SKM Egg Products Exp India Ltd-532143-March-2007

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TWELFTH ANNUAL REPORT

2006 - 2007
• Excellence - Our Goal

D Service - Our Motto
EGG PRODUCTS
Tel: +91 424 23 51 532-34 156, Gandhiji Road, Erode
Fax: +91 424 23 51 530-31
• Quality - Our Obsession E-mail: finance@skmegg.com
Tamilnadu,lndia.Pin:638001
Website: www.skmegg.com
Silver Award from Frost & Sullivan
The award acknowledge the best facilities
in India that have achieved and sustained
manufacturing excellence
Silver Trophy Award from APEDA

for the year 2005-2006
for quality and export promotion.
Export Excellence Award

from MEPZ for the year 2005-2006
SKM EGG PRODUCTS EXPORT (INDIA) LIMITED
156, Gandhiji Road, Erode - 638 001
BOARD OF DIRECTORS Shri. SKM. MAEILANANDHAN

Executive Chairman
Shri. SKM. SHREE SHIVKUMAR

Managing Director
Dr. M. CHANDRASEKAR
Shri. B. RAMAKRISHNAN
(TIDCO Nominee)
Shri. S.M. VENKATACHALAPATHY
Dr. L.M.RAMAKRISHNAN
Shri. M. CHINNAYAN
Shri. P.KUMARASAMY
MANAGEMENT EXECUTIVES
GENERAL MANAGER - FINANCE Shri.V. JAGADEESAN, B.Sc, A.C.A., A.I.C.W.A., A.C.S.
& COMPANY SECRETARY
GENERAL MANAGER - OPERATIONS Shri. S. HARIHARAN, B.Sc, B.Tech., (FoodTech.,)
AUDITORS N.C.RAJAGOPAL&CO.,
Chartered Accountants,
199, Agraharam Street,
ERODE-638 001.
BANKERS STATE BANK OF INDIA

Commercial Branch,
ERODE - 638 003.
REGISTERED OFFICE 156, Gandhiji Road,

Erode-638 001.
ERODE DISTRICT.
FACTORY Erode to Karur Main Road,

Cholangapalayam,
Punjai Kilambadi Village,
ERODE DISTRICT - 638 154.

156, Gandhiji Road, Erode - 638 001
NOTICE TO MEMBERS
Notice is hereby given that the Twelfth Annual General Meeting of the Members of the Company will be held on -
Tuesday the 11 th day of September 2007 at 4.00 p.m at Kongu Kaiaiarangam, E. V.K.Sampath Nagar, Erode - 638
011 to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt:
a. The audited Profit and Loss Account for the year ended 31 st March 2007.
b. The audited Balance Sheet as at 31 st March, 2007.
c. The Directors'and Auditors'Report thereon.
2. To declare a dividend for the year 2006-2007. The Directors recommended dividend of 5% on the equity
shares for the accounting year 2006-2007.
3. To appoint a Director in the place of Dr.M.Chandrasekar, who retires by rotation and being eligible, offers
himself for re-appointment.
4. To appoint a Director in the place of Shri S.M.Venkatachalapathy, who retires by rotation and being
eligible, offers himself for re-appointment.
5. To appoint Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of
the next Annual General Meeting and to fix their remuneration. The retiring Auditors M/s N.C.Rajagopal &
Co., Chartered Accountants are eligible for re-appointment and confirmed their willingness to accept the
office, if re-appointed.
SPECIAL BUSINESS:
6. To consider and if thought fit to pass the following resolution with or without modification(s) as an ordinary
resolution:
"RESOLVED THAT pursuant to Section 309 read with Section 198 and Schedule XIII and other applicable
provisions, if any, of the Companies Act 1956 , consent of the company be and is hereby accorded to the
payment of remuneration, perquisites and benefits as detailed below to Shri SKM. Maeilanandhan, Executive
Chairman , with effect from 1 st January 2007.
i. Basic Pay Rs.1,90,000/- per month
ii. House Rent Allowance at 20% of the Basic Pay.
iii. Reimbursement of Medical Expenses for self and family.
iv. Reimbursement of expenditure incurred towards (not exceeding 10% of the Basic Pay) gas,
electricity, water and furnishing.
v. Payment of club fees, other than admission and life membership fees, subject to a maximum of
two clubs.
vi. Personal Accident Insurance Premium up to Rs. 10,000/- per annum.

