TO THE SHAREHOLDERS,

Your Directors have pleasure in presenting their 56th Annual Report together with the Audited Accounts for the year ended 31st March, 2006.

1. FINANCIAL RESULTS:

2. DIVIDEND:

The Board of Directors declared an Interim Dividend of Rs.120/- which includes a special dividend of Rs.110/- per Equity Share, at the Board meeting held on 14th November, 2005. Your directors are pleased to now recommend to the shareholders, a final dividend of Rs.10/- per Equity Share.

3. OPERATIONS:

The net sales during the year under consideration was Rs.332 Crores, lower by 12.4% compared to the previous year. During the year, your Company scaled down the distribution activity of the third party products that lowered net sales by compared to the previous year. Your Company’s Seeds business registered a healthy growth, continuing a trend since 2001. Overall Seed realizations and margins were higher than the previous year primarily on the back of continuing healthy growth in the Corn business. However, Agrichemicals business realizations and margins were significantly lower compared to the previous year owing to intense price and product competition from increasing number of generic players in the Industry. This has adversely impacted the Profit Before Tax from operations, which at Rs.75.76 Crores, is lower by 15% year on year basis.

Your Company fully recognizes the growing importance of the Seeds business portfolio and has been making critical capital investments over the past few years. Continuing the trend, during the year under review, your Company has made a significant investment in a Corn drying facility in Andhra Pradesh in order to meet the growing demand for quality seeds both in the domestic as well as international markets. This project is expected to come on stream during the first quarter of 2007.

4. ENVIRONMENT, SAFETY AND HEALTH:

The Company’s seed processing/drying facilities and herbicide formulation plant are equipped with state of art equipment and technology meeting international standards with regard to safety & health of employees and visitors also. In this connection, the manufacturing sites as well as corporate office are having various accreditation from reputed international agencies since many years.

The Company is having a very stringent policy on “Safe driving” and continuously arranging training programme for the employees, enabling the Company to maintain a very low level of road accidents and no fatality reported during the year. The policy is aimed to improve the safety standards while driving, ensuring that staff, who had to travel significantly on account of their work responsibilities were provided vehicles with enhanced safety and also trained appropriately.

Your Company is conscious of its responsibility to preserve the ecology and surrounding environment from ill effect of industrialisation around its manufacturing facilities and taking appropriate steps in this direction.

5. PERSONNEL:

The Company continues to maintain cordial relationship with its workforce at all locations. Continuous upgradation of core skill through training programmes either internal or external agencies are an integral part of human resources development policy.

The information regarding particulars of remuneration etc. of certain employees required under Section 217(2A) of the Companies Act, 1956 (‘Act’) and the rules made thereunder is given in an Annexure which forms part of this report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding this Annexure. Any shareholder interested in obtaining a copy of the said Annexure may write to the Company at its Registered Office.

6. DIRECTORS:

• During the year, due to relocation to USA, Mr.Andrew Kuchan resigned from the Board effective 26th July, 2005 and Mr.Mark J. Deadwyler replaced from that date. Mr. Mark J. Deadwyler is a non- retiring director on the Board.
  
  Mr.Mark J.Deadwyler is a Finance Lead – Asia Pacific and actively involved in the business activities of the Company in India. Presently, he is responsible for overall strategies and operations of the Asia Pacific Region of the Group.
  
• Mr. William Hallman resigned from the Board effective 30th December, 2005 due to change in his responsibilities.
  
  The Company has placed on record the contribution made in the growth of the Company by Mr.Andrew J. Kuchan and Mr.William Hallman during their association with the Company.
• Mr.Pradeep Poddar was appointed as an additional director on 30th December, 2005.
• Mr.H. C. Asher retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

7. DIRECTORS’ RESPONSIBILITY STATEMENT:

In compliance with Section 217(2AA) of the Act, your directors, on the basis of information made available to them, confirm the following:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2006 and of the profit or loss of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts are prepared on a going concern basis.

8. CORPORATE GOVERNANCE:

A report on Corporate Governance together with Management Discussion and Analysis Report and alongwith certificate from the auditors of the Company regarding compliance with the Clause 49 of the Listing Agreement are annexed.

9. AUDITORS:

M/s. Deloitte Haskins & Sells, Chartered Accountants, retire as auditors of the Company at the ensuing Annual General Meeting and, being eligible is proposed for re-appointment.

10. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of expenditure and earnings in foreign currency are given under Notes to Accounts in Schedule 15.

11. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:

The information required to be furnished pursuant to Section 217(1)(e) of the Act, read with the Companies Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this Report.

12. ACKNOWLEDGEMENT:

Your Board acknowledges the service rendered by the employees of the Company at all levels towards the growth and success of the Company. The Board also wishes to place on record its appreciation for the continued support from Monsanto Company, USA. The Board also wishes to thank its shareholders, distributors/dealers, farmers, and other business associates for their support during the year.

For and on behalf of the Board of Directors

R. C. KHANNA 
Director

FELIPE OSORIO
Managing Director

Mumbai: 25th May, 2006

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