|BSE: N.A.||Sector: N.A.|
|NSE: N.A.||ISIN Code: N.A.|
|BSE 05:30 | 01 Jan|
|NSE 05:30 | 01 Jan|
|BSE: N.A.||Sector: N.A.|
|NSE: N.A.||ISIN Code: N.A.|
|BSE 05:30 | 01 Jan|
|NSE 05:30 | 01 Jan|
To the Members
Your Directors have pleasure in presenting their 69th AnnualReport on the business and operations of the Company and the financial results for theFinancial Year ended March 31 2019.
The financial performance of your Company for the year ended March 312019 is summarized below:
FINANCIAL & OPERATIONAL HIGHLIGHTS
During the financial year (F.Y.) 2018-19 your Company posted a ProfitAfter Tax (PAT) of Rs 151.66 crore as compared to previous year's PAT of Rs 164.56crore (lower by 8%). Total Comprehensive Income decreased by 8% from Rs 168.51 crores in2017-18 to Rs 154.45 crores in 2018-19.
Revenue from sale of products for the year under review decreased to Rs657.91 crore compared to Rs 667.44 crore for the previous F.Y. (lower by 1%).
Your Company's seeds' (DEKALB) sale is lower atRs 449.99 crore in the F.Y. 2018-19 vis--vis Rs 481.78 crore in the F.Y. 2017 - 18(lower by 7%) due to a challenging Rabi and Spring season.
Net Sales of Roundup during the year stands at Rs 207.92crore (increase of 12%) compared to the previous year net sales of Rs 185.66 crore(including excise duty) driven by higher volumes. Revenues for 2017-18 includes exciseduty up to June 30 2017 which is discontinued with effect from July 1 2017 uponimplementation of Goods and Services Tax (GST) in India.
Details and status of merger of your Company and Bayer CropScienceLimited forms a part of this report.
DIVIDEND & SHARE CAPITAL
During the financial year 2018-19 your Company had declared an interimdividend of Rs 25/- (Rupees twenty- five only) per equity share. In addition yourDirectors are pleased to recommend a payment of Rs 25/- (Rupees Twenty-five only) perequity share as the final dividend for the financial year ended March 31 2019.
If approved by the members at the Annual General Meeting to be held onJuly 4 2019 the total dividend (interim and final dividend) for the financial year2018-19 would be Rs 50/- (Rupees Fifty only) per equity share.
In terms of Regulation 43A of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("hereinafterSEBI LODR") your Company has formulated the Dividend Distribution Policy of theCompany which is Annexed as (Annexure 1) and forms a part of this Report. Thedividend on Ordinary Shares is subject to the approval of the shareholders at the AnnualGeneral Meeting (AGM) scheduled on July 4 2019. The Register of Members and ShareTransfer Books will remain closed from Wednesday June 12 2019 to Friday June 142019 (both days inclusive) for the purpose of payment of the dividend for theFinancial Year ended March 31 2019.
The dividend payout for the year under review has been formulated inaccordance with the Company's policy to pay sustainable dividend linked to long termgrowth objectives of the Company and is in compliance with the Dividend DistributionPolicy of the Company.
There has been no change in the capital structure of the Company.
TRANSFER TO RESERVES
The Company has not transferred any amount to general reserve.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Ms. Shilpa Shridhar Divekar erstwhileManaging director resigned from the Company w.e.f. September 21 2018 as she moved on to aSenior Leadership position at the parent Company Bayer. She however continues to remainas a Non- executive Director of the Company
On recommendation of the Nomination and Remuneration Committee theBoard of directors have appointed Mr. Ravishankar Cherukuri as the Managing Director andKey Managerial Personnel of the Company w.e.f. September 22 2018 for a period of threeyears subject to the approval of the shareholders in the ensuing general meeting.
Your directors on the recommendation of the Nomination and RemunerationCommittee have appointed Ms. Aarti Arun Sathe as an Independent Woman Director of theCompany w.e.f. April 1 2019 for a period of one- year subject to the approval ofthe shareholders in the ensuing general meeting. This is in pursuance and in compliancewith Regulation 17(1)(a) of revised SEBI LODR (Amendment) Regulations 2018 wherein top500 listed entities by market capitalization shall appoint at least one-woman independentdirector on the Board. The terms and conditions of her appointment as entered into withMs. Sathe has been uploaded on the website of the Company.