vii. Leave Travel Concession for self and family members according to the rules of the Company.
viii. Shri SKM. Maeilanandhan shall be eligible to the following perquisites, which shall not be included
in the computation of remuneration specified above.
a. Company's contribution to Provident Fund, Superannuation Fund or Annuity Fund as per
the Rules of the Company to the extent these either singly or put together are not
taxable under the Income Tax Act, 1961.
b. Gratuity payable at a rate not exceeding half a month's salary for each completed year
of service.
c. Encashment of Leave at the end of the tenure.
ix. The Company shall provide a car for official use on Company's business and telephone at the
residence of Shri SKM. Maeilanandhan.
"RESOLVED FURTHER THAT in the event of absence or inadequacy of profits in any year, the above
remuneration, perquisites and benefits be paid to Shri SKM. Maeilanandhan as minimum remuneration
subject to the provisions of Section II(A) of Part I! of Schedule XIII to the Companies Act, 1956."
"RESOLVED FURTHER THAT the Board be and is hereby authorised to take all such steps as may be
necessary, proper or expedient to give effect to this resolution."
7.. To consider, and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary
Resolution.
"RESOLVED THAT pursuant to sub section (1 )(d) of Section 293 of the Companies Act, 1956 and Article 113 A
(xxiv) of the Article of Association of the Company and other enabling provisions, if any, the consent of the
Company be and is hereby accorded to the Board of Directors to their borrowing for and on behalf of the Company
monies from time to time and without prejudice to the generality thereof by way of loans, advances, credits,
acceptance of deposits, banking, financial facilities, bonds or otherwise from any bank or banks or any financial
institution(s) or other person or persons situated in India or abroad and whether the same be secured or unsecured
and if secured, whether by way of mortgagee, charge, hypothecation, pledge or otherwise in any way whatsoever
on, over, or in respect of all or any of the Company's asset, effects and properties notwithstanding that the monies
so borrowed by the Company, together with the monies already borrowed by the Company (apart from temporary
loans obtained/ to be obtained from the Company's Bankers in the ordinary course of business) may exceed the
aggregate of the paid up capital and its free reserves, that is to say, reserves not set apart for any specific
purpose provided such excess amount so borrowed by the Board and outstanding shall not an any time exceed
the limit of Rs 100 crores (Rupees one hundred crores only).
By order of the Board
V. JAGADEESAN.
Place. Erode GENERAL MANAGER - FINANCE
Date: 30.07.2007 & COMPANY SECRETARY
Notes:
1. A Member entitled to attend and vote at this Annual General Meeting may appoint a proxy to attend
and vote on his/her behalf. A proxy need not be a member of the Company. The instrument appointing
the proxy duly completed shall be deposited at the Registered Office at 156 - Gandhiji Road, Erode
-638001 not later than 48 hours before the scheduled time of the meeting.
2. Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Special
Business as set out above is annexed hereto.
3. The Register of Members and Share Transfer Books will remain closed from 07.09.2007 to 11.09.2007
(both days inclusive) for the purpose of payment of dividend, if any, approved by the Members.
4. Consequent upon introduction of Sec 109A of the Companies Act, 1956, shareholders are entitled to
make nomination in respect of shares held by them. Shareholders desirous of making nominations
are requested to send their request in FORM 2B to the Registrar and Transfer Agents, M/s S.K.D.C
Consultants Ltd., P.B.NO: 2979, No.11, Seth Narayandoss Layout, Street No.1, (West Power House
Road), Tatabad, Coimbatore-641012.
5. Members holding shares in DEMAT form are requested to incorporate Client ID Number and DPID
Number in the attendance slip/proxy form for easy indentification.
6. All documents referred to in the accompanying Notice and Explanatory Statement are available for
inspection at the Registered Office of the Company on all working days between 11.00 a.m and 2.00
p.m up to the date of the Annual General Meeting.
7. Pursuant to the provisions of Section 205A read with Section 205C of the Companies Act, 1 956,
as amended, any dividend which remains unpaid/unclaimed for a period of 7 years will be transferred
to the Investor Education and Protection Fund of the Central Government. Shareholders who have
not encashed dividend warrant(s) so far for the Financial year ended 31 st March 2004, 31 st March
2005, and 31 st March, 2006 are requested to approach the company for obtaining payments thereof.
8. Members are requested to notify any change in their address, mandate etc to:
(i) the Company's Registrar and Transfer Agents, M/s S.K.D.C Consultants Ltd., P.B.NO:
2979, No.11, Seth Narayandoss Layout, Street No.1, (West Power House Road),
Tatabad, Coimbatore-641012 in respect of shares held in physical form.
(ii) their Depository Participants (DPs) in respect of shares held in dematerialized form.
9. Brief particulars of Directors proposed for re-appointment of Directors are given in REPORT ON
CORPORATE GOVERNANCE.
10. In accordance with the amended clause 32 of the listing agreement the company herewith attached
Balance sheet, profit and loss account and Auditors Report. Complete and full Annual Report shall
be sent to those shareholders from whom written request is received for the detailed Annual Report.
By order of the Board
V. JAGADEESAN.
Place: Erode GENERAL MANAGER - FINANCE
Date. 30.07.2007 & COMPANY SECRETARY
ANNEXURETOTHE NOTICE
EXPLANATORY STATEMENT PURSUANTTO SECTION 173(2) OFTHE COMPANIES ACT, 1956
Item No: 6
In the Eleventh Annual General Meeting of the company held on 16th September 2006, shareholders had given
their consent for the appointment of Shri. SKM. Maeilanandhan as Executive Chairman for a period of 5 years
from 26.06.2006 to 25.06.2011. In the same meeting shareholders had consented for payment of remuneration to
Executive Chairman which consist of Basic Pay Rs. 1,50,000/- per month, House Rent Allowance at 20% of the
Basic Pay and with other usual allowances and benefits. During the periods when the company was incurring loss
Shri. SKM. Maeilanandhan did not receive any remuneration to which he was entitled for the office of the Managing
Director of the company. As the company's financial performance continued to be excellant for the past five
years, Shri. SKM. Maeilanandhan for the first time received remuneration from the company in this financial year
2006-07. During this financial year the company earned a net profit of Rs. 10.83 crores which surpassed the
performance of the company for the previous years. In view of the significant increase in the Net profit and after
considering the valuable contribution made by Shri. SKM. Maeilanandhan to the company as Executive Chairman,
it was proposed to revise the salary and other allowances payable to Shri. SKM. Maeilanandhan.The Remuneration
Committee of the Board of Directors recommended for the revision of salary and allowances payable to Shri.
SKM. Maeilanandhan to Rs. 1,90,000/- per month, HRA 20% of the Basic Pay and other usual allowances and
benefits. The Board of Directors in thier meeting held on 25th January 2007, subject to the approval of the
shareholders, accepted the recommendation made by the remuneration committeee and the Board accordingly
unanimously approved for the payment of remuneration to Shri SKM. Maeilanandhan at the revised scale effective
from 1 st January 2007. Considering the execuitve remuneration being paid by other similar sized companies, the
revised salary and allowances , as determined by the Remuneration Committee and approved by the Board of
Directors is reasonable.The members are requested to approve this proposal of revision of salary to Shri. SKM.
Maeilanandhan.
This proposal of revision of pay scale to Shri SKM. Maeilanandhan is in conformity with the requirement of
Schedule XIII of the Companies Act, 1956.
Memorandum of Interest of Directors.
Shri SKM. Maielanandhan is interested in this resolution. Shri SKM. Shree Shivkumar and Dr M. Chandrasekar,
who are the relative of Shri SKM. Maeilanandhan are deemed to be interested in this resolution.
Item No: 7
The Company has embarked into backward integration of poultry farm with 12 lakhs layers. The total capital
outlay of this project is Rs 41.50 crores which is financed by way of term loan of Rs 31.16 crores from the State
Bank of India, Erode Branch and the balance is promoters' contribution out of internal accruals of the company.
This project become absolutely essential for having a control over the cost of raw materials, and making for
improvement in the quality of egg powder and for traceability purpose. In addition the Company is contemplating
investments in expanding the present capacity to bridge the gap between the present demand and supply for egg
powders. Plans are also underway to expand the activities of SKM Europe BV, the marketing subsidiary established
in the Netherlands to take advantage of numerous opportunities for marketing value-added egg products in
Europe and for this SKM Europe BV may need financial assistance either by way of equity or term loan from the
company.
In addition the company is also exploring possibilities for growth through acquisition in poultry and its value added
industries. The Company would need to have borrowing limit up to Rs.100 crores.
As the proposed borrowing will be in excess of the paid up capital of the Company and its free reserves approval
of the shareholders in terms of Section 293(1 )(d) of the Companies Act, 1956 is necessary.
The ordinary resolution at item No.7 is therefore submitted to the meeting for consideration and approval.
None of the directors is interested in the said resolution.
SHAREHOLDERS' INFORMATION
Date and Venue of Annual General Meeting
On Tuesday the 11th September, 2007 at Kongu Kalaiarangam, E. V.K. Sampath Nagar, Erode - 638011
Tentative Financial Calender:
Fourth quarter and Unaudited results 2006-2007 April 30, 2007.
First quarter results for 2007-2008 and audited results for 2006-2007 30.07.2007
Twelth Annual General Meeting 11th September 2007
Second quarter results for 2007-2008 on or before October 31,2007.
Third quarter results for 2007-2008 on or before January 31,2008.
Date of book closure 07.11.2007 to 11.11.2007
Listing on Company's Equity Shares
Coimbatore Stock Exchange Ltd The Bombay Stock Exchange Limited
Stock Exchange Building Phiroze Jeejeebhoy Towers
TrichyRoad Dalai Street
Coimbatore - 641 005. Mumbai - 400 001.
Madras Stock Exchange Ltd National Stock Exchange of India Ltd

Exchange Building Exchange Plaza, 5ffi.FIoor
Post Box No. 183 Bandra- Kurla Complex
11, Second Line Beach Bandra (E)
Chennai-600 001. Mumbai-400 051.
In the Eleventh Annual General Meeting of the company, special resolution was passed for delisting the
shares of the company from Madras and Coimbatore Stock Exchanges. The company informed the decision
of the shareholders to the above two stock exchanges and the stock exchanges are yet to inform the company
about their formalities for delisting.
Annual listing fees has been paid to all Stock Exchanges for the year 2007-08 except to Coimbatore Stock
Exchange. Listing fees has not been paid to coimbatore stock exchange for the year 2006-07 & 2007-08 as the
company did not receive any demand from the said exchange.
Share Price Movements

The high and low prices of the Company's share on the Bombay Stock Exchange Limited and the National Stock
Exchange between April, 2006 and March, 2007 are as under:
Month Bombay Stock Exchange Limited National Stock Exchange Limited

High Low Quantity High Low Quantity
Apr-06 28.25 23.25 1,50,775 28.30 23.10 4,88,072
May-06 31.05 20.80 4,04,073 31.15 21.10 8,24,982
Jun-06 24.65 15.25 1,00,380 24.70 15.25 2,62,025
Jul-06 19.90 16.00 32,880 20.20 16.05 1,21,488
Aug-06 24.75 18.60 1,34,859 24.95 18.60 3,14,269
Sep-06 24.00 20.65 1,45,334 24.00 20.45 1,89,330
Oct-06 30.75 23.15 3,00,869 31.10 23.15 5,56,358
Nov-06 25.00 21.05 1,18,503 25.40 21.55 2,35,882
Dec-06 22.60 19.75 81,791 22.70 19.75 1,46,695
Jan-07 23.65 22.00 2,03,005 26.50 21.75 2,62,722
Feb-07 23.70 20.00 1,09,380 24.50 20.00 2,07,265
Mar-07 21.95 18.60 56,250 22.35 18.00 1,46,275
30.75 15.25 18,38,099 31.15 15.25 37,55,363
Stock Code:
National Stock Exchange of India (NSE) SKMEGGPROD
The Bombay Stock Exchange Ltd 532143
NSDL & CSDL INE 411 D1015
The Equity Shares of the company are under the process of delisting from the Madras Stock Exchange Ltd
and the Coimbatore Stock Exchange Ltd.
Share Transfer System:

The Board delegated its authority to transfer shares to Committee of Directors called as Share Transfer Committee.
The details of share transferred are being placed before the Board of Directors and duly ratified. The Committee
oversees transfers, transmissions, dematerialisation, rematerialisation of shares and issue of duplicate share
certificates.
Com pi iance Officer :

V. JAGADEESAN,
General Manager (Finance) and Company Secretary,
M/s.SKM Egg Products Export (India) Limited,
156, Gandhiji Road, Erode - 638 001.
Distribution of shareholding as on :
31.03.2007 31.03.2006
No. of
Equity Shares No. of %of No. of %of No. of %of %of
No. of
held Share Shares Shares Share Share Shares Share
Shares held
holders held held holding holders held holding
1-500 5,954 66.02 20,14,477 7.65 6,019 66.22 20,79,680 7.90
501-1000 1,553 17.22 13,27,926 5.04 1,515 16.67 13,02,851 4.95
1001-2000 386 4.28 5,90,119 2.24 389 4.28 5,90,269 2.24
2001-3000 774 8.58 19,20,672 7.29 823 9.05 20,46,175 7.77
3001-4000 51 0.57 1,80,711 0.69 51 0.56 1,83,962 0.70
4001-5000 148 1.64 7,23,558 2.75 162 1.78 7,97,111 3.03
5001-10000 93 1.02 7,51,171 2.85 80 0.88 6,68,830 2.54
10001 & above 60 0.67 1,88,21,366 71.49 50 0.56 1,86,61,122 70.87
Total 9,019 100.00 2,63,30,000 100.00 9,089 100.00 2,63,30,000 100.00

