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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-K



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|    |  |                                                                                     
|--- |  | ------------------------------------------------------------------------------------
|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended September 30, 2002

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ________ to ________ .

Commission file number 0-26519

SEMINIS, INC.

(Exact Name of Registrant as Specified in its Charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or Other Jurisdiction of Incorporation or Organization) |  | 36-0769130
(I.R.S. Employer Identification No.)

|                                                                                 |  |                      
|-------------------------------------------------------------------------------- |  | ---------------------
|2700 Camino del Sol, Oxnard, California
(Address of Principal Executive Offices) |  | 93030-7967
(Zip Code)

(805) 647-1572
(Registrants telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|                    |  |                                          
|None                |  | None                                     

Securities registered pursuant to Section 12(g) of the Act:

Class A Common Stock, par value $0.01 per share
(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [   ]

The aggregate market value of the voting stock held by non-affiliates of
Seminis, Inc. as of December 17, 2002 was approximately $47.87 million.

The number of shares outstanding of the registrants Class A Common Stock, par
value $0.01 per share and Class B Common Stock, par value $0.01 per share, as
of December 17, 2002 was 18,939,611 and 45,142,508 shares, respectively.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Stockholders of
Seminis, Inc. are incorporated by reference into Part III hereof.



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TABLE OF CONTENTS



|               |                                                                                               |  |  |  |  |  |  | 
|-------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I        
|               | Item 1. Business                                                                             
|               | Item 2. Properties                                                                           
|               | Item 3. Legal Proceedings                                                                    
|               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|               | Item 4A. Executive Officers of the Registrant                                                
|PART II       
|               | Item 5. Market Price of the Registrants Common Equity and Related Stockholder Matters       
|               | Item 6. Selected Consolidated Financial Data                                                 
|               | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|               | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                          
|               | Item 8. Financial Statements and Supplementary Data                                          
|               | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III      
|               | Item 10. Directors and Executive Officers of the Registrant                                  
|               | Item 11. Executive Compensation                                                              
|               | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|               | Item 13. Certain Relationships and Related Transactions                                      
|               | Item 14. Controls and Procedures                                                             
|PART IV       
|               | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|Exhibit Index 
|SIGNATURES    
|CERTIFICATIONS
|               | Derivative Instruments and Hedging Activities                                                
|EXHIBIT 10.14 
|EXHIBIT 10.15 
|Ex-23         
|EXHIBIT 99.3  
|EXHIBIT 99.4  



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##### Table of Contents



SEMINIS, INC.

Form 10-K Annual Report
For the Fiscal Year Ended September 30, 2002

TABLE OF CONTENTS

|         |  |                                                                                       |  |  |    |      |  | 
|-------- |  | ------------------------------------------------------------------------------------- |  |  | -- | ---- |  | 
|         |  |                                                                                       |  |  |    | Page
|         |  |                                                                                       |  |  |    |     
|PART I   |  |                                                                                       |  |  |    |      |  | 
|Item 1.  |  | Business                                                                              |  |  | 3  |     
|Item 2.  |  | Properties                                                                            |  |  | 12 |     
|Item 3.  |  | Legal Proceedings                                                                     |  |  | 13 |     
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                   |  |  | 14 |     
|Item 4A. |  | Executive Officers of the Registrant                                                  |  |  | 14 |     
|PART II  |  |                                                                                       |  |  |    |      |  | 
|Item 5.  |  | Market Price of the Registrant's Common Equity and Related Stockholder Matters        |  |  | 16 |     
|Item 6.  |  | Selected Consolidated Financial Data                                                  |  |  | 17 |     
|Item 7.  |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  |  | 19 |     
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  |  | 30 |     
|Item 8.  |  | Financial Statements and Supplementary Data                                           |  |  | 31 |     
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  |  | 31 |     
|PART III |  |                                                                                       |  |  |    |      |  | 
|Item 10. |  | Directors and Executive Officers of the Registrant                                    |  |  | 32 |     
|Item 11. |  | Executive Compensation                                                                |  |  | 32 |     
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                        |  |  | 32 |     
|Item 13. |  | Certain Relationships and Related Transactions                                        |  |  | 32 |     
|Item 14. |  | Controls and Procedures                                                               |  |  | 32 |     
|PART IV  |  |                                                                                       |  |  |    |      |  | 
|Item 15. |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  |  | 33 |     
|         |  | Exhibit Index                                                                         |  |  | 34 |     
|         |  | Signatures                                                                            |  |  | 35 |     
|         |  | Certifications                                                                        |  |  | 36 |     

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PART I




Item 1.Business

OVERVIEW

Seminis, Inc. (the Company, we) is the leading worldwide developer,
producer and marketer of vegetable and fruit seeds. We produce more than 60
species and 4,000 vegetable and fruit seed products (which do not include tree
and citrus fruits). We market our seeds through four full-line
brands  Seminis,
Asgrow, Petoseed and Royal Sluis  and five specialty and regional brands. Our
2002 net seed sales represented approximately 19% of the estimated $2.3 billion
worldwide market for vegetable and fruit seeds (excluding tree and citrus
fruits).

We use seeds as the delivery vehicle for innovative agricultural technology. We
develop seeds designed to reduce the need for chemicals, increase crop yield,
reduce spoilage, offer longer shelf life, create better tasting foods and
provide better nutritional value for consumers. We have the largest vegetable
and fruit germplasm bank in the world and substantially all of our seeds are
developed through our hybridization process.

As a result, we are creating and setting the foundation to capture value at all
steps of the vegetable and fruit production and distribution chain: growers,
distributors, processors and retailers. Our strategy is to capture this value
by marketing premium-priced seeds with quantifiable benefits and superior
traits directly to the parties along the distribution chain who are able to
derive the most value from these seeds. This value creation and capture
strategy, from grower to processor, has been successfully implemented in the
field crop industry. In April 2001, we became the first vegetable and fruit
seed provider to employ this value capture strategy at the grower level through
increased prices for our seeds.

We have established a worldwide presence and global distribution system. We
market seeds in over 150 countries, have 48 research and development facilities
in 17 countries and territories and production sites in over 25 countries. This
allows us to remain close to local markets around the world, adapt our products
to any microclimate and meet the preferences of local consumers.

We were incorporated in 1999 under Delaware law and we are the successor to an
Illinois corporation, Seminis, Inc. organized in 1994. Our principal executive
offices are located at 2700 Camino del Sol, Oxnard, CA 93030-7967, telephone
(805) 647-1572 and our internet address is www.seminis.com.

INDUSTRY OVERVIEW

Global Demand

As the global demand for vegetables and fruits increases, the demand for seeds
to grow these crops will increase as well. We believe a fundamental driver to
the increase in demand for vegetables and fruits is global population growth.
The United Nations is projecting that the world population will increase from
6.2 billion people in 2002 to 7.2 billion people in 2015. In developing
countries, which will experience much of the growth, vegetable and fruit
consumption increased 162% from 1980 to 1999. During the same period, worldwide
consumption of vegetables and fruits increased 100%.

Another driver of demand for vegetables and fruits is the health and
nutritional benefits they offer. Vegetables and fruits are proven to be
valuable in meeting basic nutritional needs and in preventing disease.
Vegetables and fruits have very little fat, are low in calories and contain
vitamins and other nutritional components. Diets high in vegetables and fruits
protect against the risk of cardiovascular disease, stroke, diabetes,
iron-deficiency anemia and cataracts and have been proven to significantly
reduce the risk of cancer. The demand for vegetables and fruits will increase
as consumers become more concerned about the health and nutritional benefits of
vegetables and fruits.

New Opportunities

In addition to an overall increase in the demand for vegetables and fruits, we
believe there will be an increase in demand for hybrid seeds for which growers
will pay a substantially higher price. The increase in demand for hybrid seeds
will come from the increasing number of benefits that can be obtained through
hybridization. These benefits include obtaining higher yields per acre,
greater uniformity, greater resistance to pests, diseases and environmental
conditions and improved quality, flavor and nutrition.

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Two breakthroughs in plant science occurred in the 1980s that may facilitate
increased productivity and higher quality vegetables and fruits. The first was
the understanding of how genes, the fundamental components of the genetic code,
work in plants to produce traits such as disease resistance or higher
nutritional content. The second was the development of transformation
technology, which is a process used to introduce new character traits into
plants. These breakthroughs have opened a window of opportunity for the seed
industry to generate value by developing products that increase productivity
for farmers and/or have characteristics that cater to the preferences of
consumers. We believe growers will pay a premium for seeds that increase
productivity because advances in agricultural technology will be necessary to
meet increased demand for vegetables and fruits as the amount of arable land in
the world decreases. Similarly, we believe growers will pay premiums for seeds
with improved output characteristics such as longer shelf life and higher
nutrition. We believe seed producers will be able to capture a portion of this
value being delivered to farmers, shippers, packers and consumers through
increased prices.

Barriers to Entry

The vegetable and fruit seed industry is characterized by high barriers to
entry. In order to develop products in the seed industry, companies need to
have access to a broad germplasm bank as well as the capital to develop
products over long periods of time. The development of a germplasm bank
requires the accumulation of genetic materials over a period of years.
Germplasm is scarce, expensive and must be refined to properly serve different
markets. Furthermore, development cycles can last 5 to 12 years before a
product is launched. Seed companies invest a considerable amount of capital in
research and development to keep the product pipeline full. Other barriers to
entry include the need for global distribution, lack of established brands and
inability to achieve economies of scale in mass production.

COMPETITIVE STRENGTHS

Leading Market Position

We have a leading market share of vegetable and fruit seeds in the United
States, Canada, Europe, Latin America, the Middle East and South Korea.

Strength of Germplasm Bank

We own what we believe is the largest vegetable and fruit germplasm bank in the
world. We view our germplasm bank as our key strategic asset. Germplasm is the
genetic information contained in seeds that captures the characteristics of
vegetables and fruits, including: (i) input traits, such as resistance to pests
and adverse weather conditions, (ii) system traits, such as long shelf life,
reduced spoilage and enhanced processing capability and (iii) output traits,
such as crop yield, color, texture, flavor, ready-to-eat convenience and
nutrition. Because germplasm is extremely difficult to replicate, we view our
germplasm bank as a barrier to entry and believe that combined with our
research and development capabilities and systems we have a competitive
advantage in developing and marketing better products.

Global Presence and Worldwide Distribution

Since our formation in 1994, we have built a global presence through a series
of ten acquisitions. Through these acquisitions, we were able to gain access
to or ownership of key technologies, patents and germplasm collections, to add
developed and proven products to our portfolio and to enter new and established
markets. We believe that through economies of scale in our global production
and distribution system, we will be able to leverage our brands and product
lines to increase market share and streamline costs. We currently market over
4,000 vegetable and fruit seed products in over 150 countries with production
sites in over 25 countries. By geographically diversifying our production
facilities, we can schedule our planting on a year-round basis, maximize yield,
reduce inventory requirements and better ensure adequate supplies of our
products.

Strength in Research and Development

We conduct research and development activities in 48 locations throughout the
world, including 16 in North America, 10 in Europe, 2 in the Middle East, 4 in
South America and Central America and 16 in Asia. We have an extensive
research and development staff with over 620 full-time employees. By
diversifying our research and development geographically, we are able to take
advantage of local breeding resources and many different microclimates. We are
also better positioned to tailor our products to local tastes and preferences.

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Brand Strength and Long Operating History

We market full lines of seeds under the Asgrow, Petoseed, Royal Sluis and,
beginning in October 2001, Seminis brands. The Asgrow, Petoseed and Royal
Sluis brands have each been in existence for over 50 years. Asgrow, Petoseed
and Royal Sluis are well recognized in the industry and their markets for
consistently developing and marketing high quality seeds for most major
vegetable and fruit species. We also market seeds through five regional or
specialty brands, which are targeted to respond to the demands of local
markets. We believe that our brands rank among the leading brands worldwide in
the vegetable and fruit seed markets.

Broad Customer Base and Growing Demand for Our Products

We have approximately 16,000 customers in over 150 countries and territories.
No customer accounted for more than 3.0% of seed revenues in fiscal year 2002
and our ten largest customers accounted for approximately 14.0% of seed
revenues in fiscal year 2002. Our product portfolio is also diversified, with
no variety accounting for more than 1.3% of seed revenues in fiscal year 2002.
Furthermore, our customer base is geographically diversified with no region
accounting for more than 38.3% of seed revenues in fiscal year 2002.

We believe that demand for our products will increase as the world population
and health awareness grows. The United Nations projects that the world
population will increase by 16.1% to 7.2 billion from 2002 to 2015. Also, the
increased awareness of the nutritional benefits of vegetables and fruits will
have a positive impact on the demand for our products. Vegetables and fruits
have proven to be valuable in meeting basic nutritional needs and in preventing
disease. We expect that the growing worldwide population and health awareness
will drive the continued growth in the vegetable and fruit market.

BUSINESS STRATEGY

Our business strategy is to focus on the following key initiatives:

Maintain Leadership in Product Development

Our current strategy is to continue to produce innovative and value-added
products to increase revenues and improve cash flows. We plan to achieve this
goal by leveraging our germplasm bank and our research and development
capabilities to develop products that are profitable and that cater to local
tastes and preferences. We also continue to develop products that will meet
the demand for a growing population under the constraint of a declining amount
of arable land. In fiscal year 2002, we launched over 80 new products.

Increase Revenues through Value Capture

The market for vegetable and fruit seeds (which excludes tree and citrus
fruits) in 2002 was approximately $2.3 billion. We believe that the worldwide
market for vegetable and fruit seeds represents only a small percentage of the
worldwide market for vegetable and fruit sales by farmers (farmgate). As part
of our value capture strategy, in April 2001, we implemented a pricing strategy
to maximize revenues and increase our share of the farmgate revenues. The
strategy includes identifying existing products that are under-priced based
upon superior traits and quantifiable benefits and continuing to develop new
products with these advanced traits and benefits.

Leverage Our Global Production and Distribution System

Because we grow and produce seeds all over the world, our portfolio of
production facilities and growers lessens the effects of adverse weather
conditions in a geographic region. We have the ability to shift production to
utilize different seasons/climates in different regions of the world to
accelerate product development.

Our global distribution system gives us inroads into the farming communities of
the world. This allows us to stay in tune with the local markets and to
develop products on a global basis for local preferences. We will continue to
gather market information for new product development and expand our
distribution system into new markets.

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PRODUCTS

Brands

Through our customer-focused, brand strategy, we provide choices to growers
with respect to product, price, promotion and service. We also advance our goal
of providing information to enable growers to anticipate changes in consumer
trends rather than reacting to them. We have four full-line brands, Asgrow,
Petoseed, Royal Sluis and, beginning in October 2001, Seminis, each with its
own identity and positioning. Asgrow, Petoseed and Royal Sluis, through the
years, have each featured important products in different regions and market
segments, establishing highly valued brand identity, which we leverage through
the introduction of new products. We also market seeds through regional or
specialty brands, which are targeted to respond to the needs of local markets.
These needs are driven by dietary preferences, desire for local products,
specialized farm growing practices and local environmental and climatic
conditions. We believe that our brands rank among the leading brands worldwide
in the vegetable and fruit seed market.

The table below shows the characteristics of each of our brands in fiscal year
2002:

|                        |  |             |      |                    |  |                                                                                |  |                                                                                |  |                  |       |  
|----------------------- |  | ----------- | ---- | ------------------ |  | ------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------ |  | ---------------- | ----- | -
|                        |  |             |      |                    |  |                                                                                |  |                                                                                |  | Percentage of   
|                        |  |             |      |                    |  |                                                                                |  |                                                                                |  | Fiscal year 2002
|                        |  | Date of     |      |                    |  |                                                                                |  | Net Seed Sales                                                                
|Brand                   |  | Acquisition |      | Principal Products |  | Principal Regions                                                              |  | by Brand                                                                      
|                        |  |             |      |                    |  |                                                                                |  |                                                                               
|Asgrow/Bruinsma         |  |             | 1994 |                    |  | Lettuce, peas,
beans, carrots,
onions, glass house
cucumber, pepper
and tomato |  | North America,
Central America,
Northern and
Southern Europe                   |  |                  | 33.6  |  
|Petoseed/California     |  |             | 1995 |                    |  | Tomato, pepper,
melon, squash,
onion and cucumber                              |  | North America,
Central America,
South America,
Southern Europe and
Middle East |  |                  | 35.9  |  
|Royal Sluis             |  |             | 1995 |                    |  | Broccoli, cabbage,
cauliflower, leeks,
lettuce, spinach
and bean               |  | Europe and Middle
East                                                         |  |                  | 18.0  |  
|Horticeres              |  |             | 1998 |                    |  | Lettuce, okra,
tomato and tropical
cauliflower                                 |  | Brazil                                                                         |  |                  |      |  
|Hungnong and Choong Ang |  |             | 1998 |                    |  | Watermelon, Chinese
cabbage, hot
peppers and
oriental radishes                 |  | South Korea                                                                    |  |                  | 10.0  |  
|Other non-branded sales |  |             |      |                    |  |                                                                                |  |                                                                                |  |                  | 2.5   |  
|                        |  |             |      |                    |  |                                                                                |  |                                                                                |  |                  |       |  
|Total                   |  |             |      |                    |  |                                                                                |  |                                                                                |  |                  | 100.0 | %
|                        |  |             |      |                    |  |                                                                                |  |                                                                                |  |                  |       |  

Sales and Marketing

Our product sales are widely diversified geographically, with Europe
representing the largest percentage of total sales outside of North and Central
America. The tables below illustrate the breadth of our worldwide seed sales
and product family in fiscal year 2002.

Fiscal Year 2002 Net Seed Sales by Region

|                                      |       |                |                  |                      |                    |  |      |       |  
|------------------------------------- | ----- | -------------- | ---------------- | -------------------- | ------------------ |  | ---- | ----- | -
|                                      |       |                | Fiscal Year 2002 |                      | As a Percentage of
|Geographic Region                     |       | Net Seed Sales |                  | Total Net Seed Sales
|                                      |       |                |                  |                     
|North and Central America             |       | $              | 165.7            |                      |                    |  | 38.3 | %    
|Southern Europe                       |       |                | 86.1             |                      |                    |  | 19.9 |      
|Northern and Eastern Europe           |       |                | 46.3             |                      |                    |  | 10.7 |      
|Middle East and Africa                |       |                | 39.4             |                      |                    |  | 9.1  |      
|South America/Australia & New Zealand |       |                | 37.7             |                      |                    |  | 8.7  |      
|Asia                                  |       |                | 57.1             |                      |                    |  | 13.3 |      
|                                      |       |                |                  |                      |                    |  |      |      
|                                      | Total |                | $                | 432.3                |                    |  |      | 100.0 | %
|                                      |       |                |                  |                      |                    |  |      |      

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Fiscal Year 2002 Net Seed Sales by Family

|                                                                                       |       |                        |               |       |  
|-------------------------------------------------------------------------------------- | ----- | ---------------------- | ------------- | ----- | -
|                                                                                       |       |                        | Percentage of
|Product Family                                                                         |       | Fiscal Year 2002 Sales
|                                                                                       |       |                       
|Solanaceous (tomato, pepper, eggplant, okra)                                           |       |                        | 30.0          | %    
|Cucurbits (melon, cucumber, pumpkin, squash)                                           |       |                        | 23.2          |      
|Large Seed (bean, peas, sweet corn)                                                    |       |                        | 15.0          |      
|Brassica (broccoli, Brussels sprouts, cabbage,
cauliflower, bok choy, Chinese cabbage) |       |                        | 11.8          |      
|Root and Bulb. (onion, leek, beet, carrot, radish)                                     |       |                        | 10.6          |      
|Leafy and Other (lettuce, spinach, celery)                                             |       |                        | 9.4           |      
|                                                                                       |       |                        |               |      
|                                                                                       | Total |                        |               | 100.0 | %
|                                                                                       |       |                        |               |      

We reinforce the market positions of our products through strategic planning,
pricing and communications. We believe that strong brands provide an advantage
in the marketplace when introducing new varieties. The reputation, reliability
and trust associated with our brands can lend credibility to representations
made regarding new products.

Over the last year, we have reviewed our regional brand strategy in order to
leverage our brand recognition and reputation, while optimizing our
infrastructure in sales teams and breeding programs. By doing so, we continue
to provide new products in a way that will be supported by brand identity and
market opportunity.

This review resulted in the following:



| |  | we rationalized our product portfolio from over 6,000 varieties to just over
4,000,                                              
|- |  | ---------------------------------------------------------------------------------------------------------------------------------
| 
| |  | we consolidated sales teams around the world to meet market needs and                                                            
| 
| |  | we established teams of breeders focused on specialized lines of products and eliminated breeder redundancies in target  markets.

We sell our products worldwide by using a wide range of distribution strategies
involving direct sales, dealers, distributors and importers. Largely driven by
local market needs, our distribution strategy for each geographic region is
designed to maximize the market penetration of our brands.

While an important proportion of our sales are direct to growers, we also
foster close relationships with dealers and distributors. Where there is a
market need, we use these dealers and distributors as an outside direct sales
force. Dealers and distributors extend our brands ability to reach growers in
areas where there are geographic or other limitations to direct sales efforts.
We are highly selective in the dealers and distributors chosen to represent our
brands. Dealers and distributors are selected based on shared vision,
technical expertise, local market knowledge and financial stability. In
addition, we build dealer/distributor loyalty through an emphasis on service,
access to breeders, joint trials, ongoing training and extensive promotional
material support.

Product Development

We rely heavily on plant breeding supplemented with molecular and cellular
technology to create new product innovations. We focus our internal product
development activities on products that are likely to have practical market
applications, create significant market value, command premium pricing and
capture leading local market share.

We currently own or have pending over 132 patents in such areas as virus
resistance, product quality, breeding technology, gene expression, cell
selection and resistance genes. A total of 7 patents were issued and 14 new
patent applications were filed in fiscal year 2002. In addition, we have
protected more than 382 varieties under plant variety protection laws and we
have applications pending on additional 196 varieties.

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Our new product development efforts utilize plant breeding, proprietary
technology, biotechnology, molecular and cell biology and plant pathology to
introduce innovative products to the marketplace in an efficient and
cost-effective manner. We augment our internal product development efforts
through technological alliances with leading companies, research institutions
and universities. We believe that our internal research and development
capability and access to innovative technology, coupled with our extensive
germplasm resources, position us to best meet the changing demands and
preferences of growers and end-consumers and increase our penetration in the
value chain in the vegetable and fruit industry.

During fiscal year 2002, we believe our new product sales represented
approximately 5.0% of revenue and existing products introduced into new
countries or new markets over the last three years represented over 25.0% of
total seed sales.

Product Development Platform

We conduct research and development activities in 48 locations throughout the
world, including 16 in North America, 10 in Europe, 2 in the Middle East, 4 in
South and Central America and 16 in Asia. By diversifying our research and
development geographically, we are able to take advantage of local breeding
resources and many different microclimates. We are also better able to tailor
our products to local tastes and preferences.

Each region of the world has particular requirements for the production of
vegetables and fruits. These requirements are driven by local environmental
conditions such as temperature or rainfall as well as local consumer preference
such as very sweet pink tomatoes in Japan or more acidic red tomatoes in Italy.
We maintain an internally developed, proprietary database that contains
information on local production and local consumer needs. We have compiled the
information in this database to enable our plant breeders and marketing and
sales personnel to more effectively design new products to meet the needs of
local markets.

We incurred $44.3 million, $52.4 million and $58.4 million of expenses related
to research and development during fiscal years 2002, 2001 and 2000,
respectively. We have an extensive research and development staff with over 620
full-time people employed in research and development functions, including over
120 professionals with Ph.D. or M.S. degrees, including 79 plant breeders, 16
biotechnologists and 16 pathologists. Our plant breeding staff is structured by
groups of related crops (families). Within each family, breeding is further
structured by species to enhance product development efficiencies and
adequately respond to changing consumer demands and preferences. All plant
breeders have access to technology developed from our biotechnology,
biochemistry and pathology laboratories. We provide incentives to our breeders
to ensure that our new products are targeted at viable markets.

Germplasm

We own what we believe is the largest vegetable and fruit germplasm bank in the
world. Our germplasm bank is our key strategic asset. Germplasm, our bank of
genetic information, is contained in millions of seeds. These seeds capture
the characteristics of vegetables and fruits grown for our customers in
different regions of the world, including input traits, such as resistance to
pests and adverse weather conditions and output traits, such as crop yield,
color, texture, flavor and ready-to eat convenience. This extensive germplasm
resource is extremely difficult to replicate, having been developed through
more than 150 years of intensive research and development efforts.

The merger of the Petoseed, Asgrow and Royal Sluis germplasm, plus the
additions of germplasm from Bruinsma, Hungnong, Choong Ang and other acquired
vegetable seed businesses, has created a very diverse germplasm resource. The
strength of our germplasm is the extensive diversity of materials available and
the genetic characteristics it contains. Our breeders utilize our germplasm,
as well as our proprietary technologies, to develop innovative products
suitable to the needs of different markets and conditions. Our extensive
germplasm base is the basis for continued development of innovative products
and future growth.

Technology

Our product development technology positions us as one of the leaders in
agricultural innovation. The time and capital required for the development of
new products represent the most formidable barriers to entry in the vegetable
and fruit seed industry. On average, it takes five to 12 years for a
proprietary variety to reach commercial viability. We employ biotechnology,
biochemistry, plant-to-plant genomics, tissue culture, dihaploids, cytoplasmic
male sterility and molecular markers to enhance our plant breeding programs and
improve the efficiency of our new product development efforts.

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Breeding  We maintain significant breeding programs for 28 major vegetable and
fruit species that yielded more than 80 commercial varieties and more than 150
non-commercial products in fiscal year 2002. Our breeding strategy is to
create vegetable and fruit hybrids and varieties with combinations of traits
that are superior to principal competitor hybrids and varieties that meet or
anticipate the changing demands of the market. These improved traits include
more economical production, improved yields, superior disease resistance,
environmental tolerance, longer shelf lives, superior processing
characteristics and consumer benefits such as improved taste, appearance,
nutrition, ready-to-eat convenience and health benefits.

Plant and Genetic
Technology  Through the use of our proprietary processes, we
enhance the efficiency of our breeding programs by enabling our breeders to
identify and incorporate important plant traits into breeding lines, while
significantly reducing the lead-time necessary to introduce commercially viable
products. These proprietary processes include the use of tissue culture,
dihaploid breeding, cytoplasmic male sterility, molecular markers, genomics and
biotechnology.

Plant Pathology  Vegetables and fruits are susceptible to diseases that can
affect yield as well as quality of the final product. In order for our plant
breeders to develop vegetable and fruit varieties resistant to diseases, we
believe we have established the largest plant pathology group in the industry
to identify and understand diseases important in vegetables and fruits. With
16 scientists in a network of laboratories throughout the world, we are
currently working on more than 100 different diseases, targeting those that
have the greatest impact on commercial vegetable and fruit production.

As a result of these efforts, we lead the industry by providing what we believe
to be the widest range of disease resistant hybrids that require reduced or no
chemical applications while enhancing growers yield potential. Our plant
pathology resources also enable us to maintain rigorous quality control
standards. All seed-lots are screened for a wide variety of diseases that could
be carried on the seed. Lots that may be contaminated are treated to destroy
the disease organisms or are destroyed.

Strategic Relationships

We actively seek access to technology applicable to vegetables and fruits from
companies, research institutions and leading universities. Either directly or
through Savia, our majority owner, we have over 100 technology agreements
providing access to germplasm, genes, technology, patents and proprietary
knowledge. We actively develop collaborations and acquire technologies from
private corporations, research institutions and leading universities. We
believe that our investment in technology agreements and collaborations reduces
the cost and risk normally associated with new product development, as we
utilize collaborators for most of our basic research. We typically share the
value created as a result of our agreements and collaborations with our
partners once a product reaches commercialization.

Production and Operations

We typically contract with seed growers to produce 80-85% of our seeds. The
balance is produced on company-owned farms. We provide the producer with male
and female ''parent lines for hybrid varieties and basic stock seed for open
pollination varieties, which are multiplied into commercial quantities. The
grower returns the seeds to one of our operations facilities for cleaning,
quality control, packaging and climate-controlled storage prior to sale to the
customer.

Our seeds are produced both domestically and internationally in 25 countries in
the Northern and Southern Hemispheres to mitigate growing risks associated with
weather or disease in any one region and to replicate local growing conditions.
In the United States, we produce seeds in Arizona, California, Idaho, Oregon
and Washington through contract production with high-quality, dependable
growers. Seeds are produced internationally through subsidiaries in Argentina,
Canada, Chile, France, Guatemala, Hungary, Italy, Mexico, New Zealand, Peru,
South Africa, South Korea, Thailand and the Netherlands and through exclusive
agents using our proprietary technology in Australia, China, Czech Republic,
Denmark, Ecuador, Germany, India, Israel, Italy, Japan, Latvia, New Zealand,
Romania, Slovakia, South Africa, Taiwan, Tanzania, Turkey and Vietnam.

By geographically diversifying our production facilities, we can schedule
planting on a year-round basis, maximize yield, reduce inventory requirements
and better ensure adequate supplies. In addition, we manage the availability
of quality products throughout the world by maintaining production capabilities
for each variety in at least two locations in each hemisphere. For example, a
new variety with strong, unanticipated demand in the Northern Hemisphere can be
supplied by using additional production from the Southern Hemisphere.

