dr. L éon Bro ers	216 ,000 .00	21,4 56.4 8	512 ,543 .52	750 ,000 .00	211 ,023 .12	961 ,023 .12
Dr. H n Du enb l oste age	216 ,000 .00	19,2 44.9 5	514 ,755 .05	750 ,000 .00	273 ,166 .52	1,02 3,16 6.52
Eva Kien le	50,0 00.0 0	6,48 3.24	70,0 00.0 0	126 ,483 .24	0.00	126 ,483 .24
	968 ,000 .00	88,5 86.0 8	2,12 3,89 7.16	3,18 0,48 3.24	891 ,162 .80	4,07 1,64 6.04

1 CEO

As of fi scal 2014/2015, a new arrangement has been agreed upon with the members of the Executive Board, under which the basic compensation is to rise from €216,000 to €300,000. At the same time, calculation of the performance-related bonus on the basis of a declining scale will be replaced by its being calculated as a linear function of the sustained net income; that means that the variable compensation will be lower, as well as being more dependent on the company's earnings and thus subject to greater volatility. The performancerelated bonus will be limited to €500,000, a fi gure that will increase subsequently to €600,000 if the company posts two successive, average sustained annual incomes of more than €100 million. The other compensation components will remain unchanged, but there will no longer be an obligation to invest one third of the LTI before taxes in KWS shares after it has been paid out.

Pension obligations are granted both in the form of a direct obligation to provide benefi ts and a defi ned contribution plan, with the annual pensions ranging

between €130 thousand and €140 thousand. In fi scal 2013/2014, €108 thousand (€72 thousand) were paid into a provident fund backed by a guarantee for pension commitments to members of the Executive Board. €115 thousand (€193 thousand) were allocated to the pension provisions in accordance with IAS 19. Pension provisions totaling €588 thousand (€1,689 thousand) were formed for members of the Executive Board of KWS SAAT AG.

Compensation of former members of the Executive Board and their surviving dependents amounted to €1,476 thousand (€1,097 thousand). Pension commitments in accordance with IAS 19 (2011) recognized for this group of persons amounted to €7,018 thousand (€3,155 thousand) as of June 30, 2014. The pension commitments for three former members of the Executive Board are backed by a guarantee.

No loans were granted to members of the Executive Board and Supervisory Board in the year under review.

Pension commitments

in €	07/0 1/20 13	Inter est expe nses	Rev alua tion effec ts	06/3 0/20 14
Dr. H n Du enb l oste age	472 ,785 .00	16,5 47.0 0	98,5 29.0 0	587 ,861 .00

06/30/20131	07/01/20121
101,866	111,725
287.623	261,457
7,305	1,938
5,719	6,093
44,949	33,622
447,462	414,835
144,452	139,694
359,867	309,422
100,878	40,399
101,517	142,569
24,385	25,957
26,587	14,689
13,535	9,304
771,221	682,034
	1,096,869
	1,218,683

Note no.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(8)
(8)
(8)

Statement of comprehensive income

from July 1, 2013 through June 30, 2014

in € thou sand	Note No.	/201 2013 4	Prev ious 1 year
I. In e st atem ent com
Net sale s	(18)	1,17 8,00 7	1,14 7,23 5
Cos t of sale s	(18)	614 ,528	607 ,027
Gro rofi t sale ss p on s		563 ,479	540 ,208
Sell ing exp ens es	(18)	203 ,952	190 ,548
Res h an d de velo nt e earc pme xpe nses	(18)	148 ,821	140 ,371
Gen eral and adm inist rativ e ex pen ses	(18)	76,7 41	69,0 43
Oth ting inc er o pera ome	(19)	60,6 72	61,9 43
Oth ting er o pera exp ens es	(20)	56,2 05	50,0 61
Ope ratin g in com e		138 ,432	152 ,128
Inte rest and sim ilar i nco me		1,91 0	1,71 9
Inte and sim ilar e rest xpe nses		14,4 68	12,0 80
Net inco from ity in vest ts me equ men		7	45
Net fi na ncia l inc /ex ome pen ses	(21)	–12 ,551	–10 ,316
Res ults of o rdin acti vitie ary s		125 ,881	141 ,812
Taxe s	(22)	45,5 95	49,5 28
Net inc for the ome yea r	(24)	80,2 86	92,2 84
II. O the ehe nsiv e in r co mpr com e	(11)
Rev alua tion of fi cial instr nts nan ume		– 16 1	86
Cur nsla tion diff ce f omi cally ind nde nt fo reig its y tra renc eren or e con epe n un		–19 ,198	–13 ,478
Item s th ay h to b bse ntly recla ssifi ed a ofi t or lo at m ave e su que s pr ss		–19 ,359	–13 ,392
Rev alua tion of n et lia biliti es/a s fro m d efi ne d be nefi t pla sset ns		–5,8 78	–1,8 17
Item t rec lass ifi ed profi t or los s no as s		–5,8 78	–1,8 17
Oth rehe nsiv e in e af ter tax er c omp com		– 25 ,237	– 15 ,209
III. C rehe nsiv e in omp com e
Com preh ive inco ens me		55,0 49	77,0 75
Sha f oth inor ity in tere sts re o er m		3,05 7	2,20 1
Com preh ive i afte r sh of m inor ity in tere sts ens nco me ares		51,9 92	74,8 74
Net inc for the ome yea r		80,2 86	92,2 84
Sha of o ther min ority inte rest res s		3,16 2	3,38 3
Net inco afte r sh of o ther min ority inte rest me ares s		77, 124	88,9 01
Ear ning r sh (in € ) s pe are		11.6 9	13.4 7
1 ad justed o IAS 19 (2 011) uant t purs

Balance sheet of the KWS Group

at June 30, 2014

Ass ets
in € thou sand	Note no.	06/3 0/20 14	06/3 0/20 13 1	07/0 1/20 12 1
Inta ngib le as sets	(2)	99,8 03	101 ,866	111 ,725
Prop , pla nd e quip erty nt a t men	(3)	321 ,947	287 ,623	261 ,457
Fina ncia l ass ets	(4)	2,77 4	7,30 5	1,93 8
Non ent tax ts curr asse	(5)	4,18 9	9 5,71	6,09 3
Defe rred tax ets ass	(6)	48,0 56	44,9 49	33,6 22
Non ent ets curr ass		476 ,769	447 ,462	414 ,835
Inve ies a nd b iolog ical ntor ts asse	(7)	192 ,988	144 ,452	139 ,694
Trad ceiv able e re s	(8)	361 ,576	359 ,867	309 ,422
Sec uritie s	(9)	76,7 12	100 ,878	40,3 99
Cas h an d ca sh e quiv alen ts	(10)	78,2 61	101 ,517	142 ,569
Cur rent tax ets ass	(8)	45,6 09	24,3 85	25,9 57
Oth nt fi cial ts er c urre nan asse	(8)	15,8 81	26,5 87	14,6 89
Oth nt a sset er c urre s	(8)	15,0 33	13,5 35	9,30 4
Cur rent ets ass		786 ,060	771 ,221	682 ,034
Tota l as sets		1,26 2,82 9	1,21 8,68 3	1,09 6,86 9
o IAS 19 (2 011) 1 ad justed uant t purs
Equ ity a nd L iabi litie s
in € thou sand	Note no.	06/3 0/20 14	06/3 0/20 13 1	07/0 1/20 12 1
Sub scri bed ital cap		19,8 00	19,8 00	19,8 00
Cap ital r ese rve		5,53 0	5,53 0	5,53 0
Reta ined ning ear s		604 ,376	592 ,553	536 ,542
Min ority inte rest		8,07 3	31,7 62	24,1 24
Equ ity	(11)	637 ,779	649 ,645	585 ,996
Lon rovis ions g-te rm p		99,6 34	90,3 89	88,2 56
Lon g-te rm b wing orro s		113 ,754	98,4 60	48,7 17
Trad yab les e pa		1,47 0	1,69 7	1,91 4
Defe rred liab ilitie tax s		26,3 32	29,6 95	36,0 43
Oth nt lia biliti er n onc urre es		12,9 64	9,07 5	8,20 7
Non ent liab ilitie curr s	(12)	254 ,154	229 ,316	183 ,137
Sho rovis ions rt-te rm p		131 ,841	131 ,350	121 ,633
Sho rm b wing rt-te orro s		53,3 57	33,2 59	58,4 19
Trad yab les e pa		81, 111	82,7 46	74,3 73
Cur liab ilitie rent tax s		35,4 67	31,9 29	24,0 53
		12, 191	11,8 33	8,85 7
Oth nt fi cial liabi lities er c urre nan
Oth nt lia biliti er c urre es		56,9 29	48,6 05	40,4
Cur rent liab ilitie s	(13)	370 ,896	339 ,722	327 ,736
Liab ilitie s		625 ,050	569 ,038	01 510 ,873

in € thou sand	Note no.	06/3 0/20 14	13 1 06/3 0/20	12 1 07/0 1/20
Sub scri bed ital cap		19,8 00	19,8 00	19,8 00
Cap ital r ese rve		5,53 0	5,53 0	5,53 0
Reta ined ning ear s		604 ,376	592 ,553	536 ,542
Min ority inte rest		8,07 3	31,7 62	24,1 24
Equ ity	(11)	637 ,779	649 ,645	585 ,996
Lon rovis ions g-te rm p		99,6 34	90,3 89	88,2 56
Lon g-te rm b wing orro s		113 ,754	98,4 60	48,7 17
Trad yab les e pa		1,47 0	1,69 7	1,91 4
Defe rred liab ilitie tax s		26,3 32	29,6 95	36,0 43
Oth nt lia biliti er n onc urre es		12,9 64	9,07 5	8,20 7
Non ent liab ilitie curr s	(12)	254 ,154	229 ,316	183 ,137
Sho rovis ions rt-te rm p		131 ,841	131 ,350	121 ,633
Sho rm b wing rt-te orro s		53,3 57	33,2 59	58,4 19
Trad yab les e pa		81, 111	82,7 46	74,3 73
Cur liab ilitie rent tax s		35,4 67	31,9 29	24,0 53
Oth nt fi cial liabi lities er c urre nan		12, 191	11,8 33	8,85 7
Oth nt lia biliti er c urre es		56,9 29	48,6 05	40,4 01
Cur rent liab ilitie s	(13)	370 ,896	339 ,722	327 ,736
Liab ilitie s		625 ,050	569 ,038	510 ,873
Tota l eq uity and liab ilitie s		1,26 2,82 9	1,21 8,68 3	1,09 6,86 9

1 adjusted pursuant to IAS 19 (2011)

Statement of changes in fi xed assets

of the KWS Group 2012/2013 1

		Gros lues s va						Amo	rtiza tion/ dep recia	tion			Net boo k va lues
in € thou sand		Curr ency slati tran on	Add ition s	Writ e-up s	Disp osal s	Tran sfers			Curr ency slati tran on	Add ition s	Writ e-up s	Disp osal s	Tran sfers
	Bala nce 07/0 1/20 12						Bala nce 06/3 0/20 13	Bala nce 07/0 1/20 12						Bala nce 06/3 0/20 13	Bala nce 06/3 0/20 13	Prev ious year
Pate ind ial p nts, ustr rty rope righ nd s oftw ts a are	82,6 22	– 2,5 84	4,40 6	0	1,02 1	11	83,4 34	21,0 14	– 40 4	11,6 74	0	1,01 7	0	31,2 67	52,1 67	61,6 08
Goo dwi ll	56,9 07	– 45 8	0	0	0	0	56,4 49	6,79 0	– 40	0	0	0	0	6,75 0	49,6 99	50,1 17
Inta ngib le a ts sse	139 ,529	– 3,0 42	4,40 6	0	1,02 1	11	139 ,883	27,8 04	– 44 4	11,6 74	0	1,01 7	0	38,0 17	101 ,866	111 ,725
Lan d an d bu ildin gs	237 ,471	– 3,7 03	9,99 1	0	341	7,14 9	250 ,567	70,8 64	– 80 4	7,07 6	0	183	5	76,9 58	173 ,609	166 ,607
Tec hnic al eq uipm ent and chin ma ery	170 ,233	– 2,5 04	16,8 99	0	5,10 9	3,56 9	183 ,088	109 ,373	49 – 1,5	11,6 37	0	4,34 0	– 16 2	,959 114	68,1 29	60,8 60
Ope ratin d of fi ce ipm ent g an equ	75,5 91	– 1,0 96	10,1 07	0	3,07 4	6,07 1	87,5 99	50,3 08	– 71 3	8,06 1	0	2,81 8	1,84 5	56,6 83	30,9 16	25,2 83
Pay ts o nt men n ac cou	8,70 7	– 11 5	18,0 46	0	11	– 11 ,656	14,9 71	0	0	0	0	– 2	0	2	14,9 69	8,70 7
Pro lant and ipm pert ent y, p equ	492 ,002	– 7,4 18	55,0 43	0	8,53 5	5,13 3	536 ,225	230 ,545	– 3,0 66	26,7 74	0	7,33 9	1,68 8	248 ,602	287 ,623	261 ,457
Fina ncia l as sets	2,10 4	– 18	6 5,74	1	362	0	7,47 1	166	0	0	0	0	0	166	7,30 5	1,93 8
Ass ets	633 ,635	–10 ,478	65,1 95	1	9,91 8	5,14 4	683 ,579	258 ,515	– 3,5 10	38,4 48	0	8,35 6	1,68 8	286 ,785	396 ,794	375 ,120

1 adjusted pursuant to IAS 19 (2011)

Statement of changes in fi xed assets

of the KWS Group 2013/2014

Gros lues s va							Amo	rtiza tion/ dep recia	tion			Net boo	k va lues
in € thou sand		Curr ency tran slati on	Add ition s	Writ e-up s	Disp osal s	Tran sfers			Curr ency tran slati on	Add ition s	Writ e-up s	Disp osal s	Tran sfers
	Bala nce 07/0 1/20 13						Bala nce 06/3 0/20 14	Bala nce 07/0 1/20 13						Bala nce 06/3 0/20 14	Bala nce 06/3 0/20 14	Prev ious year
Pate nts, ind ustr ial p rty rope righ nd s oftw ts a are	83,4 34	– 1,0 08	7,95 7	0	101	1,13 6	91,4 18	31,2 67	– 41	12,9 43	0	99	0	44,0 70	47,3 48	52,1 67
Goo dwi ll	56,4 49	– 49 1	499	0	0	4,85 9	61,3 16	6,75 0	– 39	2,15 0	0	0	0	8,86 1	52,4 55	49,6 99
Inta ngib le a ts sse	139 ,883	– 1,4 99	8,45 6	0	101	5,99 5	152 ,734	38,0 17	– 80	15,0 93	0	99	0	52,9 31	99,8 03	101 ,866
Lan d an d bu ildin gs	250 ,567	–4,2 58	11,2 39	0	762	8,37 1	265 ,157	76,9 58	– 66 3	8,28 7	0	700	5	83,8 87	181 ,270	173 ,609
Tec hnic al eq uipm ent and chin ma ery	183 ,088	– 3,0 07	14,0 40	0	2,44 1	9,52 9	201 ,209	114 ,959	– 1,4 98	13,0 28	0	1,91 8	– 69 6	123 ,875	77,3 34	68,1 29
Ope ratin d of fi ce g an ipm ent equ	87,5 99	– 1,9 65	8,87 8	0	5,02 3	5,80 7	95,2 96	56,6 83	– 1,0 36	9,38 4	0	4,54 3	2,26 5	62,7 53	32,5 43	30,9 16
Pay ts o nt men n ac cou	14,9 71	– 50 1	38,5 52	0	151	– 22 ,069	30,8 02	2	0	0	0	0	0	2	30,8 00	14,9 69
Pro lant and pert y, p ipm ent equ	536 ,225	– 9,7 31	72,7 09	0	8,37 7	1,63 8	592 ,464	248 ,602	– 3,1 97	30,6 99	0	7,16 1	1,57 4	270 ,517	321 ,947	287 ,623
Fina ncia l as sets	7,47 1	– 5	1,43 8	0	109	– 5,6 73	3,12 2	166	182	0	0	0	0	348	2,77 4	7,30 5
Ass ets	683 ,579	– 11 ,235	82,6 03	0	8,58 7	1,96 0	748 ,320	286 ,785	– 3,0 95	45,7 92	0	7,26 0	1,57 4	323 ,796	424 ,524	396 ,794

Statement of changes in equity

of the KWS Group 2013/14

Grou p
ity equ

	Pare nt co mpa ny						Pare nt co mpa ny				Min ority inte rest			ity equ
in € thou sand	Sub scrib ed ital cap	Cap ital rese rve	Acc umu lated grou p ity fr equ om ings earn	Com preh grou Adju stme nts from curre ncy	ensi ther ve o p inc ome Rese rve f or from fi na ncia l ts cu asse r y he ld renc	Com preh grou Reva luatio n of de fi ned	ensi ther ve o p inc ome Othe r	Tota l	Mino rity inter est	Com preh Adju stme nts from curre ncy	ensi ther ve o gro Reva luatio n of de fi ned	up in com e Othe r	Tota l
Bala at J 30, 201 2 nce as une	19,8 00	5,53 0	554 ,110	trans latio n – 1,5 90	for s ale 144	bene fi t pl ans 0	trans actio ns 594	578 ,588	24,7 92	trans latio n – 28 0	bene fi t pl ans 0	trans actio ns – 4	24,5 08	603 ,096
AS 19 ( 1) Adju stm ent due to I 201						– 16 ,716		– 16 ,716			– 38 4		– 38 4	– 17 ,100
1 Bala at J uly 1, 2 012 nce as	19,8 00	5,53 0	554 ,110	– 1,5 90	144	– 16 ,716	594	561 ,872	24,7 92	– 28 0	– 38 4	– 4	24,1 24	585 ,996
Divid end id s pa			– 18 ,480					– 18 ,480	– 66 4				– 66 4	– 19 ,144
Net inco for t he y me ear			88,9 01					88,9 01	3,38 3				3,38 3	92,2 84
Oth rehe nsiv e in e af ter t er c omp com ax				– 12 ,720	86	– 1,7 76		– 14 ,410		– 75 6	– 41		– 79 7	– 15 ,207
Tota l co lidat ed g ains (los ses) nso			88,9 01	– 12 ,720	86	– 1,7 76		74,4 91	3,38 3	– 75 6	– 41		2,58 6	77,0 77
Cha in s hare s of min ority inte rest nge s									5,71 6				5,7 16	5,7 16
Oth han er c ges			0					0						0
3 1 Bala at J 30, 201 nce as une	19,8 00	5,53 0	624 ,531	– 14 ,310	230	– 18 ,492	594	617 ,883	33,2 27	– 1,0 36	– 42 5	– 4	31,7 62	649 ,645
Divid end id s pa			– 19 ,800					– 19 ,800	– 1,3 28				– 1,3 28	– 21 ,128
Net inco for t he y me ear			77, 124					77,1 24	3,16 2				3,16 2	80,2 86
Oth rehe nsiv e in e af ter t er c omp com ax				– 19 ,213	– 16 1	– 5,7 58		– 25 ,132		15	– 12 0		– 10 5	– 25 ,237
Tota l co lidat ed g ains (los ses) nso			77, 124	– 19 ,213	– 16 1	– 5,7 58		51,9 92	3,16 2	15	– 12 0		3,05 7	55,0 49
Cha in s hare s of min ority inte rest nge s			– 19 ,559			– 54 5		– 20 ,104	– 25 ,963		545		– 25 ,418	– 45 ,522
Oth han er c ges			– 26 5					– 26 5						– 26 5
Bala at J 30, 201 4 nce as une	19,8 00	5,53 0	662 ,031	– 33 ,523	69	– 24 ,795	594	629 ,706	9,09 8	– 1,0 21	0	– 4	8,07 3	637 ,779

1 adjusted pursuant to IAS 19 (2011)

Notes for the KWS Group 2013/2014

The statements were prepared under the assumption that the operations of the company will be continued.