Registrar and Transfer Agent

M/s. S.K.D.C Consultants Limited, P.B.No.2979, No.11, Seth Narayandoss Layout, Street No.1, (West Power
House Road), Tatabad, Coimbatore - 641012, Phone: 0422-2499856,554995 Fax: 0422 - 2499574 is the Share
Transfer Agent for Physical and Electronic transfer of Company's Shares.
Categories of shareholding as on :
31.03.2007 31.03.2006
No. of %of No. of %of No. of %of %of
Category No. of
Share Shares Shares Share Share Shares Share
Shares held
holders holders held holding holders held holding
Promoters 14 0.12 1,65,99,604 63.04 21 0.23 1,77,08,188 67.25

Corporate 180 2.00 2,61,639 1.00 251 2.76 3,91,489 1.49
Individuals 8,794 97.54 80,98,800 30.76 8,792 96.73 79,53,139 30.21
NRIs/OCBs 31 0.34 13,69,957 5.20 25 0.28 2,77,184 1.05
TOTAL 9,019 100.00 2,63,30,000 100.00 9,089 100.00 2,63,30,000 100.00
Dematerialisation of shares:
As per SEBI's instruction the Company's Equity Shares can be sold through Stock Exchanges only in
Dematerialised form.
Extent of Dematerialisation as on 31.03.2007
Name of the Depository No.of Shares %
National Securities Depository Ltd 78,26,833 29.73
Central Depository Services (India) Ltd 53,68,773 20.39
Total 1,31,95,606 50.12
Plant location:
Cholangapalayam
Erode - Karur Main Road
Pasur Post
Erode District
Pin-638154.
Registered Office and Address for Correspondence:

156 - Gandhiji Road
Erode-638001.
Phone: (0424) 2258212,2258213,2258216,2259714,2262963
Fax: (0424)2260933
e-mail: shares@skmegg.com
Place: Erode SKM. MAEILANANDHAN

Date: 30-07-2007 EXECUTIVE CHAIRMAN
8
DIRECTORS' REPORT AND MANAGEMENT ANALYSIS
Your directors are pleased to present the TWELFTH ANNUAL REPORT on the business and operations of your
company for the year ended 31 st March 2007.
FINANCIAL HIGHLIGHTS
Rs. in lacs
DESCRIPTION 2006-2007 2005-2006
Net Sales 8,838.39 7,164.70

Profit Before Interest and Depreciation 1,600.54 1,347.76
Less : Interest 223.95 163.14
Depreciation 278.98 249.03
Profit before tax 1097.62 935.58
Less : Provision for Taxation 15.10 4.03
Profit after tax and available for appropriation 1082.52 931.55
APPROPRIATIONS:
Proposed dividend 131.65 263.30
Corporate dividend tax 22.16 36.93
Balance carried to Balance Sheet 928.71 631.32
DIVIDEND
The Board of Directors recommended dividend of 5% amounting to Rs. 153.81 lakhs (including dividend distribution
tax) for the accounting year 2006-07.
PERFORMANCE
Your company has achieved record results during this year with total sales revenue of Rs.8,838.39 lakhs, up
from Rs.7,164.70 lakhs in the previous year .Profit after tax up at Rs.1,082.52 lakhs (Previous year Rs. 931.55
lakhs). The sales revenue and the profit earned during this year surpassed the sales revenue and profit of the
company of the earlier years .
During this year under review your company produced 4,525 MT of egg powder and sold 4,580 MT which was
respectively at 4,254 MT and 4,005 MT during the previous year. Your directors are pleased to inform that the
production and sales quantity during this year also is the highest since the formation of the Company.
INDUSTRY OVERVIEW
The out-break of dreaded disease bird-blue in the latter part of the last financial year created panic among the
pcfultry farmers resulting in discontinuance of chick placement. However, the egg price during the earlier part of
this financial year was under control due to ban imposed by some foreign countries of import of table egg from
India. The egg price during the last quarter of this financial year and in the first quarter of the financial year 2007-
08 increased significantly which had a severe bearing on the bottom line of the company. In view of the contracted
commitment to deliver egg powders to some of the important and prestigious customers, the company had no
option except to carry on its manufacturing operation under loss. However there is an improvement in the price of
egg products in the international market which helped the company to reduce its loss to little extent. Inspite of the
heavy import duty levy on the egg products in the European and other international markets, the company did not
face any problem in marketing its product and this had been possible due to quality policy and adherance to
delivery schedule by the company.
PROSPECTS FORTHE FINANCIAL YEAR 2007-08:

The unexpected and sudden appreciation of rupee against US Dollar in the first quarter of this financial year 2007-
08 caused major threat to exporter. As export turnover is significant portion of your company's sales revenue,
the impact due to weekening of US Dollar caused severe impact on the cash position of the company. The
company is cautiously watching the forex market and enter into forward contracts to hedge against exchange
fluctuation risks. Your director informed in the previous year's Annual Report about policy changes made by the
Governmant of India which made EOU's disentitle to export incentive benefit available under Vishesh Krishi and
Gram Udyog Yojana (VKGUY) scheme. Your directors are pleased to inform that the Governmant of India in the
Trade Policy for the year 2007-08 extended this benefit to export made by Export Oriented Unit also. It is to
inform to shareholders that this financial year 2006-07 is the last year of 10 years tax holiday period prescribed
under Section 10B of the Income Tax Act'1961. In view of this with effect from the financial year 2007-08 there will
not be any favorable treatment to your company under the provisions of the Income Tax Act and the profits that
would be derived by the company attracts income-tax at normal rate.
POULTRY PROJECT:
The company is implementing poulty project with 12 laks layers near Paramathy in Karur District.The cost of this
project is Rs.41.50 crores which is funded by means of term loan of Rs. 31.16 crores from State Bank of India
and the balance of Rs. 10.34 crores is promoter's contribution funded out of internal accural of the company. The
entire project is expected to be completed in 2 years time. After implementation of the project your directors hope
that wide fluctuation in the bottom line of the company, due to fluctuation in raw material price.would be arrested
and the company would also able to exercise complete control over quality of raw materials and traceability up to
feed ingredient level can be achieved.
SUBSIDIARY COMPANY:
The company's marketing subsidiary SKM Europe BV- Netherlands, started to offer benefit of synergy with the
company's product development and marketing efforts. As expected the subsidiary functions as a conduit for
reducing delivery time and servicing customers besides identifying and procuring orders from new valued customers.
The performance of the subsidiary during this financial year shows improvements. The Annual Accounts of the
subsidiary for the financial year under review are attached with this report.
MARKETING ARRANGEMENT IN JAPAN:

SKM Japan Ltd, which is entirely owned by a resident of Japan is taking tremendous effort for marketing the
company's product in Japan. As your company has stake in SKM Japan Ltd, disclosure of performance of SKM
Japan Ltd is not made with this report.
HUMAN RESOURCES:
Seizing the fact that human resources are the valuable asset to an organisation, your company lays emphasis
on training of its employees through seminars and workshops to sharpen their skills and knowledge.The relationship
between the company and its employees continue to be cordial throughout this financial year.
DIRECTORS:
The directors, Dr. M. Chandrasekar and Shri S.M. Venkatachalapathy retire by rotation at this Annual General
Meeting and are eligible for reappointment. The retiring directors offer themselves for re-appointment.
FIXED DEPOSITS:
The Company has not accepted deposits from the public during the year under review.
CEO / CFO CERTIFICATION:

The Managing Director and the General Manager - Finance have submitted to the Board regarding financial
statements and other matters as required under Clause 49(V) of the listing agreement.
10
DELISTING OF COMPANY'S EQUITY SHARES