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We control contract production globally by providing on-site management and
technical personnel to oversee the production process. We supply producers with
stock seed, specialized hybridizing techniques and specialized sowing and
harvesting equipment to ensure product quality. Production is split among
numerous species, ranging from hand-labor intensive hybrid crops such as
peppers and tomatoes, to machine planted and harvested seed crops such as peas,
beans and sweet corn. Product quantities are determined by long-term sales
forecasts, product safety stock in inventory and the production history for the
region and product.

We have main processing facilities in California, Idaho, Washington, Chile,
Italy, Hungary, the Netherlands and South Korea and auxiliary processing
centers in Brazil, New Zealand and India. The location of our seed processing
centers is intended to facilitate the flow of seeds from production areas to
major markets. Our planning department utilizes a specially designed logistics
system, which integrates the planning functions in production, operations and
sales. The implementation of this system has provided real time information
about inventory from crop in ground to finished and available inventory for
sales over a four-year time horizon.

Quality Assurance

Quality assurance (QA) oversees an extensive program that is designed to build
quality into the seed, beginning at the breeder level, continuing through
production, processing and sale of the commercial seed. This group conducts
extensive testing of our seed to confirm genetic purity and identity, both in
the field and through molecular techniques, fieldwork in molecular purity,
hybridity and identity analysis, as well as germination and physical purity
evaluations. We also test the general health of the seed.

QA sets guidelines for the production and operations process, as well as
monitors the correct application of procedures. In addition, this group
interfaces with our customers to ensure their satisfaction with our products
and services, gathering, analyzing and disseminating quality-related
information to all our internal areas involved in the supply chain. As a
result, we capitalize on the experience and historical information available to
us across regions and functions.

COMPETITION

We face direct competition from technological advances by competitors such as
other seed companies, chemical and pharmaceutical companies and biotechnology
companies, many of which have substantially greater resources than we do. To
remain competitive, we expend approximately 10.0% of our revenue from seed
sales in research and development and strive to maintain technological
alliances.

Our principal global competitors are Syngenta Seeds Inc., Sakata Seed Corp. and
Groupe Limagrain. We also face local competition in each region. We believe
that the key competitive drivers in the industry are proven performance,
customer support in the field as well as price and service. We believe that
our global and local presence gives us a leading role in the industry as well
as a competitive advantage. The economies of scale that we have and our
ability to quickly introduce new products to market provide us with a superior
advantage in the marketplace.

INTELLECTUAL PROPERTY

We use a wide array of technological and proprietary processes to enhance our
germplasm and product development programs. These technologies and proprietary
processes enable us to create novel product concepts and reduce the time to
market by, in many cases, two to five years. We file for patents on technology
that is patentable, although we do not file for patents on all potentially
patentable technologies. We currently own or have pending patents in such
areas as virus resistance, product quality, breeding technology, gene
expression, cell selection and resistance genes, including 51 issued or allowed
patents in Australia, Canada, France, Germany, Great Britain, Italy, the
Netherlands, South Africa and the United States. We currently have 81 patent
applications filed or pending, in Argentina, Australia, Brazil, Canada, Chile,
China, the European Union, Hungary, India, Indonesia, Israel, Japan, Mexico,
New Zealand, Romania, South Korea, Saudi Arabia, Spain, Thailand, Turkey,
Ukraine and the United States.

Intellectual property rights protect our products and technologies from use by
competitors and others. Intellectual property rights of importance for us
include utility patents, plant variety protection (PVP) certificates under
plant variety protection laws, trademarks and trade secrets. The protection of
our germplasm and varieties through patents and PVP certificates is focussed on
open-pollinated varieties, parental lines, traits and gene technologies related
to hybrid varieties, novel traits, novel breeding technologies, molecular
markers and disease resistance.

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In the United States, the European Union, Japan and many other countries, plant
varieties can be protected under laws which grant rights to plant breeders to
protect their seeds, including the right to prevent third parties from
importing or exporting, storing, processing, reproducing or selling protected
varieties within the territory of protection. We have protected 382 plant
varieties under plant variety protection certificates or plant variety right
certificates in the United States, the European Union and other countries. We
have another 196 applications for plant variety protection pending, mostly in
the United States and the European Union.

Apart from obtaining patent and PVP protection Seminis has developed a
corporate policy to protect its proprietary and confidential information such
as trade secrets. In the past fiscal year a corporate policy has been
announced. The implementation of this policy is now underway in the different
functional areas of the company. The objectives of the trade secret policy are
to prevent disclosure of sensitive information and to protect the companys
legal interests if its trade secrets are appropriated.

Recently the registration and maintenance of trademarks were transferred from
the marketing to the Intellectual Resource Protection department. Seminis owns
a large portfolio of trademarks in many countries of the world.

We intend to continue developing comprehensive intellectual property and
protection through utility patents including key varieties and parent lines,
PVP certificates and trade secrets. We will also aggressively expand
protection of our varieties and parent lines through plant variety rights. We
will continue to aggressively enforce all our intellectual property rights.

REGULATION

The developing, testing and commercialization of seed products are subject to
legislation and regulation in various countries. These regulations may govern
genetic exclusivity, environmental concerns, product viability, performance and
labeling. While regulation adds a cost of doing business to the industry, it
also provides protection for research and development investment in new
products, thereby encouraging continued new product development.

Registration Process

Variety registration varies from country to country, but generally each variety
must be phenotypically unique. That is, the size, color, maturity and quality
must be verifiably different from the varieties that already exist in the
market. Once a variety is registered it cannot be changed. In the United
States, the registration process is voluntary and determination that a variety
is unique is left to the breeder. In Europe and many other countries, the
registration process is regulated and determination of uniqueness is made in
official trials.

Phytosanitary Certification

The purpose of phytosanitary requirements is to prevent the spread of plant
diseases that can be carried on seeds or other plant tissue. Each
seed-producing country has agricultural inspectors that check the seed crops
for the presence of specified diseases. After these crops are harvested,
laboratory tests are also conducted to ensure that the seeds are clean and free
of impurities. Having passed the inspection and lab tests, the department or
ministry of agriculture of the producing country issues a phytosanitary
certificate stating that the seeds are free of specified diseases. Importing
countries then allow the seeds to cross their borders on the basis of these
certificates.

Labeling of Genetically Engineered Products

There are no worldwide, accepted regulations for genetically engineered
products. Consequently, we are required to seek and obtain regulatory
approvals in each country where such seeds will be sold or where the harvested
produce will be exported. In the European Union and Switzerland, labeling of
genetically engineered products is mandatory, whereas in other countries, such
as Canada and the United States, labeling is required only if there is a
compositional change or a health risk associated with the product. Japan,
Australia and New Zealand now also require labeling. Other regions where we
sell products either have labeling requirements similar to the United States or
have no labeling requirements. We believe we do comply with the labeling
requirements of each country in which we conduct business.

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Environmental Regulation

Our worldwide operations are subject to a broad range of environmental and
health and safety laws, regulations and standards. These laws, regulations and
standards are related to, among other things, air emissions, waste water
discharges, the use and handling of hazardous materials, product labeling,
waste disposal practices, cleanup of environmental contamination and the use of
chemicals in our agricultural growing operations. Capital expenditures for
property, plant and equipment for environmental control activities were not
material during the fiscal years ended September 30, 2002 or September 30,
2001.

Although we are unable to predict which environmental legal requirements may be
adopted in the future, we have not made and do not anticipate making material
expenditures with respect to environmental protection. The compliance cost
associated with environmental legal requirements, however, could result in
future additional costs to operations.

EMPLOYEES

As of September 30, 2002, we had approximately 2,702 employees. We believe we
have good relations with our employees.

RECENT DEVELOPMENTS

On December 13, 2002, Savia, S.A. de C.V., Seminis majority stockholder,
announced that it signed a letter of intent with Fox Paine & Company, LLC, a
San Francisco based private equity firm, under which Fox Paine and certain
Savia related parties will acquire all of the outstanding shares of Seminis,
Inc. In response to the proposed transaction, the Company formed a special
committee of the independent directors to evaluate the proposed transaction and
its fairness and to make a recommendation to the full Board of Directors. The
proposed transaction is subject to certain conditions, including the
satisfactory completion of a review of the business and financial condition of
Seminis by Fox Paine, the negotiation of definitive agreements covering the
transactions contemplated under the letter of intent, the refinancing and
incurrence of additional indebtedness of Seminis, the acquisition of the
Seminis shares held by the public, the approval of the bank lenders of both
Savia and its controlling stockholders, the obtaining of regulatory approvals,
the approval of the Board of Directors of Seminis and Savia and the approval of
the stockholders of Seminis and Savia.

On December 17, 2002 and January 4, 2003, four purported class action lawsuits
were filed relating to the above-described transaction. Three of these actions
 Garry Firth v. Alfonso Romo Garza, et al., Civil Action No. 20085, Boris
Pozniak v. Alfonso Romo Garza, et al., Civil Action No. 20097 and Pablo Herranz
v. Seminis, Inc., et al., Civil Action No. 20105  were filed in the Delaware
Court of Chancery (New Castle County), while the fourth, Mark Rosales v.
Seminis, Inc., Case No. CIV216255, was filed in California Superior Court
(Ventura County). The Firth, Pozniak and Herranz complaints name as defendants
Savia S.A. de C.V. (Savia) and Seminis, Inc. (Seminis), along with Seminis
directors. The Rosales complaint names as a defendant Seminis and its
directors. All four complaints purport to be brought on behalf of Seminis
common stockholders or their successors. All four complaints allege that the
above-described transaction, if consummated, would provide insufficient
consideration to Seminis common stockholders and allege that the defendants
breached their fiduciary duties in connection with the transaction. The
complaints seek a preliminary and permanent injunction to enjoin the
transaction and, in the event the transaction is consummated, rescission and
damages. The defendants will vigorously defend these actions.




Item 2.Properties

In fiscal year 2000, we relocated to our new worldwide headquarters and
processing facility located in Oxnard, California. This facility is equipped
with some of the highest quality, state-of-the-art, seed processing equipment
and has been specifically designed for optimum storage conditions for vegetable
and fruit seeds, to further ensure high quality seed inventory. Within the
production process, we directly control significant, open-field production
capacity in Chile, Mexico and Peru on land predominantly owned by us. Our main
greenhouse production facilities are located in Mexico, on sites owned by us
and in Chile, the Netherlands and France, on sites owned by us, but contracted
out to third parties that grow seeds exclusively for us.

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We maintain 25 facilities throughout the world, equipped to handle activities
such as seed harvesting, cleaning, sizing, treating, testing and packaging. In
addition to our worldwide headquarters, we own and operate production and
processing facilities in Idaho, Washington, Chile, France, New Zealand, South
Africa, South Korea, Thailand, the Netherlands, Brazil, Italy, India and
Hungary.

We conduct our research primarily at five company-owned research centers in
France, Italy, South Korea, the Netherlands and the United States. We also
conduct limited research at seven owned and ten leased facilities.




Item 3.Legal Proceedings

We are involved from time to time as a defendant in various lawsuits arising in
the normal course of business. We believe that no current claims, individually
or in the aggregate, will have a material adverse effect on our business,
results of operations or financial condition.

As part of the formation of LSL PlantScience, LSL Biotechnologies contributed
certain agreements between LSL Biotechnologies and a third party. These
agreements contain provisions that permanently restrict the third party from
engaging in the development or marketing of open field tomato seeds having
long-shelf-life characteristics in certain areas in the world, including North
America. In September 2000, the Antitrust Division of the United States
Department of Justice filed suit in the United States District Court for the
District of Arizona against LSL PlantScience, LSL Biotechnologies and our
Company to delete these restrictive provisions. On March 29, 2002, the United
States District Court dismissed without prejudice the action against LSL
PlantScience, LSL Biotechnologies and Seminis.

In January 2002, melon growers in Costa Rica notified us that our Dorado melon
seeds were infected with Watermelon Fruit Blotch. Growers who purchased the
infected Seminis seeds and growers whose crops were infected by the bacteria
that spread from crops grown with the infected Seminis seeds have claimed
damages against us. The claims related to those growers who purchased Seminis
seeds have been settled for approximately $5.8 million, of which, approximately
$2.6 million was recovered under our errors and omissions insurance policy and
the remainder of the settlement was paid by the Company by July 2002. The
claims related to the growers with infected crops total approximately $5.2
million and we believe these claims are covered under our general liability
insurance policy. We have tentatively settled all of these claims and we have
advanced approximately $2.1 million to the growers; however, we are unable to
finalize the settlement because our general liability insurance carrier has
tentatively denied coverage. We are continuing to negotiate with our general
liability insurance carrier on this matter. In the event we cannot finalize the
settlement, claims could increase above $5.2 million.

In early 2000, we filed a suit against Dietrich Schmidt, the former president
of Seminis and the current president of United Genetics, a competitor of ours,
United Genetics and two former Seminis breeders, Ken Owen and Wei Ouyang, for
trade secret misappropriation and breach of contract. Schmidt filed a
counterclaim for defamation against us. We were unsuccessful on our claims for
trade secret misappropriation and breach of contract and Schmidt was successful
on his counterclaim with the court awarding him $1 in nominal damages. The
court subsequently awarded Schmidt, Owen, Ouyang their attorneys fees. We
have appealed certain aspects of the judgement, including the fee award. The
appeal is still pending and is not expected to be decided until 2003.

On December 17, 2002 and January 4, 2003, four purported class action lawsuits
were filed relating to the proposed transaction under which Fox Paine &
Company, LLC, a San Francisco based private equity firm and certain Savia
related parties will acquire all of the outstanding shares of Seminis, Inc.
Three of these actions  Garry Firth v. Alfonso Romo Garza, et al., Civil
Action No. 20085, Boris Pozniak v. Alfonso Romo Garza, et al., Civil Action No.
20097 and Pablo Herranz v. Seminis, Inc., et al., Civil Action No. 20105 
were filed in the Delaware Court of Chancery (New Castle County), while the
fourth, Mark Rosales v. Seminis, Inc., Case No. CIV216255, was filed in
California Superior Court (Ventura County). The Firth, Pozniak and Herranz
complaints name as defendants Savia S.A. de C.V. (Savia) and Seminis, Inc.
(Seminis), along with Seminis directors. The Rosales complaint names as a
defendant Seminis and its directors. All four complaints purport to be brought
on behalf of Seminis common stockholders or their successors. All four
complaints allege that the above-described transaction, if consummated, would
provide insufficient consideration to Seminis common stockholders and allege
that the defendants breached their fiduciary duties in connection with the
transaction. The complaints seek a preliminary and permanent injunction to
enjoin the transaction and, in the event the transaction is consummated,
rescission and damages. The defendants will vigorously defend these actions.

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Item 4.Submission of Matters to a Vote of Security Holders

The Annual Meeting of Stockholders of the Company was held on September 26,
2002. At the Annual Meeting, Alfonso Romo Garza, Jose Manuel Garcia Garcia,
Eugenio Najera Solorzano, Eugenio Garza Herrera and William F. Kirk were
elected as directors of the Company. Over 82% of the voting shares voted in
favor of the election of the aforementioned directors.

At the Annual Meeting, Stockholders approved the issuance of 37,669,480 shares
of Class A common stock to Savia, S.A. de C.V. in exchange for the cancellation
of the shares of Class C preferred stock and Additional Paid-In
Capital and $10.0 million of accrued and unpaid dividend thereon. This proposal received
123,964,096 votes for approval, 122,945 votes against approval and 27,205 votes
abstaining.

At the Annual Meeting, Stockholders approved the First Amendment to the
Seminis, Inc. 1998 Stock Option Plan, as Amended and Restated. This proposal
received 123,502,338 votes for approval, 586,229 votes against approval and
25,679 votes abstaining.

At the Annual Meeting, Stockholders approved the Seminis Inc. Restricted Stock
Plan of 2001. This proposal received 123,866,028 votes for approval, 233,539
votes against approval and 14,679 votes abstaining.

At the Annual Meeting, Stockholders approved the appointment of
PricewaterhouseCoopers LLP as the Companys independent accountants for the
fiscal year beginning October 1, 2001. This proposal received 123,964,511
votes for approval, 136,910 votes against approval and 12,825 abstaining.

Although the Exchange Agreement was approved by the Stockholders at the Annual
Meeting, it is subject to customary closing conditions and approvals by
creditors of Savia and the Company. At this time, all of the closing
conditions and approvals have not been satisfied and therefore, the exchange
has not been consummated. The Company may not complete all of the transactions
contemplated under the Exchange Agreement until the conditions and approvals
are obtained or waived, including the payment by the Company of the accrued and
unpaid dividends on the Class B preferred stock and the consent of the lenders
under the Companys Syndicated Credit Facility.




Item 4A.Executive Officers of the Registrant

The following table shows our current executive officers and their areas
of responsibility. Biographies are included after the table.

|                              |  |     |    |       |  |                                                                          
|----------------------------- |  | --- | -- | ----- |  | -------------------------------------------------------------------------
|Name                          |  | Age |    | Title
|                              |  |     |    |      
|Alfonso Romo Garza            |  |     | 52 |       |  | Chairman of the Board and Chief Executive Officer, Director              
|Eugenio Najera Solorzano      |  |     | 55 |       |  | President and Chief Operating Officer, Director                          
|Oscar Javier Velasco          |  |     | 48 |       |  | Senior Vice President, Asia                                              
|Jose Manuel Madero Garza      |  |     | 34 |       |  | Vice President, Forecasting and Inventory Management                     
|Bruno Ferrari                 |  |     | 41 |       |  | Executive Senior Vice President, Europe, Middle East and Africa          
|Gaspar Alvarez Martinez       |  |     | 47 |       |  | Vice President and Worldwide Corporate Comptroller                       
|Enrique Fernando Osorio Lopez |  |     | 51 |       |  | Vice President of Treasury, Investor Relations and Information Technology
|Charles Edward Green          |  |     | 59 |       |  | Senior Vice President, Research and Development                          
|Salvador Alanis Gracia        |  |     | 29 |       |  | Vice President, Strategic Support                                        
|Franco Campana                |  |     | 41 |       |  | Vice President, North America Sales                                      
|Jean Pierre Posa              |  |     | 49 |       |  | Vice President, South America Sales                                      
|Jorge Barrera Gutierrez       |  |     | 64 |       |  | Secretary                                                                

Alfonso Romo Garzahas been the Chairman of the Board of Seminis since October
1995 and Chief Executive Officer of Seminis since January 1, 2000. Mr. Romo has
been Chairman of the Board of Pulsar Internacional, S.A. de C.V., a private
holding company and an affiliate of Seminis, since 1984. Mr. Romo has also been
the Chairman of the Board and Chief Executive Officer of Savia, a holding
company and our majority shareholder, since 1988 and the Chairman of the Board of

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Seguros Comercial America, S.A. de C.V. since 1989. Mr. Romo is also a director
of Cementos Mexicanos, S.A. de C.V. and Gruma S.A. de C.V.

Eugenio Najera Solorzanohas been a Director of Seminis since May 1998. Mr.
Najera has been President and Chief Operating Officer of Seminis since August
2000. Mr. Najera was in charge of new business development at Savia from
August 1997 to July 2000. From November 1992 to September 1997, Mr. Najera was
Chief Operating Officer of Cigarrera La Moderna, S.A. de C.V., a manufacturer
and distributor of cigarettes. Mr. Najera is a director of Savia.

Oscar Javier Velascohas been Senior Vice President, Asia for Seminis since
June 2001. Mr. Velasco was Vice President, Strategic Services from October 2000
to May 2001 and was Vice President, Non-Core Business Activities from April
1999 to October 2000. Prior to joining Seminis, Mr. Velasco served as Vice
President of Trade Marketing and Distribution of Cigarrera la Moderna, S.A. de
C.V., from 1993 to October 2000.

Jose Manuel Madero Garzahas been Vice President, Forecasting and Inventory
Management for Seminis since August 2002. Mr. Madero was Managing Director of
Pastelerias Monterrey from April 2001 to August 2002. He was also in various
management and project coordination positions for Pulsar since January 1997.

Bruno Ferrarihas been Executive Senior Vice President, Europe, Middle East and
Africa for Seminis since November 2000. Mr. Ferrari has been Senior Vice
President of Legal and Human Resources from January 1997.

Gaspar Alvarez Martinezhas been Vice President and Worldwide Corporate
Comptroller since December 2000 and was Worldwide Finance Director of Seminis
from January 2000 to November 2000. Prior to joining Seminis, Mr. Alvarez
served as a Director of the Controlling and Financial Planning at Savia from
1997 to 1999 and Finance General Manager at Savia from 1995 to1997.

Enrique Fernando Osorio Lopezhas been Vice President, Treasury, Investor
Relations and Information Technology of Seminis since July 2001. Previously,
Mr. Osorio served as Vice President, Treasury and Investor Relations at Savia
from June 1994 to June 2001.

Dr. Charles Edward Greenhas been Senior Vice President, Research and
Development for Seminis since November 1999 and he previously directed new
technology development at Seminis from 1996 to 1999.

Salvador Alanis Graciahas been Vice President, Strategic Support for Seminis
since June 2001. Mr. Alanis joined Seminis in December 2000 working on
strategic projects and served as Senior Director, Value Capture Planning and
Control from March 2001 to June 2001. Prior to joining Seminis, Mr. Alanis was
the Corporate Manager at Bionova, a biotechnology and fresh produce company and
majority owned subsidiary of Savia from March 2000 to October 2000. Mr. Alanis
served in various business development positions at Savia from October 1996 to
March 2000.

Franco Campanahas been Vice President, North America Sales for Seminis since
October 2000 and was Director of North America Sales for Petoseed, a Seminis
brand, from March 1999 to October 2000. Mr. Campana served in various sales
management positions with Petoseed from 1988 to March 1999.

Jean Pierre Posahas been Vice President, South America Sales for Seminis since
1997. Mr. Posa served as General Manager Petoseed Chile from 1992 to 1997.

Jorge Barrera Gutierrezhas been Secretary of Seminis since February 2001. Mr.
Barrera has been Legal Counselor of Savia since 1986.

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PART II




Item 5.Market Price of the Registrants Common Equity and Related Stockholder Matters

MARKET INFORMATION FOR COMMON STOCK

Seminis Class A Common Stock began trading on the NASDAQ National Market
System on June 30, 1999 and the initial public offering of Seminis Class A
Common Stock was completed on July 5, 1999. Seminis shares of Class A Common
Stock are traded under the symbol SMNS. The following table sets forth, for
the quarters ended December 31, 1999, March 31, 2000, June 30, 2000, September
30, 2000, December 31, 2000, March 31, 2001, June 30, 2001, September 30, 2001,
December 31, 2001, March 31, 2002, June 30, 2002 and September 30, 2002, the
high and low prices as reported by the NASDAQ National Market System:

|                                          |  |      |        |     |  |   |        | 
|----------------------------------------- |  | ---- | ------ | --- |  | - | ------ | 
|Quarter                                   |  | High |        | Low
|                                          |  |      |        |    
|October 1, 1999 through December 31, 1999 |  | $    | 9.6250 |     |  | $ | 5.0000 | 
|January 1, 2000 through March 31, 2000    |  |      | 7.1875 |     |  |   | 4.1562 | 
|April 1, 2000 through June 30, 2000       |  |      | 6.4375 |     |  |   | 2.5000 | 
|July 1, 2000 through September 30, 2000   |  |      | 4.0000 |     |  |   | 1.0000 | 
|October 1, 2000 through December 31, 2000 |  |      | 1.7500 |     |  |   | 0.4375 | 
|January 1, 2001 through March 31, 2001    |  |      | 2.5312 |     |  |   | 0.4688 | 
|April 1, 2001 through June 30, 2001       |  |      | 1.7344 |     |  |   | 0.9688 | 
|July 1, 2001 through September 30, 2001   |  |      | 1.8000 |     |  |   | 0.9800 | 
|October 1, 2001 through December 31, 2001 |  |      | 1.4500 |     |  |   | 1.0400 | 
|January 1, 2002 through March 31, 2002    |  |      | 1.2900 |     |  |   | 1.0800 | 
|April 1, 2002 through June 30, 2002       |  |      | 3.6400 |     |  |   | 1.1500 | 
|July 1, 2002 through September 30, 2002   |  |      | 3.9000 |     |  |   | 2.3100 | 

The closing price quoted on the NASDAQ National Market System on September 30,
2002 was $2.930 per share. As of December 17, 2002, there were 18,939,611
shares of Class A Common Stock outstanding with 73 owners of record.

Seminis also had 45,142,508 shares of its Class B Common Stock outstanding with
14 owners of record as of December 17, 2002. The Class B Common Stock is not
traded on an exchange or in an over-the-counter market.

RECENT SALES OF UNREGISTERED SECURITIES

The following provides information as to Seminis securities sold by the
Company during fiscal years 2000, 2001 and 2002, which were not registered
under the Securities Act of 1933 as amended.

In April, May and June 2000, Seminis converted, $22.0 million, $14.0 million
and $6.0 million, respectively, of intercompany advances from Savia into 2,200
shares, 1,400 shares and 600 shares of Class C Preferred Stock. In August and
September 2000, Savia made additional equity investments of $10.0 million and
$14.0 million, respectively, in exchange for 1,000 shares and 1,400 shares of
Class C Preferred Stock. The issuance of such shares was effected in reliance
on the exemption from registration under Section 4(2) of the Securities Act.
Through September 30, 2000, 662.4 shares of Class C Preferred Stock were issued
as dividends. Through December 31, 2000, additional 299.6 shares of Class C
Preferred Stock were issued as dividends. Effective January 2001, the
dividends of Class C Preferred Stock have been converted to a cash basis in
accordance with the Board resolution on February 24, 1999. On October 1, 2002
the Board of Directors approved the conversion of the Savia additional capital
contribution and the associated paid in kind (PIK) dividends that totaled $46.7
million to be converted to 4,670 shares of Class C Preferred Stock.
Concurrently, the Board also adopted a resolution authorizing and directing an
increase in the number of shares designated as Class C Redeemable Preferred
Stock from 14,400 shares to 16,688 shares. No Class C Preferred Stock cash
dividends have been paid to date due to the prohibition mandated in the credit
agreement of the Syndicated Banks.

16



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##### Table of Contents



DIVIDENDS

Seminis has never paid cash dividends on its common stock and Class C Preferred
Stock. Under Seminis amended July 1999 credit agreement with Harris Trust and
Savings Bank, Bank of Montreal and other lenders, Seminis is prohibited from
paying cash dividends on its common stock and Class C Preferred Stock. Seminis
has paid cash dividends on its Class B Preferred Stock in the past, but not in
fiscal years 2001 or 2002. The Company is restricted from paying cash
dividends on its Class B Preferred Stock until certain conditions are met.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information concerning equity securities of the
Company that are authorized for issuance under all compensation plans (in
thousands, except per share data).

|                                                           |  |                   |         |                   |  |                          |      |                      |  |  |       | 
|---------------------------------------------------------- |  | ----------------- | ------- | ----------------- |  | ------------------------ | ---- | -------------------- |  |  | ----- | 
|                                                           |  | Number of         |         |                   |  |                          |      | Number of Securities
|                                                           |  | Securities to be  |         |                   |  |                          |      | Remaining Available 
|                                                           |  | Issued Upon       |         | Weighted-average  |  | for Future Issuance     
|                                                           |  | Exercise of       |         | Exercise Price of |  | Under Equity            
|                                                           |  | Outstanding       |         | Outstanding       |  | Compensation Plans      
|                                                           |  | Options, Warrants |         | Options, Warrants |  | [excluding Securities   
|                                                           |  | and Rights        |         | and Rights        |  | Reflected in Column (a)]
|Plan Category                                              |  | (a)               |         | (b)               |  | (c)                     
|                                                           |  |                   |         |                   |  |                         
|Equity compensation
plans approved by
security holders
(1) |  |                   | 4,422.4 |                   |  | $                        | 2.02 |                      |  |  | 254.7 | 



|1. |  | The Seminis, Inc. 1998 Stock Option Plan, as Amended and Restated, was
adopted by the Company prior to the initial public offering
of the common stock of the Company in July 1999.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 6.Selected Consolidated Financial Data

The selected consolidated financial data presented below should be read in
conjunction with Managements Discussion and Analysis of Financial Condition
and Results of Operations and the consolidated financial statements, including
the notes thereto, included herein.

In fiscal year 2002, operating expenses included $0.8 million of consulting
fees related to the companys Global Restructuring and Optimization Plan and
$7.3 million of compensation expenses related to the restricted stock awards.
The Company ceased amortization of its goodwill in accordance with
SFAS No. 142 in fiscal year 2002, whereas approximately
$9.0 million of goodwill amortization was recorded during fiscal
year 2001. Income tax expense reflected a $5.9 million U.S. tax refund and the utilization
of net operating loss carryforwards.

In fiscal year 2001, gross profit included approximately $73.9 million of
non-cash charges for inventory write-downs. Included in this amount was $58.2
million of write-downs, which occurred in conjunction with the Companys Global
Restructuring and Optimization Plan, whereby the Company rationalized its
product line from 6,000 to 4,000 varieties as well as imposed more stringent
quality standards. The loss from operations also included approximately $19.6
million of severance and other exit charges associated with the Companys
Global Restructuring and Optimization Plan and $2.6 million of compensation
expense related to restricted stock awards. Income tax expense reflected the
establishment of a valuation allowance totaling $62.8 million for certain
deferred tax assets.