The KWS Group (KWS Konzern) is a consolidated group as defi ned in the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB), London, taking into account the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and in addition the commercial law regulations to be applied pursuant to section 315a (1) of the HGB (German Commercial Code). In accordance with Section 291 (1) HGB, the consolidated fi nancial statements of KWS SAAT AG, Einbeck, discharge the obligations of KWS LOCHOW GMBH, Bergen, and KWS MAIS GMBH, Einbeck, to produce their own consolidated fi nancial statements and Group Management Report. IAS 19 (2011) – "Employee Benefi ts" IAS 19 (2011) "Employee Benefi ts" must be applied for the fi rst time to fi scal year 2013/2014. The amendments to this standard must be applied retrospectively. The main change relates to the abolition of the corridor method. The net interest cost is still carried in the net fi nancial income/expenses. Remeasurement effects due to actuarial gains and losses and income from planned assets not already included as interest income must be recognized in profi t or loss in the statement of compredefi nition of post-employment benefi ts. The top-up amounts for semi-retirement obligations are now other long-term benefi ts to employees that must be accumu-

The accounting and measurement methods have been retained without change, except for the changes resulting from the new accounting standards IAS 19 (2011) "Employee Benefi ts" and IFRS 13 "Fair Value Measurement".

• hensive income. IAS 19R (2011) introduces an amended lated on a pro-rata basis over the vesting period. Up to now, top-up amounts have been carried in full at their present value. That resulted in a reversal of the provision against the retained income of €601 thousand, which must be allocated again in profi t or loss in the subsequent periods. Allowing for deferred taxes, there were
• the following changes for the previous years:

Changes to IAS 19 – Balance sheet

in € thou sand	06/3 0/20 13 (adju sted )	Adju stme nt	06/3 0/20 13	07/0 1/20 12 (adju sted )	Adju stme nt	07/0 1/12
Ass ets
Non ent ts curr asse	402 ,513	–2,4 55	404 ,968	381 ,213	–3,0 99	384 ,312
Defe rred tax ets ass	44,9 49	7,81 5	37,1 34	33,6 22	7,65 2	25,9 70
Cur rent ets ass	771 ,221	0	771 ,221	682 ,034	0	682 ,034
Tota l as sets	1,21 8,68 3	5,36 0	1,21 3,32 3	1,09 6,86 9	3 4,55	1,09 2,31 6
Equ ity a nd L iabi litie s
Equ ity	649 ,645	–17 ,881	667 ,526	585 ,996	–17 ,100	603 ,096
Pen sion visio pro ns	81,5 49	23,8 42	07 57,7	78,8 65	21,6 53	57,2 12
Oth rovis ions er p	8,84 0	–60 1	9,44 1	9,39 1	0	9,39 1
Defe rred tax liab ilitie s	29,6 95	0	29,6 95	36,0 43	0	36,0 43
Lon rm b wing g-te orro s	109 ,232	0	109 ,232	58,8 38	0	58,8 38
Sho rm b wing rt-te orro s	339 ,722	0	339 ,722	327 ,736	0	327 ,736
Tota l eq uity and liab ilitie s	1,21 8,68 3	5,36 0	1,21 3,32 3	1,09 6,86 9	3 4,55	1,09 2,31 6

06/3 0/20 13			07/0 1/20 12		07/0 1/12
402 ,513	–2,4 55	404 ,968	381 ,213	–3,0 99	384 ,312
44,9 49	7,81 5	37,1 34	33,6 22	7,65 2	25,9 70
771 ,221	0	771 ,221	682 ,034	0	682 ,034
1,21 8,68 3	5,36 0	1,21 3,32 3	1,09 6,86 9	3 4,55	1,09 2,31 6
649 ,645	–17 ,881	667 ,526	585 ,996	–17 ,100	603 ,096
81,5 49	23,8 42	07 57,7	78,8 65	21,6 53	57,2 12
8,84 0	–60 1	9,44 1	9,39 1	0	9,39 1
29,6 95	0	29,6 95	36,0 43	0	36,0 43
109 ,232	0	109 ,232	58,8 38	0	58,8 38
339 ,722	0	339 ,722	327 ,736	0	327 ,736
1,21 8,68 3	5,36 0	1,21 3,32 3	1,09 6,86 9	3 4,55	1,09 2,31 6
	(adju sted )	Adju stme nt	06/3 0/20 13	(adju sted )	Adju stme nt

Cash Flow Statement of the KWS Group

in € thou sand	Note	/201 2013 4	r 1 Prev ious yea
Net inco for t he y me ear		80,2 86	92,2 84
Dep recia tion /rev l of imp airm loss es (– ) on ent ersa erty , pla nt a nd e quip t prop men		45,7 92	38,4 48
Incr e/de se (– ) in long visio -term eas crea pro ns		1,42 3	–2,7 55
Oth ash es/i (–) er n onc exp ens nco me		–17 ,100	–18 ,492
Cas h ea rnin gs		110 ,400	109 ,485
Incr e/de se (– ) in sho rovis ions rt-te eas crea rm p		20,6 31	24,0 62
Net gain (–)/ loss from the dis al o f as sets pos		–14 6	–19 1
Incr e (–) /dec e in inve ies, trad ceiv able nd o ther ntor ets not eas reas e re s, a ass attri buta ble t o in ing or fi cing ivitie vest act nan s		–90 ,881	–86 ,287
Incr e/de se (– ) in trad yab les a nd o ther liab ilitie ribu tabl t att e to eas crea e pa s no inve sting or fi cing act ivitie nan s		21,0 14	37,5 09
Net h fro ting act iviti cas m o pera es	(1)	61,0 18	84,5 78
Proc eed s fro m d ispo sals of p plan d eq uipm rty, t an ent rope		1,36 1	1,55 4
Pay ts (– ) for ital e ndit plan d eq uipm rty, t an ent men cap xpe ure on p rope		–66 ,461	–57 ,739
Proc eed s fro m d ispo sals of i ntan gible ets ass		2	3
Pay ts (– ) for ital e ndit on i gible ntan ets men cap xpe ure ass		–8,5 31	–4,4 06
Proc eed s fro m d ispo sals of fi cial ts nan asse		109	361
Pay ts (– ) for ital e ndit on fi cial ts men cap xpe ure nan asse		–1,9 01	–5,7 45
ts (– ) for Pay cha f sh in c olida ted sub sidia ries and oth men pur se o ares ons er bus ines its s un		0	–22 ,970
Net h fro m in ting iviti act cas ves es	(2)	,421 –75	–88 ,942
Cas h re ceip ts fr issu e of ital om cap		0	5,71 6
Divid end ts (– ) to and min ority sha reho lder pay men own ers s		–66 ,915	–19 ,144
Cas h pr eds from lon rm b wing g-te oce orro s		58,3 01	100 ,264
Cas h re ts o f lon g-te rm b wing pay men orro s		–32 ,903	–51 ,998
Cha s fro eds (+)/ (–) o f sh bor ings nts ort- term nge m p roce repa yme row		9,99 4	–7,6 16
Net h fro m fi cing iviti act cas nan es	(3)	–31 ,523	27,2 22
Net h ch es i sh a nd c ash ival ents cas ang n ca equ		,926 –45	22,8 58
Cha s in h an d ca sh e quiv alen ts d ue t cha rat nge cas o ex nge e, soli date d gr d m cha ent con oup , an eas urem nge s		–1,4 96	–3,4 31
Cas h an d ca sh e quiv alen t be ginn ing of y ts a ear		202 ,395	182 ,968
Cas h an d ca sh e quiv alen ts a t en d of yea r	(4)	154 ,973	202 ,395

1 adjusted pursuant to IAS 19 (2011)

Fina ncia l rep orti tand ards and inte tatio ng s rpre ns	Ma nda tory fi rs t-tim plic atio e ap n
IFRS 10: Co lidat ed F inan cial Stat nts nso eme	In fi l yea r 20 14/2 015 sca
IFRS 11: Joi nt A ents rran gem	In fi l yea r 20 14/2 015 sca
IFRS 12: Dis clos of In in O ther Ent ities tere sts ure	In fi l yea r 20 14/2 015 sca
AS Sep Stat Ame ndm ents to I 27: arat e Fi cial nts nan eme	14/2 In fi l yea r 20 015 sca
Ame ndm to I AS 28: Inve in A ciat nd J oint Ven ents stm ents ture sso es a s	In fi l yea r 20 14/2 015 sca
Ame ndm to I FRS 10, IFR S 1 1 an d IF RS 12 – Co lidat ed F inan cial Stat ents nts, nso eme in O on G Join t Ar nts and Dis clos of In tere sts ther Ent ities : Tra nsiti uida rang eme ure nce	14/2 In fi l yea r 20 015 sca
Ame ndm to I FRS 10, IFR S 12 and IAS 27 – C olida ted Fina ncia l Sta ents tem ents ons , Disc losu f Int ts in Oth er E ntitie d Se te F inan cial Stat Inv nts: est re o eres s an para eme t En tities men	In fi s cal y 201 4/20 15 ear
Ame ndm to I AS 32 – Fin ial In ts: P ion: Offs ettin g Fi cial ents stru ntat anc men rese nan Ass ets and Fin ial L iabil ities anc	14/2 In fi l yea r 20 015 sca
Ame ndm ents to I AS 36 – Imp airm ent of A sset s: R ble A nt D isclo s fo eco vera mou sure r Non -Fin ial A sset anc s	In fi l yea r 20 14/2 015 sca
Ame ndm to I AS Fin ial In ts: R gnit ion and Me ents 39 – stru ent anc men eco asu rem – Nov atio n of De rivat ives and Co ntin uati f He dge Acc ting on o oun	In fi l yea r 20 14/2 015 sca
IFRI C 2 1 – Levi es	In fi l yea r 20 14/2 015 sca
Ame ndm to I AS 19 ( 1) – Emp loye e Be nefi t s: D efi ne d B fi t P lans ents 201 ene	At t he e arlie st in fi sc al ye /20 ar 2 014 15
Sta Ann ual Imp ts to the Inte rnat iona l Fin ial R rting nda rds rove men anc epo (201 0 – 2 012 le) cyc	At t he e arlie st in fi sc al ye ar 2 014 /20 15
Ann ual Imp the Inte iona l Fin ial R rting Sta nda rds ts to rnat rove men anc epo (201 1 – 2 013 le) cyc	At t he e arlie st in fi sc al ye ar 2 014 /20 15
IFRS 14 – Re gula Def l Ac tory nts erra cou	At t he e arlie st in fi sc al ye ar 2 016 /20 17
Ame ndm to I FRS – Jo int A : Ac ntin g fo r Ac quis ition ents 11 ents rran gem cou s of In in Jo int O tion tere sts pera s	At t he e arlie st in fi sc al ye ar 2 016 /20 17
Ame ndm to I AS 16 a nd I AS 38 – Pro y, P lant and Equ ipm and Inta ngib le ents pert ent Cla Ass ets: rifi ca tion of A ptab le M etho ds o f De iatio d Am ortiz atio cce prec n an n	/20 At t he e arlie st in fi sc al ye ar 2 016 17
Ame ndm to I AS 16 a nd I AS 41 – Pro y, P lant and Equ ipm and Ag ricu lture ents pert ent : Bea rer P lants	At t he e arlie st in fi sc al ye /20 ar 2 016 17
AS Sep Stat Sep Ame ndm ents to I 27 – arat e Fi cial nts: Equ ity M etho d in arat nan eme e Fina ncia l Sta tem ents	At t he e arlie st in fi sc al ye ar 2 016 /20 17
IFRS – Re ue f Co with Cu 15 ntra cts stom ven rom ers	At t he e arlie st in fi sc al ye /20 ar 2 017 18
IFRS 9 – Fin ial In stru ts anc men	/20 At t he e arlie st in fi sc al ye ar 2 018 19

Changes to IAS 19 – Income statement and statement of comprehensive income

in € thou sand	/201 2012 3 (adju ) sted	Adju stme nt	2/20 201 13
Net sale s	1,14 7,23 5	0	1,14 7,23 5
Cos t of sale s	607 ,027	–36 7	607 ,394
Gro rofi t sale ss p on s	540 ,208	367	539 ,841
Sell ing exp ens es	190 ,548	–21 4	190 ,762
Res h an d de velo nt e earc pme xpe nses	140 ,371	–43 9	140 ,810
Gen eral and adm inist rativ e ex pen ses	69,0 43	–44 2	69,4 85
Oth ting inc er o pera ome	61,9 43	0	61,9 43
Oth ting er o pera exp ens es	50,0 61	0	50,0 61
Ope ratin g in com e	152 ,128	1,46 2	150 ,666
/exp Net fi na ncia l inc ome ens es	–10 ,316	0	–10 ,316
Res ults of o rdin acti vitie ary s	141 ,812	1,46 2	140 ,350
Taxe s	49,5 28	426	49, 102
Net inc for the ome yea r	92,2 84	1,03 6	91,2 48
Rev alua tion of fi cial instr nts nan ume	86	0	86
Cur nsla tion diff ce f omi cally ind nde nt fo reig its y tra renc eren or e con epe n un	–13 ,478	0	–13 ,478
Item s th at m ay h to b bse ntly recla ssifi ed a ofi t or lo ave e su que s pr ss	–13 ,392	0	–13 ,392
Rev alua tion of n et lia biliti es/a s fro m d efi ne d be nefi t pla sset ns	–1,8 17	–1,8 17	0
Item lass ifi ed profi los t rec t or s no as s	–1,8 17	–1,8 17	0
Oth rehe nsiv e in e af ter tax er c omp com	,209 –15	–1,8 17	–13 ,392
Com preh ive inco ens me	77,0 75	–78 1	77,8 56

Earnings per share in fi scal 2012/2013 are higher by €0.15 as a result of IAS 19 (2011).

If the old version of IAS 19 had continued to be applied in fi scal 2013/2014, the following changes would not have occurred in the present fi nancial statements:

• A reduction of €24,846 thousand in the other reserves
• An increase of €34,371 thousand in pension provisions
• An increase in deferred tax assets and a reduction in deferred tax liabilities of €10,265 thousand
• An increase of €740 thousand in net income for the year
• An increase of €0.11 in earnings per share

IFRS 13 – "Fair Value Measurement"

On May 12, 2011, the IASB adopted the new accounting standard IFRS 13 "Fair Value Measurement" with the objective of introducing a consistent defi nition and principles for determining fair value. IFRS 13 must be applied prospectively. First-time application of the new standard does not result in any signifi cant effects on the consolidated fi nancial statements of the KWS Group.

The following fi nancial reporting standards and interpretations were published by the IASB by the balance sheet date, but must be applied by the KWS Group only at a later date.

1. General disclosures

Consolidation methods

IAS 27 (2011), IAS 28 (2011), IFRS 10, IFRS 11 and IFRS 12 – Consolidation

IFRS 10 introduces a new concept of control that infl uences the methods and scope of consolidation. IFRS 11 governs the fi nancial reporting of joint arrangements and prescribes only the equity method for consolidation of joint ventures in future. IFRS 12 contains more extensive disclosure requirements in connection with subsidiaries, joint ventures, associated companies and unconsolidated structured companies. IAS 27 (2011) and IAS 28 (2011) are subsequent amendments of the new IFRS 10, IFRS11 and IFRS 12.