In the Eleventh Annual General Meeting of the company, the shareholders had given their consent for delisting of
equity shares of the company from the Madras Stock Exchange Limited and Goimbatore Stock Exchange
Limited. Accordingly, the company informed the above two stock exchanges about the decision taken by the
company to delist its equity shares from these two stock exchanges. The Madras Stock Exchange requested the
company to co-operate by continuing listing of the company's equity shares with its exchange which was negativated
by the company. Coimbatore Stock Exchange did not send any reply to the letter sent by the company proposing
for delisting. As no demand was received from the Coimbatore Stock Exchange, the company did not pay listing
fee to the exchange for the years 2006-07 and 2007-08.
DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that:
1. In the preparation of Annual Accounts the applicable Accounting Standards (except AS 22 which is not
applicable to companies during tax holiday period u/s. 10B of the Income Tax Act, 1961 as clarified by the
Institute of Chartered Accountants of India -ICAI), has been followed and thatthere were no material departures;
2. The Accounting policies selected are being applied consistently and judgements and estimates made
are reasonable and prudent and gives a true and fair view of the state of affairs of the Company at the end
of the financial year and of the profit or loss of the Company for that period;
3. Proper and sufficient care had been taken for the maintenance of adequate Accounting Records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
4. The Annual Accounts had been prepared on a going concern basis;
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:
The Corporate Governance and Management Discussion and Analysis Reports form an integral part of this
Reports and are set out as separate annexures to this Report. The certificate from the Statutory Auditors of the
Company certifying compliance of conditions of Corporate Governance stipulated in Clause 49 of the Listing
Agreement with the Stock Exchange is also annexed to the Report on Corporate Governance.
AUDITORS:
The Statutory Auditors, M/s N.C. Rajagopal &Co, Chartered Accountants, Erode retire at the conclusion of the
forthcoming Annual General Meeting. The retiring auditors M/s N.C. Rajagopal & Co, Chartered Accountants,
confirmed their eligibility under section 224(1 B) of the Companies Act,1956 and also signified their willingness to
accept office, if reappointed.
STATUTORY INFORMATION:
Particulars of employees' remuneration u/s 217(2A) of the Companies Act,1956:
The Company does not have any employee drawing remuneration warranting disclosure under the Companies
(Particulars of Employees) Rules,1975.
The information required as per Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988 is given in the Annexure forming part of this report.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their thanks and appreciation to the company's customers, suppliers.banks
and investors for their continued support during this year. Your Directors also wish to place on record their appreciation
of the dedicated service and contribution made by the employees at all levels and look forward to their continued
support in the future as well.
By Order of the Board

Date: 30-07-2007 EXECUTIVE CHAIRMAN
11
ANNEXURE TO THE DIRECTORS' REPORT
Information under Section 217(1 )(e) of the Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988.
FORM-A
PARTICULARS 2006-2007 2005-2006
(I) POWER AND FUEL CONSUMPTION

(1) Electricity
a. Purchased units (Kwh) 57,56,756 22,40,417
Total Amount (Rs.) 2,69,38,222 1,06,21,811
Rate/unit (Rs.) 4.68 4.74
b. Own Generation through Diesel Generator
Units (Kwh) 3,48,647 34,48,217
Total Amount 24,88,931 2,26,46,525
Units per litre of Diesel Oil 3.20 3.51
Cost/Unit (Rs.) 7.14 6.56
(2) Furnace Oil
Quantity (Litres) 4,57,221 3,54,800
Total Cost (Rs.) 66,09,023 39,80,708
Average rate (Rs.) 14.45 11.22
(3) Fire wood
Quantity (Metric Tonnes) 10,373 9,626
Total Cost (Rs.) 1,91,93,326 1,68,67,022
Average rate (Rs.) 1,850.32 1,752.31
(II) CONSUMPTION PER UNIT OF PRODUCTION

Product - Egg Powder (MetricTonnes) 4,525 4,254
Electricity (Rs. Per Metric Tonne) 6,503 7,820
Fuel (Rs. Per Metric Tonne) 5,702 4,901
FOREIGN EXCHANGE EARNINGS AND OUTGO: (Rs. in lacs)

Earnings: 8,622.51 6,997.01
Outgo : 457.98 370.88
12
CONSERVATION OF ENERGY:
The company has implemented various initiatives for conservation of energy and due to this the company reduced
expenditure towards power consumption in terms of each MT of Egg Powder produced by 2%.
A few such key initiative are:

1. Existing EB demand increased from 450 kva to 1350 kva.
2. The usage of Furnace Oil fired boiler reduced considerably and Wood fired boiler used extensively for
generating steam for process.
3. Installation of Uninterrupted Power Supply in important process areas completed during this year and the unit
became operational during this year.
TECHNOLOGY ABSORPTION:
The company is always in pursuit for identifing areas which require improvement in process technology and
product development. In tune with the requirements of customers for new product the company developed such
products by adopting new process techniques .The new laboratory constructed at an investment of Rs.2.25 crore
during the previous financial year is equipped with modern equipments which make the laboratory as a state of art
in technology for testing and analysing products with precision at international standards.
RESEARCH AND DEVELOPMENT:

Research and Development activities are being carried out on an ongoing basis for achieving efficiency in production
process and for improving quality of finished products. R&D division of the company fine tunes recipes and with
the consultation of the customers develops new products.

Date : 30-07-2007 EXECUTIVE CHAIRMAN
13
MANAGEMENT DISCUSSION AND ANALYSIS
Cautionary Statement
All statements that address expectations or projections about future, including but not limited to statements
about the Company's strategy for growth, market position, financial results etc are forward looking statements.
Forward-looking statements are based on certain assumptions about fiscal and industrial policies and future
events. The Company can not guarantee that these assumptions and expectations are accurate or materialize.
The Company do not take any responsibility to amend or modify and make public announcement or advertisement
when the actual results differ from those expected even if the deviations or differences are material.
1. Company Profile:
Your Company is engaged in the business of manufacture of egg powders out of shell eggs. The manufacturing
plant of the company is situated at Cholangapalayam village in Erode District.The products manufactured by the
company is being exported to over 24 countries and earns valuable foreign exchange for our Nation.
2. Industry Profile:
Eventhough India is one of the world leader in the production of eggs, Indian egg producing industries are in
nascent stage. Eggs produced in this country are either consumed directly or exported to foreign countries and
consumption of eggs by Indian egg processing industries is very meager. Due to the requirement of stringent
phytosanitory measures by the importing countries, Indian entrepreneur are not envincing keen interest in starting
egg processing plant and hence number of egg processing plant in India is very few. As this industry's survival
depends upon demand for its product in the international markets, this industries is to cope with various quality
parameters formulated by the importing countries. Importing country's monitory policies such as import levy on
imported egg products and subsidies to local entrepreneur are having a direct bearing on the performance of this
industry. Wide fluctuation of egg price in the local markets is another factor affecting the performance of this
industry. However the advantage of low cost of producing an egg in India provide a shot in the arm to the Indian
egg processors which enable them to effectively tackle competition posed by egg processing plant operating in
economically developed nations.
3. Industry Performance:
Out of the five egg powder manufacturing industries in India some industries are either not functioning or being
operated as a part of other industrial undertaking. In view of this data relating to performance of Indian egg
processing industries are not available. During the year under review this company produced 4,525 MT of egg
powders as against the installed capacity of 4300 MT. During the year under review demand for the company's
product increased steadily througout the year which enabled the Company to sell 4,580 MT. The average
exchange rate between Indian Rupee and US Dollar was 45.05 during April'06 and it reached the peak rate of
47.04 in the month of July 2006 and after that there was a continuous drop and finally the average rate at which
rupee was traded against US Dollar at the end of the financial year was 44.07. The substantial sales revenue of
the company is also from Euro currency. Throughout the financial year there were wide fluctuations in the exchange
rate between Euro and Rupee. In the month of April'06 the average rate at which rupee was traded against euro
was at Rs.55.28 and this rate was maximum at 60.37 in the month of August'06 the average rate during the
month of March 07 was Rs.58.40. As the company had taken forward cover both against US dollar and euro, the
fluctuation in exchange rate did not cause any major disturbance on the bottom or top line of the company for the
financial year under review.
14
GOVERNMENT POLICIES:
In the Eleventh Annual Report of the company we have informed the policy changes made by the Government of
India which disentiled EOU's from availing export incentive designed with an objective to promote export of agri
& poultry products, called Vishesh Krishi and Gram Udyog Yojana scheme. The company's bottom line would
have been increased by Rs. 400 lakhs had the Government of India not made any changes in its Foreign Trade
Policy for the year 2006-07.
Based on the representation made by the Export Promotion Council for EOU on behalf of its members and also
by your company, the Government of India in its Foreign Trade Policy for the Year 2007-08 extended this benefit
to exports made by EOU's which do not avail direct tax benefits / exemptions. As the Financial Year 2006-07 is
the last year for hundred percent tax holiday benefit being availed by the company under Section 10B of the
Income Tax Act'1961 ,your company is eligible for availing the benefit under this scheme in the Financial Year
2007-08.
INDUSTRY OUTLOOK:
The demand for eggs is more than supply in the last quarter of this financial year under review and therefore the
egg price increased significantly which affected adversely the performance of last quarter of the company. The
same situation of demand and supply mismatch pervailed upto the first week of July'07 which pushed up the egg
price to all time high price of Rs. 1.98 resulting huge losses from operations in the first quarter of this current
financial year. Another setback to the company's performance is from strenthening of rupee against US dollar to
the extent of 10% in this financial year. In order to control operational losses, the management initiated various
controls including purchase price of raw-materials and sale price of egg powders.The company negotiated rates
with contract poultry farmers and renewed old contracts and entered into new contracts for purchase of eggs at a
discount of 5 paise per egg from NECC rate. The management also negotiated with customers for increase in
selling price of egg powders and as a result most of the customers of the company agreed for price revision
ranging from 5% to 20% and new contracts were finalised with the revised rates.
The company's backward integration project of 1.2 million layer is in the advanced stage of implementation. After
completion of this project the present situation of frequent disturbance of bottom line of the company due to egg
price movement will be greatly averted.The selling price increase and the assistance of the Government of India
to exporter in the form of interest subvention of 2% are expected to compensate some extent the adverse effect
of strengthening of Rupee against US dollar.
STRENGTH OFTHE COMPANY:

The Company' is following good manufacturing practice and manufacturing processes are being carried under
hygenic environment. The officials of the company are professionally qualified and are having rich experience in
egg processing industry. The whole chain of manufacturing process right from receipt and issue of rawmaterials,
production process, storage of finished goods and despatches are well documented to enable the company to
trace any causes of product compliant from its customers upto the sources of rawmaterials. The production
department is technically competent in fine tuning recipes and with customer consultation able to manufacture
new proucts.The farm project under implementation will make the company as unique one with traceability upto
feed ingredients level. The Residue Laboratory of the company is equipped with equipments and residue test can
be performed with precision. The company always believes in the performance of its contractual obligations and
so it is able to carry out negotiations most advantageous to it.
FUTURE PROSPECTS:
To meet the increase in demand for its product, the company expanded the installed capacity from 3500 MT to
4300 MT in the previous financial year but still the company is finding difficult to match its production to the
demand for its product. In the financial year under review, capacity utilisation of the plant exceeded by more than
3%. The company foresees that demand for its product will further increase in the ensuing years. In view of this
steady increase in demand for its products, the company has plans to expand further increase the installed
capacity.The company is also envisaging to integrate the production process wherever possible to achieve efficiency
in operation and to increase the bottom line.
15
OPPORTUNITIES:
The standard range of products developed by the Company's Research & Development wing of the company find
wide applications in health food, mayonnaise, sauces, soup, meat, fish, pasta, backery and confectinary industries.
The growth in functional foods could also be a opportunity to this industry. In the past decade, on health concern
about cholesterol, reduced egg consumption with doctors recommending elimination of eggs from the daily diet.
In recent years medical indications are that eggs and egg products are actually beneficial to health. Recommendation
by doctors for eating more eggs combined functional advantages of egg products, there is a great opportunity
ahead for egg processing industries.
THREATS:
Poultry industry is prone to bird flue disease and this may endanger availability of eggs for processing. As there
is no local market for egg products the company solely depend on international market. As international markets
are heavily protected in the form of import duties and subsidies, occassions may arise to market the products of
the company at unremunerative price. Political and Policy changes of countries where the company's products
are marketed may have favourable or adverse effect on the company's performance.
INTERNAL CONTROL SYSTEM ANDTHEIR ADEQUACY:

The Company has adequate system and internal controls to safeguard the assets of the Company and to ensure
maintenance of proper accounting records. The ERP packages are under implementation and test.Once the ERP
becomes operational the managment will have full control over its assets and efficieny and cost savings through
maintaining resources at optimum level can be obtained. The Audit Committee of the Board of Directors meets
regularly and oversees the internal control practice and analysis its adequacy considering the size and nature of
operation of the company.
INDUSTRIAL RELATION:
The relation between the management and employees are continued to be cordial throughout the financial year
under review. Review of adequacy of manpower of each department are continuously made and employees with
requisite qualification and experience are employed in all the departments of the company .The total number of
manpower employed by the company aggregates to 138.

16
REPORT ON CORPORATE GOVERNANCE
1. COMPANIES PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:

The Company is committed to high standard of Corporate Governance in all its activities and
processes. Through its Corporate Governance measures, the company aims to maintain
transparency in its financial reporting and keep all its shareholders informed about its policies,
performance and developments.The key elements of Corporate Governance viz transparency,
internal controls, risk management and communications are being scrupulously followed and
being practiced.
The Company formed various committees to oversee the functions of the Management. The Committees
meet regularly and transact the business assigned to it.
2. BOARD OF DIRECTORS
The details of composition of the Board, attendance of each Director at the Board Meeting held during the
year under review as well as last Annual General Meeting and the number of other Directorship /Committee
Membership held by them are as follows.
Promoter/ No. of other Committee

Companies in which
Chairman/ Independent/
S.No. Name of Directors in which he he is a
Director Nominee is a member/
Director Director Chairman
1 Shri. SKM. Maeilanandhan Chairman Promoter 3 Nil

2 Shri. SKM. Shree Shivkumar Director Promoter 2 Nil
3 Dr. M.Chandrasekar Director Promoter 2 Nil
4 Shri.B. Ramakrishnan Director TIDCO-Nominee 9 5
5 Shri. S.M. Venkatachalapathy Director Promoter Nil Nil
6 Dr. L.M. Ramakrishnan Director Independent 3 Nil
7 Shri. M. Chinnayan Director Independent Nil Nil
8 Shri. P. Kumarasamy Director Independent Nil Nil
BOARD MEETINGS AND ANNUAL GENERAL MEETING - DIRECTORS' ATTENDANCE

Board Meeting Last Annual General Meeting
S.No. Name of Directors
Held Attended Attended Not Attended
1 Shri. SKM. Maeilanandhan 6 6 Yes -

2 Shri. SKM. Shree Shivkumar 6 6 Yes -
3 Dr. M. Chandrasekar 6 5 Yes -
4 Shri.B. Ramakrishnan 6 4 Yes -
5 Shri. S.M. Venkatachalapathy 6 5 Yes -
6 Dr. L.M. Ramakrishnan 6 5 Yes -
7 Shri. M. Chinnayan 6 5 - Yes
8 Shri. P. Kumarasamy 6 6 Yes -
17
DIRECTOR RETIRING BY ROTATION BEING RE-APPOINTED:

Dr. M. Chandrasekar, B.V.Sc; M.S (USA), DFT(Netherlands) aged 37 years is representing promoters and is
associating with this company from 26.06.1996 as a Director. Dr. Chandrasekar's indepth knowledge in veterinary
science and Food Technology helps significantly in taking key decisions. Dr. M. Chandrasekar is the Managing
Director of SKM. Animal Feeds and Foods (India) Limited which is one of the promoter of this company. He is
also a director in SKM Siddha and Ayurvedic Medicines India Private Limited. He is a member of the Share
Transfer committee of the Board of Directors.
Shri. S.M.Venkatachalapathy, aged 69 years is a Senior Advocate. Shri. S.M.Venkatachalapathy belongs to

promoters group and is associating with this company as a directorfrom 28.02.1997. Shri. S.M.Venkatachalapathi's
legal knowledge and experience helps the company in solving legal issues. He is a member in the Remuneration
Committee of the Board of Directors of this company.
AUDIT COMMITTEE :
All the three members of the Audit committee are Non- Executive and Independent Directors. The Chairman of the
Committee is a Chartered Accountant. The Committee met four times on 25.04.2006, 31.07.2006, 25.10.2006
and on 25.01.2007 during this year. The name and the attendance of members are given below:
Audit Committee Meetings

S.No. Name of Members Category
Held Attended
1 Shri. M. Chinnayan Chairman 4 4
2 Shri B. Ramakrishnan Member 4 2
3. Shri. P. Kumarasamy Member 4 4
TERMS OF REFERENCE:
The Audit Committee periodically reviews the adequacy of the internal control system of the company and
reviews the Reports of the Statutory Auditors and discussed their findings. The terms of reference made by the
Board to the Audit Committee are in accordance with the items listed in Clause 49 (II) (D) of the Listing Agreement,
inter alia, including
a. Review of financial statement before submission to the Board of Directors.
b To initiate steps for implementing effective internal control systems to safeguard the assets of the
company.
c. To investigate into any matter, either in relation to the terms specified in Section 292A of the
Companies Act,1956 or referred to it by the Board.
d. Review the Company's financial and risk management policies.
The Company Secretary of the company acts as the Secretary to the Committee. The Statutory Auditors of the
company were invited to attend the meeting.
18
REMUNERATION COMMITTEE:
The Board of Directors constituted this committee on 29.04.2002, which comprises of 3, Non-Executive Directors
and the Composition of the Board is given below.
Name of Members Chairman / Member
Dr. L.M. Ramakrishnan Chairman

Shri. S.M. Venkatachalapathy Member
Shri. P. Kumarasamy Member
During this year under consideration the committee met once on 25-01-07 for determining revision of salary to
Shri.SKM Maeilanandhan, the Executive Chairman.
OBJECTIVES:
The Committee reviews and determine the company's policy on remuneration of Executive Chairman and Managing
Director so as to ensure that they are fairly rewarded for their individual contribution to the company's overall
performance and their remuneration is in line with industry standards.
BRIEF DESCRIPTION OFTERMS OF REFERENCE:

The broad terms of reference to the Remuneration Committee are to recommend to the Board regarding salary
(including annual increments), perquisites, commission/incentives to be paid to the company's Executive Chairman,
Managing Director/Whole Time Director.
Details of remuneration paid to Executive and Non-Executive Directors for the year 2006-07 are given below
(Amount in Rs.)
Perquisites
Sitting
Name of Directors Salary and Total
Fees
allowances
Shri. SKM. Maeilanandhan 17,64,000 Nil Nil 17,64,000
Shri. SKM. Shree Shivkumar 19,72,000 2,42,920 Nil 22,14,920
Dr. M.Chandrasekar Nil Nil 5,000 5,000
Shri. B. Ramakrishnan* Nil Nil 4,000 4,000
Shri. S.M. Venkatachalapathy Nil Nil 5,000 5,000
Dr. L.M. Ramakrishnan Nil Nil 5,000 5,000
Shri. M. Chinnayan Nil Nil 5,000 5,000
Shri. P. Kumarasamy Nil Nil 6,000 6,000
*PaidtoTIDCO
19
SHAREHOLDERS' AND INVESTORS' GRIEVANCE COMMITTEE :

The Shareholder and Investor Grievances Committee specifically looks into redressing of shareholders' and
investors' complaints such as transfer of shares, non-receipt of share certificates, non-receipt of dividends and to
ensure expeditious share transfer process. The Committee endeavors to settle all shareholders complaints in the
minimum possible time.
The committee consists of the following independent directors
S.No. Name of Members Chairman / Member
1 Shri. P . Kumarasamy Chairman
2 Shri. S.M. Venkatachalapathy Member
3 Dr. L.M. Ramakrishnan Member
GENERAL BODY MEETING:

a. Location and time, where last three Annual General Meetings were held:
Details of Special
AGM Location Date Time Resolution, if any,
passed
Kongu Kalaiarangam No Special
2004-9 t h AGM E.V.K. Sampath Nagar 03.09.2004 4.00 p.m. Resolution was
Erode - 638 011 passed
Kongu Kalaiarangam No Special

th
2005-10 AGI\ I E.V.K. Sampath Nagar 12.09.2005 4.00 p.m. Resolution was
Erode - 638 011 Passed
Special Resolution to
2 0 0 6 - 1 1 t h AG Kongu Kalaiarangam
delist company equity
E.V.K. Sampath Nagar 16.09.2006 4.00 p.m. shares from Madras
Erode-638 011 and Coimbatore stock
exchange was passed
b. Whether special resolutions were put through postal ballot last year? No
i. If Yes, details of voting pattern Not applicable
ii. Persons who conducted the postal ballot exercise Not applicable
iii. Procedure for postal ballot Not applicable
Details of non-compliance by the Company, penalties, strictures imposed

on the Company by Stock Exchange or SEBI or any authority on any matter
related to capital markets, during last 3 years. NIL
20
MEANS OF COMMUNICATIONS :
1. Half yearly report sent to each household of Shareholders No
2. In which newspaper quarterly results normally published in Daily Thanthi(Tamil)

Business Line (English)
3. Any website where displayed Electronic Data Information Filing and

Retrieval (EDIFAR)
4. Whether it also displays official news releases Nil
5. Presentation made to institutional investors or to the analysts Nil
6. Whether Management Discussions and Analysis is part

of annual report or not Yes, it is part of the annual report

21
CERTIFICATE OF THE AUDITORS TO THE SHAREHOLDERS OF

M/S. SKM EGG PRODUCTS EXPORT (INDIA) LIMITED
ON CORPORATE GOVERNANCE
To the members of M/s.SKM Egg Products Export [India] Limited,
We have reviewed the implementation of Corporate Governance procedures by M/s.SKM Egg Products
Export (India) Limited, during the year ended on 31 S| March 2007, with the relevant records and
documents maintained by the Company, furnished to us for our review and the report on Corporate
Governance as approved by the Board of Directors.
The compliance of conditions of corporate governance is the responsibility of the management. Our
examination was limited to procedure and implementation thereof, adopted by the Company for ensur-
ing the compliance of the conditions of the corporate governance. It is neither an audit nor an expres-
sion of opinion on the financial statements of the Company.
We have conducted our review on the basis of the relevant records and documents maintained by the
Company and furnished to us for the review and the information and explanations given to us by the
Company.
Based on such a review, in our opinion, the Company has complied with the conditions of Corporate
Governance, as stipulated in clause 49 of the Listing Agreement.
We state that no investors grievances are pending for a period exceeding one month against the
Company as per the records maintained by the shareholders/investors grievance committee.
We further state that such compliance is neither an assurance as to the future viability of the Company
nor the efficiency or effectiveness with which the management has conducted the affairs of the
Company.
for N.C. RAJAGOPAL & CO.,

Chartered Accountants
Place: Erode N.C.SAMPATH

Date : 30.07.2007 PARTNER
Membership No. 009592
22
AUDITOR'S REPORT
TO THE SHAREHOLDERS OF SKM EGG PRODUCTS EXPORT (INDIA) LIMITED
We have audited the attached Balance Sheet of SKM EGG PRODUCTS EXPORT (INDIA)
LIMITED, 156, Gandhiji Road, Erode - 638001 as at 31 S| March 2007 and also the Profit and Loss
Account for the year ended on that date annexed thereto and cash flow statement for the period
ended on that date. These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with audit standards generally accepted in India. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by the management,
as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion
1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government
of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure
a Statement on the matters specified in paragraphs 4 & 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph (1) above:
a. We have obtained all the information and explanations which to the best of our knowledge
and belief where necessary for the purpose of our audit.
b. In our opinion, proper books of accounts as required by law have been kept by the
company, so far as it appears from our examination of the books.
c. The Balance sheet and Profit and Loss Account dealt with by this report are in
agreement with the books of accounts.
d. In our opinion the profit and loss account and Balance sheet comply with the accounting
standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956 except
for the Accounting Standard No.22 dealing with Accounting for Taxes on Income issued by the
Institute of Chartered Accountants of India, which is inapplicable to the Company, since the Company
enjoys the benefit u/s.10B of the Income Tax Act, 1961.
e. On the basis of Written confirmation received from the directors as on 31.03.2007 and taken
on record by the Board of Directors, we report that none of the Directors are disqualified
as on 31.03.2007 from being appointed as a director in terms of clause (g) of sub section
(i) of section 274 of the Companies Act, 1956.
f. In our opinion and to the best of our information and according to the explanations given
to us, the said profit & loss account and the balance sheet read together with the notes
thereon give the information required by the Companies Act, 1956 in the manner as required
and give a true and fair view in conformity with the accounting principles generally accepted
in India :-
23
i. In the case of the Profit and Loss Account, of the Profit for the period ended 31st
March 2007 and
ii. In the case of the Balance Sheet of the state of affairs of the Company as at 31st
March 2007
iii. In the case of cash flow statement, of the cash flows for the year ended on that date.
For N.C. RAJAGOPAL & CO.,

Place: Erode
Date : 30.07.2007
N.C.SAMPATH
PARTNER
24
ANNEXURE
As required by the Companies (Auditors' report) Order, 2003, made by the Central Government under section
227 (4 A) of the Companies Act, 1956, we state that:
1. a. The Company has maintained proper records showing full particulars including quantities details
and situation of fixed assets.
b. The fixed assets have been physically verified by the management at reasonable intervals and no
material discrepancies were noticed on such verifications
c. Fixed assets of a substantial part, affecting the going concern, have not been disposed off during
the year.
2. a. The Management has carried out physical verification of inventory at reasonable intervals.
b. The procedure of verification of inventory followed by the Management is reasonable and adequate
in relation to the size of the Company and the nature of its business.
c.The Company is maintaining proper records of inventory and no material discrepancies were noticed
on physical verification.
3 a. The Company has granted unsecured loan amounting to Rs.1.00 Crore (Last Year Rs.1.5 Crores) to
SKM Siddha and Ayurvedic Medicines India Private Limited which is covered under section 301 of
the Companies Act 1956. The Company had received Interest Income of Rs. 11.37 Lacs on the
above advances. There is no balance as on 31.3.2007.
b. The Company has not taken any loans, secured or unsecured, from Companies, firms or other
parties covered in the Register maintained under Section 301 of the Companies act, 1956.
4. There is an adequate internal control system commensurate with the size of the Company and the
nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services
and there is no continuing failure to correct major weaknesses in internal control system.
5. a. The particulars of contracts or arrangements referred to in Section 301 of the Companies Act,
1956, have been entered in the register maintained under that section.
b. Transactions made in pursuance of such contracts or arrangements have been made at prices
which are reasonable, having regard to the prevailing marker prices at the relevant time.
6. The Company has not accepted any deposits from the public.
7. The company has an internal audit system commensurate with its size and nature of its business.
8. As explained to us the company is maintaining reasonable records for the sale and disposal of wastes
and scraps. There is no by-products in the process.
9. We have been informed that the Central Government has not prescribed maintenance of Cost Records
under section 209(1 )(d) of the Companies Act, 1956.
10. According to the information and explanation given to us, there are no undisputed amounts payable, in
respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs duty and Cess, were in arrears as
at March 2007, for a period of more than six months from the date they become payable except the
following payments, the details for which are given below:
25
Period to which it Amount Due Forum where the appeal is

Particulars Relates to be paid preferred
Excise Duty 1.4.2003 to Rs.64,288/- Commissioner of Central Excise,