In fiscal year 2000, gross profit included approximately $58.9 million of
non-cash charges for inventory write-downs. Write-downs totaling $18.4 million
related to the Global Restructuring and Optimization Plan included inventories
that were scrapped as part of the consolidation of production and distribution
facilities. The loss from operations also included approximately $19.0 million
of severance and other exit charges associated with the Companys Global
Restructuring and Optimization Plan, a $2.1 million charge related to Seminis
research incentive program and a $6.4 million impairment write-down related to
the Companys investment in LSL PlantScience.

Income (loss) from continuing operations before extraordinary items available
for common stockholders in fiscal year 1998 reflects the optional repurchase by
Seminis of a portion of its mandatorily redeemable common stock at an amount in
excess of the redemption value. Seminis was required to deduct this
difference, which totaled $134.3 million, from income (loss) from continuing
operations before extraordinary items for purposes of determining income (loss)
from continuing operations before extraordinary items available for common
stockholders and related per share amounts.

17



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##### Table of Contents



Historical data for income (loss) from continuing operations before
extraordinary items available for common stockholders reflect deductions for
dividends on preferred stock and mandatorily redeemable preferred stock, for
accretion of the redemption value of mandatorily redeemable common stock and,
in fiscal year 1998, for the excess of purchase price over redemption value of
the mandatorily redeemable common stock repurchased.

Whereas we have met our obligations as well as covenant requirements under the
amended credit facility through September 30, 2002, we must successfully
execute a refinancing plan prior to December 31, 2003 in order to meet the
final maturity of the facility. We will continue to pursue a refinancing plan,
which may include negotiation of a new credit facility, and/or placement of new
debt securities; however, there can be no assurances that we will be able to
successfully complete the refinancing. Additionally, there can be no
assurances that the Fox Paine transaction will be consummated. Failure to
comply with existing covenants, which would make the Syndicated debt
callable, or
our inability to obtain adequate financing with reasonable terms prior to
December 31, 2003 could have a material adverse impact on our business, results
of operations or financial condition.

Acquisitions and Effects of Purchase Accounting

Seminis was formed in 1994 to consolidate various industry-leading vegetable
and fruit seed brands into one consumer-oriented, agrobiotechnology company.
Seminis core business was created through the acquisition of the Asgrow seed
business from the Upjohn Company in December 1994 and the subsequent
combination of the Asgrow vegetable and fruit seed business with Petoseed and
Royal Sluis businesses in October 1995. In fiscal year 1998, Seminis completed
several acquisitions, including the acquisition of two South Korean companies,
Hungnong Seed Co., Ltd. (Hungnong) and Choong Ang Seed Co., Ltd. (Choong
Ang). In November 1998, Seminis completed the acquisition of the vegetable
seed business of Agroceres, a Brazilian company. As a result of these
transactions, the results of operations and consolidated financial position
reflect the effects of purchase accounting.

|                                                                                                                                          |  |                                       |         |      |  |      |          |      |  |      |         |   |  |   |         |   |  |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ------- | ---- |  | ---- | -------- | ---- |  | ---- | ------- | - |  | - | ------- | - |  | - | -------- | -
|                                                                                                                                          |  | For the
Years Ended September 30,    
|                                                                                                                                          |  |                                      
|                                                                                                                                          |  | 2002                                  |         | 2001 |  | 2000 |          | 1999 |  | 1998
|                                                                                                                                          |  |                                       |         |      |  |      |          |      |  |     
|                                                                                                                                          |  | (In Thousands, Except Per Share Data)
|Results of Operations:                                                                                                                    |  |                                       |         |      |  |      |          |      |  |      |         |   |  |   |         |   |  |   |          |  
|Net sales                                                                                                                                 |  | $                                     | 452,607 |      |  | $    | 449,895  |      |  | $    | 474,445 |   |  | $ | 530,633 |   |  | $ | 428,423  |  
|Gross profit                                                                                                                              |  |                                       | 280,715 |      |  |      | 217,828  |      |  |      | 237,340 |   |  |   | 328,284 |   |  |   | 265,617  |  
|Research and development expenses                                                                                                         |  |                                       | 44,316  |      |  |      | 52,441   |      |  |      | 58,364  |   |  |   | 62,421  |   |  |   | 49,416   |  
|Selling, general and administrative
expenses                                                                                              |  |                                       | 174,854 |      |  |      | 191,113  |      |  |      | 222,632 |   |  |   | 192,978 |   |  |   | 158,588  |  
|Management fees paid to Savia                                                                                                             |  |                                       |        |      |  |      |         |      |  |      |        |   |  |   |        |   |  |   | 8,465    |  
|Amortization of intangible assets                                                                                                         |  |                                       | 17,065  |      |  |      | 28,034   |      |  |      | 30,454  |   |  |   | 27,896  |   |  |   | 14,457   |  
|Income (loss) from operations                                                                                                             |  |                                       | 44,480  |      |  |      | (53,760  | )    |  |      | (74,110 | ) |  |   | 44,989  |   |  |   | 34,691   |  
|Income (loss) from continuing
operations before extraordinary
items                                                                       |  |                                       | 16,086  |      |  |      | (134,455 | )    |  |      | (80,783 | ) |  |   | 2,387   |   |  |   | 6,762    |  
|Income (loss) from continuing
operations before extraordinary
items available for common
stockholders                                     |  |                                       | (2,602  | )    |  |      | (152,779 | )    |  |      | (89,407 | ) |  |   | (4,097  | ) |  |   | (133,367 | )
|Income (loss) from continuing
operations before extraordinary
items available for common
stockholders per common share,
basic and diluted |  | $                                     | (0.04   | )    |  | $    | (2.55    | )    |  | $    | (1.49   | ) |  | $ | (0.10   | ) |  | $ | (4.23    | )
|Weighted average shares outstanding,
basic and diluted                                                                                    |  |                                       | 62,074  |      |  |      | 59,824   |      |  |      | 59,824  |   |  |   | 43,936  |   |  |   | 31,536   |  

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##### Table of Contents



|                             |           |   |                     |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |        | 
|---------------------------- | --------- | - | ------------------- | ------ | ---- | - | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ |  | - | ------- | ------ | 
|                             |           |   | As of September 30,
|                             |           |   |                    
|                             |           |   | 2002                |        | 2001 |   | 2000    |        | 1999 |   | 1998   
|                             |           |   |                     |        |      |   |         |        |      |   |        
|                             |           |   | (In Thousands)     
|Balance Sheet Data:          |           |   |                     |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |       
|Working capital              |           | $ | 265,030             |        |      | $ | 245,961 |        |      | $ | 25,056  |        |  | $ | 349,175 |        |  | $ | 272,097 |       
|Total assets                 |           |   | 799,997             |        |      |   | 835,357 |        |      |   | 998,037 |        |  |   | 993,362 |        |  |   | 862,189 |       
|Long-term debt               |           |   | 228,293             |        |      |   | 248,898 |        |      |   | 23,468  |        |  |   | 315,424 |        |  |   | 394,446 |       
|Subordinated debt due Savia  |           |   |                    |        |      |   |        |        |      |   |        |        |  |   |        |        |  |   | 35,857  |       
|Mandatorily redeemable stock |           |   |                     |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |       
|                             | Common    |   |                     |       |      |   |         |       |      |   |         |       |  |   |         |       |  |   |         | 48,416 | 
|                             | Preferred |   |                     | 29,500 |      |   |         | 27,500 |      |   |         | 25,500 |  |   |         | 25,000 |  |   |         | 25,000 | 
|Total stockholders equity   |           |   | 337,505             |        |      |   | 319,718 |        |      |   | 450,880 |        |  |   | 470,715 |        |  |   | 160,421 |       

In fiscal year 2000, long term debt was reclassified as current long term debt
due to the non-compliance of certain financial covenants of the credit
agreement with the Syndicated Banks. Without the reclassification long term
debt and working capital would have been $320,768 and $321,856, respectively.




Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the
Selected Consolidated Financial Data and consolidated financial statements,
including the notes thereto, appearing elsewhere herein. The following
discussion and analysis contains certain forward-looking statements which are
subject to certain risks, uncertainties and contingencies, including, without
limitation, those set forth below, which could cause Seminis actual business,
results of operations or financial condition to differ materially from those
expressed in or implied by, such statements.

RISK FACTORS

Readers should be aware that there are various risk factors including, but not
limited to, those set forth below:



| |  |  | As of December 31, 2002, we had not completed a refinancing
transaction in order to pay the remaining balance of our Syndicated
Credit Facility totalling $224.7 million.
The lenders agreed to temporarily extend the term of the credit facility
and in January 2003, a formal amendment was executed. Among other
things, the amendment extended the final maturity of the credit facility
from the previously agreed on date of December 31, 2002 to December 31,
2003, revised principal payment dates under the term loan, instituted a
new grid pricing formula to determine interest on borrowings and revised
covenant obligations. Interim principal obligations under the amendment
included $3.0 million and $9.5 million due in the third and fourth
quarters of fiscal year 2003, respectively. The remaining outstanding
amount totaling $212.2 million will be due in the first quarter of
fiscal year 2004. Upon receipt of the amended credit agreement,
long-term portions of borrowings were reclassified from current
liabilities to long-term debt as of September 30, 2002. Whereas we have
met our obligations as well as covenant requirements under the amended
credit facility through September 30, 2002, we must successfully execute
a refinancing plan prior to December 31, 2003 in order to meet the final
maturity of the facility. We will continue to pursue a refinancing plan,
which may include negotiation of a new credit facility, and/or placement
of new debt securities; however, there can be no assurances that we will
be able to successfully complete the refinancing. Additionally, there
can be no assurances that the Fox Paine transaction will be consummated.
Failure to comply with existing covenants, which would make the
Syndicated debt callable, or our inability to obtain adequate financing
with reasonable terms prior to December 31, 2003 could have a material
adverse impact on our business, results of operations or financial
condition.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The Company is currently restricted from any additional borrowings
under the Syndicated Credit Facility. As of November 2000, Seminis
parent company suspended advancing funds to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  |  | Savia owns approximately 63.4% of the Companys outstanding common
stock and controls 78.9% of the vote of its common stock. Accordingly,
Savia controls the Company and has the power to approve all actions
requiring the approval of our stockholders, including the power to elect
all of its directors. Therefore, Savia effectively controls our
management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

19



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##### Table of Contents





| |  |  | A new management team has been in place as of August 2000. The
Companys ability to generate operating profits and cash flows will be
dependent on their successful implementation of the Companys strategic
initiatives including, but not limited to, the Global Restructuring and
Optimization Plan.                                                                                                                                                                                         
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The Company continues to invest in research and development in order
to enable us to identify and develop new products to meet consumer
demands. In fiscal year 2002, our investment in research and
development represented 9.8% of net sales. Despite investments in this
area, our research and development may not result in the discovery or
successful development of new products, which will be accepted by our
customers.                                                               
|
| |  |  | The Company may have the inability to protect its intellectual
property due to the uncertainty of litigation and the ineffectiveness of
the laws in some of the countries that the Company currently has
operations, which could have a material adverse effect on our business,
results of operations or financial condition.                                                                                                                                                                   
|
| |  |  | A change in United States law protecting plant patents could take
away patent protection for the Companys patented seeds, which could
have a material adverse effect on our business, results of operations or
financial condition.                                                                                                                                                                                                                                                             
|
| |  |  | The Company faces substantial competition due to technological
advances by competitors such as other seed companies, pharmaceutical and
chemical companies and biotechnology companies. Many of these companies
have substantially greater resources than we. If a competitor
introduces a competitively successful product, it could take years to
develop a competitive seed variety, which could have a material adverse
effect on our business, results of operations or financial condition.
|
| |  |  | The Companys failure to accurately forecast and manage inventory
could result in an unexpected shortfall or surplus of seeds, which could
have a material adverse effect on our business, results of operations or
financial condition.                                                                                                                                                                                                                                                         
|
| |  |  | Extreme weather conditions, disease and pests can materially and
adversely affect the quality and quantity of seeds produced. There can
be no assurance that these factors will not affect a substantial portion
of the Companys production in any year and have a material adverse
effect on our business, results of operations or financial condition.                                                                                                                                       
|
| |  |  | Defective seeds could result in warranty claims and negative
publicity and the insurance covering warranty claims may become
unavailable or be inadequate which could have a material adverse effect
on our business, results of operations or financial condition.                                                                                                                                                                                                                              

OVERVIEW

Seminis was formed in 1994 to consolidate various industry-leading vegetable
and fruit seed brands into one consumer-oriented producer and marketer of
vegetable and fruit seeds. Our core business was created through the
acquisition of the Asgrow seed business in December 1994 and the subsequent
combination of the Asgrow business with the Petoseed and Royal Sluis seed
businesses in October 1995. Since our formation, we have been at the forefront
of the consolidation of the vegetable and fruit seed industry and have
completed ten acquisitions.

Our rapid growth through acquisitions created a highly complex operation that
impacted our results. An increasing level of inventory
as well as production and quality assurance difficulties were the primary
operating problems that resulted in us experiencing severe financial
difficulties over the past several years.

Global Restructuring and Optimization Plan

In February 2000, we announced a cost-saving initiative designed to streamline
operations, increase utilization of facilities and improve efficiencies. The
first phase of the initiative, which commenced in fiscal year 2000 and focused
on North American operations, was completed by the end of fiscal year 2001. In
June 2001, we commenced the second phase, which was targeted at our global
operations and expanded the phase to cover additional headcount reductions and
to consolidate our facilities in Holland. The key elements to the Global
Restructuring and Optimization Plan involve:



| |  | reorganizing our ten legacy seed companies into four geographical regions;
|- |  | --------------------------------------------------------------------------
| 
| |  | selling or consolidating certain operation and production facilities;     

20



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##### Table of Contents





| |  | reducing headcount that results from the reorganization and from facility consolidation;
|- |  | ----------------------------------------------------------------------------------------
| 
| |  | rationalizing our product portfolio;                                                    
| 
| |  | implementing an advanced logistics management information system; and                   
| 
| |  | divesting non-strategic assets.                                                         

In connection with phase one of the Global Restructuring and Optimization Plan,
we recorded pre-tax charges to operations of approximately $34.4 million for
restructuring costs during fiscal year 2000 that included severance and other
exit costs, inventory write-downs and costs associated with streamlining our
products portfolio. Of this amount, $18.4 million was included in cost of
goods sold for inventory write-downs. The remaining $16.0 million was included
in selling, general and administrative expenses and consisted primarily of
severance costs. The total phase one and initial phase two severance charges
related to a planned 600-employee reduction worldwide in both operational and
administrative groups.

As part of the implementation of the expanded second phase of our Global
Optimization Plan, we recorded a pre-tax charge of $12.0 million in selling,
general and administrative expenses in the third quarter of fiscal year 2001.
This charge was primarily related to severance and related costs resulting from
an additional planned 250-employee reduction worldwide in both operational and
administrative groups. In fiscal year 2001, we also recorded non-cash
inventory write-downs of $58.2 million in cost of goods sold in order to comply
with more stringent seed quality standards and to further rationalize our
product portfolio from 6,000 to 4,000 varieties. We believe we have
established adequate reserves for all of the remaining costs and expenses
related to our Global Restructuring and Optimization Plan.

The remaining components of the restructuring accruals are as follows:

|                               |       |   |         |      |          |   |           |       |            |   |            |      |           |   |            |      |            |   |           |       |            |   |      |      |  |   |   |   |  |   |      |      |   |   |     |     | 
|------------------------------ | ----- | - | ------- | ---- | -------- | - | --------- | ----- | ---------- | - | ---------- | ---- | --------- | - | ---------- | ---- | ---------- | - | --------- | ----- | ---------- | - | ---- | ---- |  | - | - | - |  | - | ---- | ---- | - | - | --- | --- | 
|                               |       |   |         |      |          |   | Amounts   |       | Balance at |   | Additional |      | Amounts   |   | Balance at |      | Additional |   | Amounts   |       | Balance at
|                               |       |   | Charges |      | Incurred |   | Sept. 30, |       | Charges    |   | Incurred   |      | Sept. 30, |   | Charges    |      | Incurred   |   | Sept. 30,
|                               |       |   | 2000    |      | 2000     |   | 2000      |       | 2001       |   | 2001       |      | 2001      |   | 2002       |      | 2002       |   | 2002     
|                               |       |   |         |      |          |   |           |       |            |   |            |      |           |   |            |      |            |   |          
|Severance and
related expenses |       | $ | 14.0    |      |          | $ | (1.8      | )     |            | $ | 12.2       |      |           | $ | 12.0       |      |            | $ | (12.3     | )     |            | $ | 11.9 |      |  | $ |  |   |  | $ | (8.6 | )    |   | $ | 3.3 |    
|Inventory
write-downs          |       |   | 18.4    |      |          |   | (18.4     | )     |            |   |           |      |           |   | 58.2       |      |            |   | (58.2     | )     |            |   |     |      |  |   |  |   |  |   |     |      |   |   |    |    
|Other                          |       |   | 2.0     |      |          |   | (2.0      | )     |            |   |           |      |           |   |           |      |            |   |          |       |            |   |     |      |  |   |  |   |  |   |     |      |   |   |    |    
|                               |       |   |         |      |          |   |           |       |            |   |            |      |           |   |            |      |            |   |           |       |            |   |      |      |  |   |   |   |  |   |      |      |   |   |     |    
|                               | Total |   | $       | 34.4 |          |   | $         | (22.2 | )          |   | $          | 12.2 |           |   | $          | 70.2 |            |   | $         | (70.5 | )          |   | $    | 11.9 |  |   | $ |  |  |   | $    | (8.6 | ) |   | $   | 3.3 | 
|                               |       |   |         |      |          |   |           |       |            |   |            |      |           |   |            |      |            |   |           |       |            |   |      |      |  |   |   |   |  |   |      |      |   |   |     |    

To date, there have been no material adjustments to amounts accrued under the
plan. The remaining $3.3 million reserve balance is expected to be utilized in
fiscal year 2003.

Improved Financial Performance

As a result of the implementation of the global restructuring and optimization
plan, we have significantly improved our cash flows and established the basis
for future profitable operations through:



| |  |  | decreased operating expenses primarily through a reduction in global
headcount and the consolidation of production and operations facilities;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | improved collections of accounts receivable;                                                                                                 
|
| |  |  | reduced inventory purchases resulting from improved forecasting and inventory controls; and                                                  
|
| |  |  | the sale of non-core assets.                                                                                                                 

Together with price increases that we implemented in April 2001, during fiscal year 2002, we:



| |  |  | reduced our debt by $57.6 million;                                           
| | - |  | -----------------------------------------------------------------------------
|
| |  |  | reduced operating expenses as a percentage of sales by 7.9%; and             
|
| |  |  | generated positive cash flows from operations of approximately $38.1 million.

21



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##### Table of Contents



Results of Operations

The table below sets forth Seminis results of operations data expressed as a
percentage of net sales.

|                                                             |  |                                  |       |      |  |      |       |    |  |  |       |   
|------------------------------------------------------------ |  | -------------------------------- | ----- | ---- |  | ---- | ----- | -- |  |  | ----- | --
|                                                             |  | Fiscal Years Ended September 30,
|                                                             |  |                                 
|                                                             |  | 2002                             |       | 2001 |  | 2000
|                                                             |  |                                  |       |      |  |     
|Net sales                                                    |  |                                  | 100.0 | %    |  |      | 100.0 | %  |  |  | 100.0 | % 
|Gross profit                                                 |  |                                  | 62.0  |      |  |      | 48.4  |    |  |  | 50.0  |   
|Research and development expenses                            |  |                                  | 9.8   |      |  |      | 11.7  |    |  |  | 12.3  |   
|Selling, general and administrative expenses                 |  |                                  | 38.6  |      |  |      | 42.4  |    |  |  | 46.9  |   
|Amortization of intangible assets                            |  |                                  | 3.8   |      |  |      | 6.2   |    |  |  | 6.4   |   
|                                                             |  |                                  |       |      |  |      |       |    |  |  |       |   
|Income (loss) from operations                                |  |                                  | 9.8   |      |  |      | (11.9 | )  |  |  | (15.6 | ) 
|Interest expense, net                                        |  |                                  | (6.1  | )    |  |      | (8.7  | )  |  |  | (7.1  | ) 
|Other non-operating income (expense), net                    |  |                                  | 0.4   |      |  |      | (0.4  | )  |  |  | 0.5   |   
|                                                             |  |                                  |       |      |  |      |       |    |  |  |       |   
|Income (loss) from continuing operations
before income taxes |  |                                  | 4.1   |      |  |      | (21.0 | )  |  |  | (22.2 | ) 
|Income tax benefit (expense)                                 |  |                                  | (0.5  | )    |  |      | (8.9  | )  |  |  | 5.2   |   
|                                                             |  |                                  |       |      |  |      |       |    |  |  |       |   
|Net income (loss)                                            |  |                                  | 3.6   | %    |  |      | (29.9 | )% |  |  | (17.0 | )%
|                                                             |  |                                  |       |      |  |      |       |    |  |  |       |   

Year Ended September 30, 2002 Compared With Year Ended September 30, 2001

Net Sales

Net sales increased 0.6% to $452.6 million for the year ended September 30,
2002 from $449.9 million for the year ended September 30, 2001. The result was
impacted by $4.8 million of negative currency fluctuations relating to weakness
in the European Monetary Union Euro, Argentinean Peso and Brazilian Real versus
the United States Dollar during the year ended September 30, 2002, compared to
the same period in the prior fiscal year. In addition, the year ended
September 30, 2001 included incremental net sales of $10.7 million from a
non-core business divested in January 2002. In constant dollars, stated at
monthly average exchange rates for fiscal year 2001 and excluding the sales of
the non-core businesses, net seed sales would have increased 4.0%. This
increase was primarily attributable to higher sales of spinach, onion,
cucumber, tomato, white cabbage, peas and bean varieties in the Europe, Middle
East and Africa region. Also, the North and Central America sales regions
benefited from increased sales of lettuce, spinach and sweet and hot pepper
varieties. The sales increases were primarily attributed to price increases
implemented in these respective regions. Overall sales increases were
partially offset by decreases in the Far East region sales due to weak economic
and poor weather conditions and in South American sales due to the economic
instability in Argentina, which also affected other countries in the region.

Gross Profit

Gross profit increased 28.9% to $280.7 million for the year ended September 30,
2002 from $217.8 million for the year ended September 30, 2001. Gross margin
increased to 62.0% for the year ended September 30, 2002 from 48.4% for the
year ended September 30, 2001. The improvement in both gross profit and gross
margin was primarily due to a non-cash inventory write-down of $58.2 million
taken during fiscal year 2001, related to the Global Restructuring and
Optimization Plan. Excluding the non-cash inventory write-down, gross margin
for the period ended September 30, 2001 would have been 61.4%. The increase
was also due to seed price increases within the Europe, Middle East and Africa
and the North and Central America sales regions as well as an improved product
mix. Additionally, there was approximately $3.1 million of freight and
handling charge revenue that was recognized in net sales during the year ended
September 30, 2002 in compliance with EITF 00-10, Accounting for Shipping and
Handling Fees and Costs,; with the corresponding expense recorded in selling,
general and administrative expenses. In the prior year, through June 29, 2001,
such freight and handling charge revenue was netted against the corresponding
selling, general and administrative expenses, other than $1.3 million that was
recognized in net sales in the fourth quarter of fiscal year 2001.

Research and Development Expenses

Research and development expenses decreased 15.5% to $44.3 million for the year
ended September 30, 2002 from $52.4 million for the year ended September 30,
2001. $4.2 million of the decrease was due to personnel reductions and $1.3
million of other expenses resulted from initiatives of the Global Restructuring
and Optimization Plan. The decrease was also attributable to an approximate
$0.9 million research grant received in Europe which offset research and
development expenses during the year ended September 30, 2002. In addition,
expenses decreased by approximately $1.6 million due to the impact of the
divestiture of a non-core business.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 8.5% to $174.9 million
for the year ended September 30, 2002 from $191.1 million for the year ended
September 30, 2001. The decrease was primarily the result of approximately
$12.0 million of severance provision, $4.3 million of facility consolidating
costs and $3.3 million of consulting fees due to restructuring initiatives
incurred in fiscal year 2001 compared to $0.8 million of consulting fees for
restructuring initiatives in fiscal year 2002. Additionally, the decrease was
attributable to the elimination of approximately $8.9 million of expenses from
a non-core business divested in January 2002, combined with the impact of
further headcount reductions following the implementation of the Global
Restructuring and Optimization Plan. The decrease in expenses was partially
offset by a compensation charge of $7.3 million related to an employee
restricted stock award plan recorded during the year ended September 30, 2002,
compared to $2.6 million recorded during the prior fiscal year. Additionally,
the decrease in expenses was offset by approximately $3.1 million of freight
and handling charge revenue that was recognized in net sales during the year
ended September 30, 2002. In the prior year, such freight and handling charge
revenue was netted against the corresponding selling, general and
administrative expenses, other than $1.3 million that was recognized in the
fourth quarter of fiscal year 2001.

Amortization of Intangible Assets

Amortization of intangible assets decreased 39.1% to $17.1 million for the year
ended September 30, 2002 from $28.0 million for the year ended September 30,
2001. The decrease was primarily due to the adoption of SFAS No. 142,
Goodwill and Other Intangible Assets. The pronouncement requires that
periodic amortization of goodwill be ceased and that annual reviews of the fair
value of the goodwill need to be performed to determine if an impairment of the
goodwill asset value exists. Upon completing our analyses, no
impairment adjustments in goodwill and
other intangible assets were required. Therefore, we recorded no goodwill
amortization in accordance with SFAS No. 142 in fiscal year 2002, whereas
approximately $9.0 million of goodwill amortization was recorded during fiscal
year 2001. The decrease was also due to the effect of latter stages of
accelerated amortization of intangible assets related to purchase accounting.
The decrease was partially offset by the currency impact from the fluctuation
of the South Korean Won on South Korean based intangible assets.

Interest Expense, Net

Interest expense, net, decreased 29.1% to $27.7 million for the year ended
September 30, 2002 from $39.1 million for the year ended September 30, 2001.
The decrease was primarily due to lower average debt balances and interest
rates during fiscal year 2002 compared to the prior fiscal year. During the 12
months ended September 30, 2002, our bank debt balance decreased by
approximately $57.6 million.

Other Non-Operating Income (Expense), Net

We had other non-operating income, including foreign currency gain (loss), net,
of $1.8 million for the year ended September 30, 2002 as compared to other
non-operating expense, net, of $1.6 million for the year ended September 30,
2001. Other non-operating income, net, for the year ended September 30, 2002
primarily consists of an approximate $3.9 million gain from the sale of a
non-core business in January 2002, offset by foreign currency losses of $2.2
million resulting from currency fluctuations in South America and a United
States Dollar denominated loan in the Netherlands and a minority interest
provision of $1.2 million. Other income, net, also includes gains from
non-strategic asset sales in South Korea. Other non-operating expense, net,
for the year ended September 30, 2001, primarily resulted from the loss on sale
of fixed assets of $1.9 million and a minority interest provision of $1.4
million. The expense was partially offset by a foreign currency gain of $1.7
million.

Income Tax Benefit (Expense)

Income tax expense was $2.5 million and $40.0 million for the years ended
September 30, 2002 and September 30, 2001, respectively. The decrease in
income tax expense was the result of utilization of net operating loss
carryforwards in fiscal year 2002, the receipt of a $5.9 million tax refund in
July 2002 in the United States due to certain changes in the U.S. tax law for
net operating loss carrybacks, the mix of worldwide income tax rates and the
establishment of valuation allowances for certain deferred tax assets in fiscal
year 2001.

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Year Ended September 30, 2001 Compared With Year Ended September 30, 2000

Net Sales

Total net sales at actual currency rates decreased 5.2% to $449.9 million for
the year ended September 30, 2001, from $474.4 million for the year ended
September 30, 2000. The decrease was primarily due to currency fluctuation and
divestiture of certain businesses. The weakness of the European Monetary Union
Euro, the South Korean Won and Brazilian Real accounted for the majority of the
$20.9 million decrease in sales from currency fluctuation in comparison to
fiscal year 2000. The divestiture of the garden and soybean businesses
impacted sales with a further decrease of $17.3 million. At a constant
currency rate with fiscal year 2000, net seed sales increased 2.4% to $439.5
million for the year ended September 30, 2001, from $429.2 million for the year
ended September 30, 2000. North America had the largest increase of $8.4
million with significant improvements in Mexico. At a constant currency rate
with fiscal year 2000, South America had a sales increase of $2.8 million,
despite unfavorable economic conditions in Argentina and Colombia; the Far East
also recorded a net seed increase in sales of $0.6 million, even though Korea
was negatively impacted by heavy snowfall and an economic downturn; Europe, the
Middle East and Africa sales decreased by $1.5 million, mainly due to weather
conditions in Southern Europe. Non-core business also increased sales by $3.4
million, at constant currency rates with fiscal year 2000, with Incotec being
the major contributor.

Gross Profit

Gross profit decreased 8.2% to $217.8 million for the year ended September 30,
2001, from $237.3 million for the year ended September 30, 2000. Gross margin
decreased to 48.4% for the year ended September 30, 2001, from 50.0% for the
year ended September 30, 2000. Both gross profit and gross margin reflected
total non-cash inventory writedowns of $73.9 and $58.9 million taken during
fiscal year 2001 and 2000, respectively. The writedowns in fiscal year 2001
included approximately $58.2 million of charges taken in conjunction with the
Companys Global Restructuring and Optimization Plan, whereby the Company
rationalized its product line from 6,000 to 4,000 varieties as well as imposed
more stringent quality standards. Gross margins in fiscal year 2001 were also
positively impacted by price increases resulting from efforts of the Global
Restructuring and Optimization Plan.