Companies consolidated in the KWS Group The consolidated fi nancial statements of the KWS Group include the single-entity fi nancial statements of KWS SAAT AG and its subsidiaries in Germany and other countries in which it directly or indirectly controls more than 50% of the voting rights. In addition, joint ventures are proportionately consolidated according to the percentage of equity held in those companies. Subsidiaries and joint ventures that are considered immaterial for the presentation and evaluation of the fi nancial position and performance of the Group are not included. Details on the changes in the consolidated group are provided in Section 2. Disclosures on the annual fi nancial statements – Consolidated group and changes in the consolidated group. According to IAS 36, goodwill is not amortized, but tested for impairment at least once a year (impairmentonly approach). Investments in unconsolidated companies are carried at cost. Joint ventures are carried according to the percentage of equity held in the companies concerned using IAS 31. Subsidiaries and joint ventures are consolidated and associated companies measured at equity only if such recognition is considered material for the fair presentation of the fi nancial position and results of operations of the KWS Group. As part of the elimination of intra-

KWS will apply the new fi nancial reporting standards relating to consolidation for the fi rst time in fi scal year 2014/2015.

There will be signifi cant changes for the KWS Group in particular from application of IFRS 11. At June 30, 2014, eight joint ventures were proportionately consolidated in the KWS Group's fi nancial statements and will be consolidated using the equity method in future in accordance with IFRS 11.

For the fi rst time in fi scal 2014/2015, the balance sheet and statement of comprehensive income will no longer include the proportionate revenue, expenses, assets and liabilities of the above-mentioned joint ventures.

The balance sheet for fi scal 2013/2014 would be as follows if IFRS 11 were applied early:

Assets

The single-entity fi nancial statements of the individual subsidiaries and joint ventures included in the consolidated fi nancial statements were uniformly prepared on the basis of the accounting and measurement methods applied at KWS SAAT AG; they were audited by independent auditors. For fully or proportionately consolidated units acquired before July 1, 2003, the Group exercised the option allowed by IFRS 1 to maintain the consolidation procedures chosen to date. The goodwill reported in the HGB fi nancial statements as of June 30, 2003, was therefore transferred unchanged at its carrying amount to the opening IFRS balance sheet. For acquisitions made after June 30, 2003, capital consolidation follows the purchase method by allocating the cost of acquisition to the Group's interest in the subsidiary's remeasured equity at the time of acquisition. Any excess of interest in equity over cost is recognized as an asset, up to the amount by which fair value exceeds the carrying amount. Any goodwill remaining after fi rst-time consolidation is recognized under intangible assets. income, and expenses are netted between consolidated companies, and intra-group distributions of profi t are eliminated.Deferred taxes on consolidation transactions recognized in income are calculated at the tax rate applicable to the company concerned. These deferred taxes are aggregated with the deferred taxes recognized in the separate fi nancial statements.Minority interests are recognized in the amount of the imputed percentage of equity in the consolidated companies.

in € millio ns	Afte r adju stme nt	Adju stme nts uant to purs IFRS 11	As r rted epo
Non ent ts curr asse	534 .5	57.7	476 .8
Cur rent ets ass	630 .5	–15 5.5	786 .0
Tota l as sets	1,16 5.0	–97 .8	1,26 2.8

Equity and liabilities

in € millio ns	Afte r adju stme nt	Adju stme nts uant to purs IFRS 11	As r rted epo
Equ ity	637 .8	0.0	637 .8
Non liabi lities ent curr	252 .7	–1.4	254 .1
Cur rent liab ilitie s	274 .5	–96 .4	370 .9
Tota l eq uity and liab ilitie s	1,16 5.0	–97 .8	1,26 2.8

The income statement sheet for fi scal 2013/2014 would be as follows if IFRS 11 were applied early:

Income statement for the period July 1, 2013 through June 30, 2014

in € millio ns	Afte r adju stme nt	Adju stme nts uant to purs IFRS 11	As r rted epo
Net sale s	923 .5	–25 4.5	1,17 8.0
Ope ratin g in com e	118 .3	–20 .1	138 .4
Net fi na ncia l inc /exp ome ens es	7.6	20.1	–12 .5
Res ult o f ord inary ivitie act s	125 .9	0.0	125 .9
Taxe s	45.6	0.0	45.6
Net inc for the ome yea r	80.3	0.0	80.3

To the extent that these relate to supplementary disclosure obligations, there will be no effects on the balance sheet or statement of comprehensive income.

As far as can be seen at present, the other fi nancial reporting standards and interpretations will not have a signifi cant impact on the consolidated fi nancial statements of the KWS Group.

Group balances, borrowings, receivables, liabilities, and provisions are netted between the consolidated companies. Intercompany profi ts not realized at Group level are eliminated from intra-Group transactions. Sales,

The service life of intangible assets is as follows:

Bree ding teria l, pr opri y rig hts etar ma arie ties and trad rks to v ema	10 y ears
Oth er ri ghts	5 – 1 0 ye ars
Soft war e	3 – 8 yea rs
Dist ribu tion righ ts	5 – 2 0 ye ars

Property, plant, and equipment

Useful life

Buil ding s	10 – 50 yea rs
Ope ratin uipm ent and oth er fa ciliti g eq es	5 – 2 5 ye ars
Tec hnic al eq uipm and chin ent ma ery	5 – 1 5 ye ars
Lab and h fa ciliti orat ory res earc es	5 – 1 3 ye ars
Oth quip ing and offi t, op erat er e men ce
ipm ent equ	3 – 1 5 ye ars

Low-value assets are fully expensed in the year of purchase; they are reported as additions and disposals in the year of purchase in the statement of changes in fi xed assets. Impairment losses on property, plant, and equipment are recognized according to IAS 36 whenever the recoverable amount of the asset is less than its carrying amount. The recoverable amount is the higher of the fair value less costs to sell or the value in use. In accordance with IAS 20, government grants are deducted from the costs of the asset. Any deferred income is not recognized.

Useful lifeto varieties and trademarks 10 years Other rights 5 – 10 years Software 3 – 8 years Distribution rights 5 – 20 years Property, plant, and equipment is measured at cost less straight-line depreciation. If the impairments exceed the use-related depreciation that has already been applied, a loss is recognized. In addition to directly attributable costs, the cost of self-produced plant or equipment also includes a proportion of the overheads and depreciation/amortization. Financial instruments are in particular fi nancial assets and fi nancial liabilities. The fi nancial assets consist primarily of bank balances and cash on hand, trade receivables, other receivables and securities. The credit risk mainly comprises trade receivables. The amount recognized in the balance sheet is net of allowances for receivables expected to be uncollectible, estimated on the basis of historical patterns and the current economic environment. The credit risk on cash and derivative fi nancial instruments is limited because they are kept with banks that have been given a good credit rating by international rating agencies. There is no signifi cant concentration of credit risks, because the risks are spread over a large number of contract partners and customers. The entire credit risk is limited to the respective carrying amount. Comments on the risk management system can be found in the Management Report.

Financial instruments

Available-for-sale fi nancial assets are carried at fair value if that can be reliably measured. Unrealized gains and losses, including deferred taxes, are recognized directly in the reserve for available-for-sale fi nancial assets under equity. Allowances are recognized immediately through the income statement. Financial assets belonging to this category of fi nancial instruments are measured at cost, since there is no active market. The fi nancial assets include shares in unconsolidated subsidiaries and securities classifi ed as noncurrent assets. They are subsequently measured at amortized cost. Borrowings are carried at amortized cost.

The carrying amount of receivables, fi xed-income securities and cash is assumed as the fair value due to their short term and the fi xed-interest structure of the investments.

Currency translation

Under IAS 21, the fi nancial statements of the consolidated foreign subsidiaries and joint ventures that conduct their business as fi nancially, economically, and organizationally independent entities are translated into euros using the functional currency method and rounded in accordance with standard commercial practice as follows:

• Income statement items at the average exchange rate for the year;
• Balance sheet items at the exchange rate on the balance sheet date

The difference resulting from the application of annual average rates to the net profi t for the period in the income statement is taken directly to equity. Exchange differences resulting from loans to foreign subsidiaries and joint ventures are reported in the other comprehensive income and are not recognized in profi t or loss.

Classifi cation of the statement of comprehensive income

The costs for the functions include all directly attributable costs, including other taxes. Research and development expenses are reported separately for reasons of trans parency. Research grants are not deducted from the costs to which they relate, but reported gross under other operating income.

Accounting policies

Consistency of accounting policies

The accounting policies are unchanged from the previous year, with the exception of the fi nancial reporting standards IAS 19 (2011) and IFRS 13, which had to be applied for the fi rst time in the year under review.

All estimates and assessments as part of accounting and measurement are continually reviewed; they are based on historical patterns and expectations about the future regarded as reasonable in the particular circumstances.

Recognition of income and expenses

Net sales include sales of products and services, less revenue reductions. Net sales from the sale of products are realized at the time at which the opportunities and risks pass to the buyer. Net sales from service transactions are recognized at the time at which the outcome of the transaction can be reliably estimated in accordance with the percentage of completion. Other income, such as interest, royalties and dividends, is recognized in the period it accrues as soon as there is a contractual or legal entitlement to it.

Performance-based public grants are carried under the other operating income as part of profi t/loss.

Operating expenses are recognized in the income statement upon the service in question being used or as of the date on which they occur.

Intangible assets

Purchased intangible assets are carried at cost less straight-line amortization Impairment losses on intangible assets with fi nite useful lives are recognized according to IAS 36. Goodwill and intangible assets with an indefi nite useful life are not amortized, but tested for impairment at least once a year. The procedure for the impairment test is explained in the notes to the balance sheet. Intangible assets acquired as part of business combinations are carried separately from goodwill if they are separable according to the defi nition in IAS 38 or result from a contractual or legal right, and fair value can be reliably measured. Straight-line amortization of these intangible assets is applied over their individual useful life.

• Available-for-sale fi nancial assets

• Financial liabilities measured at amortized cost

This category covers all fi nancial assets that have not been assigned to one of the above categories. In principle, securities are classed as available for sale, unless a different classifi cation is required due to the fact that they have an explicit purpose. Equity instruments, such as shares in (unconsolidated) affi liated companies, which are measured at amortized cost, and shares held in listed companies, are also included in this category. In principle, fi nancial instruments in this category are measured at their fair value in subsequent recognition. The changes to their fair value in subsequent recognition are recognized as unrealized gains and losses directly in equity in the reserve for available-for-sale fi nancial assets. The realized gains or losses are not recognized as profi t or loss until they are disposed of. If there is objective evidence of permanent impairment on the balance sheet date, the instruments are written down to the lower value. Any subsequent decreases in the impairment loss are recognized directly in equity. which is why changes in their fair values that require reporting are taken directly to equity. If securities are carried at their fair value and have to be recognized in income, changes to the fair values are directly included in the net income for the period. The outstanding purchase price obligation for consolidated subsidiaries must be carried at the present value of the anticipated future purchase price payments for minority interests. Changes to the estimates in subsequent years are recognized in profi t or loss. The cost of interest accrued on the purchase price obligation is carried in the net fi nancial income/expenses. Derivatives The derivatives do not meet the requirements of IAS 39 to be designated as a hedging instrument. They are measured at their fair value. The changes in their market value are recognized in the income statement. Derivatives are derecognized on their day of settlement.

• Financial liabilities at fair value

that have a negative market value and are categorized in principle as held for trading. They are measured at fair value. Changes in value are recognized in income. Derivatives that are designated hedging instruments in accordance with IAS 39 are excluded from this provision.

Securities are generally classifi ed as available for sale,

All fi nancial liabilities, with the exception of derivative fi nancial instruments, are measured at amortized cost using the effective interest method. The liabilities are derecognized at the time they are settled or when the reason why they were formed no longer exists. This category covers derivative fi nancial instruments Derivatives are measured at the lower of cost or net realizable value less an allowance for obsolescent or slow-moving items. In addition to directly attributable costs, the cost of sales also includes indirect labor and materials including depreciation under IAS 2. Under IAS 41, biological assets are measured at fair value less the estimated costs to sell. Immature biological assets are carried as inventories as of the time they are harvested. The measurement procedure used is based on standard industry value tables.

Inventories and biological assets

Deferred taxes

Deferred taxes are calculated on differences between the IFRS carrying amounts of assets and liabilities

The fi nancial liabilities comprise in particular trade payables, borrowings and other liabilities.

The fair value of fi nancial liabilities with a long-term fi xed interest rate is determined as present values of the payments related to the liabilities, using a yield curve applicable on the balance sheet date.

Derivative instruments are measured at fair value in accordance with IAS 39; they can be assets or liabilities. Common derivative fi nancial instruments are essentially used to hedge interest rate and foreign currency risks. The fair value of the derivative fi nancial instruments is measured on the basis of the market information available on the balance sheet date and using recognized mathematical models, such as present value or Black-Scholes, to calculate option values, taking their volatility, remaining maturity and capital market interest rates into account. The instruments must also be classifi ed in a level of the fair value hierarchy.

Financial instruments in level 1 are measured using quoted prices in active markets for identical assets or liabilities. In level 2, they are measured by directly observable market inputs or derived indirectly on the basis of prices for similar instruments. Finally, input factors not based on observable market data are used to calculate the value of level 3 fi nancial instruments.

Subsequent measurement of the fi nancial instruments depends on their classifi cation in one of the following categories defi ned in IAS 39:

• Loans and receivables

This category mainly comprises trade receivables, other receivables, loans and cash, including fi xedincome short-term securities. Loans are measured at cost. Loans that carry no interest or only low interest are measured at their present value. Discernable risks are taken into account by recognition of an impairment loss. After their initial recognition, the other fi nancial assets in this category are measured at amortized cost using the effective interest method, minus impairments. Receivables that carry no interest or only low interest and with a term of more than twelve months are discounted. Necessary value impairments are based on the expected credit risk and are carried in separate impairment accounts. Receivables are derecognized if they are settled or uncollectible. Other fi nancial assets are derecognized at the time they are disposed of or if they have no value.

• Financial assets at fair value

Held-for-trading securities acquired with the intention of being sold in the short term are assigned to this category. Derivative fi nancial instruments with a positive market value are also categorized as held for trading, unless they are designated hedging instruments in accordance with IAS 39. They are measured at fair value. Changes in value are recognized in income. Securities are derecognized after being sold on the settlement date.

and their tax base, and on loss carryforwards; they are reported on a gross basis. Deferred tax assets are recognized if they result from deductible temporary differences and suffi cient taxable profi t in future periods is expected. Deferred tax liabilities must be set up for all taxable temporary differences. All deferred taxes must be assessed individually at each balance sheet date and must not be discounted. Under IAS 12, deferred taxes are calculated on the basis of the applicable local income tax.

Provisions for pensions and other employee benefi ts

The provisions for pensions and other employee benefi ts are calculated using actuarial principles in accordance with the projected unit credit method. Actuarial gains and losses resulting from revaluation of the net liability must be recognized directly in equity in the other comprehensive income. If there are planned assets, they are netted off against the associated obligations.

The provisions for semi-retirement include obligations from concluded semi-retirement agreements. Payment arrears and top-up amounts for semi-retirement pay and for contributions to the statutory pension insurance program are recognized in measuring them.

Other provisions

Tax and other provisions account for all discernible risks and contingent liabilities. Depending on circumstances, they are measured at the most probable amount or at the expected value.

Contingent liabilities

The contingent liabilities result from debt obligations where outfl ow of the resource is not probable or the level of the obligation cannot be estimated with suffi cient reliability or from obligations for loan amounts drawn down by third parties as of the balance sheet date.

Borrowing costs

In accordance with IAS 23, borrowing costs are capitalized if they can be classifi ed as qualifying assets.

Discretionary decisions and estimates

The measurement approaches and amounts to be carried in these IFRS fi nancial statements are partly based on estimates and specifi cally defi ned specifi cations. This relates in particular to:

• Determination of the useful life of the depreciable asset
• Defi nition of measurement assumptions and future results in connection with impairment tests, above all for capitalized goodwill and in connection with measurement of outstanding purchase price obligations for fully consolidated subsidiaries
• Determination of the net selling price for inventories
• Defi nition of the parameters required for measuring pension provisions
• Selection of parameters for the model-based measurement of derivatives
• Determination whether tax losses carried forward can be used
• Determination of the fair value of intangible assets, tangible assets and liabilities acquired as part of a business combination and determination of the service lives of the purchased intangible assets and tangible assets
• Measurement of other provisions

Despite careful estimates, the actual development may deviate from the assumptions.

The Executive Board of KWS SAAT AG prepared the consolidated fi nancial statements on October 1, 2014, and released them for distribution to the Supervisory Board. The Supervisory Board has the task of examining the consolidated fi nancial statements and declaring whether it approves them.

2. Disclosures on the annual fi nancial statements

Proportionately consolidated companies

in € t hous and	2013 /201 4	Prev ious yea r
Non ent ts curr asse	52,8 02	44,7 67
Cur rent ets ass	163 ,022	155 ,378
Tota l as sets	215 ,824	200 ,145
Equ ity	113 ,101	107 ,640
Non ent liabi lities curr	1,63 0	868
Cur liab ilitie rent s	101 ,093	91,6 37
Tota l eq uity and liab ilitie s	215 ,824	200 ,145
Tota l inc ome	274 ,068	281 ,396
Tota l ex pen ses	253 ,858	257 ,758
Net inc for the ome yea r	20,2 10	23,6 38

In line with the corporate strategy for the Cereals Segment, we expanded our wheat breeding activities in France by acquiring the remaining 51% stake in SOCIETÉ DE MAR-TINVAL S.A. effective September 30, 2014. 110 employees there currently generate net sales of more than €20 million, of which over 20% is plowed back into research. The net assets to be acquired total around €12.5 million; a large part of the purchase price of approximately €30 million is accounted for by intangible assets, such as approved varieties, the gene pool and customer base. Details on the purchase price allocation will be provided in the fi rst quarterly report as of September 30, 2014.