30.3.2004 Salem CESTAT, Chennai
Excise Duty 1.8.2002 to Duty-Rs.23,156/- Commissioner of Central Excise,

30.4.2003 Interest- Rs.2,605/- Salem CESTAT, Chennai
Excise Duty May 2004 to Rs.49,650/- Commissioner of Central Excise,

March 2005 Salem
Service Tax July 2005 to Rs.3,10,489/- High Court of Madras

December 2005
Service Tax January 2005 to Rs.13,419/- . Commissioner of Central Excise -

June 2005 Appeal, Salem.
Service Tax July 2005 to Rs.1,01,786/- High Court of Madras

December 2005
Service Tax January 2006 to Rs.4,82,328/- High Court of Madras

March 2006
Excise Duty June 2005 to May Rs.29,230/- Commissioner of Central Excise

2005 Appeals, Salem
11. The Company has not defaulted in repayment of dues to Financial Institution or banks.
12. The Company has not granted loans and advances on the basis of security by way of pledge of shares,
debentures and other securities and hence maintenance of adequate documents and records for such
cases does not arise.
13. The Company does not have any accumulated losses. The Company has not incurred cash losses
during the year covered by our audit and the immediately preceding financial year.
14. The Company has not given any guarantee for loans taken by others from banks or financial institutions.
15. The company is not a chit fund, Nidhi or Mutual benefit Society. Hence the requirements of item (xiii)
of paragraph 4 of the Order is not applicable to the company.
16. In our opinion, the company is not dealing in or trading in shares, Securities, Debentures and other
Investments. Accordingly the provisions of clause 4[xiv] of the companies [Auditor's Report] Order
2003 are not applicable to the company.
17. As per the information and explanations given to us, Term Loans borrowed by the company were applied
for the purposes for which the loans were obtained.
18. As per the information and explanations given to us, funds raised on short term basis have not been
used for long term Investments.
19. On the basis of the information and explanations furnished by the company no fraud on or by the
Company has been noticed or reported during the year.
26
20. According to the information and explanations given to us no preferential allotment of shares has been
made by the company to companies, firms, or parties listed in the register maintained under section
301 of the Companies Act 1956.
21. The company has not issued any debentures. Hence the requirement of clause (xix) of paragraph 4 of
the Order is not applicable to the company.
22. During the period covered by our audit report, the company has not raised any money by public issue.

Place : Erode
Date : 30.07.2007 N.C.SAMPATH
PARTNER
27
BALANCE SHEET AS AT 31st MARCH, 2007

(Amount in Rs.)
Particulars Schedule As at 31.03.2007 As at 31.03.2006
SOURCEOF FUNDS
Share Capital A 26,33,00,000 26,33,00,000
Reserves & Surplus B 24,50,83,243 15,22,12,221
Secured Loans C 16,39,76,720 17,67,86,869
67,23,59,963 59,22,99,090
APPLICATION OF FUNDS
Fixed Assets
Gross Block 57,53,05,242 53,84,19,184
Less: Accumulated Depreciation D 18,44,87,326 15,65,88,952
Net Block 39,08,17,916 38,18,30,232
Investment E 2,81,36,362 1,28,32,779
Current Assets, Loans
and Advances
Inventories F 17,31,02,046 13,69,97,094
Sundry Debtors G 1,00,94,061 43,43,527
Cash & Bank Balances H 3,03,30,578 1,81,96,987
Loans & Advances I 8,20,54,019 8,22,28,539
29,55,80,704 24,17,66,147
Less: Current Liabilities J 2,13,32,955 1,17,76,961
Provisions K 2,08,42,064 3,23,53,107
Total Current Liabilities & Prov. 4,21,75,019 4,41,30,068
Net Current Assets 25,34,05,685 19,76,36,079
67,23,59,963 59,22,99,090
Notes on Accounts S
As per our report of even date. For and on behalf of the Board
For N.C.RAJAGOPAL & CO., SKM. MAEILANANDHAN SKM. SHREE SHIVKUMAR

Chartered Accountants Executive Chairman Managing Director
N.C.SAMPATH V. JAGADEESAN
Partner General Manager - Finance &
Membership No. 009592 Company Secretary
Place : Erode
Date : 30.07.2007
28
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2007
(Amount in Rs.)
Year Ended Year Ended
Particulars Schedule
31.03.2007 31.03.2006
INCOME
Sales 88,38,38,747 71,64,70,537

Other Income 1,80,17,453 3,89,88,187
Increase in Stock M 2,28,06,690 1,84,80,470
Total 92,46,62,890 77,39,39,194
EXPENDITURE
Purchase and Manufacturing Expenses N 64,51,40,953 54,96,46,848
Employees' Cost O 3,01,47,867 2,02,22,862
Other Expenses P 7,61,91,354 5,55,56,937
Marketing Expenses Q 1,31,27,768 1,37,36,974
Total Cost 76,46,07,942 63,91,63,621
Profit Before Interest and Depreciation 16,00,54,948 13,47,75,573
Interest and Financial Charges Ft 2,23,94,882 1,63,14,214
Profit After Interest 13,76,60,066 11,84,61,359
Depreciation D 2,78,98,374 2,49,02,997
Profit Before Tax 10,97,61,692 9,35,58,362
Provision for Tax 4,10,000 4,03,000
Provision for Fringe Benefit Tax 11,00,000 ...
Profit After Tax and available for appropriation 10,82,51,692 9,31,55,362
Less: Appropriations
a) Provision for proposed dividend 1,31,65,000 2,63,30,000
b) Provision for Corporate Dividend Tax 22,15,670 36,92,783
1,53,80,670 3,00,22,783
Balance carried to Balance Sheet 9,28,71,022 6,31,32,579
EPS (Basic) 4.11 3.53
EPS (Diluted) 4.11 3.53
Notes on Accounts S

N.C.SAMPATH
Partner V.JAGADEESAN
Membership No. 009592 General Manager - Finance &
Company Secretary
Place : Erode
Date : 30.07.2007
29
SCHEDULES FORMING PART OF THE BALANCE SHEET

AND PROFIT & LOSS ACCOUNT
(Amount in Rs.)
Particulars As at 31.03.2007 As at 31.03.2006
SCHEDULE - A - Share Capital
Authorised Capital:
3,00,00,000 Equity Shares of Rs.10A each 30,00,00,000 30,00,00,000
Issued, Subscribed & Paid-up Capital:
2,63,30,000 Equity Shares of Rs. 10/-each fully paid-up 26,33,00,000 26,33,00,000
SCHEDULE - B - Reserves & Surplus

Share Premium Account 4,00,692 4,00,692
General Reserve
- Revenue Reserve 1,15,124 1,15,124
Profit & Loss Account
- Opening Balance 15,16,96,405 8,85,63,826
- Add: Current Year Balance after appropriation 9,28,71,022 6,31,32,579
- Closing Balance 24,46,82,551 15,18,11,529
24,50,83,243 15,22,12,221
SCHEDULE-C-SECURED LOANS *
i) From State Bank of India , Commercial Branch, Erode.

Working Capital Finance 11,99,65,712 8,33,83,369
Corporate Foreign Currency Term Loan 4,39,89,867 8,40,47,290
ii) AdhocLoan 90,81,353
iii) Vehicle Loan Account (Kotak Mahendra) 21,141 2,74,857
16,39,76,720 17,67,86,869
WORKING CAPITAL FINANCE AND CORPORATE LOAN ARE SECURED BY :
a. Hypothecation of stocks consisting of raw materials, semi-finished goods, finished goods and stores, spares
and other current assets of the Company.
b. First charge on the entire fixed assets of the Company.
c. Personal guarantees of Executive Chairman, Managing Director and Dr. M. Chandrasekar, Director and
Corporate guarantee of M/s. SKM Animal Feeds and Foods (India) Limited.
30
Schedule
SCHEDULE - D - FIXED ASSETS

(Amount in Rs.)
Gross Block Depreciation Net Block

\djustments Adjustments
As at Additions As at up to During the deductions up to As at As at
DESCRIPTION deductions
31.03.2006 during the 31.03.2007 31.03.2006 year 31.03.2007 31.03.2006
year
during the during the 31.03.2007
year vear
Egg Products Division