Research and Development Expenses

Research and development expenses decreased 10.1% to $52.4 million for the year
ended September 30, 2001 from $58.4 million for the year ended September 30,
2000. The decrease was due to an approximate $2.0 million charge related to
Seminis research incentive program recorded in the first half of fiscal year
2000, with no corresponding charges in fiscal year 2001. The decrease in
expenses was also a result of headcount reduction from the Global Restructuring
and Optimization Plan and currency fluctuations from research and development
operations in Europe during fiscal year 2001.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 14.2% to $191.1 million
for the year ended September 30, 2001 from $222.6 million for the year ended
September 30, 2000. The decrease was primarily the result of headcount
reductions following the implementation of the Global Restructuring and
Optimization Plan and, in part, the impact of currency fluctuations.
Furthermore, the decrease was the result of divestiture of certain non-core
businesses totaling $6.9 million, the absence of a $6.4 impairment charge
recorded in fiscal year 2000 associated with the Companys investment in LSL
Plantscience and a restructuring charge primarily for severances of $12.0
million in fiscal year 2001 compared to $14.0 million in fiscal year 2000. The
decrease was partially offset by facility moving costs of $4.3 million compared
to $3.1 million and consulting fees for restructuring of $3.3 million compared
to $2.0 million in fiscal years 2001 and 2000, respectively. Additionally, a
compensation charge of $2.6 million for a newly established employee stock plan
was taken in fiscal year 2001.

Amortization of Intangible Assets

Amortization of intangible assets decreased 7.9% to $28.0 million for the year
ended September 30, 2001 from $30.5 million for the year ended September 30,
2000. The decrease was primarily due to the effect of latter stages of
accelerated amortization of intangible assets related to purchase accounting.
Furthermore, the decrease was attributable to the currency impact from the
devaluation of the South Korean Won on Korean based intangible assets. The
decrease was partially offset by an increase in intangible asset amortization
in an U.S. subsidiary.

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Interest Expense, Net

Interest expense, net, increased 17.1% to $39.1 million for the year ended
September 30, 2001 from $33.4 million for the year ended September 30, 2000.
The increase was primarily due to higher effective interest rates in this
fiscal year compared to last fiscal year. Furthermore, the increase was due to
the acceleration of deferred financing cost amortization related to the
Companys credit facility. The acceleration was a result of the advancement of
the maturity date of the term loan.

Other Non-Operating Income (Expense), Net

Seminis had other non-operating expense, net of $1.6 million for the year ended
September 30, 2001, as compared to other non-operating income, net of $2.2
million for the year ended September 30, 2000. Other non-operating expense,
net, for the year ended September 30, 2001 included other expense, net of $1.9
million, primarily from the loss on the sale of fixed assets, offset by a
foreign currency gain of $1.7 million and a minority interest provision of $1.4
million. Other income in fiscal year 2000 included a $10.0 million gain on the
asset sales of MBS, a soybean subsidiary, a currency loss of $5.4 million,
primarily associated with Seminis Vegetable Seeds Holland on its U.S. Dollar
denominated loan and a minority interest provision of $1.2 million.

Income Tax Benefit (Expense)

We had an income tax expense of $40.0 million for the year ended September 30,
2001, as compared to an income tax benefit of $24.6 million for the year ended
September 30, 2000. The increase in income tax expense during fiscal year 2001
primarily related to a provision of a valuation allowance against the deferred
tax assets arising from net operating loss carryforwards. As of September 30,
2001, our tax assets for net operating loss carryforwards primarily consisted
of a Netherlands carryforward of $45,655 that has an indefinite life and a
United States carryforward of $94,456, which will begin to expire in 2020.
Although a valuation allowance has been established on these tax assets, we
have commenced certain initiatives in order to utilize these loss carryforwards
before they expire.

Contractual Obligations and Commercial Commitments

The following tables summarize the Companys contractual obligations and
commitments at September 30, 2002:

|                        |                                    |  |                        |         |        |  |           |        |           |  |               |         |  |  |   |       |  |  |   |       | 
|----------------------- | ---------------------------------- |  | ---------------------- | ------- | ------ |  | --------- | ------ | --------- |  | ------------- | ------- |  |  | - | ----- |  |  | - | ----- | 
|                        |                                    |  | Payments Due by Period
|                        |                                    |  |                       
|                        |                                    |  | Total                  |         | 1 year |  | 2-3 years |        | 4-5 years |  | After 5 years
|                        |                                    |  |                        |         |        |  |           |        |           |  |              
|Contractual obligations |                                    |  |                        |         |        |  |           |        |           |  |               |         |  |  |   |       |  |  |   |      
|                        | Long-term debt (1)                 |  | $                      | 250,002 |        |  | $         | 21,709 |           |  | $             | 217,643 |  |  | $ | 5,116 |  |  | $ | 5,534 | 
|                        | Operating leases (2)               |  |                        | 13,456  |        |  |           | 5,102  |           |  |               | 6,411   |  |  |   | 1,689 |  |  |   | 254   | 
|                        |                                    |  |                        |         |        |  |           |        |           |  |               |         |  |  |   |       |  |  |   |      
|                        | Total contractual
cash obligations |  |                        | 263,458 |        |  |           | 26,811 |           |  |               | 224,054 |  |  |   | 6,805 |  |  |   | 5,788 | 

|                             |  |                                             |     |        |  |           |   |           |  |               |     |  |  |   |   |  |  |   |   | 
|---------------------------- |  | ------------------------------------------- | --- | ------ |  | --------- | - | --------- |  | ------------- | --- |  |  | - | - |  |  | - | - | 
|                             |  | Amount of Commitment Expirtation Per Period
|                             |  |                                            
|                             |  | Total Amounts                               |     |        |  |           |   |           |  |               |     |  |  |   |   |  |  |  
|                             |  | Committed                                   |     | 1 year |  | 2-3 years |   | 4-5 years |  | After 5 years
|                             |  |                                             |     |        |  |           |   |           |  |              
|Commercial commitments       |  |                                             |     |        |  |           |   |           |  |               |     |  |  |   |   |  |  |   |   | 
|Guarantees                   |  | $                                           | 330 |        |  | $         |  |           |  | $             | 330 |  |  | $ |  |  |  | $ |  | 
|                             |  |                                             |     |        |  |           |   |           |  |               |     |  |  |   |   |  |  |   |   | 
|Total commercial
commitments |  |                                             | 330 |        |  |           |  |           |  |               | 330 |  |  |   |  |  |  |   |  | 



|(1) |  | See Note 8 to the Consolidated Financial Statements 
|--- |  | ----------------------------------------------------
|(2) |  | See Note 12 to the Consolidated Financial Statements

The Companys contractual obligations and commercial commitments are
discussed in the Liquidity and Capital Resources section below and in the
footnotes to the Consolidated Financial Statements.

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Liquidity and Capital Resources

Cash flows from operations

As a result of our Global Restructuring and Optimization Plan, we have made
significant strides in the enhancement of our cash flow. Operating activities
provided $38.1 million in cash flow in fiscal year 2002 compared to $13.5
million of cash utilized in fiscal year 2001. These improvements in cash flows
were primarily due to the positive impacts of: (i) a decrease in the levels of
seed purchases for inventory reflecting improved production planning over our
inventory level, (ii) a decrease in both production overhead and operating
expenses resulting from the successful implementation of the Global
Restructuring and Optimization Plan and (iii) an improvement in collections of
accounts receivables. These working capital improvements were partially offset
by severance costs in connection with the Global Restructuring and Optimization
Plan and a reduction in the level of accounts payable.

Cash flows from investments

Capital expenditures increased to $14.9 million for the year ended September
30, 2002, from $14.3 million in the prior fiscal year. The increase was partly
due to $5.2 million investment that primarily related to a production facility,
which is being utilized to consolidate our South Korean operations and to
enhance our growth strategy in the Far East market. Additionally, $2.3 million
of capital expenditure was attributable to the expansion of our Hungarian
facility in order to consolidate large seed operations in Europe. Other
investing activities for the year ended September 30, 2002 included
approximately $28.5 million in proceeds from the sale of assets, primarily
relating to the sale of an office building in Seoul, South Korea and $17.6
million from the sale of a non-core business.

During fiscal year 2001, we sold our properties in Saticoy (California), Filer
(Idaho) and Vineland (New Jersey) as part of our efforts to reduce and
consolidate our operation and production facilities. Other investing
activities for the year ended September 30, 2001 included approximately $14.1
million in proceeds from the sale of non-operating assets.

Cash flows from financings

We have issued 10,830 shares of our Class C Preferred Stock to Savia for a
total purchase price of $108.3 million. These shares accrue dividends
quarterly at a rate of 10.0% per year. In October and November 2000, we
received an additional $31.9 million and $14.0 million, respectively, of
capital contributions from Savia. We have agreed to pay dividends on these
contributions at the same rate as the Class C Preferred Stock. Through July 1,
2002, there were approximately $25.0 million of accrued and unpaid dividends on
the outstanding Class C Preferred Stock and additional capital contributions.
We have also paid dividends of $12.7 million in the form of additional shares
on the Class C Preferred Stock, which are classified as additional paid in
capital.

Since December 2000, we have not received any further capital contributions
from Savia and we have financed our operations through cash flows from
operations and the disposition of assets.

On October 1, 2002 the Board of Directors approved the conversion of the Savia
additional capital contribution and the associated paid in kind dividends that
totaled $46.7 million to be converted to 4,670 shares of Class C Preferred
Stock. Concurrently, the Board also adopted a resolution authorizing and
directing an increase in the number of shares designated as Class C Redeemable
PIK Preferred Stock from 14,400 shares to 16,688 shares.

We had $4.5 million of accrued and unpaid dividends relating to our Class B
mandatorily redeemable preferred stock at September 30, 2002. These accrued
dividends are classified within mandatorily redeemable stock.

Our total indebtedness as of September 30, 2002 was $278.5 million, of which
$229.7 million were borrowings under our existing credit facility and we had
$14.9 million, $9.4 million, $6.2 million and $14.6 million of borrowings by
our United States, Italian, Spanish and South Korean subsidiaries, respectively
and $3.7 million of borrowings by other foreign subsidiaries.

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As of September 30, 2000, we were not in compliance with certain covenants of
our existing credit facility, which gave the lenders the right to accelerate
payment of all amounts outstanding under the facility. In December 2000, the
lenders granted a waiver with respect to these covenants that extended through
April 30, 2001, at which time any defaults would once again arise. As we did
not expect to be in compliance with our covenants once the waiver expired, all
outstanding borrowings under the credit facility were classified as a current
liability as of September 30, 2000. In connection with granting the waivers,
the lenders agreed to reschedule principal payments within fiscal year 2001.
The lenders also accelerated the final maturity of the term loan and the
termination date for the revolving credit commitments to June 30, 2002 from
June 30, 2004. We were obligated to deliver a financial plan through September
30, 2002, which detailed cash flow projections on a monthly basis as well as
proposed alternatives for the refinancing of the credit facility or
recapitalization of the company.

On May 31, 2001, our lenders agreed with the financial plan that we submitted
and agreed to restructure our existing credit facility. Upon receipt of the
amended credit agreement, long-term portions of borrowings were reclassified
from current liabilities to long-term debt. Among other things, the amendment
extended the final maturity of the credit facility from the previously agreed
on date of June 30, 2002 to December 31, 2002, revised principal payment dates
under the term loan, instituted a new grid pricing formula to determine
interest on borrowings and revised covenant obligations. Interim principal
obligations under the amendment included $16.0 million due in the fourth
quarter of fiscal year 2001, $19.0 million, $4.0 million, $31.0 million and
$9.0 million due in the first, second, third and fourth quarters of fiscal year
2002, respectively. All remaining amounts were due in the first quarter of
fiscal year 2003.

In October 2001, we completed the sale of an office building in Seoul, South
Korea, which generated net proceeds of approximately $20.0 million. We used
$19.5 million of the proceeds to make the scheduled $19.0 million payment on
the credit facility in October 2001. We also sold one of our non-core
businesses in January 2002, which generated additional proceeds of
approximately $17.6 million. We used $13.0 million of the proceeds to prepay
our existing credit facility in January 2002 and utilized our operating cash
flow to pay the remaining $18.0 million in June 2002.

We met all required principal and interest payments during fiscal years 2002
and 2001 and were in compliance with all of our financial covenants under the
amended credit agreement at September 30, 2002. In October 2002, we paid an
additional $5.0 million of principal as required by the amended credit
agreement; however, as of December 31, 2002, we had not completed a refinancing
transaction in order to pay the remaining balance of $224.7 million. The
lenders agreed to temporarily extend the term of the credit facility and in
January 2003, a formal amendment was executed. Among other things, the
amendment extended the final maturity of the credit facility from the
previously agreed on date of December 31, 2002 to December 31, 2003, revised
principal payment dates under the term loan, instituted a new grid pricing
formula to determine interest on borrowings and revised covenant obligations.
Interim principal obligations under the amendment included $3.0 million and
$9.5 million due in the third and fourth quarters of fiscal year 2003,
respectively. The remaining outstanding amount totaling $212.2 million will be
due in the first quarter of fiscal year 2004. Upon receipt of the amended
credit agreement, long-term portions of borrowings were reclassified from
current liabilities to long-term debt as of September 30, 2002.

Although not impacting current liquidity, the Company entered into an exchange
agreement with its majority shareholder, Savia S.A. de C.V. as of July 1, 2002
to exchange all of its outstanding Seminis Class C Preferred Stock (including
accrued PIK dividends) having a principal value of $120.2 million, additional
paid-in capital (including accrued PIK dividends) of $46.7 million and accrued
and unpaid cash dividends of $10.0 million into 37.7 million shares of Seminis
Class A common stock. The remaining accrued and unpaid cash dividends on the
Class C Preferred Stock of $15.0 million will remain due and payable and will
be paid in cash by the Company in accordance with the terms of the exchange
agreement. On July 3, 2002, the Company received an opinion from UBS Warburg
that, as of such date, the number of shares of Class A common stock to be
received by Savia in the exchange was fair from a financial point of view to
the holders of the Companys Class A common stock and Class B common stock (in
each case other than Savia and its affiliates and other than holders of the
Companys Class B common stock that also hold shares of the Companys Class B
Redeemable preferred stock). The exchange agreement was approved by the
Companys Board of Directors on July 3, 2002 and was approved by our
stockholders on September 26, 2002. Although the exchange agreement was
approved by the Stockholders at the Annual Meeting, it is subject to customary
closing conditions and approvals by creditors of Savia and the Company. At
this time, all of the closing conditions and approvals have not been satisfied
and therefore, the exchange has not been consummated. The Company may not
complete all of the transactions contemplated under the exchange agreement
until the conditions and approvals are obtained or waived, including the
payment by the Company of the accrued and unpaid dividends on the Class B
preferred stock and the consent of the lenders under the Companys Syndicated
Credit Facility.

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In December 2002, Savia, Seminis majority stockholder announced that it signed
a letter of intent with Fox Paine & Company LLC under which Fox Paine and
certain Savia related parties will acquire all the outstanding shares of
Seminis, Inc. The proposed transaction is subject to numerous conditions;
however, if completed, such a change in control would require the credit
facility to be paid in full. It is anticipated that such a transaction would
be funded by financing arranged by Fox Paine.

Whereas we have met our obligations as well as covenant requirements under the
amended credit facility through September 30, 2002, we must successfully
execute a refinancing plan prior to December 31, 2003 in order to meet the
final maturity of the facility. We will continue to pursue a refinancing plan,
which may include negotiation of a new credit facility, and/or placement of new
debt securities; however, there can be no assurances that we will be able to
successfully complete the refinancing. Additionally, there can be no
assurances that the Fox Paine transaction will be consummated. Failure to
comply with existing covenants, which would make the Syndicated debt
callable, or
our inability to obtain adequate financing with reasonable terms prior to
December 31, 2003 could have a material adverse impact on our business, results
of operations or financial condition.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires us to make significant estimates and judgments
that affect the reported amounts of assets, liabilities, revenues, expenses and
related disclosure of contingent assets and liabilities. We evaluate our
estimates, including those related to bad debts, inventories, intangible
assets, income taxes, restructuring costs and contingencies and litigation, on
an on-going basis. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions.

We believe that the following critical accounting policies, among others,
involve the more significant judgments and estimates used in the preparation of
our consolidated financial statements.

We maintain allowances for doubtful accounts for estimated losses resulting
from the inability of our customers to make required payments. Many of our
customers are located in foreign jurisdictions where payment terms and the
timing of collections can differ from domestic transactions. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.

Our inventory is recorded at the lower of cost or market. The value of each
seed variety in inventory is dependent upon various quality characteristics,
which deteriorate over time. Write-downs of inventory to market value are
based upon assumptions about future demand and market conditions, the success
of our sales programs and the shelf life of the seeds. If actual market
conditions and sales results are less favorable than those projected by
management, additional inventory write-downs may be required.

We are subject to proceedings, lawsuits, other claims related to seedmens
errors and omissions, environmental, labor and other matters. We assess the
likelihood of adverse judgments or outcomes to these matters as well as the
range of potential losses. A determination of the reserves required, if any,
is made after careful analysis. The required reserves may change in the future
due to new developments.

We have recorded reserves in connection with restructuring our business. These
reserves principally include estimates related to employee separation costs,
the consolidation or closing of facilities and the valuation of certain assets,
including inventory. Actual costs could be different from those estimated.

In assessing the recoverability of our goodwill and long-lived assets,
significant assumptions regarding the estimated future cash flows and other
factors to determine the fair value of the respective assets must be made as
well as the related estimated useful lives. If these estimates or their
related assumptions change in the future as a result of changes in strategy
and/or market conditions, we may be required to record impairment charges for
these assets not previously recorded. On October 1, 2001, we adopted Statement
of Financial Accounting Standards No. 142, Goodwill and Other Intangible
Assets, which required us to analyze our goodwill for impairment issues
during fiscal year 2002 and on a periodic basis thereafter.

28



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The carrying value of our deferred tax assets is dependent upon our ability to
generate sufficient future taxable income in certain tax jurisdictions. We
established a valuation allowance against certain of our deferred tax assets
due to uncertainties related to the ability to utilize these assets, primarily
consisting of net operating losses carried forward and foreign tax credits,
before they expire. The valuation allowance is based on our estimates of
taxable income by each jurisdiction in which we operate and the period over
which the assets will be recoverable. In the event that actual results differ
from these estimates, or we adjust these estimates in future periods, the
valuation allowance would change and could materially impact our financial
position and results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 141, Business
Combinations, was effective for the company on July
1, 2001. SFAS No. 141 addresses financial accounting and reporting for
business combinations and supersedes APB Opinion No. 16, Business
Combinations, and FASB Statement No. 38, Accounting for Preacquisition
Contingencies of Purchased Enterprises. All business combinations in the
scope of this Statement are to be accounted for using one method, the purchase
method.

SFAS No. 142, Goodwill and
Other Intangible Assets, was effective for the
Company for fiscal years beginning after December 15, 2001, but was adopted
early as of the beginning of fiscal year 2002. SFAS 142 addresses financial
accounting and reporting for acquired goodwill and other intangible assets and
supersedes APB Opinion No. 17, Intangible Assets. It addresses how
intangible assets that are acquired individually or with a group of other
assets (but not those acquired in a business combination) should be accounted
for in financial statements upon their acquisition. This Statement also
addresses how goodwill and other intangible assets should be accounted for
after they have been initially recognized in the financial statements. We have
ceased the amortization of goodwill due to our adoption of SFAS No. 142 and no
impairment was required in fiscal year 2002.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143, is effective for fiscal years beginning after June
15, 2002 and requires an entity to record the fair value of a liability for an
asset retirement obligation in the period in which it is incurred. Management
has not yet determined the impact, if any, of the adoption of this standard on
the financial position or results of operation of the Company.

In August 2001, FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No. 121 but
retains many of its fundamental provisions. In addition, SFAS No. 144 expands
the scope of discontinued operations to include more disposal transactions. We
will adopt SFAS No. 144 as of October 1, 2002. We do not expect SFAS No. 144
to have a material effect on our consolidated financial position, results of
operations or cash flows.

In May 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Rescission of SFAS Nos. 4, 44 and 64, Amendment of SFAS No. 13 and Technical
Corrections. Among other things, SFAS No. 145 rescinds various
pronouncements regarding extinguishment of debt and allows extraordinary
accounting treatment for early extinguishment only when the provisions of
Accounting Principles Board Opinion No. 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business and
Extraordinary, Unusual and Infrequent Occurring Events and
Transactions are
met. SFAS No. 145 provisions regarding early extinguishment of debt are
generally effective for fiscal years beginning after May 15, 2002. The Company
believes this new standard will not have an impact on its business,
consolidated financial position, results of operations or cash flow.

In June 2002, the Financial Accounting Standards Board issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No.
146 supersedes previous accounting guidance, principally Emerging Issues Task
Force Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in a Restructuring).

SFAS No. 146 requires that the liability for costs associated with an exit or
disposal activity be initially measured at fair market value and recognized
when the liability is incurred. In periods subsequent to initial measurement,
changes to the liability are measured using the credit-adjusted risk-free rate
that was used in the initial measurement of the liability recorded. The
cumulative effect of a change resulting from revisions either to the timing or
the amount of estimated cash flow is recognized as an adjustment to the
liability in the period of the change and charged to the same line items in the
statement of operations used when the related costs were initially recognized.
Under EITF No. 94-3, a liability for an exit cost was recognized at the date of
the Companys commitment to an exit plan.

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The provisions of SFAS No. 146 are required to be applied prospectively to exit
or disposal activities initiated after December 31, 2002. The Company believes
SFAS No. 146 may affect the timing of recognizing future restructuring costs,
as well as the amounts recognized, depending on the nature of the exit or
disposal activity and the timing of the related estimated cash flows.

On November 25, 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees of Indebtedness of Others, Including Indirect Guarantees of
Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107
and Rescission of FASB Interpretation No. 34. FIN 45 clarifies the
requirements of FASB Statement No. 5, Accounting for Contingencies, relating to
the guarantors accounting for, and disclosure of, the issuance of certain
types of guarantees. The disclosure provisions of the Interpretation are
effective for financial statements of interim or annual periods that end after
December 15, 2002.




Item 7A.Quantitative and Qualitative Disclosures About Market Risk

MARKET RISK DISCLOSURES

We do not have any financial instruments held for trading purposes and do not
hedge any of our market risks with derivative instruments.

The currencies that experienced significant fluctuations in fiscal year 2002
were the European Monetary Union Euro, Argentinean Peso and Brazilian Real. Our
primary market risk exposure relates to foreign currency fluctuations in
connection with foreign currency gains or losses that occur from intercompany
receivables and payables between us and our foreign subsidiaries and from the
United States Dollar denominated loan under our existing credit facility
originated by SVS Holland, B.V., one of our foreign subsidiaries.

The fair value of short-term borrowings approximates cost due to the short
period of time to maturity. The fair value of long-term debt was estimated
based on current interest rates available to Seminis for debt instruments with
similar terms, degrees of risk and remaining maturities. The interest expense
would be impacted by $2.5 million with a fluctuation of 100 basis points.
However, considerable judgment is required in interpreting market data to
develop the estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that Seminis could realize
in a current market exchange.

The fair value of Seminis borrowing arrangements and other financial
instruments is as follows:

|                      |  |                       |         |                       |  |          |         |       |  |   |         |   |  |   |         |  
|--------------------- |  | --------------------- | ------- | --------------------- |  | -------- | ------- | ----- |  | - | ------- | - |  | - | ------- | -
|                      |  | At September 30, 2002 |         | At September 30, 2001
|                      |  | Asset (Liability)     |         | Asset (Liability)    
|                      |  |                       |         |                      
|                      |  | Carrying              |         | Fair                  |  | Carrying |         | Fair 
|                      |  | Amount                |         | Value                 |  | Amount   |         | Value
|                      |  |                       |         |                       |  |          |         |      
|Short-term borrowings |  | $                     | (28,532 | )                     |  | $        | (28,532 | )     |  | $ | (19,665 | ) |  | $ | (19,665 | )
|Asset (Liability)     |  |                       |         |                       |  |          |         |       |  |   |         |   |  |   |         |  

Principal amount by expected maturity as of 9/30/02:

|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  |        |        |          |  |       |          |      |  |   |          |  
|--------------------------------------------- |  | ---- | ------- | ---- |  | ---- | -------- | ---- |  | ---- | ------ | ----- |  | ----- | ------ | ------- |  | - | ------ | - |  | ------ | ------ | -------- |  | ----- | -------- | ---- |  | - | -------- | -
|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  |        |        |          |  | Total |          | Fair
|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  | There- |        | Carrying |  | Value
|                                              |  | 2003 |         | 2004 |  | 2005 |          | 2006 |  | 2007 |        | after |  | Value |        | 9/30/02
|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |        
|Long-term debt
(including
current maturities) |  | $    | (21,709 | )    |  | $    | (214,930 | )    |  | $    | (2,713 | )     |  | $     | (2,719 | )       |  | $ | (2,397 | ) |  | $      | (5,534 | )        |  | $     | (250,002 | )    |  | $ | (250,002 | )
|Asset (Liability)                             |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  |        |        |          |  |       |          |      |  |   |          |  

Principal amount by expected maturity as of 9/30/01:

|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  |        |        |          |  |       |          |   |  |   |          |  
|--------------------------------------------- |  | ---- | ------- | ---- |  | ---- | -------- | ---- |  | ---- | ------ | ----- |  | ----- | ------ | ------- |  | - | ------ | - |  | ------ | ------ | -------- |  | ----- | -------- | - |  | - | -------- | -
|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  |        |        | Total    |  | Fair 
|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |         |  |   |        |   |  | There- |        | Carrying |  | Value
|                                              |  | 2002 |         | 2003 |  | 2004 |          | 2005 |  | 2006 |        | After |  | Value |        | 9/30/01
|                                              |  |      |         |      |  |      |          |      |  |      |        |       |  |       |        |        
|Long-term debt
(including current maturities) |  | $    | (67,527 | )    |  | $    | (233,242 | )    |  | $    | (2,703 | )     |  | $     | (2,807 | )       |  | $ | (2,801 | ) |  | $      | (7,345 | )        |  | $     | (316,425 | ) |  | $ | (316,425 | )

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Item 8.Financial Statements and Supplementary Data

The consolidated financial statements and report of independent accountants are
filed as part of this report on pages F-1 through F-25.




Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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PART III




Item 10.Directors and Executive Officers of the Registrant

Information regarding executive officers of the Company is located in Part I as
permitted by Instruction 3 to Item 401(b) of Regulation S-K. Other information
required by this item is incorporated by reference to Seminis definitive proxy
statement for the Annual Meeting of Stockholders, which will be filed within
120 days of September 30, 2002 with the Securities and Exchange Commission
pursuant to Regulation 14A.




Item 11.Executive Compensation

The information required by this item is incorporated by reference to Seminis
definitive proxy statement for the Annual Meeting of Stockholders, which will
be filed within 120 days of September 30, 2002 with the Securities and Exchange
Commission pursuant to Regulation 14A.




Item 12.Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated by reference to Seminis
definitive proxy statement for the Annual Meeting of Stockholders, which will
be filed within 120 days of September 30, 2002 with the Securities and Exchange
Commission pursuant to Regulation 14A.




Item 13.Certain Relationships and Related Transactions

The information required by this item is incorporated by reference to Seminis
definitive proxy statement for the Annual Meeting of Stockholders, which will
be filed within 120 days of September 30, 2002 with the Securities and Exchange
Commission pursuant to Regulation 14A.




Item 14.Controls and Procedures



|(a) |  | Evaluation of disclosure controls and procedures.The Companys chief
executive officer and chief financial officer have evaluated the
effectiveness of the Companys disclosure controls and procedures [as
defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act
of 1934 (the Exchange Act)] as of a date (the Evaluation Date) within
90 days before the filing date of this annual report. Based on such
evaluation, they have concluded that, as of the Evaluation Date, the
Companys disclosure controls and procedures were effective to ensure that
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the rules and forms of
the Securities and Exchange Commission.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Changes in internal controls.There were no significant changes in the
Companys internal controls or in other factors that could significantly
affect these controls during the period covered by this annual report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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##### Table of Contents






PART IV




Item 15.Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) Listing of Consolidated Financial Statements

Reference is made to the index set forth on Page F-1.

(a)(2) Listing of Financial Statement Schedules.

Schedule II  Valuation and Qualifying Accounts on page S-1

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.

(a)(3)
Listing of Exhibits  See Index to Exhibits beginning on Page 34 of
this report.

(b) Reports on Form 8-K- Seminis filed a Form 8-K on August 9, 2002 in
regards to an agreement with Savia, S.A. de C.V., its majority shareholder, to
exchange all of its outstanding shares of Class C Preferred Stock, additional
paid-in capital and unpaid and accrued dividends on the Class C Preferred Stock
and additional paid-in capital of $10 million into 37,669,480 shares of Class A
Common Stock. Accrued dividends on the Class C Preferred Stock of $15 million
will remain due and payable and will be paid in cash in accordance with the
Exchange.

(c)
Exhibits  See Index to Exhibits beginning on Page 34 of this report.

(d)
Financial Statement Schedules The following consolidated financial
statement schedule is included herein: Schedule II  Valuation and Qualifying
Accounts.