Consolidated group and changes in the consolidated group

Number of companies including KWS SAAT AG

	n,
Fully consolidated
--------------------------------------- Proportionately consolidated
_________ Total
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Equity method
Total

	06/3 0/20 14			Prev ious yea r
	Dom estic	Fore ign	Tota l	Dom estic	Fore ign	Tota l
Fully solid ated con	13	44	57	13	42	55
Prop ortio ly co lidat ed nate nso	0	8	8	0	7	7
Tota l	13	52	65	13	49	62
Equ ity m etho d	0	0	0	0	1	1
Tota l	13	52	65	13	50	63

The fi nancial position and results of operations of the eight (seven) proportionately consolidated companies are as follows:A total of 57 (55) companies were fully consolidated and eight (seven) proportionately consolidated in the year under review.

We founded the breeding company KWS PERU S.A.C. in Lima, Peru, at the beginning of the fi scal year. KWS SERVICES MEDITERRANEAN S.L. in Barcelona took over the existing activities of the French Service Center on July 24, 2013. The research center KWS GATEWAY RESEARCH CENTER LLC. in St. Louis, Missouri (U.S.) was founded on March 12, 2014. BETASEED LTD. in Rothwell, UK, discontinued its business operations on June 19, 2014. The joint venture GENECTIVE S.A. in Chappes, France, which had been previously included at equity, was proportionately included in the consolidated fi nancial statements for the fi rst time in fi scal 2013/2014.

Subsidiaries and associated companies included in the consolidated group 1

Sug arbe	et	Corn		Cere als		Corp	orat e
100 %	B ETAS EED INC . 2 Shak /U.S , MN opee	100 %	K WS MAIS GM BH Einb eck	100 %	K WS LOC HOW GM BH Berg en	100 %	K WS LAN DWI RTS CHA FT GMB H **
100 %	K WS FRA NCE S.A .R.L. Roye /Fran ce	100 %	K WS BEN ELUX B.V. 5 Ams terda m/N ethe rland s	100 %	K WS UK L TD. 7 Thrip low/ UK	100 %	Einb eck WS RSA AT G K INTE MBH
100 %	D ELIT ZSC H PF LAN ZEN ZUC HT G MBH 10	100 %	K WS SEM ENA S.R .O. 5 Brat islav a/Slo vakia	100 %	K WS LOC HOW POL SKA SP.Z O.O . 7	100 %	Einb eck K WS SEE DS I NC. 9
100 %	Einb eck S 12 O .O.O . KW S RU	100 %	WS MAIS NCE K FRA S.A. R.L. 5	100 %	ice/P Kond ratow olan d K WS CER EALS USA LLC . 7	100 %	Shak , MN /U.S opee G LH S S IN C. 2 EED
100 %	Lipez k/Ru ssia O .O.O . KW S R& D RU S 11	100 %	Cha l/Fra mpo nce K WS AUS TRIA SAA T	49 %	Sh akop ee, M N/U. S. SOC IETE DE MAR TINV AL	100 %	Shak , MN /U.S opee K WS SAA TFIN ANZ GM BH
100 %	Lipez k/Ru ssia WS IA S. K ITAL P.A. Forli/	100 %	GMB H 5 na/A Vien ustria K WS SJEM E D. O.O . 5	100 %	S.A. 8, * -Pév èle/F Mon s-en ranc e M OMO NT H ENN ETTE	100 %	Einb eck R AGIS KAR TOF FELZ UCH T SGE SEL UND HAN DEL L
100 %	Italy K WS POL SKA SP.Z O. O. Pozn an/P olan d	100 %	Poze ga/C roati a K WS OSIV A S. R.O. 5		S.A. 14, * Mon -Pév èle/F s-en ranc e		SCH AFT MBH Einb eck
100 %	K WS SCA NDIN AVIA A/S 10 Guld /Den borg sund mark		Velke Mez irici/C zech Repu blic	% 95	LAB OGE RM S .A.R .L. 14 , * -Pév èle/F Mon s-en ranc e	100 %	K WS KLO STE RGU T W IEBR ECH TSH AUS EN
100 %	K WS SEM ILLA S IBER ICA S.L. 10	100 %	K WS BUL GAR IA E. O.O .D. 5 So fi a/B ulga ria	100 %	A DRIE N M OMO NT S.A. R.L. 14, *		GM BH Nort heim -Wie brec htsh ause n
100 %	Zara tán/S pain S EMIL LAS KWS CHIL E LT DA.	100 %	Form erly: KWS Sem ena Bulg aria E.O. O.D. GRO MAIS GM BH 5 A	100 %	Mon -Pév èle/F s-en ranc e H AME T S.C .A. 14 , * -Pév èle/F Mon s-en ranc e	100 %	E URO -HYB RID GES ELL FÜR SCH AFT GET RE ÜCH IDEZ TUN G M BH
100 %	Ranc /Chi le agua K WS SRB IJA D .O.O	100 %	Ever swin kel ZÁG K WS MAG YAR ORS 5			100 %	Einb eck K WS SEM ENT ES B RAS IL PAR TICIP ACO ES L TDA . 19
100 %	New Belg rade /Ser bia K WS SUIS SE S A e/Sw Basl itzerl and	100 %	KFT. Gyö r/Hu ngar y WS SEM S.R .L. 13 K INTE			100 %	São Paul o/Br azil K WS BRA SIL
100 %	A CH S EED S IN C. 4 Eden Pra irie, M N/U. S.	99 %	Buch t/Ro ia ares man KWS ARG ENT INA S.A. 5				TICIP ACO ES L . 20 PAR TDA São Paul o/Br azil
100 %	B ETAS EED FRA NCE S.A. R.L. 18	% 51	Balc /Arg entin arce a RAZ ES H YBR IDES S.A .R.L. 3			100 %	K WS GAT EWA Y RES EAR CH C ENT ER L LC. 2
100 %	une/ Beth Fran ce K WS UKR AINE T.O .W. 12 Kiev/ Ukra ine	50 %	nne/ Alzo Fran ce AGR ELIA NT G ENE TICS LLC . 6, *			100 %	St. L ouis , MO /U.S WS SER VICE S K DEU TSC HLA ND G MBH
100 %	TÜR K WS K TA RIM TICA RET A.S. 9 ehir/ Eskis Turk	% 50	Wes tfi eld , IND /U.S AGR ELIA NT G ENE TICS INC. *			100 %	Einb eck K WS SER VICE S EA ST GMB H
100 %	ey B ETAS EED GM BH Fran kfurt	100 %	Chat ham , Ont ario/ Cana da K WS MEL HOR AME NTO E			100 %	na/A Vien ustria K WS SER VICE S
100 %	K WS POT ATO B.V. 17 rd/N Emm eloo ethe rland s		SEM ENT ES L TDA . 21 Curit iba/B razil				NOR TH B .V. Rotte rdam /Net herla nds
93 %	AGR I S.A 16 DYN .R.L. Casa blan ca/M oroc co	50 %	S SE TES RIBE R KW MEN S.A. 21 Pato s de Min as/B razil			100 %	K WS SER VICE S AN S .A.S . 3 M EDIT ERR ANE Roye /Fran
		100 %	K WS PER U S. A.C. 22 /Per Lima u			100 %	ce K WS SER VICE S MED ITER RAN EAN S.L
		100%	WS Chin D. 15 K R&D a LT Hefe i/Chi na				Barc elon a/Sp ain
		50 %	GEN ECT IVE S .A.* Cha /Fran ppes ce
1 Th e per 2 Su bsidia 3 Su bsidia 4 Su bsidia 5 Su bsidia 6 In veste 7 Su bsidia 8 In veste 9 Su bsidia 10 Su bsidia	hown for e ach c ny rel centa ges s ompa ry of KWS SEED S INC ry of KWS FRAN CE S .A.R.L ry of BETA SEED INC. ry of KWS MAIS GMB H e of G LH SE EDS INC. ry of KWS LOCH OW G MBH e of K WS L OCHO W GM BH ry of KWS INTER SAAT GMB H and ry of KWS INTER SAAT GMB H	ate to KWS SAAT	the s hare in tha held w ithin t t com pany AG	he KW S Gro	up

• 11 Subsidiary of O.O.O. KWS RUS 12 Subsidiary of EURO-HYBRID GMBH and KWS SAATFINANZ GMBH
• 13 Subsidiary of KWS MAIS GMBH and KWS SAATFINANZ GMBH
• 14 Subsidiary of SOCIETE DE MARTINVAL S.A.
• 15 Subsidiary of EURO-HYBRID GMBH
• 16 Subsidiary of KWS POTATO B.V. 17 Subsidiary of RAGIS GMBH
• 18 Subsidiary of BETASEED GMBH
• 19 Subsidiary of KWS INTERSAAT GMBH and KWS SAATFINANZ GMBH
• 20 Subsidiary of KWS SEMENTES BRASIL PARTICIPACOES LTDA. and KWS INTERSAAT GMBH
• 21 Subsidiary of KWS BRASIL PARTICIPACOES LTDA.
• 22 Subsidiary of KWS CHILE LTDA. and KWS SEMENTES BRASIL PARTICIPACOES LTDA.

In accordance with its internal reporting system, the KWS Group is primarily organized according to the following business segments:

• Corn
• Sugarbeet
• Cereals
• Corporate.

Considered a core competency for the KWS Group's entire product range, plant breeding, including the related biotechnology research, is essentially concentrated at the parent company KWS SAAT AG in Einbeck. The breeding material, including the relevant information and expertise about how to use it, is owned by KWS SAAT AG with respect to sugarbeet and corn and by KWS LOCHOW GMBH with respect to cereals. Product-related R&D costs are carried directly in the product segments Corn, Sugarbeet and Cereals. Centrally controlled corporate functions are grouped in the Corporate Segment. Because of their minor importance within the KWS Group, the distribution and production of oil and fi eld seed are reported in the Cereals and Corn Segments, in keeping with the legal entities involved.

Description of segments

Corn

KWS MAIS GMBH is the lead company for the Corn Segment. In addition to KWS MAIS GMBH, business activities are conducted by one (one) German company and 18 (17) foreign companies of the KWS Group. The production and distribution activities of this segment relate to corn for grain and silage corn, and to oil and fi eld seed.

Sugarbeet

The results of the multiplication, processing and distribution activities for sugarbeet seed, as well as our seed potato business, are reported under the Sugarbeet Segment. Under the leadership of KWS SAAT AG, 17 (18) foreign subsidiaries and affi liated companies and two (two) subsidiaries in Germany are active in this segment.

Cereals

The lead company of this segment, which essentially concerns the production and distribution of hybrid rye, wheat and barley, as well as oil and fi eld seed, is KWS LOCHOW GMBH with its eight (eight) foreign subsidiaries and affi liated companies in France, Great Britain, the U.S. and Poland.

Corporate

Apart from revenue from our farms and services for third parties, net sales from strategic projects are reported in this segment. The segment also assumes the costs of all central functions and expenses for long-term research projects that have not yet reached market maturity.

It also includes all management services of KWS SAAT AG, such as holding company and administrative functions, which are not directly charged to the product segments or indirectly allocated to them by means of an appropriate cost formula.

Segment information

Segment sales contains both net sales from third parties (external sales) and net sales between the segments (intersegment sales). The prices for intersegment sales are determined on an arm's-length basis. Uniform royalty rates per segment for breeding genetics are used as the basis. Technology revenues from genetically modifi ed properties ("tech fees") are paid as a per-unit royalty on the basis of the number of units sold, due to their growing competitive importance.KWS is not dependent on any one external customer.

List of shareholdings in accordance with Section 313 HGB 3. Segment reporting for the KWS Group (German Commercial Code)

* Proportional consolidation ** Profit transfer agreement June 30, 2014

Notes 85 Notes for the KWS Group 2013/2014 3. Segment reporting for the KWS Group

	Seg t sa les men		Inte rnal	sale s	Exte rnal sale s
in € thou sand	2013 /201 4	Prev ious year	201 3/20 14	Prev ious year	201 3/20 14	Prev ious year
Cor n	714 ,968	701 ,743	46	35	714 ,922	701 ,708
Sug arbe et	351 ,488	329 ,288	439	713	351 ,049	328 ,575
Cer eals	108 ,435	113 ,482	1,09 5	1,82 8	107 ,340	111 ,654
Cor te pora	15,0 12	14,8 73	10,3 16	9,57 5	4,69 6	5,29 8
S G KW roup	1,18 9,90 3	1,15 9,38 6	11,8 96	12,1 51	1,17 8,00 7	1,14 7,23 5

The Corporate Segment generates 68.7% (64.4%) of its sales from the other segments. The sales of this segment represents 0.4% (0.5%) of the Group's external sales.

Depreciation and amortization charges of €45,792 thousand (€38,448 thousand) allocated to the segments relate exclusively to intangible assets and property, plant, and equipment.

The other noncash items recognized in the income statement relate to noncash changes in the allowances on inventories and receivables, and in provisions.

The corn segment is the largest contributor of external sales, accounting for 60.7% (61.2%) of external sales, followed by sugarbeet with 29.8% (28.6%) and cereals with 9.1% (9.7%).

External sales by region

in € thou sand	2013 /201 4	Prev ious yea r
Ger man y	225 ,399	223 ,384
Euro pe ( ludin g G any) exc erm	447 ,171	433 ,524
ther eof: Fra nce	(10 0) 5,31	(10 7) 2,98
Nor th a nd S outh Am eric a	448 ,120	435 ,787
ther eof: Bra zil	(52 ,841 )	(36 ,904 )
ther eof: US A	(36 3,43 8)	(36 6,41 7)
Res t of ld wor	57,3 17	54,5 40
KW S G roup	1,17 8,00 7	1,14 7,23 5

The external net sales are broken down by sales region on the basis of the country where the customer is based. 57.1% (57.3%) of total sales are recorded in Europe (including Germany).

	Seg men	t ea rnin gs	Dep recia amo	tion and rtiza tion	Oth sh it er n onca ems
in € thou sand	2013 /201 4	Prev ious 1 year	2013 /201 4	Prev ious year	2013 /201 4	Prev ious year
Cor n	100 ,859	92,1 50	16,5 55	14,9 78	689	9,88 5
Sug arbe et	70, 172	73,9 39	16,1 59	11,7 40	7,03 6	6,81 8
Cer eals	17, 125	26,9 17	4,35 1	3,92 8	– 3,2 38	1,28 4
Cor te pora	– 49 ,724	– 40 ,878	8,72 7	7,80 2	– 16 ,110	– 7,2 83
S G KW roup	138 ,432	152 ,128	45,7 92	38,4 48	– 11 ,623	10,7 04

1 adjusted pursuant to IAS 19 (2011)

The operating income of each segment is reported as the segment result. The segment results are presented on a consolidated basis and include all directly attributable income and expenses. Items that are not directly attributable are allocated to the segments by means of an appropriate formula.

	Ope ratin sets g as		Ope ratin g lia biliti es
in € thou sand	2013 /201 4	Prev ious 1 year	2013 /201 4	Prev ious 1 year
Cor n	546 ,753	484 ,560	,664 151	161 ,274
Sug arbe et	260 ,088	253 ,973	74,9 92	67,0 17
Cer eals	74,2 80	64,9 10	17,7 49	20,1 65
Cor te pora	95, 193	90,3 65	67,6 33	58,5 29
Tota l se nts gme	976 ,314	893 ,808	312 ,038	306 ,985
Oth ers	286 ,515	324 ,875	313 ,012	262 ,053
S G KW roup	1,26 2,82 9	1,21 8,68 3	625 ,050	569 ,038

1 adjusted pursuant to IAS 19 (2011)

The operating assets of the segments are composed of intangible assets, property, plant, and equipment, inventories and all receivables, other assets, and prepaid expenses that can be charged directly to the segments or indirectly allocated to them by means of an appropriate formula.

The operating liabilities attributable to the segments include the borrowings reported on the balance sheet, less provisions for taxes and the portion of other liabilities that cannot be charged directly to the segments or indirectly allocated to them by means of an appropriate formula.

Capital expenditure on assets was increased year on year by 36.5% to €81,165 thousand (€59,449 thousand). Investments were intensifi ed considerably in the Corn Segment (€42,029 thousand; previous year: €23,626 thousand) and the Corporate Segment (€13,840 thousand; previous year: €6,082 thousand), while they were slightly below the level of the previous year in the Sugarbeet Segment (€18,535 thousand; previous year: €22,408 thousand) and at the Cereals Segment (€6,761 thousand;

previous year: €7,333 thousand). 35.0% (37.3%) of the capital spending was made in North and South America. 33.7% (28.0%) was made in Europe (excluding Germany) and 28.8% (26.8%) in Germany.

Investments in long-term assets by segment

in € thou sand	/201 2013 4	Prev ious yea r
Cor n	42,0 29	23,6 26
Sug arbe et	18,5 35	22,4 08
Cer eals	6,76 1	7,33 3
Cor te pora	13,8 40	6,08 2
KW S G roup	81,1 65	59,4 49
Inve in l ts b gion stm ents -ter ong m a sse y re

Investments in long-term assets by region

2013 /201 4	Prev ious yea r
23,3	15,9
94	33
27,3	16,6
81	37
28,3	22,
77	174
2,01	4,70
3	5
81,1	59,4
65	49

For the European and American markets, the key assumptions on which corporate planning is based include assumptions about price trends for seed, in addition to the development of market shares and the regulatory framework. Company-internal projections take the assumptions of industry-specifi c market analyses and company-related growth perspectives into account.