In accordance with provisions of the Companies Act 2013 and theArticles of Association of the Company Mr. Bangla Bose Non-executive Director retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forreappointment.
A brief profile of Mr. Bangla Bose Radhakrishna Mallepeddi Mr.Ravishankar Cherukuri and Ms. Aarti Arun Sathe and the details of directorship held bythem forms a part of the Notice convening the 69th Annual General Meetingcontained in this Annual Report. The Independent Directors of your Company have confirmedthat they meet the criteria of independence as prescribed under Section 149 of the Act andRegulation 16 of the SEBI LODR.
The Board of directors as on the date of report comprises of threeIndependent Non-executive Directors three Non-Independent Non-executive Directors and oneExecutive Director.
FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
Every Independent Director of the Company is provided with ongoinginformation about the industry and the Company so as to familiarise them with the latestdevelopments. The Independent Directors also visit the facilities at various locations ofthe Company where they can visit and familiarise themselves with the operations of theCompany.
The details of familiarization programs provided to the Directors ofthe Company are available on the Company's website www.monsantoindia.com.
FORMAL ANNUAL EVALUATION OF BOARD OF DIRECTORS ITS COMMITTEES ANDINDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI LODRthe Board has carried out the annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Committee. Theevaluation process focussed on various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board dynamics execution andperformance of specific duties obligations and governance. A separate exercise wascarried out to evaluate the performance of individual directors including the Chairman ofthe Board who are evaluated on parameters such as level of engagement and contributionindependence of judgement safeguarding the interest of the Company and its minorityshareholders etc. The criteria applied in the Board evaluation process is explained inthe Corporate Governance Report.
The performance evaluation of the Independent Directors was carried outby the entire Board. The performance evaluation of the Chairman and the Non-IndependentDirectors was carried out by the independent directors who also reviewed the adequacy andflow of information to the Board. The directors expressed their satisfaction with theevaluation process.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board meets at regular intervals to discuss and decide onCompany/business policies and strategies apart from other Board businesses. TheBoard/Committee Meetings are pre-scheduled and a tentative annual calendar of theBoard and Committee Meetings is circulated to the Directors in advance to facilitate themto plan their schedule and to ensure meaningful participation in the meetings.
The notice of Board meeting is given well in advance to all theDirectors. The Agenda for the Board and Committee meetings includes detailed notes on theitems to be discussed at the meeting to enable the Directors to take an informed decision.
During the year under review 8 (eight) Board Meetings and 7 (seven)Audit Committee Meetings were convened and held. Details of each such meetings are givenin the Corporate Governance Report. The intervening gap between the meetings was withinthe time limit as prescribed under the Companies Act 2013.
COMMITTEES OF THE BOARD
Currently there are seven (7) Committees of the Board namely
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
5. Share Transfer Committee
6. Independent Directors Committee
7. Risk Management Committee (w.e.f April 1 2019)
The Board decides the terms of reference for these Committees. Minutesof meetings of the Committees are placed before the Board for information. The details asto the composition terms of reference number of meetings and related attendance etc.of these Committees are provided in detail in the Corporate Governance Report whichforms a part of this Annual Report.
Your directors have also constituted a Risk Management Committeepursuant to Regulation 21(2) and 21(5) of the SEBI LODR 2015 with effect from April 12019.
INTERNAL FINANCIAL CONTROL
The Company has an internal control system commensurate with the sizescale and complexity of its operations. The Internal Auditors are an integral part of theinternal control mechanism of the Company. To maintain its objective and independence theInternal Auditors report to the Audit Committee of the Board.
The Internal Auditors monitor and evaluate the efficacy and adequacy ofinternal control systems in the Company its compliance with the operating systemsaccounting procedures and policies at all locations of the Company and its subsidiaries.Based on the report of internal auditors process owners undertake corrective action intheir respective areas and thereby strengthen the controls. Significant audit observationsand corrective actions thereon are presented to the Audit Committee of the Board.
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company's policiesthe safeguarding of its assets the prevention and detection of fraud error reportingmechanisms the accuracy and completeness of the accounting records and the timelypreparation of reliable financial statements and disclosure.
RISK MANAGEMENT POLICY
Pursuant to the requirement of LODR the Company has constituted a RiskManagement Committee.
