1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:

The Company’s philosophy of Corporate Governance is based on preserving core values and ethical business conduct, commitment to maximize shareholder value on a continuous basis while looking after the welfare of all the other stakeholders which the primary responsibility of the Board of Directors, management and employees. The six core values viz., Integrity, Dialogue, Respect, Transparency, Sharing and Benefits, guide the Company towards fulfilling the consistently high standard of Corporate Governance in all facets of the Company’s operations.

2. BOARD OF DIRECTORS:

The Board of Directors of the Company consists of Executive and Non-executive directors. The present strength of the Board is six Directors comprising of one Executive, two Independent and three Non- Executive including the Chairman of the Company. All the Directors are accomplished professionals and experts in their respective corporate fields. As 1/3rd of the Board consists of independent directors, its composition is in consonance with clause 49 of the Listing Agreement.

Monsanto Company, USA has certain rights enshrined in the Articles of Association pertaining to the appointment of Directors.

3. AUDIT COMMITTEE:

Terms of reference of the Audit Committee are as per Section 292A of the Companies Act, 1956 and the guidelines set out in the listing agreements with the Stock Exchanges which inter alia include a review of financial reporting process, draft financial statements and accounting policies and practices, internal controls and internal audit systems, risk management policies and practices, related party transactions, internal audit reports and adequacy of internal audit function.

The role of the Audit Committee includes recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment of any other services.

Composition and Attendance at the Audit Committee Meeting:

The Audit Committee was reconstituted on 27th January, 2006 and this Committee comprises of the following Independent and non-executive directors:

Ms.Nicole Ringenberg was a member of the Committee and she had attended the meeting of the Committee held on 27th May, 2005.

The Managing Director, Chief Financial Officer, Director - Legal Affairs, Internal Auditor and Statutory Auditors are the invitees to the meeting. Mr.Ajai Jain, Counsel (Legal & Taxation) & Company Secretary, acts as Secretary of the Committee.

The Audit Committee met during the year on 27th May, 2005, 26th July, 2005, 26th October, 2005 and 27th January, 2006.

4. REMUNERATION COMMITTEE:

The Remuneration Committee considers and recommends to the Board the payment of remuneration/incentive etc. to the Managing Director. The Committee comprises of Mr.R.C.Khanna - Chairman, Mr.H.C.Asher and Mr.Pradeep Poddar.

Payment of remuneration to the Managing Director is governed by the Agreement executed with the Managing Director, by the Company, the terms and conditions of which were approved by the Board and the Shareholders. The Non-Executive Directors do not draw any remuneration from the Company other than sitting fees and such commission, as may be determined by the Board from time to time.

During the year, the committee met only once on 27th January, 2006. The details of remuneration to the Directors during the year are as follows:

The Company has no stock option/pension plan for the Directors of the Company. However, all the employees of the Company including the Managing Director of the Company are entitled for the ‘Stock Appreciation Rights’ declared by the parent Company i.e. Monsanto Company, USA, from time to time.

Service contract/Notice period:

The Contract of Service entered into by the Company with Mr.Felipe Osorio is valid for three years effective 1st March, 2005 and that the Company and Mr.Felipe Osorio shall be entitled to terminate the agreement by giving to the other party, six month’s notice in writing.

5. SHAREHOLDERS’/INVESTORS’ GRIEVANCES COMMITTEE:

The Shareholders’/Investors’ Grievances Committee looks into the redressal of Shareholder and Investor complaints/grievances. The Committee also looks into the matters concerning the issue of duplicate share certificates, transfer of shares, non-receipt of dividends and Balance Sheet, dematerialization of share certificates, etc. The Committee also oversees the performance of the Registrar and Transfer Agents and recommends measures for overall improvement in the quality of investor services.

The Committee is comprised of Mr.R.C.Khanna- Chairman, Mr.Felipe Osorio and Mr.H.C.Asher.