A standard discount rate of 5.1% (5.3%) has been assumed to calculate present values. A growth rate of 1.5% (1.5%) has been assumed beyond the detailed planning horizon in order to allow for extrapolation in line with the expected infl ation rate. The impairment test for KWS POTATO B.V. revealed the need for a write-down, which was refl ected by the capitalized goodwill and intangible assets being reduced by €6,286 thousand. This value impairment has to be charged to the Sugarbeet Segment. Tests provided evidence that all the other goodwill recognized in the consolidated balance sheet and determined for the cash-generating units is not impaired. Possible changes in the fi gures reported in the balance sheet result from currency translation at the balance sheet date.

Sensitivity analyses were carried out in the fi scal year for all cash-generating units to which goodwill is allocated. In our opinion, realistic changes in the basic assumptions would not result in the need to recognize an impairment loss at any cash-generating unit whose goodwill is signifi cant relative to the total carrying amount of goodwill.

(3) Property, plant, and equipment

Capital expenditure amounted to €72,709 thousand (€55,043 thousand) and depreciation amounted to €30,699 thousand (€26,774 thousand). The latter includes value impairments of €587 thousand (€0 thousand) due to a shorter service life for buildings: they were charged to the Corporate Segment. The Management Report describes the signifi cant capital expenditure.

(4) Financial assets

Investments in non-consolidated subsidiaries and associated companies and shares in cooperatives and GmbHs that are of minor signifi cance, are reported in principle at their amortized cost totaling €707 thousand (€5,807 thousand) since the fair value cannot be reliably determined. The change from the previous year is primarily due to the fact that our joint venture GENECTIVE S.A. has been proportionately consolidated for the fi rst time. Listed shares are carried at fair value of €88 thousand (€141 thousand). This account also includes other interest-bearing loans totaling €572 thousand (€118 thousand).

(5) Noncurrent tax assets

This mainly relates to the present value of the corporate income tax credit balance of the German group companies, which was last determined at December 31, 2006, and has been paid in ten equal annual amounts since September 30, 2008.

(6) Deferred tax assets

Under IAS 12, deferred tax assets are calculated as the difference between the IFRS balance sheet amount and the tax base and on the basis of loss carryforwards. They are reported on a gross basis and total €48,056 thousand (€44,949 thousand), of which €5,210 thousand (€2,887 thousand) will be carried forward for the future use of tax losses.

Operating assets by region

in € thou sand	2013 /201 4	Prev ious r1 yea
Ger man y	251 ,641	253 ,020
Euro pe ( ludin g G any) exc erm	289 ,625	260 ,911
ther eof: Fra nce	(53 ) ,314	(41 ) ,612
nd S Nor th a outh Am eric a	402 ,648	352 ,040
ther eof: Bra zil	(95 ,492 )	(81 ,649 )
ther eof: US A	(27 4,33 2)	(23 7,80 1)
Res t of ld wor	32,4 00	27,8 37
S G KW roup	976 ,314	893 ,808

1 adjusted pursuant to IAS 19 (2011)

4. Notes to the Balance Sheet

(1) Assets

The statement of changes in fi xed assets contains a breakdown of assets summarized in the balance sheet and shows how they changed in fi scal 2013/2014. Capital expenditure on assets was €82,603 thousand (€65,195 thousand). The Management Report describes the signifi cant additions to assets. Depreciation and amortization amounted to €45,792 thousand (€38,448 thousand).

(2) Intangible assets

This item includes purchased varieties, rights to varieties and distribution rights, software licenses for electronic data processing, and goodwill. The additions of €8,456 thousand (€4,406 thousand) related to software licenses and patents to an amount of €7,957 thousand (€4,406 thousand). Amortization of intangible assets amounted to €15,093 thousand (€11,674 thousand), of which €6,286 thousand (€2,420 thousand) were value impairments. This charge is included in the relevant functional costs and the other operating expenses, depending on the operational use of the intangible assets.

The capitalized goodwill relates mainly to the Brazilian companies RIBER KWS SEMENTES S.A. – €21,686 thousand (€21,686 thousand) – and KWS MELHORAMENTO E SEMENTES LTDA. – €4,115 thousand (€4,115 thousand) – and the joint ventures

AGRELIANT GENETICS LLC. – €17,655 thousand (€17,584 thousand) and GENECTIVE S.A. – €4,888 thousand (€0 thousand) – in the Corn Segment. In the previous year the goodwill for GENECTIVE S.A. was measured at equity. In the Cereals Segment, the goodwill of KWS UK LTD. is recognized to the same amount, namely €1,693 thousand (€1,693 thousand).

In order to meet the requirements of IFRS 3 in combination with IAS 36 and to determine any impairment of goodwill, cash-generating units have been defi ned in line with internal reporting guidelines. At the KWS Group, these are the legal entities, with the exception of our potato unit, which as a whole represents the cash-generating unit. To test for impairment, the carrying amount of each entity is determined by allocating the assets and liabilities, including attributable goodwill and intangible assets. An impairment loss is recognized if the recoverable amount of an entity is less than its carrying amount. The recoverable amount is the higher of the fair value less costs to sell and the value in use of a cash generating unit. The impairment test uses the expected future cash fl ows on which the medium-term plans of the companies are based; these plans, which cover a period of four years, have been approved by the Executive Board. They are based on historical patterns and expectations about future market development.

(7) Inventories and biological assets

in € thou sand	06/3 0/20 14	Prev ious yea r
Raw teria ls an d co mab les ma nsu	18,6 90	15,9 61
Wor k in prog ress	48,9 84	47,1 24
Imm e bi olog ical atur ts asse	12,5 68	11,3 16
Finis hed ds goo	112 ,746	70,0 51
Tota l	192 ,988	144 ,452

The already overdue trade receivables that have been partly written down amount to €3,060 thousand (€4,843 thousand).

There are no indications on the balance sheet date that customers who owe trade receivables that have not been written down and are not overdue will not meet their payment obligations.

The following allowances have mainly been made for possible risks of non-payment of trade receivables:

in € thou sand	07/0 1	Add ition	Disp osal	Rev l ersa	06/3 0
201 3/20 14	28,6 42	8,60 8	2,99 3	5,56 1	28,6 96
201 2/20 13	29,0 98	7,86 5	1,77 9	6,54 2	28,6 42

The receivables include an amount of €796 thousand (€345 thousand) due after more than one year.

(9) Securities

The company does not hold any shares of its own.

The capital reserves essentially comprise the premium obtained as part of share issues.

Securities amounting to €76,712 thousand (€100,878 thousand) relate primarily to short-term liabilities securities and fund shares. (10) Cash and cash equivalents Cash of €78,261 thousand (€101,517 thousand) consists of balances with banks and cash on hand. The cash fl ow statement explains the change in this item compared with the previous year, together with the change in securities. (11) Equity The fully paid-up subscribed capital of KWS SAAT AG is still €19,800,000.00. The no-par bearer shares are certifi cated by a global certifi cate for 6,600,000 shares. The net retained profi t, the differences from currency translation and the reserve for available-for-sale fi nancial assets, as well as the reserve for revaluation of net liabilities/assets from defi ned benefi t plans, are grouped in the item "Retained earnings" in the consolidated balance sheet. The revenue reserves essentially comprise the net income generated in the past by the companies included in the consolidated fi nancial statements, minus dividends paid to shareholders. Differences from translation of the functional currency of foreign business operations into the currency used by the group in reporting (euro) are essentially carried in the item "Adjustments from currency translation". The item "Revaluation of net liabilities/assets from defi ned benefi t plans" includes the actuarial gains and losses from pensions and other employee benefi ts.

Equity (including minority interest) fell by €11,866 thousand to €637,779 thousand (€649,645 thousand). For details, see the statement of changes in equity.

Inventories increased by €48,536 thousand, or 33.6%, net of impairment losses totaling €55,703 thousand (€53,556 thousand). Immature biological assets relate to living plants in the process of growing (before harvest). The fi eld inventories of the previous year have been harvested in full and the fi elds have been newly tilled in the

year under review. Public subsidies of €1,455 thousand (€1,528 thousand), for which all requirements were met at the balance sheet date, were granted for the total area under cultivation of 4,326 (4,434) ha and were recognized in income. Future subsidies depend on the further development of European agricultural policy.

(8) Current receivables

in € thou sand	06/3 0/20 14	Prev ious yea r
Trad ceiv able e re s	361 ,576	359 ,867
Cur rent tax ets ass	45,6 09	24,3 85
Oth nt fi cial ts er c urre nan asse	15,8 81	26,5 87
Oth nt a sset er c urre s	15,0 33	13,5 35
Tota l	438 ,099	424 ,374

Trade receivables were €361,576 thousand following €359,867 thousand in the previous year. This amount includes €2,852 thousand (€2,618 thousand) in receivables from related parties.

		Of w hich : neith ritte er w n dow n no r due he on t over	Of w	hich writ : not	dow ten n on	the	Of w hich : writt en d own and not due he on t over
	Carr ying unt amo	bala shee t nce date	bala	shee t da te a nd o verd ue in the nce follo wing tim e fra mes
in € thou sand			1 – 9 0 day s	91 – 180 day s	181 – 36 0 day s	> 3 60 day s
06/3 0/20 14
Trad ceiv able e re s	361 ,576	329 ,136	18,9 16	1,54 0	3,45 9	1,25 7	4,20 9
Oth nt fi cial ts er c urre nan asse	15,8 81	15,2 78	0	0	1	215	289
Oth nt a sset er c urre s	10, 116	10, 116	0	0	0	0	0
	387 ,573	354 ,530	18,9 16	1,54 0	3,46 0	1,47 2	4,49 8
Prev ious yea r
Trad ceiv able e re s	359 ,867	311 ,686	29,4 05	3,98 7	2,25 1	1,43 5	6,26 0
Oth nt fi cial ts er c urre nan asse	26,5 87	26, 148	0	0	0	0	343
Oth nt a sset er c urre s	7,95 5	7,95 5	0	0	0	0	0
	394 ,409	345 ,789	29,4 05	3,98 7	2,25 1	1,43 5	6,60 3

The tax effects on other comprehensive income are as follows:

Other comprehensive income

	2013 /201 4			2012 /201 3
	Befo re taxe s	Tax effec t	Afte r taxe s	Befo re taxe s	Tax effec t	Afte r taxe s
Item s to be recla ssifi ed a ofi t or lo ss in s pr sub riod t pe seq uen s	–19 ,407	48	–19 ,359	–13 ,375	–17	–13 ,392
Rev alua tion of a vaila ble- for-s ale fi na ncia l ass ets	–20 9	48	–16 1	103	–17	86
Cur nsla tion diff ce f y tra renc eren or icall yind nde nt fo reig its eco nom epe n un	–19 ,198	0	–19 ,198	–13 ,478	0	–13 ,478
Item be recla ssifi ed a ofi t or lo ss in s to s pr sub riod t pe seq uen s	–8,2 32	2,35 4	–5,8 78	–2,3 37	520	–1,8 17
es/a Rev alua tion of n et lia biliti sset s fro m defi ned ben efi t plan s	–8,2 32	2,35 4	–5,8 78	–2,3 37	520	–1,8 17
Oth rehe nsiv e in er c omp com e	–27 ,639	2,40 2	–25 ,237	,712 –15	503	,209 –15

The trade payables and other long-term liabilities are due for payment in between one and fi ve (one and fi ve) years.

Long-term provisions

07/0 1/20 131

Changes in the consolidatedgroup, currency Addition Consumption Reversal 06/30/2014Pension provisions 81,549 –473 13,183 4,388 0 89,871 Tax provisions 1,533 106 1,452 1,073 0 2,018 Other provisions 7,307 –116 1,752 1,190 8 7,745 Total 90,389 –483 16,387 6,651 8 99,634

1 adjusted pursuant to IAS 19 (2011)

The following mortality tables were used at June 30, 2014:

• In Germany: The 2005 G mortality table of Klaus Heubeck
• Abroad: RP-2000 Mortality Table Scale AA

A retirement age of 63 years is imputed in Germany, while a retirement age of 65 years is imputed in the U.S.

Nature and scope of the pension benefi ts

In Germany

The following benefi ts are provided under a company agreement relating to the company retirement pension program:

The pension provisions are based on defi ned benefi t obligations, determined by years of service and pensionable compensation. They are measured using the project unit credit method under IAS 19 (2011), on the basis of assumptions about future development. The assumptions in detail are that wages and salaries in Germany will increase by 3.00% (3.00%) annually and abroad by 3.75% (3.75%) annually. An annual increase in pensions of 2.00% (2.00%) is assumed. The discount rate in Germany was 2.90% compared with 3.50% the year before and averaged 4.40% abroad following 4.85% the previous year. For benefi t obligations backed by a guarantee by an insurance company toward three former members of the Executive Board, the planned assets of €9,275 thoupension provisions are netted off against the corresponding assets (planned assets). AbroadThe defi ned benefi t obligations abroad mainly relate to pension commitments in the U.S. For the most part, stock funds and bonds were invested in to cover them. All employees who have reached the age of 21 are en-

• An old-age pension at the age of 65
• An early retirement pension before the age of 65, coupled with benefi ts from the early retirement pension from the statutory pension insurance program
• An invalidity pension for persons who suffer from occupational disability or incapacity to work as defi ned by the statutory pension insurance program, and
• A widow's or widower's pension

sand (€9,058 thousand) correspond to the present value of the obligation. In accordance with IAS 19 (2011), the

titled to benefi ts. In addition, each employee must have worked at least one year and at least 1,000 working hours to earn an entitlement.

The following benefi ts are granted from the pension plan:

• An old-age pension at the age of 65
• An early retirement pension before the age of 65 to be eligible, the employee must be at least 55 and the minimum vesting period must be 5 years
• A pro-rata pension if the employee reaches the minimum vesting period of 5 years, but is below 55

The pension plans are largely subject to the following risks:

Investment and return

The present value of the defi ned benefi t obligation from the pension plan is calculated using a discount rate defi ned on the basis of the returns on high-quality fi xed-income corporate bonds. If the income from the planned assets is below this rate of interest, the result is a shortfall in the plan. An external fund manager selects the corporate bonds and stock funds to ensure risk diversifi cation and manages them.

KWS' long-term capital base refl ects the company's strategy and accords with the interests of shareholders, employees and other stakeholders. The dividend distributed is therefore geared to the earnings strength of the KWS Group in order to ensure adequate internal fi nancing of further business expansion in the long term. Consolidated income for fi scal 2013/2014 (after taxes and minority interests) is €77,124 thousand (€88,901 thousand). It was reduced by the dividend payout of €19,800 thousand (€18,480 thousand) in December 2013 and effects

not recognized in the income statement, such as from currency translation. As a result, equity fell year on year by €11,866 thousand (previous year: an increase of €63,649 thousand) and the equity ratio to 50.5% compared with 53.3% the previous year.

Noncurrent liabilities increased by €24,838 thousand. That is mainly attributable to the increase in long-term fi nancial borrowings from banks totaling €15,294 thousand.

(12) Noncurrent liabilities

in € thou sand	06/3 0/20 14	Prev ious r1 yea
Lon g-te rovis ions rm p	99,6 34	90,3 89
Lon rm b wing g-te orro s	113 ,754	98,4 60
Trad yab les e pa	1,47 0	1,69 7
Defe rred liab ilitie tax s	26,3 32	29,6 95
Oth er lo ng-t liab ilitie erm s	12,9 64	9,07 5
Tota l	254 ,154	229 ,316

1 adjusted pursuant to IAS 19 (2011)

Change in interest rates

The fall in the returns on corporate bonds and thus the discount rate will result in an increase in obligations, which is only partly compensated for by a change in the value of the planned assets.

Life expectancy

The present value of the defi ned benefi t obligation from the plan is calculated on the basis of the best-possible estimate using mortality tables. An increase in the life expectancy of the entitled employees results in an increase in the plan liabilities.

In order to allow reconciliation with the fi gures in the balance sheet, the accrued benefi t must be netted off with the planned assets.

Reconciliation with the balance sheet values for pensions

		2013 /201 4		2012 /201 31
in € thou sand	Germ any	Abro ad	Tota l	Ger man y	Abro ad	Tota l
Acc rued ben efi t entit leme from reti oblig atio nts ent rem ns on J 30 une	95,9 42	13,9 02	109 ,844	88,1 22	11,9 85	100 ,107
Fair valu e of the pla d as Jun e 30 sets nne on	9,27 5	10,6 98	19,9 73	9,05 8	9,50 0	18,5 58
Bala she alue Jun e 30 et v nce s on	86,6 67	3,20 4	89,8 71	79,0 64	2,48 5	81,5 49
of w hich sion visio pen pro ns	95,9 42	13,9 02	109 ,844	88,1 22	11,9 85	100 ,107
of w hich pla d as sets nne	9,27 5	10,6 98	19,9 73	9,05 8	9,50 0	18,5 58

1 adjusted pursuant to IAS 19 (2011)

The following amounts were recognized in the statement of comprehensive income:

Effects on statement of comprehensive income

		2013 /201 4		2012 /201 31
in € thou sand	Germ any	Abro ad	Tota l	Ger man y	Abro ad	Tota l
Serv ice c ost	647	1,41 8	2,06 5	696	706	1,40 2
Net inte e (+ )/inc (–) rest exp ens ome	2,69 7	77	2,77 4	2,79 5	110	2,90 4
Am ts re nize d in the oun cog inco stat nt me eme	3,34 4	1,49 5	4,83 9	3,49 1	815	4,30 6
Gain s (–) /los (+) f alua tion of t he ses rom rev plan ned (exc ludin lread ets ts a ass g am oun y gniz ed a s int t inc ) reco eres ome	–49 0	36 –1,1	–1,6 26	–70 2	–83 1	33 –1,5
ins ( –)/lo (+) Actu aria l ga due to a cha sses nge in fi n ial a ions d fo lcula tion mpt anc ssu use r ca	7,71 2	1,00 7	8,71 9	3,55 0	–1,1 70	2,38 0
Actu aria l ga ins ( –)/lo (+) due to sses erie adj ustm ents exp nce	979	160	1,13 9	1,13 1	359	1,49 0
Am nize d in oth ts re oun cog er preh ive inco com ens me	8,20 1	31	8,23 2	3,97 9	–1,6 42	2,33 7
Tota l (am nize d in the ts re sta tem ent oun cog of c rehe nsiv e in e) omp com	11,5 45	1,52 6	13,0 71	0 7,47	–82 7	6,64 3

1 adjusted pursuant to IAS 19 (2011)

Wage increases

The present value of the defi ned benefi t obligation from the plan is calculated on the basis of future salaries. Consequently, increases in the salary of the entitled employees results in an increase in the plan liabilities.