A Risk Management Committee of the Board of Directors has beenconstituted to ensure that the Company has implemented an effective ongoing process toidentify risk to measure its potential impact against a broad set of assumptions and thento activate what is necessary to pro-actively manage these risks and to decide theCompany's tolerance level for risk. The Committee shall also ensure that asystematic documented assessment of the processes and outcomes surrounding key risks isundertaken at least annually for the purpose of making its public statement on riskmanagement including internal control. Also the Committee shall oversee formal reviews ofactivities associated with the effectiveness of risk management internal controlprocesses cyber security and to ensure that risks are mitigated and that theCompany's objectives are attained.
STAUTORY AUDITORS AND AUDITOR'S REPORT
In the 67th Annual General Meeting (AGM) of the CompanyM/s. MSKA & Associates Chartered Accountants (Firm Registration No :105047W)Statutory Auditors of the Company have been appointed for five consecutive years i.e.until the conclusion of 72nd Annual General Meeting. Pursuant to thenotification of the Companies Amendment Act 2017 the requirement of annual ratificationof the Statutory Auditors is no longer required.
The Notes on financial statement referred to in the Auditors'Report are self-explanatory and do not call for any further comments. The Auditors'Report does not contain any qualification reservation or adverse remark. Further incompliance with statutory requirements the Statutory Auditors have not rendered to theCompany during the financial year under review directly or indirectly any of theservices enumerated under Section 144(1) of the Companies Act 2013.
Maintenance of cost records as specified by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 is required by theCompany and accordingly such accounts and records are made and maintained. Pursuant to thedirection from the Ministry of Corporate Affairs for appointment of Cost Auditors yourBoard had reappointed M/s ABK & Associates as the Cost Auditor of your Company forthe financial year 2018-19 to conduct the audit of the cost records of the Company. TheAuditors' Report for the financial year under review does not contain anyqualification reservation or adverse remark.
Pursuant to the provisions of Section 148 of the Companies Act 2013and the Rules made thereunder and as per the recommendation of the Audit Committee theBoard of Directors of the Company at its meeting held on April 30 2019 has reappointedM/s ABK & Associates (Registration no. 000036) as the Cost Auditors of your Companyfor the financial year 2019- 20 to conduct the audit of the cost records of the Company. Aresolution for ratification of the remuneration of the said Cost Auditors is included inthe Notice convening the 69th AGM of the Company for seeking approval ofmembers. The report with respect to the audit of cost accounts maintained in respect ofinsecticides manufactured by the Company will be submitted to the Central Governmentwithin the period stipulated under the Act.
Pursuant to the provisions of Section 204 of the Act and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed M/s. Vinod Kothari & Co. Practising Company Secretaries to undertakethe Secretarial Audit of the Company for the year under review.
The Secretarial Audit Report for the FY 2018 - 19 is annexed as (Annexure2) and forms a part of the Board's Report to the members. The Secretarial AuditReport does not contain any adverse remark. During the audit period your Company hascomplied with the provisions of the Act Rules Regulations Guidelines etc. except forfiling of certain forms with Investor Education and Protection Fund Authority (IEPF) dueto delay in receipt of relevant data from the Bank and your Company is in the process offiling of certain e-forms with IEPF Authority for the period under review.
The Board has appointed M/s. Vinod Kothari & Co. PractisingCompany Secretaries to undertake the Secretarial Audit of the Company for the financialyear 2019 - 20.
GLOBAL ACQUISTION OF MONSANTO COMPANY USA BY BAYER AG
The global acquisition of Monsanto Company a company incorporatedunder the laws of Delaware United States of America ("Monsanto Co.") by BayerAktiengesellschaft Germany ("Bayer AG" or the "Acquirer") wascompleted on June 7 2018 (the "Primary Transaction"). Upon thecompletion of the Primary Transaction Monsanto Co. became a wholly owned subsidiary ofBayer AG. Prior to the completion of the Primary Transaction Monsanto Co. directly aswell as indirectly held 72.14% voting share capital in Monsanto India Limited("MIL"). As a consequence of the completion of the Primary Transaction on June7 2018 the Acquirer indirectly acquired 72.14% of the fully diluted voting rights inMIL resulting in change in control of MIL.
