India has a dynamic and evolving agricultural environment. Indian farmers are keen to progress towards a modern agricultural industry and all drivers affecting this industry, including technology, government policies and farmers, are in a positive state of transition. Monsanto is committed to being a catalyst for improving farmer productivity in India, thereby paving the way for India's prosperity.

The agriculture sector, which at one point of time was the major contributor of the country's GDP, has today, fallen to 23%. Further it is losing ground due to ineffective infrastructure and low yielding seeds. The Honourable Prime Minister of India, Dr. Manmohan Singh, while commenting on the fact that there is immense scope for private enterprise in agriculture, has stressed the need to broaden the knowledge base of farmers, enabling them to optimise their utilisation of new technologies. He has also stressed the need for farmers to have information about agriculture as a business; farming practices; policy initiatives; best practices of other farmers and market intelligence. Dr. Singh has also emphasised that agricultural sciences will have to look at providing crop, region, resource and farm specific solutions.

Keeping in line with the Government's commitment, this year we saw the “Bharat Nirman” project being implemented. Here, Rs. 944.18 crores was released as a grant under Accelerated Irrigation Benefits Program (AIBP), targeting 600,000 hectares of irrigation potential to be created this year. Also, under the Accelerated Rural Water Supply Project (ARWSP), against a target of 56,270 habitations, 47,546 habitations were covered this year. I see this to be a positive step towards reducing the farmers' dependence on the monsoons and in tackling the water problem prevalent in some areas.

At Monsanto India Limited, we strongly believe in supporting the dreams of farmers. I am proud of our consistent track record over the decades, in leading farmers forward through our innovative product line of seeds and herbicides. Our commitment to farmers is to provide them with unique solutions and products that enhance their agricultural yields with sustained environmental improvements. Today, we not only offer them agricultural products but also guide them in related areas, which have lead to a positive impact in the growth of their incomes and improvement in the quality of their lives. The simple reality is, we succeed when farmers succeed.

Last year was a turning point for Monsanto. We recognised the need to shift our focus to new products, which bring higher value to our customers and our business, such as innovative corn products. The herbicide business, in which we have been market leaders across our product categories, is becoming increasingly generic and no longer the high value business it once was. In such dynamic times, our profit declined only marginally during this financial year. It is very encouraging to see this strategy paying off, keeping us on the path of sustained growth.

I am pleased to inform our shareholders that despite increased competition and declining margins in the herbicide business, we achieved commendable financial results. While our net sales decreased by 12.18%, our Profit after Tax (PAT) decreased marginally by 5.22%. The Company paid an Interim Dividend of Rs. 120/- per share, including a 'One Time Special Dividend' of Rs. 110/- per share in November 2005 and declared a final dividend of Rs. 10/- per share for the year 2005-06, totaling to Rs. 130/- per share. This was the highest ever dividend declared in the Company's history.

Our strategy, globally, is to continue investing in new technologies in the fields of germplasm and breeding. Our primary focus is to provide farmers with seeds, which are high yielding and best suited for the climatic and soil conditions. Our principal aim is to help a farmer succeed in his ambition to build a better business.

At Monsanto India Limited, we are consistently innovating on our existing products to bring out new, high-value products. In line with this strategy, our corn breeding initiatives also continued its progress in tune with our corn seed business. I am excited to see our progress in corn and am enthusiastic about our future prospects in this segment. In our growing economy, the demand for corn is on the rise, primarily due to the poultry and cattle feed sectors.

Our product profile witnessed a shift with the launch of Pinnacle, Supreme and 900M Gold. To increase our capacity, we have invested in setting up a corn drying plant in Hyderabad, which is scheduled to be commissioned by the first quarter of 2007. At the same time we continue to upgrade the quality standards of our existing manufacturing units. In summary, this year saw us further strengthening our transition from a herbicide only business to a strong integrated agricultural solutions business that encompasses both seed and herbicide product offerings. This transition will not only allow us to grow in the long run, but will also enable us to carry our leadership into the next generation of products.

I am gratified to see Monsanto's India business grow to a leadership position in our field over the past few years. I sense a teeming pride amongst our people in all that we have achieved. This has been possible due to the effort and contribution of each individual in our Monsanto family. The journey ahead looks very exciting and promising, compelling us to structure our current organisation to meet these exciting business challenges. I expect our evolving te am to p ro duc e amp l e g rowt h opportunities for our people, an endeavour towards which we are committed.

Going forward, I believe that we are well prepared for meeting future challenges. I would like to thank all our shareholders for sharing our beliefs and trusting us over the years. We are also grateful to our customers, dealers, business partners and employees for giving it their all to help us realise our business goals.

"Our commitment to Indian agricultural industry is to provide it with unique solutions and products that enhance agricultural yields with sustained environmental improvements"- Nicole M. Ringenberg

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