In previous years, KWS countered the usual risks of direct obligations by converting the pension obligations from defi ned benefi t to defi ned contribution plans. As a result, subsequent benefi ts will be provided by a provident fund backed by a guarantee. The existing obligations, which are partly covered by planned assets, are funded from the operating cash fl ow and are subject to the familiar measurement risks.

The tables below show the changes in the accrued benefi t and planned assets:

Changes in accrued benefi t entitlements

		2013 /201 4		2012 /201 31
in € thou sand	Germ any	Abro ad	Tota l	Ger man y	Abro ad	Tota l
Acc rued ben efi t enti tlem fro ents m retir nt o blig atio n Ju ly 1 eme ns o	88,1 22	11,9 85	100 ,107	84,1 44	12,2 53	96,3 97
Serv ice c ost	647	1,4 18	2,06 5	696	706	1,40 2
Inte rest exp ens e	3,00 3	528	3,53 1	3,1 11	474	3,58 5
ins ( –) / es ( +) Actu aria l ga loss	8,69 1	1,2 18	9,90 9	4,68 1	– 74 1	3,94 0
of w hich due cha in fi cial ions to a mpt nge nan assu d fo lcula tion use r ca	12 7,7	1,05 8	8,77 0	3,55 0	00 – 1,1	2,45 0
of w hich due to e rien djus tme nts xpe ce a	979	160	1,13 9	1,13 1	359	1,49 0
Pen sion ade ts m pay men	– 4,5 21	– 83 7	– 5,3 58	– 4,5 10	– 69 2	– 5,2 02
Exc han cha ate ge r nge s		18	18		– 13	– 13
Oth han in v alue er c ges		– 42 8	– 42 8		– 2	– 2
Acc rued ben efi t enti tlem ents fro m retir blig atio n Ju ne 3 0 nt o eme ns o	95,9 42	13,9 02	109 ,844	88,1 22	11,9 85	100 ,107

1 adjusted pursuant to IAS 19 (2011)

Change in planned assets

		2013 /201 4		2012 /201 31
in € thou sand	Germ any	Abro ad	Tota l	Ger man y	Abro ad	Tota l
Fair val f th e pl ed a n Ju ly 1 ts o ue o ann sse	9,05 8	9,50 0	18,5 58	8,59 9	8,68 9	17,2 88
Inte inc rest ome	307	450	757	316	364	680
Inco from pla d as sets ludin ts a lread me nne exc g am oun y gniz ed a s int t inc reco eres ome	490	1,13 6	1,62 6	702	831	1,53 3
Pen sion ade ts m pay men	–58 0	–38 8	–96 8	9 –55	–38 5	–94 4
Exc han ate cha ge r nge s	0	0	0	0	1	1
Fair val f th e pl ed a n Ju ne 3 0 ts o ue o ann sse	9,27 5	10,6 98	19,9 73	9,05 8	9,50 0	18,5 58

1 adjusted pursuant to IAS 19 (2011)

The service cost is allocated by means of an appropriate formula and recognized in operating income in the respective functional areas. Net interest expenses and income are carried in the interest result.

The fair value of the planned assets was split over the following investment categories:

Breakdown of the planned assets by investment category

		2013 /201 4			201 2/20 131
in € thou sand	Germ any	Abro ad	Tota l	Ger man y	Abro ad	Tota l
Cor te b ond pora s		3,04 3	3,04 3		2,74 9	2,74 9
Equ ity fu nds		7,17 3	7,17 3		6,19 9	6,19 9
Con er in dus try sum		1,72 2			1,51 3
Fina nce		889			893
Indu stry		746			682
Tec hno logy		1,16 9			899
Hea lthca re		1,04 0			769
Oth er		1,60 7			1,44 3
Cas h an d ca sh e quiv alen ts		482	482		552	552
Rein pol icies sura nce	9,27 5		9,27 5	9,05 8		9,05 8
Plan ned on J 30 ets ass une	9,27 5	10,6 98	19,9 73	9,05 8	9,50 0	18,5 58

1 adjusted pursuant to IAS 19 (2011)

The planned assets abroad relate solely to the U.S.

There is no active market for the reinsurance policies in Germany. There is an active market for the other planned assets: the fair value can be derived from their stock market prices. 83.8% (previous year: 82.0%) of the corporate bonds and the cash and cash equivalents have a AAA rating.

The following sensitivity analysis at June 30, 2014, shows how the present value of the obligation would change given a change in the actuarial assumptions. No correlations between the individual assumptions were taken into account in this, i.e. if an assumption varies, the other assumptions were kept constant. The proThe following undiscounted payments for pensions (with their due dates) are expected in the following years:

Anticipated payments for pensions

	2013 /201 4
in € thou sand	Germ any	Abro ad	Tota l
201 4/20 15	4,78 4	408	5,19 2
201 5/20 16	4,68 1	419	5,10 0
6/20 201 17	4,59 5	436	5,03 1
201 7/20 18	4,57 7	488	5,06 5
201 8/20 19	4,56 6	539	5,10 5
9/20 201 20 – 202 3/20 24	23,2 60	3,22 4	26,4 84

Sensitivity analysis

	Effec t on obl igati on
in € thou sand	Cha in assu nge mpt ion	Dec reas e	Incr ease
Disc t rat oun e	+/– 100 bas ints e po	17,6 02	–13 ,852
Ant ual pay icipa ted ann incr eas es	50 bas +/– ints e po	–50 8	533
Ant ual pen icipa ted ann sion inc reas e	+/– 25 bas ints e po	–2,4 71	2,57 8

					Pen sion ts cos
							2013 /201 4			201 2/20 131
					in € thou sand	Germ any	Abro ad	Tota l	Ger man y	Abro ad	Tota l
ject ed unit	dit met cre	hod ed to c us	alcu late the	ba lanc e	Cos t for defi ned tribu tion pla con ns	1,72 8	2,02 6	3,75 4	1,48 0	2,35 0	3,83 0
she alue et v	lso s w as a	d in the use	nsit ivity se an	alys is.	Serv ice c for t he d efi ne d be nefi t obl igat ost	ions 647	1,4 18	2,06 5	696	706	1,40 2
					Pen sion ts cos	2,37 5	3,44 4	5,81 9	2,17 6	3,05 6	5,23 2
in € thou sand		in assu Cha nge mpt ion	Dec reas e	Incr ease	In a ddit ion, ntrib utio f €1 1,6 76 co ns o	tho nd (pre viou usa s	the lue of t t va pre sen			he o blig atio n of €3 ,724 tho nd usa
Sen sitiv ity a	naly sis	Effec	obl igati t on on		o IAS 19 (2 011) 1 adj usted uant t purs
Disc t rat oun	e	+/– 100 bas ints e po	17,6 02	–13 ,852	nd) r: € 10,2 00 tho aid to s yea usa wer e p insu inst ituti ran ce ons	tatu tory nsio pe n	(€3 ) (d lan) ,64 1 th and efi n ed trib utio ous con n p
Ant ual pay icipa ted incr eas	ann es	50 bas +/– ints e po	–50 8	533	The for defi ned ntrib utio lans sts co co n p	inly rela ted to ma	The lon g-te ban ks a mo	fi na rm ing to € unt	ncia l bo ings inc lude loa ns f rrow rom (€64 79, 056 tho nd ,834 tho usa u
Ant ual pen icipa ted sion inc	ann reas e	25 bas +/– ints e po	–2,4 71	2,57 8	the vide nt f und ba cke d b rant pro y a gua but ions this nsio re € to pe n p rog ram we	The ntri- ee. co 1,33 0 th and ous	d). T hey san	hav e re ma	inin atu ritie s th gh 201 7. g m rou
+/– Life ecta 1 ye –3,0 06 3,06 7 exp ncy ar					(€1 ,099 tho nd) . Th d in turn usa e re an plan ned dep end the rein ets ass on	e fr the com om licy, wh ich sura nce po			Und er IA S 1 2, d efer red liab ilitie lcul d a s th tax ate s ar e ca e S b diffe e b the IFR alan hee d etw t am t an renc een ce s oun

yields guaranteed interest of between 1.75% and 2.25%. In addition, the benefi t obligation from salary conversion was backed by a guarantee that exactly matches

The weighted average time at which the pension obligations are due is 14.9 years in Germany and 15.5 years abroad.

Apart from the above-described pension obligations, there are other old-age pension systems. However, no provisions have to be set up for them, since there are no further obligations above and beyond payment of the contributions (defi ned contribution plans). These comprise benefi ts that are funded solely by the employer and allowances for conversion of earnings by employees.

The total pension costs for fi scal 2013/2014 were as follows:

Under IAS 12, deferred tax liabilities are calculated as the difference between the IFRS balance sheet amount and the tax base. They are reported on a gross basis and total €26,332 thousand (€29,695 thousand). The composition of the deferred tax liabilities is explained in more detail under (22) Taxes.

(13) Current liabilities

in € thou sand	06/3 0/20 14	Prev ious yea r
Sho rovi sion rt-te rm p s	131 ,841	131 ,350
Cur liab ilitie ban ks rent s to	41,9 05	26,9 75
Cur liab ilitie affi liate rent s to s	301	292
Oth nt fi cial liabi lities er c urre nan	11, 151	5,99 2
Sho rm b win rt-te orro gs	53,3 57	33,2 59
Trad yab les t o af fi liat e pa es	0	7
Oth ade able er tr pay s	81,1 11	82,7 39
Trad yab les e pa	81,1 11	82,7 46
Tax liab ilitie s	35,4 67	31,9 29
Oth nt fi cial liab ilitie er c urre nan s	12,1 91	11,8 33
Oth er li abil ities	56,9 29	48,6 05

Short-term provisions

in € thou sand	07/0 1/20 13	Cha in nges the oli cons date d grou p, curr ency	Add ition	Con ptio sum n	Rev l ersa	06/3 0/20 14
Obl igat ions from sale s ion tran sact	107 ,615	–4,1 10	103 ,407	96,0 28	8,67 3	102 ,211
Obl igat ions from cha pur se ion tran sact	16,8 59	–12 8	17,3 05	10,9 90	6,88 2	16, 164
Oth bliga tion er o s	6,87 6	–74 4	11,0 62	3,65 3	75	13,4 66
	131 ,350	–4,9 82	131 ,774	110 ,671	15,6 30	131 ,841

The tax liabilities of €35,467 thousand (€31,929 thousand) include amounts for the year under review and the period not yet concluded by the external tax audit.

(14) Derivative fi nancial instruments

		06/3 0/20 14			06/3 0/20 13
in € thou sand	Nom inal volu me	Carr ying unts amo	Mar ket valu es	Nom inal volu me	Carr ying unts amo	Mar ket valu es
Cur y he dge renc s	52,8 73	272	272	58,1 24	–20 7	–20 7
Inte hed rest -rate ges	54,5 00	26	26	55,1 00	73	73
Com mod ity h edg es	13,2 80	0	0	19,8 28	0	0
Tota l	120 ,653	298	298	133 ,052	–13 4	–13 4

Of the currency hedges, €4,408 thousand (€11,041 thousand) have remaining maturities of between one and fi ve years. Of the interest-rate derivatives, hedges with a nominal volume of €39,500 thousand (€600 thousand) will mature within one year and hedges with a nominal value of €15,000 thousand (€15,000 thousand) will mature in more than fi ve years. The commodity hedges have remaining maturities of less than one (one) year.

(15) Financial instruments

In general, the fair values of fi nancial assets and liabilities are calculated on the basis of the market data available on the balance sheet date and are assigned to one of the three hierarchy levels in accordance with IFRS 13. The principal market, i.e. the market with the largest volume of trading and the greatest business activity, is used to calculate the fair value. If this market does not exist for the asset or liabilities in question, the market that maximizes the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer

• the liability, after taking into account transaction costs, is used. These are active and accessible markets for identical assets and liabilities, where the fair value results from quoted prices that are observable (level 1 input factors). At the KWS Group, this relates to securities in the category "available-for-sale fi nancial assets," as well as fund
• shares at banks and other fi nancial assets whose price is likewise quoted in active markets.

The level 2 input factors relate to derivative fi nancial instruments that are not designated hedging instruments and have been concluded between KWS companies and

• banks. The prices can thus be derived indirectly from active market prices for similar assets and liabilities. The level 3 input factors cannot be derived from observable market information.
• The carrying amounts and fair values of the fi nancial assets (fi nancial instruments), split into the measurement categories in accordance with IAS 39, are as follows:

06/3 0/20 14		Fina ncia l ins trum ents
	Fair val ues		Car ryin g am	ts oun
in € thou sand		Loa nd ns a ivab les rece	Fina ncia l held ets ass for trad ing	Ava ilab le for- sale fi na ncia l ets ass	Tota l ying carr unt amo
Fina ncia l as sets
Fina ncia l ass ets	2,77 4	0	0	2,77 4	2,77 4
Trad ceiv able e re s	361 ,576	361 ,576	0	0	361 ,576
Sec uritie s	76,7 12	0	0	76,7 12	76,7 12
Cas h an d ca sh e quiv alen ts	78,2 61	78,2 61	0	0	78,2 61
Oth nt fi cial ts er c urre nan asse	15,8 81	15,0 02	879	0	15,8 81
of w hich der ivati ve fi cial instr nts nan ume	(879 )	(0)	(879 )	(0)	(879 )
Tota l	535 ,204	,839 454	879	79,4 86	535 ,204

Prev ious r 1 yea		Fina ncia l ins trum ents
	Fair val ues		Car ryin ts g am oun
in € thou sand		Loa nd ns a ivab les rece	Fina ncia l held ets ass for trad ing	Ava ilab le for- sale fi na ncia l ets ass	Tota l ying carr unt amo
Fina ncia l as sets
Fina ncia l ass ets	7,30 5	0	0	7,30 5	7,30 5
Trad ceiv able e re s	359 ,867	359 ,867	0	0	359 ,867
Sec uritie s	100 ,878	0	0	100 ,878	100 ,878
Cas h an d ca sh e quiv alen ts	101 ,517	101 ,517	0	0	101 ,517
Oth nt fi cial ts er c urre nan asse	26,5 87	25,7 75	812	0	26,5 87
of w hich der ivati ve fi cial instr nts nan ume	(812 )	(0)	(812 )	(0)	(812 )
Tota l	596 ,154	487 ,159	812	108 ,183	596 ,154

1 adjusted pursuant to IAS 19 (2011)

The fair value of fi nancial assets (equity instruments) measured at amortized costs cannot be reliably determined because there are no active markets. These assets relate to shares in unconsolidated subsidiaries and associated companies. It is assumed that the carrying amounts are the same as the fair values. In addition, the fi nancial assets include securities classifi ed as noncurrent assets, whose fair value is measured by their prices on the stock market (level 1).

The fair value of trade receivables, other current fi nancial assets and cash and cash equivalents is the same as the carrying amounts as a result of the short time in which these instruments are due.

The fair values of securities classifi ed as current assets are based on the price for them quoted on active markets (level 1). The fair value of derivative fi nancial instruments is the present values of the payments related to these balance sheet items. These instruments are mainly forward exchange deals. They are measured on the basis of quoted exchange rates and yield curves available from market data and allowing for counterparty risks (level 2).

The carrying amounts and fair values of the fi nancial liabilities (fi nancial instruments), split into the measurement categories in accordance with IAS 39, are as follows:

06/30/2014 Financial instrumentsin € thousandFinancial liabilitiesof which outstanding purchase price

	Fair val ues
in € thou sand		Fina ncia l liab ilitie s d at mea sure rtize d amo t cos	Fina ncia l liab ilitie s held for trad ing	Disc losu re in a with cc. IFR S 7	Tota l ying carr unt amo
Fina ncia l lia bilit ies
Lon rm b wing g-te orro s	113 ,754	79,0 56	0	34,6 98	113 ,754
of w hich out stan ding cha rice pur se p oblig atio ns f olida ted sub sidia ries or c ons	(34, 698 )	(0)	(0)	(34, 698 )	(34, 698 )
Lon rade able g-te rm t pay s	0 1,47	0 1,47	0	0	0 1,47
Sho rt-te rm b wing orro s	53,3 57	53,3 57	0	0	53,3 57
Sho rade able rt-te rm t pay s	81, 111	81, 111	0	0	81, 111
Oth nt fi cial liabi lities er c urre nan	12, 191	11,6 10	581	0	12, 191
of w hich der ivati ve fi cial instr nts nan ume	(581 )	(0)	(581 )	(0)	(581 )
Tota l	261 ,883	226 ,604	581	34,6 98	261 ,883

Previous year Financial instruments

	Fair val ues	Car ryin ts g am oun
in € thou sand		Fina ncia l liab ilitie s d at mea sure rtize d amo t cos	Fina ncia l liab ilitie s held for trad ing	Disc losu re in a with cc. IFR S 7	Tota l ying carr unt amo
Fina ncia l lia bilit ies
Lon rm b wing g-te orro s	98,4 60	66, 199	0	32,2 61	98,4 60
of w hich ding cha rice out stan pur se p oblig atio ns f olida ted sub sidia ries or c ons	(32, ) 261	(0)	(0)	(32, ) 261	(32, ) 261
Lon rade able g-te rm t pay s	1,69 7	1,69 7	0	0	1,69 7
Sho rm b wing rt-te orro s	33,2 59	33,2 59	0	0	33,2 59
Sho rade able rt-te rm t pay s	82,7 46	82,7 46	0	0	82,7 46
Oth nt fi cial liabi lities er c urre nan	11,8 33	10,8 87	946	0	11,8 33
of w hich der ivati ve fi cial instr nts nan ume	(946 )	(0)	(946 )	(0)	(946 )
Tota l	227 ,995	194 ,788	946	32,2 61	227 ,995

Financial liabilities are measured at amortized cost and using the effective interest method in accordance with when they are due. The carrying amount is approximately the market value, since the fi nancial liabilities have a variable rate of interest on them. The fi xed interest rate loans have a rate of interest approximately that of the market rate.