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##### Table of Contents






Exhibit Index

|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ------------- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |               |            
|Number  |               | Description
|        |               |            
|        | (a) 1         |             | Form of Underwriting Agreement                                                                                                                                                                                                                                                                                                                                                                                                        
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 2         |             | Merger Agreement by and between Seminis, Inc., an Illinois corporation and Seminis, Inc., a Delaware corporation                                                                                                                                                                                                                                                                                                                      
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 3.1       |             | Certificate of Incorporation                                                                                                                                                                                                                                                                                                                                                                                                          
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 3.2       |             | Certificate of Designations of Class A Mandatorily Redeemable Preferred Stock and Class B Mandatorily Redeemable
Preferred Stock of Seminis, Inc.                                                                                                                                                                                                                                                                                     
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 3.3       |             | Certificate of Designations of Class C Redeemable Preferred Stock of Seminis, Inc.                                                                                                                                                                                                                                                                                                                                                    
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 3.4       |             | By-Laws                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 4.1       |             | Form of Class A Common Stock Certificate                                                                                                                                                                                                                                                                                                                                                                                              
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (a) 4.2       |             | Registration Rights Agreement by and among Seminis, Inc. and certain shareholders of Seminis, dated October 1, 1995                                                                                                                                                                                                                                                                                                                   
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 5         |             | Opinion of Milbank, Tweed, Hadley & McCloy LLP                                                                                                                                                                                                                                                                                                                                                                                        
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (a) 10.1      |             | Seminis, Inc. 1998 Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                  
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (b) 10.2      |             | Amended and Restated Seminis, Inc. 1998 Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                             
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (a) 10.3      |             | Share Subscription Agreement by and between Seminis, Inc. and Hungnong Seed Co., Ltd., dated June 12, 1998                                                                                                                                                                                                                                                                                                                            
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 10.4      |             | Form of New Credit Facility among Seminis, Inc, Seminis Vegetable Seeds, Inc., SVS Holland B.V., as borrowers,
Harris Trust and Savings Bank, individually and as Administrative Agent, Bank of Montreal, individually and as
Syndication Agent and the Lenders from time to time parties thereto, as lenders, dated as of June 28, 1999                                                                                              
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (c) 10.5      |             | Form of Letter Agreement between Savia, S.A. de C.V. and Seminis, Inc. dated as of June 21, 1999                                                                                                                                                                                                                                                                                                                                      
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (d) 10.6      |             | Second Amendment and Waiver to Credit Agreement dated as of June 28, 1999 among Seminis, Inc., Seminis Vegetable
Seeds, Inc., SVS Holland B.V., as borrowers, Harris Trust and Savings Bank, individually and as Administrative
Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time parties thereto,
as Lenders, Dated as of June 29, 2000, effective March 31, 2000                     
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (d) 10.7      |             | Security Agreement Re: Accounts, Inventory and General Intangibles among Seminis, Inc., Seminis Vegetable Seeds,
Inc., SVS Holland B.V., as borrowers, Harris Trust and Savings Bank, individually and as Administrative Agent,
Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time parties thereto, as
Lenders, dated as of June 29, 2000                                                      
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (e) 10.8      |             | Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc., Seminis Vegetable
Seeds, Inc., SVS Holland B.V., as borrowers, Harris Trust and Savings Bank, individually and as Administrative
Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time parties thereto,
as Lenders, dated as of September 30, 2000, effective September 30, 2000.              
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (d) 10.9      |             | Extension of Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc., Seminis
Vegetable Seeds, Inc., SVS Holland B.V., as borrowers, Harris Trust and Savings Bank, individually and as
Administrative Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time
parties thereto, as Lenders, dated as of December 30, 2000, effective December 30, 2000.   
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (f) 10.10     |             | Modification and Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc.,
Seminis Vegetable Seeds, Inc., SVS Holland B.V. as borrowers, Harris Trust and Savings Bank, individually and as
Administrative Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time
parties thereto, as Lenders, dated as of December 29, 2000, effective December 29, 2000.
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (g) 10.11     |             | Modification and Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc.,
Seminis Vegetable Seeds, Inc., SVS Holland B.V. as borrowers, Harris Trust and Savings Bank, individually and as
Administrative Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time
parties thereto, as Lenders, dated as of April 30, 2001, effective April 30, 2001.      
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (h) 10.12     |             | Modification and Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc.,
Seminis Vegetable Seeds, Inc., SVS Holland B.V. as borrowers, Harris Trust and Savings Bank, individually and as
Administrative Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time
parties thereto, as Lenders, dated as of May 31, 2001, effective May 31, 2001.          
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (i) 10.13     |             | Revision to (h) 10.12                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (b) 21        |             | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                                                                                                                            
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 27.1          |             | Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                                                                               
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (j) 99.1/99.2 |             | Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                              
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (k) 99.3/99.4 |             | Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                              
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (k) 10.14     |             | Modification and Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc.,
Seminis Vegetable Seeds, Inc., SVS Holland B.V. as borrowers, Harris Trust and Savings Bank, individually and as
Administrative Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time
parties thereto, as Lenders, dated as of December 31, 2002, effective December 31, 2002.
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (k) 10.15     |             | Modification and Interim Waiver Agreement to Credit Agreement dated as of June 28, 1999 among Seminis, Inc.,
Seminis Vegetable Seeds, Inc., SVS Holland B.V. as borrowers, Harris Trust and Savings Bank, individually and as
Administrative Agent, Bank of Montreal, individually and as Syndication Agent and the Lenders from time to time
parties thereto, as Lenders, dated as of December 31, 2002, effective December 31, 2002.
|        |               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | (k) 23        |             | Consent of independent accountants                                                                                                                                                                                                                                                                                                                                                                                                    



|(a) |  | Incorporated by reference to Seminis Form S-1 filed on February 11, 1999.               
|--- |  | -----------------------------------------------------------------------------------------
|   
|(b) |  | Incorporated by reference to Seminis Amendment No. 2 to Form S-1 filed on
May 27, 1999. 
|   
|(c) |  | Incorporated by reference to Seminis Amendment No. 3 to Form S-1 filed on
June 21, 1999.
|   
|(d) |  | Filed with the June 30, 2000 Form 10Q.                                                   
|   
|(e) |  | Filed with the September 30, 2000 Form 10K.                                              
|   
|(f) |  | Filed with the December 30, 2000 Form 10Q.                                               
|   
|(g) |  | Filed with the March 30, 2001 Form 10Q.                                                  
|   
|(h) |  | Filed with the June 29, 2001 Form 10Q.                                                   
|   
|(i) |  | Filed with the September 30, 2001 Form 10K.                                              
|   
|(j) |  | Filed with the June 28, 2002 Form 10Q.                                                   
|   
|(k) |  | Filed with the September 30, 2002 Form 10K.                                              

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |  |               |  |                                      
| |  | ------------- |  | -------------------------------------
| |  | SEMINIS, INC.
| |  |               |  |                                      
| |  | By:           |  | /s/ Eugenio Najera Solorzano         
| |  | Name:         |  | Eugenio Najera Solorzano             
| |  | Title:        |  | President and Chief Operating Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.

|                                                        |  |                                                    |  |                 
|------------------------------------------------------- |  | -------------------------------------------------- |  | ----------------
|Signature                                               |  | Title                                              |  | Date            
|                                                        |  |                                                    |  |                 
|                                                        |  |                                                    |  |                 
|/s/ Alfonso Romo Garza
Alfonso Romo Garza               |  | Chairman of the Board
(Chief Executive Officer)    |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Eugenio Najera Solorzano
Eugenio Najera Solorzano   |  | Director and President (Chief
Operating Officer)   |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Jose Manuel Garcia Garcia
Jose Manuel Garcia Garcia |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Bernardo Jimenez Barrera
Bernardo Jimenez Barrera   |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Mateo Mazal Beja
Mateo Mazal Beja                   |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Adrian Rodriguez Macedo
Adrian Rodriguez Macedo     |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Peter Davis
Peter Davis                             |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Frank J. Pipp
Frank J. Pipp                         |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Dr. Eli Shlifer
Dr. Eli Shlifer                     |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Roger Beachy
Roger Beachy                           |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Christopher J. Steffen
Christopher J. Steffen       |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ Eugenio Garza Herrera
Eugenio Garza Herrera         |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ William F. Kirk
William F. Kirk                     |  | Director                                           |  | January 13, 2003
|                                                        |  |                                                    |  |                 
|/s/ GasparAlvarez Martinez
Gaspar Alvarez Martinez      |  | Vice President and Worldwide
Corporate Comptroller |  | January 13, 2003

35



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##### Table of Contents






CERTIFICATION

I, Alfonso Romo Garza, certify that:



|1. |  | I have reviewed this annual report on Form 10-K of Seminis, Inc.;                                                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of and for, the periods presented in this annual report;                     
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                  



| | a) |  | Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants auditors any material weaknesses in internal
controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: January 13, 2003

| |  |                                                                  
| |  | -----------------------------------------------------------------
| |  | /s/ Alfonso Romo Garza
Alfonso Romo Garza
Chief Executive Officer

36



---



##### Table of Contents



CERTIFICATION

I, Gaspar Alvarez Martinez, certify that:



|1. |  | I have reviewed this annual report on Form 10-K of Seminis, Inc.;                                                                                                                                                                                                                                                      
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of and for, the periods presented in this annual report;                    
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                 



| | a) |  | Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants auditors any material weaknesses in internal
controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: January 13, 2003

| |  |                                                                                                 
| |  | ------------------------------------------------------------------------------------------------
| |  | /s/ Gaspar Alvarez Martinez

Gaspar Alvarez Martinez
Vice President and WW Corporate Comptroller

37



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##### Table of Contents



SEMINIS, INC.

Index To Consolidated Financial Statements

|                                                                                                      |  |      |     | 
|----------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                      |  | Page
|                                                                                                      |  |     
|Report of Independent Accountants                                                                     |  |      | F-2 | 
|Consolidated Balance Sheets as of September 30, 2002 and 2001                                         |  |      | F-3 | 
|Consolidated Statements of Operations for the Years Ended September 30, 2002, 2001 and 2000           |  |      | F-4 | 
|Consolidated Statements of Stockholders Equity for the Years Ended September
30, 2002, 2001 and 2000 |  |      | F-5 | 
|Consolidated Statements of Cash Flows for the Years Ended September 30, 2002, 2001 and 2000           |  |      | F-6 | 
|Notes to Consolidated Financial Statements                                                            |  |      | F-7 | 

F-1



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##### Table of Contents



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of Seminis, Inc.

In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a)(1) on page 33 present fairly, in all material
respects, the financial position of Seminis, Inc. and its subsidiaries at
September 30, 2002 and 2001 and the results of their operations and their cash
flows for each of the three years in the period ended September 30, 2002 in
conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedules
listed in the index appearing under Item 15(a)(2) on page 33 present fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These
financial statements and financial statement schedules are the responsibility
of the Companys management; our responsibility is to express an opinion on
these financial statements and financial statement schedules based on our
audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in Note 2 to the financial statements, all outstanding
amounts borrowed under the Companys syndicated credit facility must be repaid
by December 31, 2003. In the event that the lenders of the credit facility do
not renew or extend the final maturity date of the facility, the Company will
be obligated to secure alternative sources of financing. There can be no
assurance that such financing will be available and the inability to find such
financing could have a material adverse impact on the future financial position
and operating results of the Company.

PRICEWATERHOUSECOOPERS LLP

Los Angeles, California
January 13, 2003

F-2



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##### Table of Contents



SEMINIS, INC.
Consolidated Balance Sheets
(In thousands, except per share data)

|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |          |         | 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ------- | ------------------- | ------- | ---- | ------- | -------- | ------- | 
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         | As of September 30,
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                    
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         | 2002                |         | 2001
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |     
|Assets:                                                             |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|Current assets                                                      |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    | Cash and cash equivalents                                                                                                                                                                                                                                         |                                    | $       | 36,805              |         |      | $       | 22,323   |        
|                                                                    | Accounts receivable, less allowance for doubtful accounts of $12,344 and $12,094, respectively                                                                                                                                                                    |                                    |         | 140,315             |         |      |         | 141,691  |        
|                                                                    | Other receivable                                                                                                                                                                                                                                                  |                                    |         |                    |         |      |         | 20,612   |        
|                                                                    | Inventories                                                                                                                                                                                                                                                       |                                    |         | 272,527             |         |      |         | 279,683  |        
|                                                                    | Prepaid expenses and other current assets                                                                                                                                                                                                                         |                                    |         | 2,427               |         |      |         | 3,436    |        
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | Total current assets               |         |                     | 452,074 |      |         |          | 467,745 | 
|Property, plant and equipment, net                                  |                                                                                                                                                                                                                                                                   |                                    | 168,729 |                     |         |      | 182,261 |         
|Intangible assets, net                                              |                                                                                                                                                                                                                                                                   |                                    | 160,803 |                     |         |      | 169,664 |         
|Other assets                                                        |                                                                                                                                                                                                                                                                   |                                    | 18,391  |                     |         |      | 15,687  |         
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | $                                  | 799,997 |                     |         | $    | 835,357 |         
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|Liabilities, Mandatorily Redeemable Stock and Stockholders Equity: |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    | Current liabilities                                                                                                                                                                                                                                               |                                    |         |                     |         |      |         |          |        
|                                                                    | Short-term borrowings                                                                                                                                                                                                                                             |                                    | $       | 28,532              |         |      | $       | 19,665   |        
|                                                                    | Current maturities of long-term debt                                                                                                                                                                                                                              |                                    |         | 21,709              |         |      |         | 67,527   |        
|                                                                    | Accounts payable                                                                                                                                                                                                                                                  |                                    |         | 38,179              |         |      |         | 45,423   |        
|                                                                    | Accrued liabilities                                                                                                                                                                                                                                               |                                    |         | 98,624              |         |      |         | 89,169   |        
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | Total current liabilities          |         |                     | 187,044 |      |         |          | 221,784 | 
|Long-term debt                                                      |                                                                                                                                                                                                                                                                   |                                    | 228,293 |                     |         |      | 248,898 |         
|Deferred income taxes                                               |                                                                                                                                                                                                                                                                   |                                    | 15,753  |                     |         |      | 15,736  |         
|Minority interest in subsidiaries                                   |                                                                                                                                                                                                                                                                   |                                    | 1,902   |                     |         |      | 1,721   |         
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | Total liabilities                  |         |                     | 432,992 |      |         |          | 488,139 | 
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|Commitments and contingencies (see Note 12)                         |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Mandatorily Redeemable Stock                                        |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    | Class B Redeemable Preferred Stock, $.01 par value; 25 shares authorized as of September 30,
2002 and 2001; 25 shares issued and outstanding as of September 30, 2002 and 2001                                                                                    |                                    |         | 29,500              |         |      |         | 27,500   |        
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | Total mandatorily redeemable stock |         |                     | 29,500  |      |         |          | 27,500  | 
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|Stockholders Equity                                                |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    | Class C Preferred Stock, $.01 par value; 14 shares authorized as of September 30, 2002 and
2001; 12 shares issued and outstanding as of September 30, 2002 and 2001
(Liquidation Value of $138.2 and $129.2 million at September 30, 2002 and 2001, respectively) |                                    |         | 1                   |         |      |         | 1        |        
|                                                                    | Class A Common Stock, $.01 par value; 211,000 shares authorized as of September 30, 2002 and
2001; 18,940 and 14,682 shares issued and outstanding as of September 30, 2002 and 2001,
respectively                                                                |                                    |         | 190                 |         |      |         | 147      |        
|                                                                    | Class B Common Stock, $.01 par value; 67,000 shares authorized as of September 30, 2002 and
2001; 45,142 shares issued and outstanding as of September 30, 2002 and 2001                                                                                          |                                    |         | 452                 |         |      |         | 452      |        
|                                                                    | Additional paid-in capital                                                                                                                                                                                                                                        |                                    |         | 699,255             |         |      |         | 707,816  |        
|                                                                    | Accumulated deficit                                                                                                                                                                                                                                               |                                    |         | (324,558            | )       |      |         | (340,644 | )      
|                                                                    | Accumulated other comprehensive loss                                                                                                                                                                                                                              |                                    |         | (37,835             | )       |      |         | (48,054  | )      
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | Total stockholders equity         |         |                     | 337,505 |      |         |          | 319,718 | 
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         
|                                                                    |                                                                                                                                                                                                                                                                   | $                                  | 799,997 |                     |         | $    | 835,357 |         
|                                                                    |                                                                                                                                                                                                                                                                   |                                    |         |                     |         |      |         |         

The accompanying notes are an integral part of these consolidated financial statements.

F-3



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##### Table of Contents



SEMINIS, INC.
Consolidated Statements of Operations
(In thousands, except per share data)

|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |         |         |         | 
|--------------------------------------------------------------------------------------- | -------------------------------------------- | ------------ | ------------------------ | ------- | ------- | ------- | -------- | ------- | ------------------- | ------- | -------- | ------- | ------- | ------- | 
|                                                                                        |                                              |              |                          |         |         |         |          |         | For the Years Ended |         |          |         |        
|                                                                                        |                                              |              |                          |         |         |         |          |         | September 30,       |         |          |         |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |         |        
|                                                                                        |                                              |              |                          |         | 2002    |         | 2001     |         | 2000               
|                                                                                        |                                              |              |                          |         |         |         |          |         |                    
|Net sales                                                                               |                                              | $            | 452,607                  |         |         | $       | 449,895  |         |                     | $       | 474,445  |        
|Cost of goods sold                                                                      |                                              |              | 171,892                  |         |         |         | 232,067  |         |                     |         | 237,105  |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|                                                                                        |                                              | Gross profit |                          |         | 280,715 |         |          |         | 217,828             |         |          |         | 237,340 |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Operating
expenses                                                                      |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|                                                                                        | Research and development expenses            |              |                          | 44,316  |         |         |          | 52,441  |                     |         |          | 58,364  |        
|                                                                                        | Selling, general and administrative expenses |              |                          | 174,854 |         |         |          | 191,113 |                     |         |          | 222,632 |        
|                                                                                        | Amortization of intangible assets            |              |                          | 17,065  |         |         |          | 28,034  |                     |         |          | 30,454  |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|                                                                                        |                                              |              | Total operating expenses |         |         | 236,235 |          |         |                     | 271,588 |          |         |         | 311,450 | 
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Income (loss) from operations                                                           |                                              |              | 44,480                   |         |         |         | (53,760  | )       |                     |         | (74,110  | )      
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Other income (expense)                                                                  |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|                                                                                        | Interest income                              |              | 1,270                    |         |         |         | 1,341    |         |                     |         | 3,872    |        
|                                                                                        | Interest expense                             |              |                          | (28,989 | )       |         |          | (40,425 | )                   |         |          | (37,256 | )      
|                                                                                        | Foreign currency gain (loss)                 |              |                          | (2,177  | )       |         |          | 1,709   |                     |         |          | (5,374  | )      
|                                                                                        | Minority interest                            |              |                          | (1,187  | )       |         |          | (1,436  | )                   |         |          | (1,157  | )      
|                                                                                        | Other, net                                   |              |                          | 5,158   |         |         |          | (1,909  | )                   |         |          | 8,688   |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|                                                                                        |                                              |              | (25,925                  | )       |         |         | (40,720  | )       |                     |         | (31,227  | )      
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Income (loss) before income taxes                                                       |                                              |              | 18,555                   |         |         |         | (94,480  | )       |                     |         | (105,337 | )      
|Income tax benefit (expense)                                                            |                                              |              | (2,469                   | )       |         |         | (39,975  | )       |                     |         | 24,554   |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Net income (loss)                                                                       |                                              |              | 16,086                   |         |         |         | (134,455 | )       |                     |         | (80,783  | )      
|Preferred stock dividends                                                               |                                              |              | (14,018                  | )       |         |         | (13,986  | )       |                     |         | (8,624   | )      
|Additional capital contribution dividends                                               |                                              |              | (4,670                   | )       |         |         | (4,338   | )       |                     |         |         |        
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Net income (loss) available for common stockholders                                     |                                              | $            | (2,602                   | )       |         | $       | (152,779 | )       |                     | $       | (89,407  | )      
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        
|Net income (loss) available for common stockholders per common
share, basic and diluted |                                              | $            | (0.04                    | )       |         | $       | (2.55    | )       |                     | $       | (1.49    | )      
|                                                                                        |                                              |              |                          |         |         |         |          |         |                     |         |          |        

The accompanying notes are an
integral part of these consolidated financial statements.

F-4



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##### Table of Contents



SEMINIS, INC.
Consolidated Statements of Stockholders Equity
(In thousands)



|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |          |  
|----------------------------------------------- | ----------------------------------------------- |  | --------------- | - | ------------ | - | ------------ | - | ---------- |  | ----------- | - | ------------- | - | -------- | - | ----------- |  | ------ | - | ------ | - | --- | - |  | - | ------- | - |  | - | -------- | -------- | - | - | ------- | ------- | - | - | ------- | -------- | -
|                                                |                                                 |  | Class C         |   | Class A      |   | Class B      |   |            |  |             |   |               |   |          |   | Accumulated |  | Total 
|                                                |                                                 |  | Preferred Stock |   | Common Stock |   | Common Stock |   | Additional |  |             |   |               |   | Other    |   | Stock-     
|                                                |                                                 |  |                 |   |              |   |              |   | Paid-in    |  | Accumulated |   | Comprehensive |   | Holders
|                                                |                                                 |  | Number          |   | Amount       |   | Number       |   | Amount     |  | Number      |   | Amount        |   | Capital  |   | Deficit     |  | Loss   |   | Equity
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |       
|Balance, September 30, 1999                     |                                                 |  | 4               |   |              |   | 1            |   |            |  | 13,750      |   |               |   | 138      |   |             |  | 46,074 |   |        |   | 461 |   |  |   | 610,464 |   |  |   | (125,406 | )        |   |   | (14,943 | )       |   |   | 470,715 |         
|Comprehensive loss                              |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|                                                | Net loss                                        |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          | (80,783  | ) |   |         |        |   |   |         | (80,783  | )
|                                                | Translation adjustment                          |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          |         |   |   |         | (3,052  | ) |   |         | (3,052   | )
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   | (83,835 | )       
|Conversion of shares                            |                                                 |  |                |   |              |   |             |   |            |  | 226         |   |               |   | 2        |   |             |  | (226   | ) |        |   | (2  | ) |  |   |        |   |  |   |         |          |   |   |        |         |   |   |        |         
|Issuance of Class C Preferred
Stock             |                                                 |  | 7               |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | 66,000  |   |  |   |         |          |   |   |        |         |   |   | 66,000  |         
|Dividends on Redeemable
Preferred Stock         |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (2,000  | ) |  |   |         |          |   |   |        |         |   |   | (2,000  | )       
|Dividends on Class C Preferred
Stock            |                                                 |  | 1               |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   |         |  |  |   |          |         |   |   |         |        |   |   |         |         |  
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|Balance, September 30, 2000                     |                                                 |  | 12              |   |              | $ | 1            |   |            |  | 13,976      |   |               | $ | 140      |   |             |  | 45,848 |   |        | $ | 459 |   |  | $ | 674,464 |   |  | $ | (206,189 | )        |   | $ | (17,995 | )       |   | $ | 450,880 |         
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|Comprehensive loss                              |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|                                                | Net loss                                        |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          | (134,455 | ) |   |         |        |   |   |         | (134,455 | )
|                                                | Translation adjustment                          |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          |         |   |   |         | (30,059 | ) |   |         | (30,059  | )
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |          |  
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         | (164,514 | )
|Conversion of shares                            |                                                 |  |                |   |              |   |             |   |            |  | 706         |   |               |   | 7        |   |             |  | (706   | ) |        |   | (7  | ) |  |   |        |   |  |   |         |          |   |   |        |         |   |   |        |         
|Additional capital contribution                 |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | 45,850  |   |  |   |         |          |   |   |        |         |   |   | 45,850  |         
|Dividends on additional
capital contribution    |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (3,493  | ) |  |   |         |          |   |   |        |         |   |   | (3,493  | )       
|Dividends on Redeemable
Preferred Stock         |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (2,000  | ) |  |   |         |          |   |   |        |         |   |   | (2,000  | )       
|Dividends on Class C Preferred
Stock            |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (8,989  | ) |  |   |         |          |   |   |        |         |   |   | (8,989  | )       
|Restricted shares issuance                      |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | 1,984   |   |  |   |         |          |   |   |        |         |   |   | 1,984   |         
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|Balance, September 30, 2001                     |                                                 |  | 12              |   |              | $ | 1            |   |            |  | 14,682      |   |               | $ | 147      |   |             |  | 45,142 |   |        | $ | 452 |   |  | $ | 707,816 |   |  | $ | (340,644 | )        |   | $ | (48,054 | )       |   | $ | 319,718 |         
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|Comprehensive Income                            |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|                                                | Net income                                      |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          | 16,086   |   |   |         |        |   |   |         | 16,086   |  
|                                                | Translation adjustment                          |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          |         |   |   |         | 17,395  |   |   |         | 17,395   |  
|                                                | Equity adjustment for minimum
pension liability |  |                 |  |              |   |              |  |            |  |             |  |               |   |          |  |             |  |        |  |        |   |     |  |  |   |         |  |  |   |          |         |   |   |         | (7,176  | ) |   |         | (7,176   | )
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |          |  
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|Restricted share issuance                       |                                                 |  |                |   |              |   |             |   |            |  | 4,254       |   |               |   | 43       |   |             |  |       |   |        |   |    |   |  |   | 5,966   |   |  |   |         |          |   |   |        |         |   |   | 6,009   |         
|Options exercised                               |                                                 |  |                |   |              |   |             |   |            |  | 4           |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   |        |   |  |   |         |          |   |   |        |         |   |   |        |         
|Dividends on additional
capital contribution    |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (3,505  | ) |  |   |         |          |   |   |        |         |   |   | (3,505  | )       
|Dividends on Class B Redeemable
Preferred Stock |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (2,000  | ) |  |   |         |          |   |   |        |         |   |   | (2,000  | )       
|Dividends on Class C Preferred
Stock            |                                                 |  |                |   |              |   |             |   |            |  |            |   |               |   |         |   |             |  |       |   |        |   |    |   |  |   | (9,022  | ) |  |   |         |          |   |   |        |         |   |   | (9,022  | )       
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         
|Balance, September 30, 2002                     |                                                 |  | 12              |   |              | $ | 1            |   |            |  | 18,940      |   |               | $ | 190      |   |             |  | 45,142 |   |        | $ | 452 |   |  | $ | 699,255 |   |  | $ | (324,558 | )        |   | $ | (37,835 | )       |   | $ | 337,505 |         
|                                                |                                                 |  |                 |   |              |   |              |   |            |  |             |   |               |   |          |   |             |  |        |   |        |   |     |   |  |   |         |   |  |   |          |          |   |   |         |         |   |   |         |         

The accompanying notes are an integral part of these consolidated financial statements.