Pursuant to the indirect acquisition of voting rights and control bythe Acquirer over MIL as a result of the Primary Transaction it was mandatory for theAcquirer to make an open offer to the minority shareholders of MIL under the relevantregulations of SEBI (Substantial Acquisition of Shares & Takeover Regulations 2011)(the "SAST"). Consequently the Acquirer and Bayer CropScience Limited("BCSL") a publicly listed Indian company (as a Person acting in Concert)jointly made an Open Offer (the "Open Offer") to all the public shareholders ofMIL to acquire upto 4488315 (Four Million Four Hundred and Eighty Eight Thousand ThreeHundred and Fifteen) equity shares representing 26% of the voting share capital of MIL atthe price of INR. 2926.87. Based on the tender offer submissions by the minorityshareholders of MIL Bayer CropScience Limited (BCSL) an indirect subsidiary of Bayer AGacquired and now holds 7.82% shareholding in MIL. Bayer AG holds 8.8% shareholding in MIL.As a result both MIL and BCSL are commonly controlled subsidiaries of Bayer AG Germany.Due to the tender submissions the promoter shareholding of your Company has increased to81.87%.
MERGER OF MONSANTO INDIA LIMITED (MIL) AND BAYER CROPSCIENCE LIMITED(BCSL)
In order to attain efficiencies and create a unified platform forgrowth the Board of Directors of MIL as well as the Board of Directors of BCSL consideredand approved the amalgamation of MIL with BCSL on November 14 2018. MIL and BCSL bothbeing listed entities the process of merger is long drawn and complex as it involvesapprovals from various authorities. Both the Companies have received in-principal approvalfrom the Stock Exchange Board of India to enable the Company to file the scheme with theNational Company Law Tribunal (NCLT). On February 21 2019 the Company has filed theapplication seeking NCLT's approval for the merger of MIL with BCSL vide an Orderdated April 22 2019 the Hon'ble National Company Law Tribunal Bench at Mumbai("NCLT") has directed a meeting to be held of the equity shareholders of yourCompany for the purpose of considering and if thought fit approving with or withoutmodification(s) the arrangement embodied in the Scheme of Amalgamation of Monsanto IndiaLimited (the Transferor Company) with Bayer CropScience Limited (the Transferee Company)and their respective shareholders under Sections 230 to 232 and other applicableprovisions of the Companies Act 2013 and the rules made thereunder ("Scheme").In pursuance of the said Order of NCLT further notice has been given to the equityshareholders of the Transferor Company that a meeting is scheduled to be held on June 42019.
EXTRACT OF THE ANNUAL RETURN
In accordance with requirements under Section 134(3)(a) of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the details forming part of the extract of the Annual Return in form MGT 9shall be annexed as (Annexure 3).
A copy of the annual return shall be placed on the website of thecompany after the same is filed with the Registrar and can be accessed athttp://www.monsantoglobal.com/global/in/ whoweare/Pages/agm-2019.aspx
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Information required under Section 134(3)(o) of the Companies Act 2013and Rule 9 of the Companies (Corporate Social Responsibility) Rules 2014 shall be annexedas (Annexure 4). The Policy for the same is available on http://www.monsanto.com/global/in/whoweare/pages/policies.aspx.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTOR AND EMPLOYEES
Your Company maintains a Code of Business Conduct and Anti-CorruptionProgram. Additionally a vigil/whistle blower mechanism (Monsanto Speak-Up Protocolfor India') has also been developed pursuant to requirements of Section 177(9) and(10) of the Act and Regulation 22 of the SEBI LODR with the Stock Exchanges in India andis available on http://www. monsantoglobal.com/global/in/whoweare/pages/policies.aspx.
The Company's Monsanto Speak-Up Protocol for India'aims at:
a) informing employees of their obligation to report serious wrongdoingwithin the Company;
b) providing employees with guidance on how to raise concerns;
c) reassuring employees that they should be able to raise genuineconcerns in good faith without fear of retaliation; and
d) providing specific direction on how to contact the Chairperson ofthe Audit Committee of Board of Directors.
The Company has made available to its employees anonymous email andtelephone hotlines for reporting of any deviations / concerns.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Committee of the Board of Directors hasadopted a Charter which deals with the manner of selection of Board of Directors andManaging Director and their remuneration. This Policy is in compliance with Section 178 ofthe Companies Act 2013 read with the applicable rules thereto and Clause 49 under theListing Agreement with the Stock Exchanges.