The outstanding purchase price obligation for consolidated subsidiaries must be carried at the present value of the anticipated future purchase price payments for minority interests. This is derived from the anticipated operating income of the subsidiary and a risk-adjusted discount rate (level 3).

Notes for the KWS Group 2013/2014 4. Notes to the Balance SheetNotes

		06/3	0/20 14			Prev ious	yea r
in € thou sand	Leve l 1	Leve l 2	Leve l 3	Tota l	Leve l 1	Leve l 2	Leve l 3	Tota l
Deri vativ e fi n ial in stru ts n ot anc men of a hed nde r IAS 39 part ge u	0	879	0	879	0	812	0	812
Ava ilabl e-fo le fi n ial a sset r-sa anc s	79,0 11	0	0	79,0 11	101 ,864	0	0	101 ,864
Fina ncia l as sets	79,0 11	879	0	79,8 90	101 ,864	812	0	102 ,677
Deri vativ e fi n ial in stru ts n ot anc men of a hed nde r IAS 39 part ge u	0	581	0	581	0	946	0	946
Fina ncia l lia bilit ies	0	581	0	581	0	946	0	946

The derivative fi nancial instruments mainly consists of forward exchange deals, whose fair value is derived from the forward exchange rates and the use of option pricing models (level 2).

Due to the mainly short times in which trade payables are due, it is assumed that their carrying amounts are equal to the fair value.

The method of calculating the fair values of derivative fi nancial instruments is presented above under the comments on fi nancial assets.

in € thou sand	Boo k va lue	Cas h fl o ws
Liqu idity lysis of fi cial liab ilitie ana nan s	06/3 0/20 14	06/3 0/20 14 Tota l	Due in < 1 y ear	Due in > 1 and year 5 y < ears	Due in > 5 y ears
Fina ncia l liab ilitie s	167 ,111	185 ,894	60,6 11	125 ,090	193
Trad yab les e pa	82,5 81	82,5 81	81, 111	1,47 0
Oth er fi cial liabi lities nan	11,6 10	11,6 10	11,6 10
Non -de riva tive fi na ncia l lia bilit ies	261 ,302	280 ,085	153 ,332	126 ,560	193
Pay t cla im men		22,5 31	22,5 31
Pay t ob ligat ion men		23,2 21	23,2 21
Der ivat ive fi na ncia l lia bilit ies	581	690	690

The table below presents the net gains/losses carried in the income statement for fi nancial instruments in each measurement category:

in € thou sand	06/3 0/20 14	Prev ious yea r
Ava ilabl e-fo le fi n ial a sset r-sa anc s	125	123
Fina ncia l ass held for trad ing ets	81	–25 0
Loa nd r ivab les ns a ece	–65 8	–33 5
Fina ncia l liab ilitie ured at a tized t s m eas mor cos	–10 ,729	–11 ,879
Fina ncia l liab ilitie s he ld fo ding r tra	985	–2,6 55

The net income from fi nancial assets includes income and expenses from the measurement of fi nancial assets. The net gain/loss from loans and receivables mainly includes effects from changes in the allowances for impairment.

The net gains from fi nancial assets held for trading and fi nancial liabilities held for trading mainly comprise changes in the market value of derivative fi nancial instruments.

The net losses from fi nancial liabilities measured at amortized cost mainly result from interest expense.

Liquidity is managed in the euro zone by the central Treasury unit using a cash pooling system. Liquidity requirements are determined by means of cash planning and are covered by cash and promised credit lines. There is a credit line of €200 million under a syndicated loan, which was extended by a further year and runs until November 2018.

The table below shows the KWS Group's liquidity analysis for non-derivative and derivative fi nancial liabilities. The table is based on contractually agreed, undiscounted payment fl ows:

The cash fl ows of the derivative fi nancial liabilities mainly relate to forward exchange deals and include both interest payments and redemption payments. These derivative fi nancial instruments are settled in gross.

Interest income from fi nancial assets that are not measured at fair value and recognized in the income statement was €1,777 thousand (€1,552 thousand). Interest expenses for fi nancial borrowings were €10,729 thousand (€11,879 thousand).

In order to assess the risk of exchange rate changes, the sensitivity of a currency to fl uctuations was determined. After the euro, the US dollar is the most important currency in the KWS Group. All other currencies are of minor importance. The average exchange rate in the fi scal year was 1.36 (1.30) USD/€. If the US dollar depreciated by 10%, the fi nancial instruments would have a value of €144 thousand (€184 thousand). If the US dollar appreciated by 10%, the fi nancial instruments would have a value of €176 thousand (€225 thousand). The net income for the year and equity would change accordingly.

In order to assess the risk of interest rate changes, the sensitivity of interest rates to fl uctuations was determined. The average rate of interest in the fi scal year was 0.26% (0.29%). An increase in the rate of interest of 1percentage point would add a further €0.2 million

to the interest result (previous year: reduction of €0.5 million); equity would improve by €0.1 million (previous year: a drop of €0.3 million). A reduction in the rate of interest to 0 percentage points would add a further €1.3 million (€1.3 million) to the interest result. Equity would increase by €0.8 million (€0.9 million) in the event of such a change in the rate of interest.

In order to assess the risk of changes in commodity prices, the sensitivity of commodity prices to fl uctuations was determined. A 10% increase in commodity prices would increase the cost of sales by around €1.3 million (€2.0 million); a decrease would reduce it by around €1.3 million (€2.0 million).

In the Management Report possible risks resulting from agreements regarding fi nancial dependencies are addressed.

(16) Contingent liabilities

As in the previous year, there are no contingent liabilities to report apart from the employer's statutory secondary liability for direct pension commitments.

(17) Other fi nancial obligations

There was a €10,159 thousand (€5,588 thousand) obligation from uncompleted capital expenditure projects. The increase is mainly the result of spending on new software licenses totaling €1.7 million.

Obligations under rental agreements and leases

in € thou sand	06/3 0/20 14	Prev ious yea r
Due wit hin one yea r	14,8 54	13,9 68
Due bet and n 1 5 y wee ears	19,3 54	39 17,4
Due afte r 5 y ears	7,12 4	3,57 6
	41,3 32	34,9 83

None of the reported fi nancial instruments will be held to maturity.

The table below shows the fi nancial assets and liabilities measured at fair value:

The leases relate primarily to full-service agreements for IT equipment and fl eet vehicles, which also include services for which a total of €1,300 thousand (€2,139 thousand) was paid in the year under review. The main leasehold obligations relate to land under cultivation.

By region

in € thou sand	2013 /201 4	Prev ious year
Ger man y	225 ,399	223 ,385
Euro pe	447 ,171	433 ,524
Nor th a nd S outh Am eric a	448 ,120	435 ,787
Res t of ld wor	57,3 17	54,5 39
	1,17 8,00 7	1,14 7,23 5

For further details of sales, see segment reporting.

Sales are recognized when the agreed goods or services have been supplied and risk and title pass to the buyer. Any rebates or discounts are taken into account.

The cost of sales increased by 1.2% to €614,528 thousand (€607,027 thousand), or 52.2% (52.9%) of sales. The total cost of goods sold was €336,361 thousand (€351,442 thousand).

Allowances on inventories totaling €2,147 thousand more (previous year: €2,220 thousand more) were required. The allowances were lower by €275 thousand (€553 thousand) for the Cereals Segment, while they were higher by €514 thousand for the Sugarbeet Segment (previous year: lower by €150 thousand). Additional allowances totaling €1,908 thousand (€4,864 thousand) were required in the Corn Segment.

The €13,404 thousand increase in selling expenses to €203,952 thousand (€190,548 thousand) is attributable to the creation and expansion of distribution structures. This is 17.3% of net sales, up from 16.6% the year before.

• Research and development is recognized as an expense in the year it is incurred; in the year under review, this amounted to €148,821 thousand (€140,371 thousand the year before). Development costs for new varieties are not recognized as an asset because evidence of future economic benefi t can only be provided after the variety has been offi cially certifi ed.
• General and administrative expenses increased by €7,698 thousand to €76,741 thousand, representing 6.5% of sales, after 6.0% the year before.

(19) Other operating income

in € thou sand	2013 /201 4	Prev ious
		year
Inco from sale s of fi xe d as sets me	416	836
Inco from the l of ision me rev ersa prov s	15,6 38	10,7 63
Exc han gain d ga ins f d in te h edg ate tere st ra ge r s an rom cur renc y an es	13,5 82	14,7 57
Inco from l of allow ceiv able me rev ersa anc es o n re s	5,56 1	6,54 2
Gra nts	5,54 8	6,20 4
Inco relat ing t evio erio ds me o pr us p	6,46 6	6,77 3
Inco from los ion ived nsat me s co mpe rece	191	580
Misc ellan her ratin g in s ot eou ope com e	13,2 70	15,4 88
	60,6 72	61,9 43

The other operating income mainly comprises foreign exchange gains and income from interest rate hedges, as well as income from the reversal of provisions and miscellaneous other operating income.

5. Notes to the income statement

Income statement of the KWS Group for the period July 1, 2013 through June 30, 2014

in € milli ons	201 3/20 14	% o f sal es	Prev ious r 1 yea	% o f sal es
Net sale s	1,17 8.0	100 .0	1,14 7.2	100 .0
Cos t of sale s	614 .5	52.2	607 .0	52.9
Gro rofi t sale ss p on s	563 .5	47.8	540 .2	47.1
Sell ing exp ens es	204 .0	17.3	190 .5	16.6
Res h an d de velo nt e earc pme xpe nses	148 .8	12.6	140 .4	12.2
Gen eral and adm inist rativ e ex pen ses	76.8	6.5	69.0	6.0
Oth ting inc er o pera ome	60.7	5.2	61.9	5.4
Oth ting er o pera exp ens es	56.2	4.8	50.1	4.4
Ope ratin g in com e	138 .4	11.7	152 .1	13.3
Net fi na ncia l inc /exp ome ens es	–12 .5	–1.1	–10 .3	–0.9
Res ult o f or dina ctiv ities ry a	125 .9	10.7	141 .8	12.4
Taxe s	45.6	3.9	49.5	4.3
Net inc for the ome yea r	80.3	6.8	92.3	8.0
Sha of m inor ity in tere st res	3.2	0.3	3.4	0.3
Net inc aft inor ity i nter est ome er m	77.1	6.5	88.9	7.7

1 adjusted pursuant to IAS 19 (2011)

(18) Net sales and function costs

By product category

		Prev ious
in € thou sand	2013 /201 4	year
Cert ifi ed d sa les see	1,06 8,26 3	1,04 7,03 9
Roy altie s inc ome	63,9 22	57,8 06
Bas ic se ed s ales	14,6 94	16,9 31
Serv ices fee inc ome	8,78 4	5,63 7
Oth ales er s	22,3 44	19,8 22
	1,17 8,00 7	1,14 7,23 5

(20) Other operating expenses

in € thou sand	2013 /201 4	Prev ious year
Leg al fo rm e xpe nses	1,05 6	1,26 3
Allo ivab les wan ces on r ece	8,21 6	7,86 5
Cou y de fault nter part	392	352
Exc han loss nd l nd i hed ate nter est rate ge r es a oss es o n cu rren cy a ges	22,2 89	16,4 28
Los from sale s of fi xe d as sets ses	269	636
Exp elat ing t evio erio ds ens es r o pr us p	1,09 9	1,02 7
Exp e fro t of inta ngib le as sets ens m re mea sure men	2,36 6	72
Oth er e xpe nses	20,5 18	22,4 18
	56,2 05	50,0 61

In the year under review, allowances for receivables of €4,596 thousand (€3,414 thousand) were recognized as an expense at the Corn Segment, €3,504 thousand

(22) Taxes

Income tax expense is computed as follows:

in € thou sand	2013 /201 4	Prev ious 1 year
s, G Inco taxe me erm any	15,8 24	26,4 53
Inco ther ntrie taxe me s, o cou s	34,5 13	39,9 67
Cur es f inc rent tax exp ens rom ome es	50,3 37	66,4 20
The reof from viou pre s ye ars	(–6, 829 )	(4,8 36)
Ger Defe rred tax es, man y	–11 1	–6,2 31
Defe rred othe ies tax untr es, r co	–4,6 31	–11 ,513
Defe rred inc /exp tax ome ens e	–4,7 42	–17 ,744
Rep d in orte e ta com x ex pen se	95 45,5	49,5 28

1 adjusted pursuant to IAS 19 (2011)

Adjusted for tax relating to previous periods, KWS pays tax in Germany at a rate of 29.1%. Corporate income tax of 15.0% (15.0%) and solidarity tax of 5.5% (5.5%) are applied uniformly to distributed and retained profi ts. In addition, municipal trade tax is payable on profi ts generated in Germany. Trade income tax is applied at a weighted average rate of 13.3% (13.3%), resulting in a total tax rate of 29.1% (29.1%).

The "Law on Tax Measures Accompanying Introduction of the Societas Europaea and Amending Further Tax Regulations" (SEStEG), which was passed at the end of 2006, means that the corporate income tax credit balance at December 31, 2006, can be realized. It will be paid out in ten equal annual amounts from 2008 to 2017. The German Group companies carried these claims as assets at their present value totaling

€4,933 thousand (€6,123 thousand) at June 30, 2014. €1,190 thousand (€1,235 thousand) was recovered in the year under review and recognized directly in equity.

Under German tax law, both German and foreign dividends are 95% tax exempt.

The profi ts generated by Group companies outside Germany are taxed at the rates applicable in the country in which they are based.

For the German Group companies, deferred tax was calculated at 29.1% (29.1%). For foreign Group companies, deferred tax was calculated using the tax rates applicable in the country in which they are based.

Deferred taxes result from the following:

Defe rred tax ts asse			Defe rred liabi lities tax
in € thou sand	2013 /201 4	Prev ious 1 year	Cha nge	201 3/20 14	Prev ious 1 year	Cha nge
Inta ngib le as sets	12	5	7	9,43 1	12,7 54	–3,3 23
Prop , pla nd e quip erty nt a t men	284	220	64	13,9 87	14,0 83	–96
Fina ncia l ass ets	1,52 9	2,47 9	–95 0	634	662	–28
Inve ntor ies	9,52 7	8,5 16	1,0 11	166	201	–35
Cur rent ets ass	2,37 6	3,95 7	–1,5 81	1,20 0	428	772
Non liabi lities ent curr	14,3 27	10,4 13	3,9 14	888	1,04 2	–15 4
Cur liab ilitie rent s	03 14,4	16, 146	43 –1,7	16	521	–50 5
Tax loss ryfo rd car rwa	5,2 10	2,88 7	2,32 3	0	0	0
Oth olida tion ions tran sact er c ons	388	326	62	10	4	6
Defe rred gniz ed tax es r eco	48,0 56	44,9 49	3,10 7	26,3 32	29,6 95	–3,3 63

1 adjusted pursuant to IAS 19 (2011)

(€4,400 thousand) at the Sugarbeet Segment, €52 thousand (€48 thousand) at the Cereals Segment and €64thousand (€3 thousand) at the Corporate Segment.

(21) Net fi nancial income/expenses

in € thou sand	2013 /201 4	Prev ious year
Inte rest inc ome	1,79 1	1,64 1
Inte rest exp ens es	11,5 15	8,22 7
Inco from oth er fi cial ts me nan asse	119	78
Writ e-do rities wn on s ecu	0	1
Inte rest es f sion visio exp ens rom pen pro ns	2,77 4	2,90 4
Inte e fo r oth er lo visio rest ng-t exp ens erm pro ns	179	948
Net inte rest exp ens e	–12 ,558	–10 ,361
Net inco from sub sidia ries and join t ve ntur me es	0	38
Net inco from ticip atio me par ns	6	6
Net inco from wri bsid iarie s, jo int v and ticip atio te-u entu me ps o n su res par ns	1	1
Net inc fro quit y in tme nts ome m e ves	7	45
/ex Net fi na ncia l inc ome pen ses	–12 ,551	–10 ,316

Net fi nancial income/expenses fell by a total of €2,235 thousand to €–12,551 thousand as a result of higher interest expenses. Net interest expense was €–12,558 thousand compared with €–10,361 thousand the year before. Net income from equity investments likewise fell by €38 thousand to €7 thousand. The interest effects from pension provisions comprise interest expenses (compounding) and the planned income.

The other comprehensive income includes exchange raterelated changes to the deferred taxes of €–674 thousand (€194 thousand), which were directly credited to equity, without recognition in profi t or loss.