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##### Table of Contents



SEMINIS, INC.
Consolidated Statements of Cash Flows
(In thousands)

|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |         |          |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------------------------- | --------------------------------------------- | --------------------------------- | --------------------------------------------------- | ------ | ------- | ------- | -------- | ------ | ------------------- | ------- | ------- | ------- | -------- | ------- | -
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        | For the Years Ended |         |         |         |         
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        | September 30,       |         |         |         |         
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |         |         
|                                                             |                                                                                                    |                                               |                                   |                                                     |        | 2002    |         | 2001     |        | 2000               
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                    
|Cash flows from operating activities:                        |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |        
|                                                             | Net income (loss)                                                                                  |                                               | $                                 | 16,086                                              |        |         | $       | (134,455 | )      |                     | $       | (80,783 | )      
|                                                             | Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|                                                             |                                                                                                    | Depreciation and amortization                 |                                   |                                                     | 32,544 |         |         |          | 45,054 |                     |         |         | 50,109  |         
|                                                             |                                                                                                    | Deferred income tax                           |                                   |                                                     | (266   | )       |         |          | 33,514 |                     |         |         | (37,459 | )       
|                                                             |                                                                                                    | Provision for minority interest in subsidiary |                                   |                                                     | 1,187  |         |         |          | 1,436  |                     |         |         | 1,157   |         
|                                                             |                                                                                                    | Inventory write-down                          |                                   |                                                     | 16,937 |         |         |          | 73,850 |                     |         |         | 58,948  |         
|                                                             |                                                                                                    | Gain on sale of non-core business             |                                   |                                                     | (4,971 | )       |         |          |       |                     |         |         |        |         
|                                                             |                                                                                                    | Compensation expense for restricted stock     |                                   |                                                     | 5,866  |         |         |          | 1,806  |                     |         |         |        |         
|                                                             |                                                                                                    | Other                                         |                                   |                                                     | 1,515  |         |         |          | 5,468  |                     |         |         | 786     |         
|                                                             |                                                                                                    | Changes in assets and liabilities             |                                   |                                                     |        |         |         |          |        |                     |         |         |         |         
|                                                             |                                                                                                    |                                               | Accounts receivable               |                                                     |        | 3,212   |         |          |        | 15,138              |         |         |         | (3,821   | )      
|                                                             |                                                                                                    |                                               | Inventories                       |                                                     |        | (5,866  | )       |          |        | (23,209             | )       |         |         | (102,484 | )      
|                                                             |                                                                                                    |                                               | Prepaid expenses and other assets |                                                     |        | (8,226  | )       |          |        | (4,759              | )       |         |         | 8,663    |        
|                                                             |                                                                                                    |                                               | Current income taxes              |                                                     |        | 487     |         |          |        | (3,069              | )       |         |         | 9,385    |        
|                                                             |                                                                                                    |                                               | Accounts payable                  |                                                     |        | (7,403  | )       |          |        | (8,608              | )       |         |         | 1,999    |        
|                                                             |                                                                                                    |                                               | Other liabilities                 |                                                     |        | (13,029 | )       |          |        | (15,654             | )       |         |         | 25,045   |        
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|                                                             |                                                                                                    |                                               |                                   | Net cash provided by (used in) operating activities |        |         | 38,073  |          |        |                     | (13,488 | )       |         |          | (68,455 | )
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|Cash flows from investing activities:                        |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |        
|                                                             | Purchases of fixed and intangible assets                                                           |                                               |                                   | (14,826                                             | )      |         |         | (14,280  | )      |                     |         | (41,487 | )      
|                                                             | Proceeds from disposition of assets                                                                |                                               |                                   | 28,517                                              |        |         |         | 14,096   |        |                     |         | 11,291  |        
|                                                             | Proceeds from sale of business                                                                     |                                               |                                   | 17,551                                              |        |         |         |         |        |                     |         | 9,712   |        
|                                                             | Other                                                                                              |                                               |                                   | (258                                                | )      |         |         | (448     | )      |                     |         | (1,751  | )      
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|                                                             |                                                                                                    |                                               |                                   | Net cash provided by (used in) investing activities |        |         | 30,984  |          |        |                     | (632    | )       |         |          | (22,235 | )
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|Cash flows from financing activities:                        |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |        
|                                                             | Proceeds from long-term debt issuances                                                             |                                               |                                   | 1,855                                               |        |         |         | 1,424    |        |                     |         | 97,184  |        
|                                                             | Repayments of long-term debt                                                                       |                                               |                                   | (67,869                                             | )      |         |         | (33,670  | )      |                     |         | (81,356 | )      
|                                                             | Net short-term borrowings (repayments)                                                             |                                               |                                   | 7,606                                               |        |         |         | (856     | )      |                     |         | 15,307  |        
|                                                             | Dividends paid                                                                                     |                                               |                                   |                                                    |        |         |         |         |        |                     |         | (1,500  | )      
|                                                             | Issuance of Class C Preferred Stock                                                                |                                               |                                   |                                                    |        |         |         |         |        |                     |         | 66,000  |        
|                                                             | Savia capital contribution                                                                         |                                               |                                   |                                                    |        |         |         | 45,850   |        |                     |         |        |        
|                                                             | Other                                                                                              |                                               |                                   | 4                                                   |        |         |         |         |        |                     |         |        |        
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|                                                             |                                                                                                    |                                               |                                   | Net cash provided by (used in) financing activities |        |         | (58,404 | )        |        |                     | 12,748  |         |         |          | 95,635  |  
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|Effect of exchange rate changes on cash and cash
equivalents |                                                                                                    |                                               | 3,829                             |                                                     |        |         | 1,216   |          |        |                     | (1,534  | )      
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|Increase (decrease) in cash and cash equivalents             |                                                                                                    |                                               | 14,482                            |                                                     |        |         | (156    | )        |        |                     | 3,411   |        
|Cash and cash equivalents, beginning of period               |                                                                                                    |                                               | 22,323                            |                                                     |        |         | 22,479  |          |        |                     | 19,068  |        
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        
|Cash and cash equivalents, end of period                     |                                                                                                    | $                                             | 36,805                            |                                                     |        | $       | 22,323  |          |        | $                   | 22,479  |        
|                                                             |                                                                                                    |                                               |                                   |                                                     |        |         |         |          |        |                     |         |         |        

The accompanying notes are an integral part of these consolidated financial statements.

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##### Table of Contents



SEMINIS, INC.
Notes To Consolidated Financial Statements
(In thousands, except per share data)

Note 1  Summary of Significant Accounting Policies

Description of Business

Seminis, Inc. (the Company, we) is the leading worldwide developer,
producer and marketer of vegetable and fruit seeds. The Company is a
majority-owned subsidiary of Savia, S.A. de C.V. (Savia) and effectively
began operations when it purchased Asgrow Seed Company (Asgrow) in December
1994.

Principles of Consolidation and
Basis of Presentation

The consolidated financial statements include the accounts of the Company and
its majority controlled and owned subsidiaries. Investments in unconsolidated
entities, representing ownership interests between 20% and 50%, are accounted
for using the equity method of accounting. All material intercompany
transactions and balances have been eliminated in consolidation. Certain
reclassifications have been made to prior years financial statements to
conform to fiscal year 2002 presentation.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the fiscal year, including estimates and assumptions related to customer
discounts and allowances. Actual results could differ from those estimates.

Revenue Recognition

Product sales are recognized upon shipment of goods and are reduced by
provisions for discounts and allowances based on the Companys historical and
anticipated experience.

Cash and Cash Equivalents

The Company classifies as cash equivalents all highly liquid investments
purchased with an original maturity of three months or less. The Company
invests its excess cash in deposits with major international banks, in
government securities and in money market accounts with financial institutions.
Such investments are considered cash equivalents for purposes of reporting
cash flows and bear minimal risk.

Accounts Receivable

Accounts receivable are valued net of reserves for bad debts, discounts and
allowances. Calculations of reserves are based on historical experience and
anticipated market conditions and are adjusted as management determines
necessary. The Company performs ongoing credit evaluations of its customers
financial condition and generally does not require collateral. The Companys
diversified customer base limits the amount of credit exposure to any one
customer.

No customer accounts for more than 10% of accounts receivable or sales.

Inventories

Inventories are stated at the lower of cost or estimated net realizable value.
Costs for substantially all inventories are determined using the first-in,
first-out (FIFO) method and include the cost of materials, direct labor and
the applicable share of overhead costs. Unharvested crop-growing costs are
included as part of inventory and represent costs incurred to plant and
maintain seed crops which will be harvested during the subsequent fiscal year.
Inventories are periodically reviewed and reserves established for
deteriorated, excess and obsolete items.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Provisions for depreciation
have been made using the straight-line and accelerated methods for financial
reporting purposes and accelerated methods for tax purposes. Estimated useful
lives generally range from 5 to 40 years for buildings and improvements and
from 3 to 20 years for machinery and equipment.

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##### Table of Contents



Intangible Assets

Intangible assets consist primarily of the excess of purchase price over the
fair market value of net assets acquired in purchase acquisitions and the costs
of acquired germplasm patents and trademarks. The costs of acquired germplasm,
patents and trademarks are being amortized over 10 to 20 years on an
accelerated basis. Other intangibles are amortized over 3 to 10 years on a
straight-line basis.

Goodwill

Goodwill was amortized over 15 years on a straight-line basis. Upon adoption
of SFAS No. 142, the Company has ceased amortization of its goodwill in fiscal
year 2002.

Capitalized Software Costs

Costs of computer software developed and obtained for internal use are
capitalized and amortized over respective license periods or expected useful
lives, which range from three to five years. Capitalized computer software
costs include external direct costs for licenses and services and payroll and
payroll-related costs for employees who are directly associated with developing
or installing such software.

Impairment of Long-Lived Assets

The Company continually monitors its long-lived assets to determine whether any
impairment of these assets has occurred. In making such determination, the
Company evaluates the performance of the underlying businesses, products and
product lines. The Company recognizes impairment of long-lived assets in the
event the net book value of such assets exceeds the future undiscounted cash
flows attributable to such assets. In fiscal year 2000, the Company recognized
a $6,400 impairment write-down associated with its investment in LSL
Plantscience. No other material impairments have been experienced.

Seedmens Errors and Omissions

The Company maintains third party seedmens errors and omissions insurance
covering claims by growers for losses incurred as a result of seed quality or
errors arising in fulfilling customer orders. Such policies are subject to
annual renewal and revision and have coverage limits, deductibles and other
terms. Provisions are made for anticipated losses in excess of coverage
amounts provided by insurance based on historical experience and expected
resolution. The Company performs ongoing evaluations of such claims and
adjusts reserves as necessary to reflect expected settlements.

Research and Development Expenses

Research and development costs are charged to operations as incurred. Costs
attributable to in-process research and development activities acquired in a
purchase transaction are written-off at the date of acquisition.

Income Taxes

Deferred income taxes reflect
temporary differences between the amounts at which assets and
liabilities are recorded for financial reporting purposes and the
amounts utilized for tax purposes. A valuation allowance is
established against deferred tax assets when all or some portion of
such assets is unlikely to be realized.

Foreign Currency Translation and Transactions

The financial statements of the Companys foreign subsidiaries are generally
measured using the local currency as the functional currency. Assets and
liabilities of these subsidiaries are translated at the rates of exchange at
the balance sheet date. Income and expense items are primarily translated at
average monthly rates of exchange prevailing during the fiscal year. The
resultant translation adjustments are included in accumulated other
comprehensive loss as a separate component of stockholders equity. Gains and
losses from foreign currency transactions are included in the consolidated
statements of operations.

Subsidiaries operating in highly inflationary economies or primarily using the
United States dollar as their functional currency include gains and losses from
foreign currency transactions and balance sheet translation adjustments in the
consolidated statements of operations.

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Financial Instruments

The Companys financial instruments consist primarily of cash, accounts
receivable, notes receivable, accounts payable, accrued liabilities, debt and
mandatorily redeemable securities. These balances are stated in the
consolidated financial statements at amounts that approximate fair market value
unless separately disclosed in the Notes to Consolidated Financial Statements.

Comprehensive Income

Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. For the Company, comprehensive income primarily
consists of its reported net income or loss and changes in foreign currency
translation adjustments and minimum pension liability adjustment during a
period.

Stock-Based Compensation

The Company accounts for stock-based employee compensation arrangements in
accordance with the provisions of Accounting Principles Board Opinion (APB)
No. 25, Accounting for Stock Issued to Employees and complies with the
disclosure provisions of SFAS No. 123, Accounting for Stock-Based
Compensation. Under APB No. 25, compensation cost is recognized based on the
difference, if any, on the date of grant between the fair market value of the
Companys stock and the amount an employee must pay to acquire the stock.




Derivative Instruments and Hedging Activities

The Company accounts for derivative instruments and hedging activities in
accordance with the provisions of SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities as amended by SFAS No. 137 and No. 138.
SFAS No. 133 requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair market value. It also requires that
gains or losses resulting from changes in the values of those derivatives be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. The Company does not currently have any derivative
instruments and therefore adoption of SFAS No. 133 did not have a material
impact on the Companys consolidated financial position or results of
operations for fiscal year 2002.

Accounting for Shipping and Handling Fees and Costs

The Company accounts for shipping and handling fees and costs in accordance
with the provisions of EITF 00-10, Accounting for Shipping and Handling Fees
and Costs. EITF 00-10 requires that all amounts billed to a customer in a
sale transaction related to shipping and handling, if any, represent revenues
earned for the goods provided and should be classified as revenue. It also
states that a company may record shipping and handling costs in cost of sales.
If such costs are significant and are not included in cost of sales (that is,
if those costs are accounted for together or separately on other income
statement line items), a company should disclose both the amount(s) of such
costs and the line item(s) on the income statement that include them. Freight
and handling charges of $4.3 million related to customer shipping were stated
on a gross basis in selling expense with a corresponding $3.1 million of
revenue stated in net sales in fiscal year 2002 and $1.4 million related to
customer shipping were stated on a gross basis in selling expense with a
corresponding $1.3 million of revenue stated in net sales in the fourth quarter
of fiscal year 2001, respectively. In the prior reporting periods, these
freight and handling charges were netted with the associated billing of these
costs to the Companys customers. Restatements of the prior periods to conform
to EITF 00-10 were impractical because there was no system in place to capture
this information in the past.

Supplementary Cash Flow Information

|                                    |                                             |   |                     |       |      |   |               |        |  |   |        |       | 
|----------------------------------- | ------------------------------------------- | - | ------------------- | ----- | ---- | - | ------------- | ------ |  | - | ------ | ----- | 
|                                    |                                             |   | For the Years Ended
|                                    |                                             |   |                     |       |      |   | September 30, |        |  |   |       
|                                    |                                             |   |                     |       |      |   |               |        |  |   |       
|                                    |                                             |   | 2002                |       | 2001 |   | 2000         
|                                    |                                             |   |                     |       |      |   |              
|Cash paid for interest              |                                             | $ | 25,407              |       |      | $ | 45,933        |        |  | $ | 31,890 |      
|Cash paid for income taxes          |                                             |   | 2,248               |       |      |   | 9,530         |        |  |   | 3,520  |      
|Supplemental non-cash transactions: |                                             |   |                     |       |      |   |               |        |  |   |        |      
|                                    | Class C Preferred Stock dividends           |   |                     | 9,022 |      |   |               | 11,986 |  |   |        | 6,624 | 
|                                    | Class B Redeemable Preferred Stock dividend |   |                     | 2,000 |      |   |               | 2,000  |  |   |        | 500   | 
|                                    | Additional capital contribution dividends   |   |                     | 3,505 |      |   |               | 4,338  |  |   |        |      | 

Effective January 2001, Class C Preferred Stock and additional capital
contribution accrue cash dividends at 10% per annum. The syndicated bank
agreement, however, precludes the payment of cash dividends.

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Income (Loss) Per Common Share

Income (loss) per common share has been computed pursuant to the provisions of
Statement of Financial Accounting Standards No. 128, Earnings per Share.
Basic income (loss) per common share is computed by dividing income (loss)
available to common stockholders by the average number of common shares
outstanding during each period. Income (loss) available to common stockholders
represents reported net income less preferred dividends, accretion of
redemption value for redeemable common stock and the excess of the repurchase
price paid over the redemption value of redeemable common stock. Diluted income
(loss) per common share reflects the potential dilution that could occur if
dilutive securities and other contracts were exercised or converted into common
stock or resulted in the issuance of common stock. The following table
provides a reconciliation of income from continuing operations and sets forth
the computation for basic and diluted income (loss) per share from continuing operations:

|                                                                                    |                   |   |         |                     |   |      |          |               |   |   |         |       |   | 
|----------------------------------------------------------------------------------- | ----------------- | - | ------- | ------------------- | - | ---- | -------- | ------------- | - | - | ------- | ----- | - | 
|                                                                                    |                   |   |         | For the Years Ended
|                                                                                    |                   |   |         |                     |   |      |          | September 30, |   |   |         |      
|                                                                                    |                   |   |         |                     |   |      |          |               |   |   |         |      
|                                                                                    |                   |   |         | 2002                |   | 2001 |          | 2000         
|                                                                                    |                   |   |         |                     |   |      |          |              
|Numerator for Basic and Diluted:                                                    |                   |   |         |                     |   |      |          |               |   |   |         |      
|Income (loss) from continuing operations                                            |                   | $ | 16,086  |                     |   | $    | (134,455 | )             |   | $ | (80,783 | )    
|Preferred stock dividends                                                           |                   |   | (11,022 | )                   |   |      | (13,986  | )             |   |   | (8,624  | )    
|Additional capital contribution dividends                                           |                   |   | (3,505  | )                   |   |      | (4,338   | )             |   |   |        |      
|Contingent dividends payable                                                        |                   |   | (4,161  | )                   |   |      |         |               |   |   |        |      
|                                                                                    |                   |   |         |                     |   |      |          |               |   |   |         |      
|Loss from continuing operations available for common
stockholders                   |                   | $ | (2,602  | )                   |   | $    | (152,779 | )             |   | $ | (89,407 | )    
|                                                                                    |                   |   |         |                     |   |      |          |               |   |   |         |      
|Denominator  Shares:                                                               |                   |   |         |                     |   |      |          |               |   |   |         |      
|Weighted
average common shares outstanding basic and diluted                        |                   |   | 62,074  |                     |   |      | 59,824   |               |   |   | 59,824  |      
|Loss Per Common Share from Continuing Operations
Available for
Common Stockholders: |                   |   |         |                     |   |      |          |               |   |   |         |      
|                                                                                    | Basic and diluted |   | $       | (0.04               | ) |      | $        | (2.55         | ) |   | $       | (1.49 | )
|                                                                                    |                   |   |         |                     |   |      |          |               |   |   |         |      

A total of 4.3, 2.1 and 1.1 million potential shares from options were excluded
from the computation of diluted earnings per share for fiscal years 2002, 2001
and 2000, respectively, due to their antidilutive effect.

Contingently payable dividends represent dividends that may potentially be
payable to Savia if the Exchange Agreement described in Note 9 is not
consummated. As part of this agreement, Savia agreed to forego dividends on
Class C Preferred Stock and additional paid-in capital contributions effective
July 1, 2002; however, such dividends would be payable if the exchange
transaction is not completed and the agreement terminated. These dividends
have not been accrued but are included in the calculation of earnings per share
in order to present the most dilutive result. On a pro forma basis, had the
exchange transaction been completed as of July 1, 2002, income available for
common stockholders would have been $1,559 and the weighted average common
shares outstanding would have been increased by 9,417 shares, resulting in
income per common share available for common stockholders of $0.02.

Recent Accounting Pronouncements

SFAS No. 141, ''Business Combinations, was effective for the company on July
1, 2001. SFAS No. 141 addresses financial accounting and reporting for business
combinations and supersedes APB Opinion No. 16, ''Business Combinations, and
FASB Statement No. 38, ''Accounting for Preacquisition Contingencies of
Purchased Enterprises. All business combinations in the scope of this
Statement are to be accounted for using one method, the purchase method.

SFAS No. 142, ''Goodwill and Other Intangible Assets, was effective for the
Company for fiscal years beginning after December 15, 2001, but was adopted
early as of the beginning of fiscal year 2002. SFAS 142 addresses financial
accounting and reporting for acquired goodwill and other intangible assets and
supersedes APB Opinion No. 17, ''Intangible Assets. It addresses how
intangible assets that are acquired individually or with a group of other
assets (but not those acquired in a

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business combination) should be accounted for in financial statements upon
their acquisition. This Statement also addresses how goodwill and other
intangible assets should be accounted for after they have been initially
recognized in the financial statements. We have ceased the amortization of
goodwill and other intangible assets due to our adoption of SFAS No. 142 and no
impairment was required in fiscal year 2002.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143, is effective for fiscal years beginning after June
15, 2002 and requires an entity to record the fair value of a liability for an
asset retirement obligation in the period in which it is incurred. Management
has not yet determined the impact, if any, of the adoption of this standard on
the financial position or results of operation of the Company.

In August 2001, FASB issued SFAS No. 144, ''Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No. 121 but
retains many of its fundamental provisions. In addition, SFAS No. 144 expands
the scope of discontinued operations to include more disposal transactions. We
will adopt SFAS No. 144 as of October 1, 2002. We do not expect SFAS No. 144
to have a material effect on our consolidated financial position, results of
operations or cash flows.

In May 2002, the Financial Accounting Standards Board issued SFAS No. 145,
''Rescission of SFAS Nos. 4, 44 and 64, Amendment of SFAS No. 13 and Technical
Corrections. Among other things, SFAS No. 145 rescinds various
pronouncements regarding extinguishment of debt and allows extraordinary
accounting treatment for early extinguishment only when the provisions of
Accounting Principles Board Opinion No. 30, ''Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business and
Extraordinary, Unusual and Infrequent Occurring Events and Transactions are
met. SFAS No. 145 provisions regarding early extinguishment of debt are
generally effective for fiscal years beginning after May 15, 2002. The Company
believes this new standard will not have an impact on its business,
consolidated financial position, results of operations or cash flow.

In June 2002, the Financial Accounting Standards Board issued SFAS No. 146,
''Accounting for Costs Associated with Exit or Disposal Activities. SFAS No.
146 supersedes previous accounting guidance, principally Emerging Issues Task
Force Issue No. 94-3, ''Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in a Restructuring).

SFAS No. 146 requires that the liability for costs associated with an exit or
disposal activity be initially measured at fair market value and recognized
when the liability is incurred. In periods subsequent to initial measurement,
changes to the liability are measured using the credit-adjusted risk-free rate
that was used in the initial measurement of the liability recorded. The
cumulative effect of a change resulting from revisions either to the timing or
the amount of estimated cash flow is recognized as an adjustment to the
liability in the period of the change and charged to the same line items in the
statement of operations used when the related costs were initially recognized.
Under EITF No. 94-3, a liability for an exit cost was recognized at the date of
the Companys commitment to an exit plan.

The provisions of SFAS No. 146 are required to be applied prospectively to exit
or disposal activities initiated after December 31, 2002. The Company believes
SFAS No. 146 may affect the timing of recognizing future restructuring costs,
as well as the amounts recognized, depending on the nature of the exit or
disposal activity and the timing of the related estimated cash flows.

On November 25, 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees of Indebtedness of Others, Including Indirect Guarantees of
Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107
and Rescission of FASB Interpretation No. 34. FIN 45 clarifies the
requirements of FASB Statement No. 5, Accounting for Contingencies, relating to
the guarantors accounting for, and disclosure of, the issuance of certain
types of guarantees. The disclosure provisions of the Interpretation are
effective for financial statements of interim or annual periods that end after
December 15, 2002.

Note 2  Liquidity

As of September 30, 2000, we were not in compliance with certain covenants of
our existing credit facility, which gave the lenders the right to accelerate
payment of all amounts outstanding under the facility. In December 2000, the
lenders granted a waiver with respect to these covenants that extended through
April 30, 2001, at which time any defaults would once again arise. As we did
not expect to be in compliance with our covenants once the waiver expired, all
outstanding borrowings under the credit facility were classified as a current
liability as of September 30, 2000. In connection with granting the waivers,
the lenders agreed to reschedule principal payments within fiscal year 2001.
The lenders also accelerated the final maturity of the

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term loan and the termination date for the revolving credit commitments to June
30, 2002 from June 30, 2004. We were obligated to deliver a financial plan
through September 30, 2002, which detailed cash flow projections on a monthly
basis as well as proposed alternatives for the refinancing of the credit
facility or recapitalization of the company.

On May 31, 2001, our lenders agreed with the financial plan that we submitted
and agreed to restructure our existing credit facility. Upon receipt of the
amended credit agreement, long-term portions of borrowings were reclassified
from current liabilities to long-term debt. Among other things, the amendment
extended the final maturity of the credit facility from the previously agreed
on date of June 30, 2002 to December 31, 2002, revised principal payment dates
under the term loan, instituted a new grid pricing formula to determine
interest on borrowings and revised covenant obligations. Interim principal
obligations under the amendment included $16.0 million due in the fourth
quarter of fiscal year 2001, $19.0 million, $4.0 million, $31.0 million and
$9.0 million due in the first, second, third and fourth quarters of fiscal year
2002, respectively. All remaining amounts were due in the first quarter of
fiscal year 2003.

In October 2001, we completed the sale of an office building in Seoul, South
Korea, which generated net proceeds of approximately $20.0 million. We used
$19.5 million of the proceeds to make the scheduled $19.0 million payment on
the credit facility in October 2001. We also sold one of our non-core
businesses in January 2002, which generated additional proceeds of
approximately $17.6 million. We used $13.0 million of the proceeds to prepay
our existing credit facility in January 2002 and utilized our operating cash
flow to pay the remaining $18.0 million in June 2002.

We met all required principal and interest payments during fiscal years 2002
and 2001 and were in compliance with all of our financial covenants under the
amended credit agreement at September 30, 2002. In October 2002, we paid an
additional $5.0 million of principal as required by the amended credit
agreement; however, as of December 31, 2002, we had not completed a refinancing
transaction in order to pay the remaining balance of $224.7 million. The
lenders agreed to temporarily extend the term of the credit facility and in
January 2003, a formal amendment was executed. Among other things, the
amendment extended the final maturity of the credit facility from the
previously agreed on date of December 31, 2002 to December 31, 2003, revised
principal payment dates under the term loan, instituted a new grid pricing
formula to determine interest on borrowings and revised covenant obligations.
Interim principal obligations under the amendment included $3.0 million and
$9.5 million due in the third and fourth quarters of fiscal year 2003,
respectively. The remaining outstanding amount totaling $212.2 million will be
due in the first quarter of fiscal year 2004. Upon receipt of the amended
credit agreement, long-term portions of borrowings were reclassified from
current liabilities to long-term debt as of September 30, 2002.

Although not impacting current liquidity, the Company entered into an exchange
agreement with its majority shareholder, Savia S.A. de C.V. as of July 1, 2002
to exchange all of its outstanding Seminis Class C Preferred Stock (including
accrued PIK dividends) having a principal value of $120.2 million, additional
paid-in capital (including accrued PIK dividends) of $46.7 million and accrued
and unpaid cash dividends of $10.0 million into 37.7 million shares of Seminis
Class A common stock. The remaining accrued and unpaid cash dividends on the
Class C Preferred Stock of $15.0 million will remain due and payable and will
be paid in cash by the Company in accordance with the terms of the exchange
agreement. On July 3, 2002, the Company received an opinion from UBS Warburg
that, as of such date, the number of shares of Class A common stock to be
received by Savia in the exchange was fair from a financial point of view to
the holders of the Companys Class A common stock and Class B common stock (in
each case other than Savia and its affiliates and other than holders of the
Companys Class B common stock that also hold shares of the Companys Class B
Redeemable preferred stock). The exchange agreement was approved by the
Companys Board of Directors on July 3, 2002 and was approved by our
stockholders on September 26, 2002. Although the exchange agreement was
approved by the Stockholders at the Annual Meeting, it is subject to customary
closing conditions and approvals by creditors of Savia and the Company. At
this time, all of the closing conditions and approvals have not been satisfied
and therefore, the exchange has not been consummated. The Company may not
complete all of the transactions contemplated under the exchange agreement
until the conditions and approvals are obtained or waived, including the
payment by the Company of the accrued and unpaid dividends on the Class B
preferred stock and the consent of the lenders under the Companys Syndicated
Credit Facility.

In December 2002, Savia, Seminis
majority stockholder, announced that it signed
a letter of intent with Fox Paine & Company LLC under which Fox Paine and
certain Savia related parties will acquire all the outstanding shares of
Seminis, Inc. (See Note 16). The proposed transaction is subject to numerous conditions;
however, if completed, such a change in control would require the credit
facility to be paid in full. It is anticipated that such a transaction would
be funded by financing arranged by Fox Paine.

Whereas we have met our obligations as well as covenant requirements under the
amended credit facility through September 30, 2002, we must successfully
execute a refinancing plan prior to December 31, 2003 in order to meet the
final maturity of the facility. We will continue to pursue a refinancing plan,
which may include negotiation of a new credit facility, and/or placement

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of new debt securities; however, there can be no assurances that we will be
able to successfully complete the refinancing. Additionally, there can be no
assurances that the Fox Paine transaction will be consummated. Failure to
comply with existing covenants, which would make the Syndicated debt
callable, or
our inability to obtain adequate financing with reasonable terms prior to
December 31, 2003 could have a material adverse impact on our business, results
of operations or financial condition.

Note 3  Global Restructuring and Optimization Plan

In February 2000, we announced a cost-saving initiative designed to streamline
operations, increase utilization of facilities and improve efficiencies. The
first phase of the initiative, which commenced in fiscal year 2000 and focused
on North American operations, was completed by the end of fiscal year 2001. In
June 2001, we commenced the second phase, which was targeted at our global
operations and expanded the phase to cover additional headcount reductions and
to consolidate our facilities in Holland. The key elements to the Global
Restructuring and Optimization Plan involve:



| |  |  |  reorganizing our ten legacy seed companies into four geographical regions;              
| |  |  | ------------------------------------------------------------------------------------------
|
| |  |  |  selling or consolidating certain operation and production facilities;                   
|
| |  |  |  reducing headcount that results from the reorganization and from facility consolidation;
|
| |  |  |  rationalizing our product portfolio;                                                    
|
| |  |  |  implementing an advanced logistics management information system; and                   
|
| |  |  |  divesting non-strategic assets.                                                         

In connection with phase one of the Global Restructuring and Optimization Plan,
we recorded pre-tax charges to operations of approximately $34.4 million for
restructuring costs during fiscal year 2000 that included severance and other
exit costs, inventory write-downs and costs associated with streamlining our
products portfolio. Of this amount, $18.4 million was included in cost of goods
sold for inventory write-downs. The remaining $16.0 million was included in
selling, general and administrative expenses and consisted primarily of
severance costs. The total phase one and initial phase two severance charges
related to a planned 600-employee reduction worldwide in both operational and
administrative groups.

As part of the implementation of the expanded second phase of our Global
Restructuring and Optimization Plan, we recorded a pre-tax charge of $12.0
million in selling, general and administrative expenses in the third quarter of
fiscal year 2001. This charge primarily related to severance and related costs
resulting from an additional planned 250-employee reduction worldwide in both
operational and administrative groups. In fiscal year 2001, we also recorded
non-cash inventory write-downs of $58.2 million in cost of goods sold in order
to comply with more stringent seed quality standards and to further rationalize
our product portfolio from 6,000 to 4,000 varieties. We believe we have
established adequate reserves for all of the remaining costs and expenses
related to our Global Restructuring and Optimization Plan.