During the year, the committee met only once on 1st July, 2005 where Mr.H.C.Asher and Mr.R.C.Khanna were present.

A summary of complaints received and resolved by the Company during the year ended 31st March, 2006 is given below:

Share Transfer System: The Company’s shares are in compulsory Dematerialisation Segment.

The Company’s shares being in compulsory dematerialized (demat) list are transferable through the depository system. Shares in physical form are processed by the Registrars and Share Transfer Agents (RTA) and approved by the Share Transfer Committee of the Company. The Share transfers are processed within a period of 15 days, from the date of receipt of the transfer documents by RTA, provided requisite documents are in order. The total number of equity shares in physical form transferred during the year was 1228.

Share Transfer Committee: The Company also has a Share Transfer Committee comprising of Mr.Felipe Osorio – Managing Director, Mr.S. Rajagopalan – Chief Financial Officer and Mr.Ajai Jain – Counsel (Legal & Taxation) & Company Secretary. The Committee meets once a fortnight and approves all matters related to shares i.e. transfers, transmission, dematerialisation and rematerialisation of shares etc. The Company had no transfer of physical shares pending at the close of the financial year except where there were formalities still to be completed by the shareholders.

6. MEANS OF COMMUNICATION:

During the year under reference, quarterly results were published in widely circulated national and local daily newspapers i.e. The Business Standard and Sakaal. Financial Results are not sent individually to the shareholders.

As per requirement of Clause 51 of the Listing Agreement, all the data related to quarterly financial results, shareholding pattern etc. had been provided on the SEBI’s EDIFAR (Electronic Data Information Filing and Retrieval) website www.sebiedifar.nic.in within the timeframe prescribed in this regard. The Company’s results and official news releases are displayed on the Company’s website www.monsantoindia.com. There were no presentations made to the institutional investors or analysts during the year. The Management Discussion and Analysis Report form a part of this Annual Report.

7. GENERAL BODY MEETINGS:

Particulars of Annual General Meetings (AGM) held during the last three years:

No postal ballots were used/invited for voting at these meetings.

8. DISCLOSURES:

The details of transaction with the Company, which are either under direct control or indirect control of holding company i.e. Monsanto Company, USA and with other related parties are given in Note No. 20 of the Notes to Accounts. Besides these, the Company had no material transaction with its promoters, directors or the management, their subsidiaries or relatives, etc. that may have had a potential conflict of interest with the Company.

Legal & Professional fees of Rs.15 Lacs paid to M/s.Crawford Bayley & Co., of which Mr.H.C.Asher is a Senior Partner, during the period from 1st April, 2005 to 31st December, 2005.

The Company has complied with all regulatory requirements on capital market and has not been imposed any penalty/strictures by the Stock Exchanges or SEBI or any other statutory authorities.

Legal Compliance Report:

The Board receives on a quarterly basis, certificates of compliance with the provisions of all applicable laws from the Managing Director and Compliance Officer, which are taken on the record by the Board.

Shareholding of Non-Executive Directors:

The Shareholding of Non-Executive Directors as on 31st March, 2006 is as under:

Code of Conduct:

The Code of Conduct has been posted on the website of the Company and all Board Members and Senior Management personnel affirm compliance with the code on annual basis.

Whistle Blower Policy:

The Company has not adopted Whistle Blower Policy. However, the Company has not denied access to any personnel to approach the Management on any issue.

Compliance with mandatory and non-mandatory requirements:

The Company has fully complied with the mandatory requirements of Clause 49 of the Listing Agreement of the Stock Exchanges. Further, the Company has adopted non-mandatory requirement of Clause 49 of the Listing Agreement, viz., Remuneration Committee of the Board, which has been constituted to determine the remuneration package of the Executive Directors.

Risk Management:

The Company’s risk profile has been made and presented to the Board of Directors of the Company. During the current year, a comprehensive assessment of the risk profiles and risk responses is prepared whereafter a compilation of major risks as perceived by the management is prepared and measures identified for mitigating the risks.

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