CHAIRPERSON’S SPEECH 55TH ANNUAL GENERAL MEETING
Ladies and Gentlemen:
I have great pleasure in welcoming you to the
fifty-fifth Annual General Meeting of Monsanto
India Limited. On behalf of my co-directors and
my colleagues at Monsanto, I thank each one of
you for making it convenient to attend this important
meeting and register your solidarity with us.
THE ECONOMY:
The Indian economy grew at a rate of approx.
6.9% in the year 2004-05 as compared to 8.5 %
in the previous year, mainly due to the impact
of uneven monsoon and higher oil prices, though
partially offset by buoyant industrial activity
and strong investment. The projected growth for
the year 2005-06 is 6.8% (revised) which looks
to be on track. Spiralling Oil prices continue
to be a cause of concern and its impact on Growth
projections would need a close watch.
Our economy is rapidly morphing into a new form.
India is poised for immense growth; therefore
corrections in the policy framework will enable
this leapfrogging into the global economy. This
is a period of correction in all spheres - economic
and political.
The Indian political system is becoming increasingly
mature. Even proponents of extreme ideologies
are treading a middle path. There is a growing
realization that protectionist or inward looking
policies will not help in taking India into the
circle of developed countries.
Similarly, our economy too is preparing for the
actual trajectory of growth during the current
period of consolidation and correction. We have
all the components in place – a strong growth
rate, excellent forex reserves of over US $ 140
billion that can form a comfortable base for India
to allow full convertibility of the rupee soon
- an important step towards a borderless economy.
2005 promises to be the debutant year for India
in the global economy. India has had a consistently
high growth rate over the past few years. Unlike
in the past, our growth rate now is not entirely
dependent on the vagaries of the monsoon.
India, which is now the fourth largest economy
in terms of purchasing power parity, will overtake
Japan and become the third major economic power
within 10 years. India is also projected to be
about 60% of the size of US economy by 2025.
The 2005 south-west monsoon turned out to be
better than expectations. The delayed onset and
scanty rains in the initial three weeks have been
more-than compensated for in subsequent weeks.
With the exception of Bihar, Jharkhand and the
northeast all divisions witnessed good rainfall
till July 2005. The enhanced precipitation and
its improved spatial distribution are responsible
for the recovery in progress in Kharif sowings.
As a result, CMIE has revised its estimates for
agricultural crop production upward. In the changed
scenario, foodgrain production is projected to
go up by 3.1 per cent to 212 million Metric tonnes.
Production prospects for other crops have also
improved. Maize production is expected to go up
by 2.6 per cent to 14.5 million Metric tonnes
during 2005-06.
THE INDUSTRY SCENARIO:
The agrochemicals industry continues to be strongly
dependent on monsoons with the exception of certain
states like Punjab where irrigation facilities
are sufficiently developed. The agrochemical industry
has good potential, as the per capita consumption
of pesticides is quite low in India. This industry
is already showing some positive signs. There
is consolidation taking place and the intense
price competition has already made weaker players
to leave the market. The industry is also gradually
getting organized and disciplined. The long term
prospects of this sector look very bright.
Seed is the most important input component for
productive agriculture. In the significant advances
that India made in agriculture in the last few
decades, the role of the seed sector has been
substantially enlarged. The organized seed industry
of the country is just forty years old. Yet, its
growth has been phenomenal. India is one of the
few countries where the seed sector is already
reasonably advanced. The private seed industry
is no more confined to just production and marketing
of seed but has also well acquired technological
strength to cater to varity of farmers’ needs
of tomorrow.
Counterfeit activity continues to be a great
challenge to the agriculture Input Industry including
the governments at Central and State levels. We
are working with the Government to ensure that
such unlawful activities perpetrated by vested
interests are to be appropriately handled.
I wish to say that there is an immediate need
to address this problem objectively and on priority
for ensuring larger and rapid acceptance and adoption
of the technology which is of immense value to
our country and which can contribute towards the
country’s growth as a global agriculture power.
REVIEW OF CORPORATE PERFORMANCE IN F.Y. 2004-05:
I am happy by our progress in seeds and agro
chemical business this year and more importantly
about our prospects because farmers had a good
year and so did we. Favourable agriculture conditions
and availability of high quality products benefited
our farmer customers and in turn helped our business
performance.
Our Sales rose from Rs.333 Crores to Rs.379 Crores,
and profit after tax from Rs.69 Crores to Rs.77
Crores for the year ending 31st March, 2005. Accordingly,
dividend per share is up from Rs.20 to Rs.23.
The strong financial performance enabled your
company to contribute in growing measure to the
expectation of shareholders for increased income
through dividend i.e. 230% for the year.
The financial performance of the first quarter
of fiscal 2006 has been published and you would
have noticed that despite the reduction in sales
(due to lower trading activities) the profit before
tax has gone up by approx. Rs.5 Crores. We are
focussed on your Company’s continued growth, while
being cognizant of challenges that we need to
surmount during the part of the year.
The Company has acquired land near Hyderabad
to put up a Corn drying plant due to continuous
demand in our Corn hybrid seeds.
Changing regulatory regime is also key to our
business.
The aim of the proposed Plant Varieties Protection
and farmers Rights Act is to protect the rights
of the developers of new varieties to stimulate
investment in plant breeding and to generate competitiveness
in the field of research and development both
in the public and private sectors with the ultimate
aim of facilitating access to newly developed
varieties and maximizing agricultural production
and productivity in the country.
The protection of farmers and researchers rights
will strive to balance the need for stimulation
and incentive to R&D with welfare of the farmers.
A new Indian Seeds Bill in 2004 has been circulated
by the government of India to overhaul the seed
regulatory system. The stated objective of the
proposed law is to regulate the seed market and
ensure seeds of "quality". With the
proposed changes the seed law would be harmonised
with other seed laws around the world and ensure
the Indian seed market is open to big business.
RECOGNITION FOR PERFORMANCE:
Now, I would like to highlight few recognition
for performance received by the Company during
the year.