The remaining components of the restructuring accruals are as follows:

|                               |       |   |         |      |          |   |               |       |            |   |            |      |               |   |            |      |            |   |               |       |            |   |      |      |  |   |   |   |  |   |      |      |   |   |     |     | 
|------------------------------ | ----- | - | ------- | ---- | -------- | - | ------------- | ----- | ---------- | - | ---------- | ---- | ------------- | - | ---------- | ---- | ---------- | - | ------------- | ----- | ---------- | - | ---- | ---- |  | - | - | - |  | - | ---- | ---- | - | - | --- | --- | 
|                               |       |   |         |      |          |   | Amounts       |       | Balance at |   | Additional |      | Amounts       |   | Balance at |      | Additional |   | Amounts       |       | Balance at
|                               |       |   | Charges |      | Incurred |   | September 30, |       | charges    |   | Incurred   |      | September 30, |   | Charges    |      | Incurred   |   | September 30,
|                               |       |   | 2000    |      | 2000     |   | 2000          |       | 2001       |   | 2001       |      | 2001          |   | 2002       |      | 2002       |   | 2002         
|                               |       |   |         |      |          |   |               |       |            |   |            |      |               |   |            |      |            |   |              
|Severance and related expenses |       | $ | 14.0    |      |          | $ | (1.8          | )     |            | $ | 12.2       |      |               | $ | 12.0       |      |            | $ | (12.3         | )     |            | $ | 11.9 |      |  | $ |  |   |  | $ | (8.6 | )    |   | $ | 3.3 |    
|Inventory write downs          |       |   | 18.4    |      |          |   | (18.4         | )     |            |   |           |      |               |   | 58.2       |      |            |   | (58.2         | )     |            |   |     |      |  |   |  |   |  |   |     |      |   |   |    |    
|Other                          |       |   | 2.0     |      |          |   | (2.0          | )     |            |   |           |      |               |   |           |      |            |   |              |       |            |   |     |      |  |   |  |   |  |   |     |      |   |   |    |    
|                               |       |   |         |      |          |   |               |       |            |   |            |      |               |   |            |      |            |   |               |       |            |   |      |      |  |   |   |   |  |   |      |      |   |   |     |    
|                               | Total |   | $       | 34.4 |          |   | $             | (22.2 | )          |   | $          | 12.2 |               |   | $          | 70.2 |            |   | $             | (70.5 | )          |   | $    | 11.9 |  |   | $ |  |  |   | $    | (8.6 | ) |   | $   | 3.3 | 
|                               |       |   |         |      |          |   |               |       |            |   |            |      |               |   |            |      |            |   |               |       |            |   |      |      |  |   |   |   |  |   |      |      |   |   |     |    

To date, there have been no material adjustments to amounts accrued under the
plan. The remaining $3.3 million reserve balance is expected to be utilized in
fiscal year 2003.

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Note 4  Inventories

Inventories consist of the following at September 30, 2002 and 2001:

|                               |                       |   |         |         |      |   |         |         | 
|------------------------------ | --------------------- | - | ------- | ------- | ---- | - | ------- | ------- | 
|                               |                       |   | 2002    |         | 2001
|                               |                       |   |         |         |     
|Seed                           |                       | $ | 238,448 |         |      | $ | 246,250 |        
|Unharvested crop growing costs |                       |   | 27,199  |         |      |   | 25,857  |        
|Supplies                       |                       |   | 6,880   |         |      |   | 7,576   |        
|                               |                       |   |         |         |      |   |         |        
|                               | Total net inventories |   | $       | 272,527 |      |   | $       | 279,683 | 
|                               |                       |   |         |         |      |   |         |        

Inventories are presented net of reserves of $86,957 and $114,316 at September
30, 2002 and 2001, respectively. A non-recurring inventory write-down of
approximately $58,200 was taken in fiscal year 2001 to rationalize the
Companys product portfolio and impose more stringent seed quality standards as
part of the Global Restructuring and Optimization Plan.

Note 5  Property, Plant and Equipment

Property, plant and equipment consist of the following at September 30, 2002
and 2001:

|                               |  |      |         |      |  |   |         |  
|------------------------------ |  | ---- | ------- | ---- |  | - | ------- | -
|                               |  | 2002 |         | 2001
|                               |  |      |         |     
|Land                           |  | $    | 40,623  |      |  | $ | 42,383  |  
|Buildings and improvements     |  |      | 129,522 |      |  |   | 123,893 |  
|Machinery and equipment        |  |      | 61,478  |      |  |   | 67,518  |  
|Construction in progress       |  |      | 318     |      |  |   | 7,073   |  
|                               |  |      |         |      |  |   |         |  
|                               |  |      | 231,941 |      |  |   | 240,867 |  
|Less: accumulated depreciation |  |      | (63,212 | )    |  |   | (58,606 | )
|                               |  |      |         |      |  |   |         |  
|                               |  | $    | 168,729 |      |  | $ | 182,261 |  
|                               |  |      |         |      |  |   |         |  

Note 6  Intangible Assets

Intangible assets at September 30, 2002 and 2001 consist of the following and
are net of accumulated amortization for the respective the respective fiscal
years as parenthetically noted:

|                                                     |  |      |         |      |  |   |         | 
|---------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                                                     |  | 2002 |         | 2001
|                                                     |  |      |         |     
|Goodwill (net of $29,491 and $28,017)                |  | $    | 98,931  |      |  | $ | 93,082  | 
|Software costs (net of $20,697 and $14,603)          |  |      | 13,225  |      |  |   | 17,747  | 
|Trademarks (net of $7,772 and $6,980)                |  |      | 7,128   |      |  |   | 7,920   | 
|Germplasm (net of $71,431 and $64,044)               |  |      | 28,413  |      |  |   | 35,087  | 
|Other intangible assets (net of $12,847 and $10,109) |  |      | 13,106  |      |  |   | 15,828  | 
|                                                     |  |      |         |      |  |   |         | 
|                                                     |  | $    | 160,803 |      |  | $ | 169,664 | 
|                                                     |  |      |         |      |  |   |         | 

Changes in the net carrying amount of goodwill for the year ended September 30,
2002, are as follows:

|                                 |                                     |   |        |       | 
|-------------------------------- | ----------------------------------- | - | ------ | ----- | 
|                                 |                                     |   | Amount
|                                 |                                     |   |       
|Balance as of September 30, 2001 |                                     | $ | 93,082 |      
|                                 | Goodwill acquired during the period |   |        |      | 
|                                 | Impairment losses                   |   |        |      | 
|                                 | Translation adjustments and other   |   |        | 5,849 | 
|                                 |                                     |   |        |      
|Balance as of September 30, 2002 |                                     | $ | 98,931 |      
|                                 |                                     |   |        |      

Amortization expense on goodwill was $9,047 and $9,872 for the years ended
September 30, 2001 and September 30, 2000,
respectively.

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As required by SFAS No. 142, the results for the prior years have not been
restated. Had the Company accounted for its goodwill under SFAS No. 142 for
all periods presented, the Companys net income and loss per share would have
been as follows:

|                                          |                       |      |               |        |               |      |               |          |   |   |         |         |  
|----------------------------------------- | --------------------- | ---- | ------------- | ------ | ------------- | ---- | ------------- | -------- | - | - | ------- | ------- | -
|                                          |                       |      |               |        |               |      | Year Ended    |          |   |   |        
|                                          |                       |      | September 30, |        | September 30, |      | September 30,
|(In thousands, except per share amounts)  |                       | 2002 |               | 2001   |               | 2000
|                                          |                       |      |               |        |               |     
|Reported net loss                         |                       | $    | (2,602        | )      |               | $    | (152,779      | )        |   | $ | (89,407 | )      
|Goodwill amortization, net of tax         |                       |      |              |        |               |      | 9,047         |          |   |   | 9,872   |        
|                                          |                       |      |               |        |               |      |               |          |   |   |         |        
|                                          | Adjusted net loss     |      | $             | (2,602 | )             |      | $             | (143,732 | ) |   | $       | (79,535 | )
|                                          |                       |      |               |        |               |      |               |          |   |   |         |        
|Basic and diluted loss per share:         |                       |      |               |        |               |      |               |          |   |   |         |        
|                                          | As reported           |      | $             | (0.04  | )             |      | $             | (2.55    | ) |   | $       | (1.49   | )
|                                          | Goodwill amortization |      |               |       |               |      |               | .15      |   |   |         | .16     |  
|                                          |                       |      |               |        |               |      |               |          |   |   |         |        
|Adjusted basic and diluted loss per share |                       | $    | (0.04         | )      |               | $    | (2.40         | )        |   | $ | (1.33   | )      
|                                          |                       |      |               |        |               |      |               |          |   |   |         |        

Note 7  Accrued Liabilities

Accrued liabilities consist of the following at September 30, 2002 and 2001:

|                                       |  |      |        |      |  |   |        | 
|-------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                       |  | 2002 |        | 2001
|                                       |  |      |        |     
|Employee salaries and related benefits |  | $    | 44,754 |      |  | $ | 34,504 | 
|Severance                              |  |      | 3,269  |      |  |   | 11,936 | 
|Seedmens errors and omissions         |  |      | 4,072  |      |  |   | 3,595  | 
|Interest                               |  |      | 412    |      |  |   | 1,184  | 
|Savia dividends                        |  |      | 25,008 |      |  |   | 12,500 | 
|Income taxes payable                   |  |      | 3,236  |      |  |   | 1,820  | 
|Other                                  |  |      | 17,873 |      |  |   | 23,630 | 
|                                       |  |      |        |      |  |   |        | 
|                                       |  | $    | 98,624 |      |  | $ | 89,169 | 
|                                       |  |      |        |      |  |   |        | 

Note 8  Long-Term Debt

Long-term debt consists of the following at September 30, 2002 and 2001:

|                                                                |  |      |         |      |  |   |         |  
|--------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                                |  | 2002 |         | 2001
|                                                                |  |      |         |     
|Syndicated credit agreement borrowings                          |  | $    | 229,732 |      |  | $ | 293,200 |  
|South Korean borrowings due in annual
installments through 2007 |  |      | 1,738   |      |  |   | 1,956   |  
|GE Capital borrowings                                           |  |      | 14,174  |      |  |   | 16,077  |  
|Other borrowings                                                |  |      | 4,358   |      |  |   | 5,192   |  
|                                                                |  |      |         |      |  |   |         |  
|                                                                |  |      | 250,002 |      |  |   | 316,425 |  
|Less current portion                                            |  |      | (21,709 | )    |  |   | (67,527 | )
|                                                                |  |      |         |      |  |   |         |  
|                                                                |  | $    | 228,293 |      |  | $ | 248,898 |  
|                                                                |  |      |         |      |  |   |         |  

Other borrowings consist of various domestic and foreign, government and
non-government loans of less than $1,500 each, bearing interest annually at
average rates of 8.79% through 2013 and 8.5% through 2007 for fiscal years 2002
and 2001, respectively.

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As of September 30, 2002, long-term debt maturities are as follows:

|             |  |   |         | 
|------------ |  | - | ------- | 
|Year Ending  |  |   |         | 
|September 30 |  |   |         | 
|             |  |   |         | 
|2003         |  | $ | 21,709  | 
|2004         |  |   | 214,930 | 
|2005         |  |   | 2,713   | 
|2006         |  |   | 2,719   | 
|2007         |  |   | 2,397   | 
|Thereafter   |  |   | 5,534   | 
|             |  |   |         | 
|             |  | $ | 250,002 | 
|             |  |   |         | 

In July 1999, the Company entered into a new credit agreement with Bank of
Montreal and Harris Trust and Savings Bank providing for a $350,000 credit
facility. The Company used a portion of the net proceeds of its initial public
offering (Note 10) and funds available under the new credit facility to pay
loan origination fees and repay indebtedness under its previous credit
agreement. The Companys $350,000 credit facility consists of a term loan in
the amount of $200,000 and a revolving line of credit in the amount of
$150,000. The term loan required semi-annual payments, with the remaining
balance due and the revolving line of credit originally maturing on June 30,
2004.

The July 1999 agreement contains a number of financial covenants, including net
worth and indebtedness tests and limitations on its ability to make
acquisitions, transfer or sell assets, create liens, pay dividends, enter into
transactions with its affiliates or enter into a merger, consolidation or sale
of substantially all of its assets. The agreement is secured by the
intellectual property of Seminis and 100% of the shares of Seminis Vegetable
Seeds, Inc., a wholly owned subsidiary of Seminis, Inc. and shares of some
other international subsidiaries. The credit agreement provides for events of
default typical of facilities of its type, as well as an event of default if
Pulsar Internacional, S.A. de C.V., together with its affiliates, which
includes Savia, fails to hold a majority of the board of directors or direct
management of the Company or control at least 51% of the voting rights of the
Company.

In June 2000, the Company amended its credit agreement to provide for more
relaxed financial covenant ratios as well as to allow for the needed expenses
related to the Global Restructuring and Optimization Plan. The Company also
entered into a security agreement with the lenders that collateralized certain
receivables, general intangibles and inventory.

As of September 30, 2000, we were not in compliance with certain covenants of
our existing credit facility, which gave the lenders the right to accelerate
payment of all amounts outstanding under the facility. In December 2000, the
lenders granted a waiver with respect to these covenants that extended through
April 30, 2001, at which time any defaults would once again arise. As we did
not expect to be in compliance with our covenants once the waiver expired, all
outstanding borrowings under the credit facility were classified as a current
liability as of September 30, 2000. In connection with granting the waivers,
the lenders agreed to reschedule principal payments within fiscal year 2001.
The lenders also accelerated the final maturity of the term loan and the
termination date for the revolving credit commitments to June 30, 2002 from
June 30, 2004. We were obligated to deliver a financial plan through September
30, 2002, which detailed cash flow projections on a monthly basis as well as
proposed alternatives for the refinancing of the credit facility or
recapitalization of the company.

On May 31, 2001, our lenders agreed with the financial plan that we submitted
and agreed to restructure our existing credit facility. Upon receipt of the
amended credit agreement, long-term portions of borrowings were reclassified
from current liabilities to long-term debt. Among other things, the amendment
extended the final maturity of the credit facility from the previously agreed
on date of June 30, 2002 to December 31, 2002, revised principal payment dates
under the term loan, instituted a new grid pricing formula to determine
interest on borrowings and revised covenant obligations. Interim principal
obligations under the amendment included $16.0 million due in the fourth
quarter of fiscal year 2001, $19.0 million, $4.0 million, $31.0 million and
$9.0 million due in the first, second, third and fourth quarters of fiscal year
2002, respectively. All remaining amounts were due in the first quarter of
fiscal year 2003.

In October 2001, we completed the sale of an office building in Seoul, South
Korea, which generated net proceeds of approximately $20.0 million. We used
$19.5 million of the proceeds to make the scheduled $19.0 million payment on
the credit facility in October 2001. We also sold one of our non-core
businesses in January 2002, which generated additional proceeds of
approximately $17.6 million. We used $13.0 million of the proceeds to prepay
our existing credit facility in January 2002 and utilized our operating cash
flow to pay the remaining $18.0 million in June 2002.

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We met all required principal and interest payments during fiscal years 2002
and 2001 and were in compliance with all of our financial covenants under the
amended credit agreement at September 30, 2002. In October 2002, we paid an
additional $5.0 million of principal as required by the amended credit
agreement; however, as of December 31, 2002, we had not completed a refinancing
transaction in order to pay the remaining balance of $224.7 million. The
lenders agreed to temporarily extend the term of the credit facility and in
January 2003, a formal amendment was executed. Among other things, the
amendment extended the final maturity of the credit facility from the
previously agreed on date of December 31, 2002 to December 31, 2003, revised
principal payment dates under the term loan, instituted a new grid pricing
formula based on the greater of the sum of the base rate and 3.5 % or an
interest rate that ranges from 9.0% to 10.25% to determine interest on
borrowings and revised covenant obligations. Interim principal obligations
under the amendment included $3.0 million and $9.5 million due in the third and
fourth quarters of fiscal year 2003, respectively. The remaining outstanding
amount totaling $212.2 million will be due in the first quarter of fiscal year
2004. Upon receipt of the amended credit agreement, long-term portions of
borrowings were reclassified from current liabilities to long-term debt as of
September 30, 2002.

Loan origination fees of $3,611 were capitalized in fiscal year 1999 in
connection with the July 1999 credit agreement, $2,222 were capitalized in
fiscal year 2000 in connection with the amended credit agreement and $2,985
were capitalized in fiscal year 2001 in connection with the May 2001 amended
credit agreement. The fees are being amortized to interest expense over the
life of the agreement that expired on December 31, 2002. Fees related to the
fifth amendment will be amortized over the life of the agreement, which will
expire on December 31, 2003. Interest expense includes amortization of loan
origination fees of $4,354, $3,075 and $843 in fiscal years 2002, 2001 and
2000, respectively.

For the fiscal year ended September 30, 2002, 2001 and 2000, the Company
incurred interest at a weighted-average rate of 8.90%, 11.19% and 8.70% per
annum, respectively.

Note 9  Capital Stock and Mandatorily Redeemable Equity Securities

Recapitalization

In January 1999, the Board of Directors of Seminis, Inc., an Illinois
corporation, authorized the reincorporation of the Company in Delaware. In
conjunction with the reincorporation the holders of certain securities agreed
to a plan for the recapitalization of the Company (the Recapitalization) to
occur concurrently. The Recapitalization was effective June 18, 1999 and
provided for the exchange of shares of the Illinois corporation for shares of
the Delaware corporation as follows: (i) all preferred stock was exchanged for
like preferred stock; (ii) all 6,772 shares of Class B Redeemable Common Stock
(Old Class B Redeemable Common Stock) were converted into one-half the number
of such shares of Class B Common Stock; (iii) all Class A Common Stock was
exchanged for one-half the number of such shares of Class B Common Stock; and
(iv) all options to purchase Class C Common Stock were exchanged for options to
purchase Class A Common Stock. Immediately following the Recapitalization, the
Company paid a 1-for-1 stock dividend to all holders of Class B Common Stock.

Initial Public Offering

In July 1999, the Company completed an initial public offering of 13,750 shares
of Class A Common Stock at an initial offering price of $15.00 per share,
raising net proceeds of $191,700. The Company used the net proceeds of the
offering and funds available under the new July 1999 credit facility to pay loan origination fees, repay indebtedness under the April 1999 credit
agreement and $7,700 of a $20,000 intercompany advance from Savia.
The remaining $12,300 of the intercompany advance was converted into 1.2 shares
of Class C Preferred Stock.

Class A and B Redeemable Preferred Stock

On October 1, 1995, the Company acquired Petoseed Co., Inc. (Petoseed)
through a tax-free merger (the Merger) with George J. Ball, Inc. (Ball).
As part of the transaction, Seminis issued 25 shares of Class A Redeemable
Preferred Stock to the

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stockholders of Ball. Upon the completion of the Companys initial public
offering in July 1999, each share of Class A Redeemable Preferred Stock
automatically converted into one share of Class B Redeemable Preferred Stock.

The Class B Redeemable Preferred Stock has no voting rights. The Company pays
quarterly dividends on all issued shares of Class B Redeemable Preferred Stock
at a rate of 8% per year. Dividends are cumulative if unpaid and are added to
the redemption value of the shares. The liquidation value of the shares is
equal to the redemption value at any point in time. Class B Redeemable
Preferred Stock is not redeemable at the option of the holder. The Company
shall redeem all outstanding shares of the Class B Redeemable Preferred Stock
on October 1, 2005.

Old Class B Redeemable Common Stock

The Company also issued 18,091 shares of Old Class B Redeemable Common Stock to
the Ball stockholders as part of the Ball Merger. In November 1997, Savia
purchased 3,895 shares of Old Class B Redeemable Common Stock from the former
Ball stockholders for $72,875 or $18.71 per share. In January 1998, the
Company repurchased 11,319 shares of Old Class B Redeemable Common Stock from
the former Ball stockholders for $211,824 or $18.71 per share. Such shares were
canceled upon repurchase.

Upon the Recapitalization in June 1999, each share of Old Class B Redeemable
Common Stock automatically converted into one share of Class B Common Stock,
however, upon the conversion, the Old Class B Redeemable Common Stock lost its
redemption and accretion rights.

The redemption price of the Old Class B Redeemable Common Stock accreted at an
annual rate of approximately 6%. The redemption price was $7.48 per share on
the June 18, 1999 conversion date.

Class A Common Stock

The Company is authorized to issue up to 211,000 shares of Class A Common
Stock. Upon completion of the Companys initial public offering in July 1999,
the Company issued 13,750 shares of Class A Common Stock. In addition, 4,677
shares were reserved for issuance of stock options. Class A Common Stock is
entitled to one vote per share.

Class B Common Stock

Following the Ball Merger, Savia owned all 30,000 outstanding shares of the
Companys Class B Common Stock. During fiscal year 1998, the Company issued
7,386 shares of Class B Common Stock for cash in the amount of $138,200. The
share price of $18.71 was based on the fair market value of the Company at the
time of the transaction.

In February 1999, the Company converted its convertible subordinated debt due
Savia of $35,857 into 1,916 shares of Class B Common Stock at $18.71 per share.
As part of the Companys recapitalization in June 1999, 6,772 shares of Old
Class B Redeemable Common Stock were effectively converted into the same number
of shares of Class B Common Stock. Holders of the Class B Common Stock are
entitled to three votes per share.

In the fourth quarter of fiscal year 2001, 706 shares of Class B Common Stock
were converted to Class A Common Stock and in the second quarter of fiscal year
2000, 226 shares of Class B Common Stock were converted to Class A Common
Stock.

Class C Preferred Stock

The Company is authorized to issue up to 14 shares of its Class C Preferred
Stock. In December 1998, Savia made an equity investment in Seminis of $10,000
in exchange for 1 share of Class C Preferred Stock to finance the purchase of
shares of Hungnong, which Seminis was obligated to purchase from the minority
shareholders. In March 1999, Savia made an additional equity investment in
Seminis of $20,000 in exchange for 2 shares of Class C Preferred Stock to
finance working capital requirements. In July 1999, the Company converted
$12,300 of an intercompany advance from Savia into 1.2 shares of Class C
Preferred Stock. In April, May and June 2000, the company converted $22,000,
$14,000 and $6,000, respectively, of intercompany advances from Savia into 2.2
shares, 1.4 shares and .6 shares of Class C Preferred Stock. In August and
September 2000, Savia made additional equity investments of $10,000 and
$14,000, respectively, in exchange for 1.0 shares and 1.4 shares of Class C
Preferred Stock.

Shares of Class C Preferred Stock have no voting rights and are redeemable at
the option of the Company. Dividends accrue cumulatively at the rate of 10% per
year and are payable quarterly. Dividends payable through January 2001 are
payable by

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issuing additional fully paid and non-assessable shares of Class C Preferred
Stock. Subsequently, the dividends are part of the accrued liabilities.

The liquidation value of Class C Preferred Stock at September 30, 2002 and
2001, included $18,011 and $8,989, respectively, of accrued cash dividends
classified in accrued liabilities.

Additional Capital Contributions

In October and November 2000, the Company received additional capital
contributions of $31.9 million and $14.0 million, respectively, from Savia to
finance additional working capital requirements. Dividends were accrued at the
rate of 10% per year.

On October 1, 2002 the Board of Directors approved the conversion of the Savia
additional capital contribution and the associated paid in kind dividends that
totaled $46.7 million to be converted to 4.67 shares of Class C Preferred
Stock. Concurrently, the Board also adopted a resolution authorizing and
directing an increase in the number of shares designated as Class C Redeemable
PIK Preferred Stock from 14.4 shares to 16.7 shares.

Exchange Transaction

The Company entered into an exchange agreement with its majority shareholder,
Savia S.A. de C.V. as of July 1, 2002 to exchange all of its outstanding
Seminis Class C Preferred Stock (including accrued PIK dividends) having a
principal value of $120.2 million, additional paid-in capital (including
accrued PIK dividends) of $46.7 million and accrued and unpaid cash dividends
of $10.0 million into 37.7 million shares of Seminis Class A common stock. The
remaining accrued and unpaid cash dividends on the Class C Preferred Stock of
$15.0 million will remain due and payable and will be paid in cash by the
Company in accordance with the terms of the exchange agreement. On July 3,
2002, the Company received an opinion from UBS Warburg that, as of such date,
the number of shares of Class A common stock to be received by Savia in the
exchange was fair from a financial point of view to the holders of the
Companys Class A common stock and Class B common stock (in each case other
than Savia and its affiliates and other than holders of the Companys Class B
common stock that also hold shares of the Companys Class B Redeemable
preferred stock). The exchange agreement was approved by the Companys Board
of Directors on July 3, 2002 and was approved by our stockholders on September
26, 2002. Although the exchange agreement was approved by the Stockholders at
the Annual Meeting, it is subject to customary closing conditions and approvals
by creditors of Savia and the Company. At this time, all of the closing
conditions and approvals have not been satisfied and therefore, the exchange
has not been consummated. The Company may not complete all of the transactions
contemplated under the exchange agreement until the conditions and approvals
are obtained or waived, including the payment by the Company of the accrued and
unpaid dividends on the Class B preferred stock and the consent of the lenders
under the Companys Syndicated Credit Facility.

Note 10  Income Taxes

Income (loss) from continuing operations before income taxes consists of the following:

|                   |  |      |        |      |  |      |         |   |  |   |          |  
|------------------ |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | -------- | -
|                   |  | 2002 |        | 2001 |  | 2000
|                   |  |      |        |      |  |     
|U.S. operations    |  | $    | (9,952 | )    |  | $    | (98,826 | ) |  | $ | (90,311  | )
|Foreign operations |  |      | 28,507 |      |  |      | 4,346   |   |  |   | (15,026  | )
|                   |  |      |        |      |  |      |         |   |  |   |          |  
|                   |  | $    | 18,555 |      |  | $    | (94,480 | ) |  | $ | (105,337 | )
|                   |  |      |        |      |  |      |         |   |  |   |          |  

The expense (benefit) for income taxes consists of the following:

|          |         |   |       |        |      |   |        |        |  |   |         |         |  
|--------- | ------- | - | ----- | ------ | ---- | - | ------ | ------ |  | - | ------- | ------- | -
|          |         |   | 2002  |        | 2001 |   | 2000  
|          |         |   |       |        |      |   |       
|Current:  |         |   |       |        |      |   |        |        |  |   |         |        
|          | Federal |   | $     | (5,909 | )    |   | $      |       |  |   | $       |        |  
|          | State   |   |       | (441   | )    |   |        | 125    |  |   |         | 806     |  
|          | Foreign |   |       | 9,085  |      |   |        | 6,336  |  |   |         | 12,099  |  
|          |         |   |       |        |      |   |        |        |  |   |         |         |  
|          |         |   | 2,735 |        |      |   | 6,461  |        |  |   | 12,905  |        
|          |         |   |       |        |      |   |        |        |  |   |         |         |  
|Deferred: |         |   |       |        |      |   |        |        |  |   |         |        
|          | Federal |   |       | 2,065  |      |   |        | 23,355 |  |   |         | (32,466 | )
|          | State   |   |       | 179    |      |   |        | 2,702  |  |   |         | (2,824  | )
|          | Foreign |   |       | (2,510 | )    |   |        | 7,457  |  |   |         | (2,169  | )
|          |         |   |       |        |      |   |        |        |  |   |         |         |  
|          |         |   | (266  | )      |      |   | 33,514 |        |  |   | (37,459 | )      
|          |         |   |       |        |      |   |        |        |  |   |         |         |  
|          |         | $ | 2,469 |        |      | $ | 39,975 |        |  | $ | (24,554 | )      
|          |         |   |       |        |      |   |        |        |  |   |         |         |  

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Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Companys deferred tax assets and liabilities as of September 30, 2002
and 2001 are as follows:

|                          |                                                         |                                |         |         |         |      |         |         |         |  
|------------------------- | ------------------------------------------------------- | ------------------------------ | ------- | ------- | ------- | ---- | ------- | ------- | ------- | -
|                          |                                                         |                                |         | 2002    |         | 2001
|                          |                                                         |                                |         |         |         |     
|Deferred tax assets:      |                                                         |                                |         |         |         |      |         |        
|                          | Accounts receivable                                     |                                | $       | 2,887   |         |      | $       | 2,626   |        
|                          | Inventories                                             |                                |         | 13,644  |         |      |         | 23,411  |        
|                          | Other accruals                                          |                                |         | 6,546   |         |      |         | 12,338  |        
|                          | Net
operating loss and foreign tax credit carryforwards |                                |         | 58,864  |         |      |         | 59,135  |        
|                          |                                                         |                                |         |         |         |      |         |         |        
|                          |                                                         | Total deferred tax assets      |         |         | 81,941  |      |         |         | 97,510  |  
|                          | Valuation allowances and reserves                       |                                |         | (57,060 | )       |      |         | (62,769 | )      
|                          |                                                         |                                |         |         |         |      |         |         |        
|                          |                                                         | Net deferred tax assets        |         |         | 24,881  |      |         |         | 34,741  |  
|                          |                                                         |                                |         |         |         |      |         |         |        
|Deferred tax liabilities: |                                                         |                                |         |         |         |      |         |        
|                          | Fixed and intangible assets                             |                                |         | (19,183 | )       |      |         | (28,640 | )      
|                          | Accrued taxes on undistributed foreign earnings         |                                |         | (21,451 | )       |      |         | (21,837 | )      
|                          |                                                         |                                |         |         |         |      |         |         |        
|                          |                                                         | Total deferred tax liabilities |         |         | (40,634 | )    |         |         | (50,477 | )
|                          |                                                         |                                |         |         |         |      |         |         |        
|                          |                                                         | $                              | (15,753 | )       |         | $    | (15,736 | )      
|                          |                                                         |                                |         |         |         |      |         |         |        

Based upon an assessment of the net deferred tax assets in the United States and
foreign jurisdictions, an increase in valuation allowance on the remaining
deferred tax assets in the United States and the Netherlands was considered
necessary during fiscal year 2001.