Tax loss carryforwards of €23,154 thousand (€5,359 thousand) were regarded as not being able to be utilized, with the result that no deferred tax assets were able to be recognized as an asset for them. The anticipated taxable profi ts projected in the medium-term plans of the com-

(23) Personnel costs/employees

in € thou sand	2013 /201 4	Prev ious 1 year
Wag nd s alar ies es a	180 ,255	167 ,433
Soc ial s rity tribu tion ecu con s, es f ion plan exp ens or p ens s
and ben efi ts	45,5 52	42,5 02
	225 ,807	209 ,935

1 adjusted pursuant to IAS 19 (2011)

Personnel costs went up by €15,872 thousand to €225,807 thousand, an increase of 7.6%. The number of employees increased by 404 to 4,847 or by 9.1%.

Compensation increased by 7.7% from €167,433 thousand in the previous year to €180,255 thousand. Social security contributions, expenses for pension plans and benefi ts were €3,050 thousand higher than in the previous year.

Employees 1

in € thou sand	/201 2013 4	Prev ious year
Ger man y	1,76 3	1,67 6
Res t of Euro pe (with Ger y) out man	1,22 3	1,13 9
Nor th a nd S outh Am eric a	1,7 11	1,50 5
Res t of ld wor	150	123
Tota l	4,84 7	4,44 3

1 Annual average

Of the above number, 700 (713) employees are included according to the percentage of equity held in the companies that employ them. 61 (59) of them were in Europe and 639 (654) in North and South America.1,401 (1,428) employees are employed by now eight (seven) proportionately consolidated investees. If these persons are included in full, the workforce total is 5,549 (5,158). The reported number of employees is greatly infl uenced by seasonal labor.

panies were used for this in principle; these plans, which cover a period of four years, have been approved by the Executive Board. They are based on historical patterns and expectations about future market development.

The following schedule reconciles the expected income tax expense to the reported income tax expense. The calculation assumes an expected tax expense, applying the German tax rate to the profi t before tax of the entire Group:

in € thou sand	/201 2013 4	Prev ious 1 year
Earn ings bef inco taxe ore me s	125 ,881	141 ,812
se 2 Exp ecte d in e ta com x ex pen	36,6 31	41,2 67
Diffe e in inco liabi lity o utsid e G tax renc me erm any	13, 120	1,56 2
Tax ion f port or:
Tax- free inc ome	110	–51 7
Exp ot d edu ctib le fo r tax ens es n pur pos es	3,0 10	1,59 1
Tem ry d iffere d lo for whic h no def d ta have bee nize d pora nce s an sses erre xes n re cog	143	0
Tax cred its	–75	–27 9
Taxe latin viou g to s re pre s ye ars	–6,8 29	4,83 6
Oth er ta x ef fect s	–51 5	1,06 8
Rep d in orte e ta com x ex pen se	45,5 95	49,5 28
Effe ctive tax rate	36.2 %	34.9 %
1 adj usted o IAS 19 (2 011) uant t purs

2 Tax rate in Germany: 29.1%

(24) Net income for the year

Net income for the year was reduced by net fi nancial income/expenses of €–12,551 thousand (€–10,316 thousand) and a higher tax rate and fell by €11,998 thousand to €80,286 thousand, representing a return on sales of 6.8%, down from 8.0% in the previous year. Net income for the year after minority interest is €77,124 thousand. Earnings per share are thus €11.69 (€13.47).

The share of net income of minority interests also includes the shares that accrued to shareholders who have left the company up to the time they left.

6. Notes to the cash fl ow statement

The cash fl ow statement, which has been prepared according to IAS 7 (indirect method), shows the changes in cash and cash equivalents of the KWS Group in the three categories of operating activities, investing activities, and fi nancing activities. The effects of exchange rate changes and changes in the consolidated group have been eliminated from the respective balance sheet items, except those affecting cash and cash equivalents.

(1) Net cash from operating activities

• The cash proceeds from operating activities are substantially determined by cash earnings. They were €110,400 thousand (€109,485 thousand), slightly higher than the previous year. The proportion of cash earnings included in sales was 9.4% (9.5%). Capital tie-up amounted to €49,382 thousand (€24,907 thousand), mainly due to an increase in assets not attributable
• to fi nancing or investing activity. The cash proceeds from operating activities also include interest income of €1,648 thousand (€1,498 thousand) and dividend income of €6 thousand (€44 thousand) as well as interest expense of €7,779 thousand (€5,017 thousand). Income tax payments amounted to €68,023 thousand (€56,972 thousand).

This increase in the effective tax rate in the year under review was due to tax expenses from previous periods following fi eld audits and strong income growth in countries with higher tax rates.

Other taxes, primarily real estate tax, are allocated to the relevant functions.

(2) Net cash from investing activities

A net total of €75,421 thousand (€88,942 thousand) was required to fi nance investing activities. An amount of €74,992 thousand (€62,145 thousand) was paid for intangible and tangible assets and an amount of €1,901 thousand (€5,745 thousand) for fi nancial assets. There were total cash receipts of €1,472 thousand (€1,918 thousand) for disposals of assets. €0 thousand (€22,970 thousand) was paid to acquire shares in consolidated companies.

(3) Net cash from fi nancing activities

Financing activities resulted in cash payments of €31,523 thousand (previous year: cash proceeds of €27,222 thousand). The dividend payments to parent shareholders and other shareholders related to the dividends of €19,800 thousand (€18,480 thousand) paid to the shareholders of KWS SAAT AG, as well as profi t distributions paid to other shareholders of and at fully consolidated subsidiaries of €1,328 thousand (€664 thousand) and the acquisition of the remaining shares of other shareholders in KWS LOCHOW GMBH. In addition, net borrowings totaling €35,392 thousand (€40,650 thousand) were raised.

(4) Supplementary information on the cash fl ow statement

The changes in cash and cash equivalents due to exchange rate, consolidated group, and measurement changes were attributable to an amount of €–3,990 thousand (€–3,348 thousand) to exchange rate-related adjustments. The other changes mainly result in an amount of €2,494 thousand (€–83 thousand) from fi rst-time partial consolidation of the joint venture GENECTIVE S.A.

As in previous years, cash and cash equivalents are composed of cash (on hand and balances with banks) and current available-for-sale securities.

Cash and cash equivalents includes €32,708 thousand (€46,582 thousand) from partially consolidated companies.

In fi scal year 2013/2014, total Executive Board compensation amounted to €3,481 thousand (€4,072 thousand). Variable compensation of €1,884 thousand (€2,124 thousand), calculated on the basis of the net profi t for the period of the KWS Group, includes compensation of €33 thousand (€38 thousand) for duties performed in subsidiaries.

Compensation of former members of the Executive Board and their surviving dependents amounted to €1,476 thousand (€1,097 thousand). Pension provisions recognized for this group of persons amounted to €7,018 thousand (€3,155 thousand) as of June 30, 2014, before being netted off with the relevant planned assets.

Shareholdings of members of the Supervisory Board and the Executive Board (as of August 31, 2014)

Dr. Arend Oetker indirectly holds a total of 1,650,010 (1,650,010) shares and Dr. Andreas J. Büchting 108,030 (108,030) shares in KWS SAAT AG. All together, the members of the Supervisory Board hold 1,758,725 (1,758,718) shares in KWS SAAT AG.

The members of the Executive Board hold 14,699 (12,059) shares in KWS SAAT AG.

Related party disclosures

As part of its operations, KWS procures goods and services worldwide from a large number of business partners, including companies in which KWS has an interest. Business dealings with these companies are always conducted on an arm's length basis; from the KWS Group's perspective, these dealings have not been material. As part of Group fi nancing, short- and medium-term term loans are taken out from and granted to subsidiaries at market interest rates. A total of 14 shareholders declared to KWS SAAT AG in 2002 that as a result of mutual allocations, they respectively hold a total of more than 50% of the voting rights. The Executive Board, the Supervisory Board and the families of their members were also defi ned as related parties. There were no business transactions or legal transactions that required reporting for this group of persons in fi scal 2013/2014. The compensation that has to be

7. Other notes

Proposal for the appropriation of net retained profi ts KWS SAAT AG posted operating income of €–14,331 thousand compared with €11,768 thousand for the previous year. Allowing for net fi nancial income/expenses of €37,911 thousand (€35,512 thousand) and income taxes totaling €–265 thousand €11,549 thousand), net income in accordance with the German commercial law regulations was €23,845 thousand (€35,731 thousand). Adding the net profi t of €154 thousand (€223 thousand) brought forward from the previous year and the allocation to the revenue reserves of €4,000 thousand (€16,000 thousand), a net retained profi t of €19,999 thousand is available for distribution.

A proposal will be made to the Annual Shareholders' Meeting that an amount of €19,800 thousand of KWS SAAT AG's net retained profi t should be distributed as a dividend of €3.00 (€3.00) for each of the 6,600,000 shares.

The balance of €199 thousand (€154 thousand) is to be carried forward to the new account.

Total remuneration of the Supervisory Board and the Executive Board and of former members of the Supervisory Board and the Executive Board of KWSSAAT AG

The compensation of the members of the Supervisory Board consists of a fi xed and a variable component, with the variable component being limited to the level of the fi xed compensation. As in the previous year, the total compensation for members of Supervisory Board amounts to €516 thousand (€516 thousand), excluding value-added tax. €238 thousand (€238 thousand) of the total compensation is performance-related.

disclosed in accordance with IAS 24 for management in key positions at the Group comprises remuneration for the active Executive Board and the Supervisory Board. It is presented in the Group Management Report. No other related parties have been identifi ed for whom there is a special reporting requirement under IAS 24.

There are lease agreements with an annual lease of €132 thousand (€86 thousand) between Hans-Joachim Tessner and KWS SAAT AG.

Audit of the annual fi nancial statements

On December 19, 2013, the Annual Shareholders' Meeting of KWS SAAT AG elected the accounting fi rm Deloitte & Touche GmbH, Hanover, to be the Group's auditors for fi scal year 2013/2014.

Fee paid to the external auditors under Section 314 (1) No. 9 of the HGB

in € thou sand	2013 /201 4	Prev ious year
a) A udit of t he c olida ted ons fi na ncia l sta tem ents	710	683
b) O ther tifi ca tion vice cer ser s	2	5
c) Ta lting x co nsu	0	0
d) O ther vice ser s	45	54
Tota l fee pai d	757	742

For fi scal year 2014/2015, fees for consulting services (excluding auditing) of up to €75 thousand are expected.

Declaration of compliance with the German Corporate Governance Code

KWS SAAT AG has issued the declaration of compliance with the German Corporate Governance Code required by section 161 of the Aktiengesetz (AktG – German Stock Corporation Act) and made it accessible to its shareholders on the company's home page at www.kws.de.

Supervisory and Executive Boards of KWS SAAT AG

Supervisory Board

Dr. Drs. h.c. Andreas J. Büchting EinbeckAgricultural Biologist/Economist Chairman of the Supervisory Board of KWS SAAT AG

Membership of comparable German and foreign oversight boards:

• Member of the Board of Directors of Ball Horticultural Company, West Chicago, Illinois (U.S.)

Dr. Arend Oetker

Berlin

Businessman

Managing Partner of Kommandit gesellschaft Dr. Arend Oetker Vermögensverwaltungsgesellschaft mbH & Co, Berlin

Deputy Chairman of the Supervisory Board of KWS SAAT AG

• Membership of other legally mandated Supervisory Boards:• Schwartauer Werke GmbH & Co. KGaA,
• Bad Schwartau (Chairman)
• Cognos AG, Hamburg (Chairman)

Membership of comparable German and foreign oversight boards:

• Leipziger Messe GmbH, Leipzig
• Berliner Philharmonie gGmbH, Berlin (Chairman)

Executive Board

Philip von dem Bussche Einbeck(CEO) Corporate Affairs, Human Resources

Dr. Léon Broers Einbeck, D/Heythuysen, NL Research and Breeding

Dr. Hagen Duenbostel EinbeckCorn, Investor Relations

Membership of comparable German and foreign oversight boards:

• Hero AG, Lenzburg, CH (member of the Board of Administration)

Dr. Peter Hofmann (since October 1, 2014) EinbeckSugarbeet, Cereals, Marketing

Eva Kienle

Göttingen Finance, Controlling, Global Services, IT, Legal

Hubertus von Baumbach

Ingelheim am Rhein BusinessmanMember of Management of Boehringer Ingelheim, Ingelheim am Rhein

Jürgen Bolduan

EinbeckSeed Breeding Employee Chairman of the Central Works Council of KWS SAAT AG

Cathrina Claas-Mühlhäuser

Frankfurt am MainBusinesswomanChairwoman of the Supervisory Board of CLAAS KGaA mbH, Harsewinkel

Membership of other legally mandated Supervisory Boards:

• CLAAS KGaA mbH, Harsewinkel (Chairwoman)

Membership of comparable German and foreign oversight boards:

• CLAAS KGaA mbH, Harsewinkel (Deputy Chairwoman of the Shareholders' Committee)

Dr. Berthold Niehoff

EinbeckAgricultural Scientist Employee Representative

8. Declaration by legal representatives

We declare to the best of our knowledge that the consolidated fi nancial statements give a true and fair view of the assets, fi nancial position and earnings of the Group in compliance with the generally accepted standards of consolidated accounting, and that an accurate picture of the course of business, including business results, and the Group's situation is conveyed by the Group Management Report, and that it describes the main opportunities and risks of the Group's anticipated development.

Einbeck, October 1, 2014 KWS SAAT AG The Executive Board

P. von dem Bussche L. Broers

H. Duenbostel E. Kienle

P. Hofmann

We have audited the annual fi nancial statements of the KWS Group – consisting of the Balance Sheet, the Statement of Comprehensive Income, the Notes, the Cash Flow Statement, Segment Reporting and the Statement of Changes in Equity – and the Group Management Report for the fi scal year from July 1, 2013, to June 30, 2014, all of which were prepared by KWS SAAT AG, Einbeck. The preparation of the consolidated fi nancial statements and the Group Management Report according to the International Financial Reporting Standards (IFRS) as applicable in the EU, and in addition according to the commercial law regulations to be applied pursuant to Section 315a (1) of the HGB (German Commercial Code), is the responsibility of the Executive Board of the company. Our task is to give, on the basis of the audit we have conducted, an opinion on the consolidated fi nancial statements and the Group Management Report.

We conducted our audit of the annual fi nancial statements in accordance with Section 317 HGB and the generally accepted standards for the audit of fi nancial statements promulgated by the Institut der Wirtschaftsprüfer (German Institute of Certifi ed Public Accountants). According to these standards, the audit must be planned and executed in such a way that misstatements and violations materially affecting the presentation of the view of the assets, fi nancial position and earnings conveyed by the consolidated fi nancial statements, taking into account the applicable regulations on orderly accounting, and by the Group Management Report are detected with reasonable certainty. Knowledge of the business activities and the economic and legal operating environment of the Group and evaluations of possible errors are taken into account. The effectiveness of the internal accounting control system and the evidence supporting the disclosures in the consolidated fi nancial statements and the Group Management Report are evaluated mainly on the basis of test samples within

the framework of the audit. The audit includes the assessment of the annual fi nancial statements of the companies included in the consolidated fi nancial statements, the defi nition of the companies consolidated, the accounting and consolidation principles used and any signifi cant estimates made by the Executive Board, as well as the evaluation of the overall presentation of the consolidated fi nancial statements and the Group Management Report. We believe that our audit provides a reasonable basis for our opinion.

On the basis of our audit, we have no reservations to note.

In our opinion pursuant to the fi ndings gained during the audit, the consolidated fi nancial statements of KWS SAAT AG, Einbeck, comply with the IFRS as applicable in the EU, and in addition with the commercial law regulations to be applied pursuant to Section 315a (1) of the HGB (German Commercial Code), and give a true and fair view of the assets, fi nancial position and earnings of the Group, taking into account these regulations. The Group Management Report accords with the consolidated fi nancial statements, conveys overall an accurate view of the Group's position and accurately presents the opportunities and risks of future development.

Hanover, October 1, 2014

Deloitte & Touche GmbHWirtschaftsprüfungsgesellschaft

(Kompenhans) (Bukowski) Auditor Auditor

Auditors' Report Financial calendar

Nov ber 26 , 20 14 em	Rep the 1s r of 20 14/ 201 ort t qu arte 5 on
Dec ber 18 , 2 014 em	Sha Ann ual reh old ' M ing in E inbe ck eet ers
Feb ry 2 5, 2 015 rua	Rep the 2n d q of 2 014 /20 15 ort ter on uar
May 27 , 20 15	14/ Rep ort the 3rd arte r of 20 201 5 on qu
Oct obe r 16 , 20 15	Pub lica tion of 201 4/2 015 , fi n ial s tate anc me Ann ual nd lyst nfe in F pre ss a ana co ren ce
Dec ber , 20 17 15 em	Ann ual Sha reh old ' M ing in E inbe ck eet ers

Pub lica tion of 201 4/2 015 , fi n ial s tate nts anc me Ann ual nd lyst nfe in F kfur t pre ss a ana co ren ce ran

707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000

Key data of KWS SAAT AG

Sec urit ies iden tifi c atio ber n n um	707 400
ISIN	DE 000 707 400 7
Sto ck e xch e id ifi er ent ang	S KW
Tra lev el nsp are ncy	Prim e S dar d tan
Inde x	SD AX
Sha lass re c	Ind ivid ual sha ertifi cat re c es
Num ber of sha res	6,6 00, 000

Grimsehlstrasse 31 37555 Einbeck/Germany P.O. Box 1463 Phone +49 (0) 5561 311 0 Fax +49 (0) 5561 311 322 www.kws.com E-mail: info@kws.com

This translation of the original German version of the Annual Report has been prepared for the convenience of our English-speaking shareholders. The German version is legally binding.

Photos/Illustrations: Jan Eric Euler • Eberhard Franke • Frank Stefan Kimmel • Dominik Obertreis • Jan Schmitt • KWS Group archive

(Kompenhans)