The Nomination and Remuneration policy is annexed as (Annexure 5)as stated in the Corporate Governance Report and is available onhttp://www.monsanto.com/global/in/whoweare/ pages/policies.aspx
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY
The particulars of every contract /arrangement entered into by theCompany with the related parties referred to in Sub section
1 of Section 188 of the Companies Act 2013 including certainarms' length transaction under third proviso thereto has been disclosed in Form AOC 2as (Annexure 6).
The Policy on related party transactions as approved by the Board isuploaded on the Company's website and is available onhttp://www.monsanto.com/global/in/whoweare/pages/policies. aspx. None of the Directors hasany pecuniary relationship or transactions vis-a-vis the Company.
CORPORATE GOVERNANCE CERTIFICATE
A detailed report on the corporate governance system and practices ofthe Company forming part of this report is given as a separate section of the AnnualReport. The Compliance Certificate from the Statutory Auditors regarding compliance ofconditions of corporate governance as stipulated under Regulation 34 of the SEBI LODR isannexed to the report as (Annexure 7).
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance with Section 134(3)(c) of the Companies Act 2013("the Act") your Directors on the basis of information made available to themconfirm the following for the year under review:
a) In the preparation of the annual accounts the applicable accountingstandards have been followed and that no material departures have been made from the same;
b) They have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
c) They have taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; and
d) They have prepared the annual accounts on a going concernbasis.
e) They have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingefficiently.
f) They have devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34 of the SEBI LODR the BusinessResponsibility Report on Company's as required by Regulation 34(2) of the SEBI LODRinitiatives on environmental social and governance aspects forming part of this report isgiven as a separate section of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis on the business and operations ofthe Company as required by Regulation 34(2) of the SEBI LODR forming part of this reportis given as a separate section of the Annual Report.
Disclosures with respect to the remuneration of Directors KMPs andemployees as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in (Annexure8) to this Report.
Details of employee remuneration as required under provisions ofSection 197(12) of the Act read with Rule 5(2) & 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 form part of this Report. In terms ofthe first proviso to Section 136(1) of the Act the reports and accounts are being sent tothe shareholders excluding the aforesaid remuneration.
Having regard to the provisions of the first proviso to Section 136(1)of the Act the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection at the registeredoffice of the Company during working hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.
Total number of permanent employees employed with your Company as onMarch 31 2019 is 252 as compared to 257 as on March 31 2018.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
The information required to be furnished pursuant to Section 134(3)(m)of the Companies Act 2013 read with Rule 8 of Companies (Accounts) Rules 2014 forms partof this report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of earnings and expenditure in foreign currency are annexedto this Report.
POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT
The Company has zero tolerance towards sexual harassment at theworkplace and has constituted an Internal Complaints' Committee for preventionprohibition and redressal of sexual harassment at workplace in line with the provisions ofSection 4(1) of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder.
No cases of Sexual Harassment were received during the year underreview.
Your Directors state that no disclosure or reporting is required inrespect of the following items as transactions on these items during the year underreview:
1. There are no material changes and commitments affecting thefinancial position of the company having occurred since the end of the Year and till thedate of the Report.
2. Details relating to deposits covered under Chapter V of theAct.
3. Issue of equity shares with differential rights as to dividendvoting or otherwise.
4. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and except ESOS referred to in this Report.
5. Voting rights not exercised directly by the employees as per Section67 (3) of Companies Act 2013
6. There has been no non-acceptance of any recommendation of AuditCommittee by the Board as required under Section 177 (8) of Companies Act 2013.
7. The Managing Director of the Company does not receive anyremuneration or commission from any of its subsidiaries.
8. There has been no fraud reporting under Section 143(12) of theCompanies Act 2013
9. Particulars of Loans given Investments made Guarantees'given and Securities provided under Section 186 of Companies Act 2013
Your Directors would like to express their appreciation for theassistance and co-operation received from its shareholders Government authoritiesvendors channel partners and other business associates. Your Directors appreciate thecontinued support from Monsanto Company USA and Bayer AG and would also wish to place onrecord their deep sense of appreciation for the committed services by the employees of theCompany. Without this support the Company would not be able to successfully serve itsfarmer customers whose success eventually determines the Company's success.