The valuation allowance for deferred tax assets as of September 30, 2002 and
2001 was $57,060 and $62,769, respectively. The net change in the total
valuation allowance for the years ended September 30, 2002 and 2001 was a
decrease of $5,709 and an increase of $44,168, respectively. The
decrease in 2002 consisted of partial utilization of NOLs in the
Netherlands which had been fully reserved, utilization of a fully
reserved NOL carryback in the United States based on a change in the
tax law, offset by additional losses generated in the United States
for which no benefit was recorded.

The Companys tax asset of
$58,864 for net operating loss and foreign tax credit carryforwards
include appropriate balances relating to a Netherlands net operating loss carryforward of $28,894 that has an
indefinite life and a United States net operating loss carryforward of $83,971
which will expire in 2020 and 2022.

To address cash flow needs in the United States, the repatriation strategy for
earnings in Korea was changed during fiscal year 2001. Accordingly,
United States tax was
recorded for previously undistributed Korean earnings. The earnings for
certain other foreign subsidiaries will only be repatriated to the United
States to the extent the foreign taxes can be utilized as foreign tax credits
against federal taxes.

The expense (benefit) for income taxes varies from income taxes based on the
federal statutory rate as follows:

|                                                                       |  |      |        |      |  |      |         |   |  |   |         |  
|---------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                                       |  | 2002 |        | 2001 |  | 2000
|                                                                       |  |      |        |      |  |     
|Income tax (benefit) at statutory Federal rate                         |  | $    | 6,494  |      |  | $    | (33,068 | ) |  | $ | (36,868 | )
|State and local income tax (benefit), net of Federal income tax effect |  |      | 170    |      |  |      | (168    | ) |  |   | (1,312  | )
|Research and other tax credits                                         |  |      | (724   | )    |  |      | (1,064  | ) |  |   | (1,358  | )
|Repatriated foreign earnings                                           |  |      |       |      |  |      | 23,739  |   |  |   |        |  
|Foreign earnings taxed at different rates                              |  |      | 2,599  |      |  |      | 4,385   |   |  |   | (2,051  | )
|Net increase (decrease) in valuation allowances and reserves           |  |      | (5,709 | )    |  |      | 44,168  |   |  |   | 11,521  |  
|Goodwill amortization                                                  |  |      |       |      |  |      | 3,194   |   |  |   | 3,558   |  
|Other                                                                  |  |      | (361   | )    |  |      | (1,211  | ) |  |   | 1,956   |  
|                                                                       |  |      |        |      |  |      |         |   |  |   |         |  
|                                                                       |  | $    | 2,469  |      |  | $    | 39,975  |   |  | $ | (24,554 | )
|                                                                       |  |      |        |      |  |      |         |   |  |   |         |  

Note 11  Employee Benefits

Pension and Retirement Plans

U.S. Plans.The Company maintains a Company-sponsored defined contribution
savings plan covering eligible employees. Company contributions are based on a
percentage of employee contributions and on employee salaries. Company
contributions totaled $1,576, $2,428 and $2,499 in fiscal years 2002, 2001 and
2000, respectively. The Company also maintains a qualified profit sharing
plan. Annual contributions are made at the discretion of the Companys board
of directors and totaled $514, $566 and $440 in fiscal years 2002, 2001 and
2000, respectively.

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Foreign Plans.In accordance with the local statutory requirements, the Company
sponsors retirement and severance plans at several of its foreign locations.
The Company has an accrual of $19,740 at September 30, 2002 and $11,531 at
September 30, 2001 for anticipated payments to be made to foreign employees
upon retirement or termination. The accrual in fiscal year 2002 included a
$7,176 equity adjustment for minimum pension liability in Holland.

The Company provides a defined-benefit pension plan in the Netherlands (the
Netherlands Plan) as required by statute. The following provides a
reconciliation of the benefit obligation, plan assets and funded status of the
Netherlands Plan as of September 30, 2002 and 2001.

|                                        |                                                   |  |   |        |   |      |   |        |   | 
|--------------------------------------- | ------------------------------------------------- |  | - | ------ | - | ---- | - | ------ | - | 
|                                        |                                                   |  |   | 2002   |   | 2001
|                                        |                                                   |  |   |        |   |     
|Change in projected benefit obligation: |                                                   |  |   |        |   |      |   |       
|                                        | Projected benefit obligation at beginning of year |  | $ | 41,679 |   |      | $ | 34,193 |  
|                                        | Service cost                                      |  |   | 2,204  |   |      |   | 1,393  |  
|                                        | Interest cost                                     |  |   | 2,450  |   |      |   | 2,265  |  
|                                        | Actuarial loss                                    |  |   | 315    |   |      |   | 3,019  |  
|                                        | Benefits paid                                     |  |   | (942   | ) |      |   | (844   | )
|                                        | Plan participant contributions                    |  |   | 166    |   |      |   |       |  
|                                        | Curtailment                                       |  |   | (1,729 | ) |      |   |       |  
|                                        | Translation difference                            |  |   | 3,245  |   |      |   | 1,653  |  
|                                        |                                                   |  |   |        |   |      |   |        |  
|                                        | Projected benefit obligation at end of year       |  |   | 47,388 |   |      |   | 41,679 |  
|                                        |                                                   |  |   |        |   |      |   |        |  
|Change in plan assets:                  |                                                   |  |   |        |   |      |   |       
|                                        | Fair value of plan assets at beginning of year    |  |   | 34,143 |   |      |   | 31,978 |  
|                                        | Actual return on plan assets                      |  |   | 1,903  |   |      |   | 671    |  
|                                        | Contributions                                     |  |   | 1,835  |   |      |   | 1,035  |  
|                                        | Benefits paid                                     |  |   | (942   | ) |      |   | (844   | )
|                                        | Translation difference                            |  |   | 2,379  |   |      |   | 1,303  |  
|                                        |                                                   |  |   |        |   |      |   |        |  
|                                        | Fair value of plan assets at end of year          |  |   | 39,318 |   |      |   | 34,143 |  
|                                        |                                                   |  |   |        |   |      |   |        |  
|                                        | Funded status of plan                             |  |   | (8,070 | ) |      |   | (7,536 | )
|                                        | Unrecognized net loss                             |  |   | 12,345 |   |      |   | 10,981 |  
|                                        | Unrecognized prior service cost                   |  |   | (1,946 | ) |      |   | (3,322 | )
|                                        |                                                   |  |   |        |   |      |   |        |  
|                                        | Prepaid pension asset                             |  | $ | 2,329  |   |      | $ | 123    |  
|                                        |                                                   |  |   |        |   |      |   |        |  

The components of net pension expense of the Netherlands Plan, based on the
most recent valuation dates, are as follows:

|                              |  |      |        |      |  |      |        |   |  |   |        |  
|----------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                              |  | 2002 |        | 2001 |  | 2000
|                              |  |      |        |      |  |     
|Service cost                  |  | $    | 2,204  |      |  | $    | 1,393  |   |  | $ | 1,509  |  
|Interest cost                 |  |      | 2,450  |      |  |      | 2,265  |   |  |   | 1,752  |  
|Actual gain on plan assets    |  |      | (1,781 | )    |  |      | (649   | ) |  |   | (960   | )
|Net amortization and deferral |  |      | (2,811 | )    |  |      | (1,294 | ) |  |   | (1,256 | )
|                              |  |      |        |      |  |      |        |   |  |   |        |  
|                              |  | $    | 62     |      |  | $    | 1,715  |   |  | $ | 1,045  |  
|                              |  |      |        |      |  |      |        |   |  |   |        |  

Assumptions used in the above calculations are as follows:

|                                        |  |      |     |      |  |      |     |   |  |  |     |  
|--------------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                        |  | 2002 |     | 2001 |  | 2000
|                                        |  |      |     |      |  |     
|Weighted-average discount rate          |  |      | 5.5 | %    |  |      | 6.0 | % |  |  | 6.3 | %
|Rate of future compensation increases   |  |      | 5.8 |      |  |      | 5.5 |   |  |  | 5.5 |  
|Long-term rate of return on plan assets |  |      | 8.0 |      |  |      | 8.0 |   |  |  | 8.0 |  

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Stock Option Plan

In 1998, the Company adopted the Seminis 1998 Stock Option Plan (the Stock
Option Plan) under which key employees and board of director members may be
granted options to purchase shares of the Companys authorized and issued Class
A Common Stock. The board of directors reserved 3,677 shares for issuance
under the plan. On September 26, 2002, during the annual meeting of
stockholders, the stockholders approved an amendment to the Seminis, Inc. 1998
Stock Option Plan to increase the number of shares that may be granted under
the Plan from 3,677 shares to 4,677 shares. In July 1998, the Board of
Directors awarded options to acquire 267 shares by plan participants. During
October 1999 and August 2000, 520 options and 432 options were issued at $7.63
and $1.56 per share, respectively. During October 2000 and August 2001, 513
options and 950 options were issued at $1.36 and $1.18 per share, respectively.
During April 2002, 2,562 options were issued at $1.28 per share. Under the
Stock Option Plan, the option exercise price is equal to fair market value at
the date of grant.

Options currently expire no later than ten years from the grant date and
generally vest over four years. Proceeds received by the Company from
exercises will be credited to common stock and additional paid-in capital.

Stock option plan activity during the three years ended September 30, 2002 was
as follows:

|                   |                                |  |                  |        |                    |  |                  |       |   |  |   |       | 
|------------------ | ------------------------------ |  | ---------------- | ------ | ------------------ |  | ---------------- | ----- | - |  | - | ----- | 
|                   |                                |  | Available Number |        | Outstanding Number |  | Weighted Average
|                   |                                |  | of Shares        |        | of Shares          |  | Exercise Price  
|                   |                                |  |                  |        |                    |  |                 
|September 30, 1999 |                                |  | 3,410            |        |                    |  | 267              |       |   |  |  |      
|                   | Grants                         |  |                  | (952   | )                  |  |                  | 952   |   |  |   | 4.87  | 
|                   | Exercises                      |  |                  |       |                    |  |                  |      |   |  |   |      | 
|                   | Cancellations                  |  |                  | 135    |                    |  |                  | (135  | ) |  |   | 13.02 | 
|                   |                                |  |                  |        |                    |  |                  |       |   |  |   |      
|September 30, 2000 |                                |  | 2,593            |        |                    |  | 1,084            |       |   |  |   |      
|                   |                                |  |                  |        |                    |  |                  |       |   |  |   |      
|                   | Grants                         |  |                  | (1,462 | )                  |  |                  | 1,462 |   |  |   | 1.24  | 
|                   | Exercises                      |  |                  |       |                    |  |                  |      |   |  |   |      | 
|                   | Cancellations                  |  |                  | 434    |                    |  |                  | (434  | ) |  |   | 7.11  | 
|                   |                                |  |                  |        |                    |  |                  |       |   |  |   |      
|September 30, 2001 |                                |  | 1,565            |        |                    |  | 2,112            |       |   |  |   |      
|                   |                                |  |                  |        |                    |  |                  |       |   |  |   |      
|                   | Additional authorized A shares |  |                  | 1,000  |                    |  |                  |      |   |  |   |      | 
|                   | Grants                         |  |                  | (2,562 | )                  |  |                  | 2,562 |   |  |   | 1.28  | 
|                   | Exercises                      |  |                  | 4      |                    |  |                  | (4    | ) |  |   | 1.33  | 
|                   | Cancellations                  |  |                  | 248    |                    |  |                  | (248  | ) |  |   | 3.83  | 
|                   |                                |  |                  |        |                    |  |                  |       |   |  |  
|September 30, 2002 |                                |  | 255              |        |                    |  | 4,422            |       |   |  |   |      
|                   |                                |  |                  |        |                    |  |                  |       |   |  |  

The following table summarizes information concerning currently outstanding and
exercisable stock options:

|               |  |             |       |                  |  |            |  |             |     |  |     | 
|-------------- |  | ----------- | ----- | ---------------- |  | ---------- |  | ----------- | --- |  | --- | 
|               |  | Number      |       |                  |  |            |  | Number     
|               |  | Outstanding |       |                  |  |            |  | Exercisable
|               |  | as of       |       | Remaining        |  | as of     
|Exercise Price |  | 9/30/02     |       | Contractual Life |  | 9/30/02   
|               |  |             |       |                  |  |           
|$1.28          |  |             | 2,562 |                  |  | 9.50 years |  |             | 0   | 
|1.18           |  |             | 872   |                  |  | 8.92 years |  |             | 218 | 
|1.36           |  |             | 374   |                  |  | 8.04 years |  |             | 94  | 
|1.56           |  |             | 257   |                  |  | 7.92 years |  |             | 129 | 
|7.63           |  |             | 267   |                  |  | 7.04 years |  |             | 134 | 
|18.71          |  |             | 90    |                  |  | 5.75 years |  |             | 90  | 
|               |  |             |       |                  |  |            |  |             |     |  |     | 
|               |  |             | 4,422 |                  |  |            |  |             |     |  | 665 | 
|               |  |             |       |                  |  |            |  |             |     |  |     | 

Pro forma information regarding net income is required by SFAS No. 123. This
information is required to be determined as if the Company had accounted for
its employee stock options granted under the fair market value method of that
statement. The weighted average fair value of options granted in fiscal year
2000 was $2.80 per share using the Black-Scholes option pricing model, assuming
a weighted average risk-free interest rate of 6.03%, an expected life of five
years and no projected dividend yields. Stock price volatility was 55% and
100% for the October 1999 and August 2000 grants, respectively. The weighted
average fair value of options granted in fiscal year 2001 was $0.96 per share
using the Black-Scholes options pricing model, assuming a weighted average
risk-free interest rate of 5.04%, an expected life of five years and no
projected dividend yields. The weighted average fair value of options granted
in fiscal year 2002 was $0.98 per share using the Black-Scholes options pricing
model, assuming a weighted average risk-free interest rate of 4.59%, an
expected life of five years and no projected dividend yields. Stock price
volatility was 100% for the October 2000, August 2001 and April 2002 grants.

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For purposes of pro forma disclosures, the estimated fair market value of the
options is amortized to expense over the options vesting periods. Stock-based
compensation costs determined under the fair value method would have decreased
net income by $769 ($0.01 per share) for the year ended September 30, 2002, and
increased net loss by $622 ($0.01 per share) and $795 ($0.01 per share) for the
years ended September 30, 2001 and 2000, respectively.

Stock Award Plan

During the quarter ended June 29, 2001, the Company adopted a stock award plan
that was approved by the shareholders on September 26, 2002. Certain key
executives were awarded with Company shares that vest after meeting certain
quarterly performance criteria over 18 months. Upon meeting each quarterly
goal, the shares awarded were immediately vested. Total number of shares
eligible to be awarded under this plan is 4.8 million. Performance targets
were met, which resulted in an accrual of approximately $7.3 million and $2.6
million recorded in selling, general and administrative expenses based on
current market value of Common Stock at the date the award was earned in fiscal
year 2002 and 2001, respectively.

Note 12  Commitments and Contingencies

Leases

The Company leases land, buildings, machinery and equipment under operating
leases. Rental expenses aggregated approximately $7,579, $9,461 and $11,973 in
fiscal years 2002, 2001 and 2000, respectively.

Minimum annual lease commitments under non-cancelable operating leases at
September 30, 2002 are as follows:

|                          |  |   |        | 
|------------------------- |  | - | ------ | 
|Year Ending September 30,
|                         
|2003                      |  | $ | 5,102  | 
|2004                      |  |   | 3,854  | 
|2005                      |  |   | 2,557  | 
|2006                      |  |   | 1,215  | 
|2007                      |  |   | 474    | 
|Thereafter                |  |   | 254    | 
|                          |  |   |        | 
|                          |  | $ | 13,456 | 
|                          |  |   |        | 

Contingencies

The Company has been named as a defendant in various lawsuits arising out of
alleged seedmens errors and omissions. The Company maintains third-party
seedmens errors and omissions insurance covering these types of claims, thus
policies are subject to annual renewal and revisions and house deductibles and
coverage limits. An accrual for managements estimate of exposure related to
such claims has been recorded in the financial statements and is disclosed in
Note 7. It is the opinion of management that the ultimate resolution of these
matters will not have a material adverse effect on the Companys consolidated
financial position or results of operations.

Historically, resolution of asserted claims has been in line with managements
expectations.

Note 13  Geographic Information

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The Company operates principally in one business segment consisting of the
development, production and marketing of vegetable and fruit seeds. Revenues
derived from sales to external customers attributed to the Companys country of
domicile, to individual countries representing more than 10% of the Companys
consolidated net sales and to all other foreign countries in total are
summarized as follows:

|           |               |                        |   |         |         |      |   |         |         |  |   |         |         | 
|---------- | ------------- | ---------------------- | - | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|           |               |                        |   | 2002    |         | 2001 |   | 2000   
|           |               |                        |   |         |         |      |   |        
|Net sales: |               |                        |   |         |         |      |   |         |         |  |   |        
|           | United States |                        | $ | 144,295 |         |      | $ | 140,016 |         |  | $ | 138,774 |        
|           | Italy         |                        |   | 38,368  |         |      |   | 37,933  |         |  |   | 41,789  |        
|           | South Korea   |                        |   | 45,383  |         |      |   | 56,583  |         |  |   | 60,732  |        
|           | Spain         |                        |   | 28,492  |         |      |   | 25,717  |         |  |   | 28,153  |        
|           | Mexico        |                        |   | 28,245  |         |      |   | 27,809  |         |  |   | 22,578  |        
|           | Other foreign |                        |   | 167,824 |         |      |   | 161,837 |         |  |   | 182,419 |        
|           |               |                        |   |         |         |      |   |         |         |  |   |         |        
|           |               | Consolidated net sales |   | $       | 452,607 |      |   | $       | 449,895 |  |   | $       | 474,445 | 
|           |               |                        |   |         |         |      |   |         |         |  |   |         |        

Long-lived assets other than financial instruments and deferred tax assets
located in the Companys country of domicile, located in individual foreign
countries representing more than 10% of the Companys consolidated long-lived
assets and located in all other foreign countries in total in which the Company
holds assets are summarized as follows:

|                   |                                |  |      |         |      |  |   |         | 
|------------------ | ------------------------------ |  | ---- | ------- | ---- |  | - | ------- | 
|                   |                                |  | 2002 |         | 2001
|                   |                                |  |      |         |     
|Long-lived assets: |                                |  |      |         |      |  |   |        
|                   | United States                  |  | $    | 138,814 |      |  | $ | 159,169 | 
|                   | The Netherlands                |  |      | 29,191  |      |  |   | 32,724  | 
|                   | South Korea                    |  |      | 142,595 |      |  |   | 125,608 | 
|                   | Other foreign                  |  |      | 37,323  |      |  |   | 50,111  | 
|                   |                                |  |      |         |      |  |   |         | 
|                   | Consolidated long-lived assets |  | $    | 347,923 |      |  | $ | 367,612 | 
|                   |                                |  |      |         |      |  |   |         | 

Note 14  Related Parties

Balances and transactions with related parties included in the consolidated
financial statements are as follows:

Pursuant to an agreement between our company and Bionova, a biotechnology and
fresh produce company and a majority owned subsidiary of Savia, we paid Bionova
for access to the results of Bionovas biotechnology research. This agreement
was terminated during the third quarter of fiscal year 2002. Research and
development expenses included $662, $2,255 and $2,500 in fiscal year 2002, 2001
and 2000, respectively, in biotechnology research fees.

In fiscal year 2002 and 2001, we had sales of $793 and $944, respectively, to
Agrobionova, an affiliate of Savia and a receivable of $355 and $617 at
September 30, 2002 and 2001, respectively. We also had sales of $296 to
Bionova in fiscal year 2001 and a corresponding receivable of $296 at September
30, 2001.

We have issued 10,830 shares of our Class C preferred stock to Savia for a
total purchase price of $108.3 million. These shares accrue dividends
quarterly at a rate of 10.0% per year. In October and November 2000, we
received an additional $31.9 million and $14.0 million, respectively, of
capital contributions from Savia. We have agreed to pay dividends on these
contributions at the same rate as the Class C preferred stock. Through July 1,
2002, there were $25.0 million of accrued and unpaid dividends on the
outstanding Class C preferred stock and additional capital contributions. We
have also paid dividends of $12.7 million in the form of additional shares on
the Class C preferred stock, which are classified as additional paid in
capital.

On October 1, 2002 the Board of Directors approved the conversion of the Savia
additional capital contribution and the associated paid in kind dividends that
totaled $46.7 million to be converted to 4.67 shares of Class C Preferred
Stock. Concurrently, the Board also adopted a resolution authorizing and
directing an increase in the number of shares designated as Class C Redeemable
PIK Preferred Stock from 14.4 shares to 16.7 shares.

Note 15  Quarterly Financial Data (Unaudited)

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##### Table of Contents



The seed business is highly seasonal. Generally, net sales are highest in the
second fiscal quarter due to increased demand from northern hemisphere growers
who plant seed in the early spring. Seminis recorded 33.7% of its fiscal year
2002 and 2001 net sales, during its second fiscal quarter. Seminis results in
any particular quarter should not be considered indicative of those to be
expected for a full year.

The following table sets forth results of operations data for the last eight
fiscal quarters.

|                                                                                                               |                                   |   |          |         |          |   |                  |        |          |   |          |      |          |   |               |     |                  |   |         |         |   |   |         |     |  |   |          |          |   |   |         |         |  
|-------------------------------------------------------------------------------------------------------------- | --------------------------------- | - | -------- | ------- | -------- | - | ---------------- | ------ | -------- | - | -------- | ---- | -------- | - | ------------- | --- | ---------------- | - | ------- | ------- | - | - | ------- | --- |  | - | -------- | -------- | - | - | ------- | ------- | -
|                                                                                                               |                                   |   |          |         |          |   |                  |        |          |   |          |      |          |   | Quarter Ended |     |                  |   |         |         |   |   |         |     |  |   |         
|                                                                                                               |                                   |   |         
|                                                                                                               |                                   |   |          |         |          |   | Fiscal Year 2002 |        |          |   |          |      |          |   |               |     | Fiscal Year 2001 |   |         |         |  
|                                                                                                               |                                   |   |          |         |         
|                                                                                                               |                                   |   | Dec. 28, |         | Mar. 29, |   | Jun. 28,         |        | Sep. 30, |   | Dec. 29, |      | Mar. 30, |   | Jun. 29,      |     | Sep. 30,        
|                                                                                                               |                                   |   |          |         |          |   |                  |        |          |   |          |      |          |   |               |     |                 
|Net sales                                                                                                      |                                   | $ | 80,079   |         |          | $ | 152,309          |        |          | $ | 106,564  |      |          | $ | 113,655       |     |                  | $ | 81,233  |         |   | $ | 151,514 |     |  | $ | 106,445  |          |   | $ | 110,703 |        
|Gross profit                                                                                                   |                                   |   | 49,793   |         |          |   | 95,851           |        |          |   | 64,983   |      |          |   | 70,088        |     |                  |   | 48,271  |         |   |   | 92,155  |     |  |   | 10,238   |          |   |   | 67,164  |        
|Net income (loss) from continuing operations                                                                   |                                   |   | (19,311  | )       |          |   | 25,654           |        |          |   | 4,264    |      |          |   | 5,479         |     |                  |   | (16,837 | )       |   |   | 4,879   |     |  |   | (107,090 | )        |   |   | (15,407 | )      
|Income (loss) from continuing operations                                                                       |                                   |   |          |         |          |   |                  |        |          |   |          |      |          |   |               |     |                  |   |         |         |   |   |         |     |  |   |          |          |   |   |         |        
|                                                                                                               | available for common
stockholders |   |          | (23,880 | )        |   |                  | 20,993 |          |   |          | (396 | )        |   |               | 681 |                  |   |         | (21,086 | ) |   |         | 216 |  |   |          | (111,750 | ) |   |         | (20,159 | )
|Income (loss) from continuing operations available for common
stockholders per common share, basic and diluted |                                   |   | (0.40    | )       |          |   | 0.34             |        |          |   | (0.01    | )    |          |   | 0.01          |     |                  |   | (0.35   | )       |   |   |        |     |  |   | (1.87    | )        |   |   | (0.33   | )      

Note 16  Subsequent Event

On December 13, 2002, Savia, S.A. de C.V., Seminis majority stockholder,
announced that it signed a letter of intent with Fox Paine & Company, LLC, a
San Francisco based private equity firm, under which Fox Paine and certain
Savia related parties will acquire all of the outstanding shares of Seminis,
Inc. In response to the proposed transaction, the Company formed a special
committee of the independent directors to evaluate the proposed transaction and
its fairness and to make a recommendation to the full Board of Directors. The
proposed transaction is subject to certain conditions, including the
satisfactory completion of a review of the business and financial condition of
Seminis by Fox Paine, the negotiation of definitive agreements covering the
transactions contemplated under the letter of intent, the refinancing and
incurrence of additional indebtedness of Seminis, the acquisition of the
Seminis shares held by the public, the approval of the bank lenders of both
Savia and its controlling stockholders, the obtaining of regulatory approvals,
the approval of the Board of Directors of Seminis and Savia and the approval of
the stockholders of Seminis and Savia.

On December 17, 2002 and January 4, 2003, four purported class action lawsuits
were filed relating to the above-described transaction. Three of these actions
 Garry Firth v. Alfonso Romo Garza, et al., Civil Action No. 20085, Boris
Pozniak v. Alfonso Romo Garza, et al., Civil Action No. 20097 and Pablo Herranz
v. Seminis, Inc., et al., Civil Action No. 20105  were filed in the Delaware
Court of Chancery (New Castle County), while the fourth, Mark Rosales v.
Seminis, Inc., Case No. CIV216255, was filed in California Superior Court
(Ventura County). The Firth, Pozniak and Herranz complaints name as defendants
Savia S.A. de C.V. (Savia) and Seminis, Inc. (Seminis), along with Seminis
directors. The Rosales complaint names as a defendant Seminis and its
directors. All four complaints purport to be brought on behalf of Seminis
common stockholders or their successors. All four complaints allege that the
above-described transaction, if consummated, would provide insufficient
consideration to Seminis common stockholders and allege that the defendants
breached their fiduciary duties in connection with the transaction. The
complaints seek a preliminary and permanent injunction to enjoin the
transaction and, in the event the transaction is consummated, rescission and
damages. The defendants will vigorously defend these actions.

F-25



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##### Table of Contents



SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS

|                                |                                |  |              |             |            |  |            |            |              |  |                  |             |             |  |             |   |  |                  |             |            |            |  |  |            |   |  |  |             | 
|------------------------------- | ------------------------------ |  | ------------ | ----------- | ---------- |  | ---------- | ---------- | ------------ |  | ---------------- | ----------- | ----------- |  | ----------- | - |  | ---------------- | ----------- | ---------- | ---------- |  |  | ---------- | - |  |  | ----------- | 
|                                |                                |  | Balance at   |             | Additions  |  |            |            |              |  |                  |             |             |  |             |   |  | Foreign Currency |             |            |           
|                                |                                |  | Beginning of |             | Charged to |  |            |            |              |  |                  |             |             |  |             |   |  |                  | Translation |            | Balance at
|                                |                                |  | Year         |             | Operations |  | Deductions |            | Acquisitions |  | Reclassification |             | Adjustments |  | End of Year
|                                |                                |  |              |             |            |  |            |            |              |  |                  |             |             |  |            
|Allowance for Doubtful Accounts |                                |  |              |             |            |  |            |            |              |  |                  |             |             |  |             |   |  |                  |             |            |            |  |  |            |   |  |  |            
|                                | Year Ending September 30, 2000 |  |              | 14,838,000  |            |  |            | 4,886,000  |              |  |                  | (5,152,000  | )           |  |             |  |  |                  |             |           |            |  |  | (394,000   | ) |  |  | 14,178,000  | 
|                                | Year Ending September 30, 2001 |  |              | 14,178,000  |            |  |            | 5,482,000  |              |  |                  | (6,461,000  | )           |  |             |  |  |                  |             | (385,000   | )          |  |  | (720,000   | ) |  |  | 12,094,000  | 
|                                | Year Ending September 30, 2002 |  |              | 12,094,000  |            |  |            | 2,401,000  |              |  |                  | (2,348,000  | )           |  |             |  |  |                  |             |           |            |  |  | 197,000    |   |  |  | 12,344,000  | 
|Inventory Reserve               |                                |  |              |             |            |  |            |            |              |  |                  |             |             |  |             |   |  |                  |             |            |            |  |  |            |   |  |  |            
|                                | Year Ending September 30, 2000 |  |              | 42,161,000  |            |  |            | 58,948,000 |              |  |                  | (16,085,000 | )           |  |             |  |  |                  |             | 11,408,000 | (a)        |  |  | (1,792,000 | ) |  |  | 94,640,000  | 
|                                | Year Ending September 30, 2001 |  |              | 94,640,000  |            |  |            | 73,851,000 |              |  |                  | (52,766,000 | )           |  |             |  |  |                  |             |           |            |  |  | (1,409,000 | ) |  |  | 114,316,000 | 
|                                | Year Ending September 30, 2002 |  |              | 114,316,000 |            |  |            | 16,937,000 |              |  |                  | (47,344,000 | )           |  |             |  |  |                  |             | 1,113,000  |            |  |  | 1,935,000  |   |  |  | 86,957,000  | 



|(a) |  | Amount primarily related to reserve reclassification of non-valued
(obsolete) seed from a net inventory presentation in fiscal years 1998 and
1999, to a gross inventory presentation in fiscal years 2000 and 2001.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

S-1