Land 1,47,72,051 - -- 1,47,72,051 - -- -- -- 1,47,72,051 1,47,72,051
Building 10,22,24,529 4,81,863 -- 10,27,06,392 1,94,24,896 31,75,306 -- 2,26,00,202 8,01,06,190 8,27,99,633
Plant & Machinery 37,75,91,472 1,24,36,161 - 39,00,27,633 12,69,78,027 2,13,10,734 -- 14,82,88,761 24,17,38,872 25,06,13,445
Office & Other Equipments 2,94,11,025 35,49,480 - 3,29,60,505 47,24,179 19,54,593 -- 66,78,772 2,62,81,733 2,46,86,846
CO
Computers 38,14,206 8,65,580 -- 46,79,786 25,28,075 6,93,199 -- 32,21,274 14,58,512 12,86,131
Furniture & Fixtures 49,08,572 2,02,383 - 51,10,955 18,05,233 3,30,550 -- 21,35,783 29,75,172 31,03,339
Motor Vehicles 44,25,500 14,64,456 1,333 58,88,623 11,28,542 4,33,992 -- 15,62,534 43,26,089 32,96,958
Work in progress-Egg - 6,61,811 - 6,61,811 - - -- - 6,61,811 --
TOTAL 53,71,47,355 1,96,61,734 1,333 55,68,07,756 15,65,88,952 2,78,98,374 -- 18,44,87,326 37,23,20,430 38,05,58,403
Poultry Farm Division
Land 12,71,829 29,67,144 -- 42,38,973 -- - -- -- 42,38,973 12,71,829
WIP Plant & Mach. -- 20,74,342 - 20,74,342 -- -- -- -- 20,74,342 --
WIP Building -- 1,21,84,171 - 1,21,84,171 - --. -- -- 1,21,84,171 --
GROSS TOTAL 53,84,19,184 3,68,87,391 1,333 57,53,05,242 15,65,88,952 2,78,98,374 - 18,44,87,326 39,08,17,916 38,18,30, 232
Previous Year 49,61,48,617 4,44,02,878 21,32,311 53,84,19,184 13,16,85,955 2,49,02,997 -- 15,65,88,952 38,18,30,232 36,44,62,662
Note : Rs.12,71,829 in the Land Account in Poultry Farm Division denotes inter division transfer i.e, transfer of opening balance of land from Egg Products.
Schedule (Amount in Rs.)
SCHEDULE - E - Investments
Investments in Mutual Funds
Current Investments (Valued at lower of cost of fair value)
Quoted:
UTI Leadership Fund, — 30,00,000
Birla Infrastructure Fund ... 20,00,000
Reliance Equity Fund ... 50,00,000
Templeton Indian Equity Income Fund - (MV - Rs.1.76 lacs) 1,52,137 —
SBI MF MSFU Contra Fund (MV - Rs.1.90 lacs) 1,71,101 ...
Sundaram BNP Paribas Select Midcap Fund (MV- Rs.12.17 lacs) 12,16,832 ...
Birla Midcap Fund (MV - Rs.16.24 lacs) 16,23,918 —
Franklin India Prima Plus Fund (MV - Rs.15.00 lacs) 15,00,504 • . . .
Sundaram BNP Paribas Rural Fund (Dividend Option) (MV - Rs.8.26 lacs) 8,26,287 —
Sundaram BNP Paribas Rural Fund (Growth Option) (MV - Rs.1.80 lacs) 1,68,839 —
Long Term Investments (Valued at cost)

Birla Infrastructure Fund (Dividend Option) (MV - Rs.0.87 lacs) 79,285 —
Birla Infrastructure Fund (Growth Option) (MV - Rs.0.87 lacs) 79,285 . . .
UTI Master Value Fund (MV - Rs.5.04 lacs) 8,35,303 20,00,000

Sundaram BNP Paribas Select Midcap Fund (MV - Rs.0.50 lacs) 83,826 ...
Sundaram BNP Paribas Rural Fund (Dividend Option) (MV-Rs.2.12 lacs 2,18,185 ...
Unquoted
SKM Europe BV.The Netherlands - Subsidiary Company 8,32,779 8,32,779
Saravana Finance Private Limited 2,03,48,081 —
2,81,36,362 1,28,32,779
CURRENT ASSETS, LOANS AND ADVANCES

Schedule F - Inventories
(As Valued and Certified by the Management)
Raw Material 97,42,995 44,97,712
Additives, stores, spares and consumables 2,17,11,051 1,68,08,072
Finished Goods 14,16,48,000 11,56,91,310
17,31,02,046 13,69,97,094
Schedule G - Sundry Debtors
Unsecured and Considered Good
Sundry Debtors - Considered Good

a) Morethan 6 months ... —
b) Others: 1,00,94,061 43,43,527
32
Schedule
(Amount in Rs.)

Particulars 31.03.2007 31.03.2006
Schedule H - Cash and Bank Balances

i. Cash on hand 4,32,530 1,51,829
ii. In Current Accounts with Scheduled Banks 2,27,95,780 1,22,12,137
iii. Fixed deposit with SBI, Commercial Branch, Erode 71,02,268 58,33,021
3,03,30,578 1,81,96,987
Schedule 1 - Loans and Advances
i. Advances recoverable in Cash or in kind
for value to be received - unsecured and
considered good 7,10,43,595 7,88,25,852
ii. Deposits - considered good 95,91,495 28,42,136
iii. Advance Income Tax and VAT credit 14,18,929 5,60,551
- 8,20,54,019 8,22,28,539
Schedule J - Current Liabilities and Provisions
i. Trade Creditors* 1,93,06,579 64,12,048
ii. Creditors for Expenses & Others 3,42,944 43,94,280
iii. ICICI and UTI - Unpaid Dividends 16,83,432 9,70,633
2,13,32,955 1,17,76,961
Schedule K - Provisions
i. Provision for Income Tax - MAT 4,10,000 4,03,000
ii. Provision for Proposed Dividend 1,31,65,000 2,63,30,000
iii. Provision for Corporate Dividend Tax 22,15,670 36,92,783
iii. Provision for Earned Leave 5,27,601 3,43.760
iv. Provision for Sales Commission 11,40,000 2,28,008
v. Provision for Genset Tax 9,30,000 4,50,000
vi. Provision for Expenses 13,53,793 9,05,556
vii. Provision for Fringe Benefit Tax 11,00,000 -
2,08,42,064 3,23,53,107
33

Particulars 31.03.2007 31.03.2006
Schedule -L Sales and Other Income
Sales:
Export sales 86,22,51,870 69,97,01,234
Domestic sales 2,15,86,877 1,67,69,303
88,38,38,747 71,64,70.537
Other Income:
Sale of shell eggs and scrap 6,55,005 5,36,171
Interest received, 23,54,802 21,67,724
Dividend received from Mutual Funds 28,15,633 31,51,151
Interest subsidy 1,06,63,099 ...
Vishesh Krishi Upaj Yojana Scheme ... 3,31,33,141

Exchange fluctuation net 15,28,914 _
1,80,17,453 3,89,88,187
SCHEDULE - M- INCREASE / (DECREASE) IN STOCK
Opening Stock - Finished Goods (+) 11,56,11,914 9,43,80,906
Semi-finished goods(+) 79,396 27,31,934
Egg Powder Purchase (+) 31,50,000 98,000
Closing Stock - Finished goods (-) & 14,16,48,000 11,56,91,310
Semi-finished goods (-) — ...
2,28,06,690 1,84,80,470
SCHEDULE - N - PURCHASE AND MANUFACTURING EXPENSES

Raw material - Eggs Consumed 50,69,79,919 44,55,22,732
Egg Purchase 2,27,36,713 2,47,645
Egg Powder Processing Charges 16,96,560 ...
Packing Material - Consumed 1,83,57,081 1,65,87,804
Power and Fuel 5,53,80,485 5,44,17,528
Transport Hire and Cooli 9,62,640 6,08,557
Additives and Consumables 3,90,27,555 3,22,62,582
64,51,40,953 54,96,46,848
SCHEDULE - O - EMPLOYEES' COST

Salaries and Wages 1,48,63,269 1,03,38,010
PF Contribution 9,81,434 9,77,912
Contract Wages 1,20.43,712 77,67,198
Welfare Expenses 22,59,452 11,39,742
3,01,47,867 2,02,22,862
34

Particulars 31.03.2007 31.03.2006
SCHEDULE - P - OTHER EXPENSES
Repairs and Maintenance
a. Building 10,30,775 11,97,394
b. Plant and Machinery 16,72,203 12,02,484
c. Others 18,23,844 11,46,078
d.Vehicle (Car, Van and Two wheelers) 29,50,333 20,65,601
74,77,155 56,11,557
Stores and Spares - consumed 1,37,88,416 94,32,785
Analysing Charges 83,91,844 22,20,374
Rent, Rates and Taxes 8,43,888 7,02,364
Postage, Courier and Telephone Charges 23,04,110 19,01,910
Printing and Stationery 9,25,912 7,01,026
Insurance Premium 10,29,187 14,47,798
Advertisement and Publicity 5,46,398 4,83,253
Travelling Expenses 29,39,074 30,94,953
Freight, Insurance and Forwarding Charges 2,55,97,105 2,47,85,829
Professional Charges 17,65,357 18,56,645
ISO/HACCP-Expenses 4,64,006 3,87,794
Stock Exchange Listing Fee 1,71,594 2,09,120
Miscellaneous Expenses 4,34,435 7,67,319
Audit fees: Statutory 2,11,230 2,45,400
Donation 21,55,000 17,08,810
Loss on sale of Import Licence 34,96,059 —
Loss on sale of Investments (Mutual Funds) 23,18,126 —
Diminishion in value of investments 13,32,458 —
6,87,14,199 4,99,45,380
7,61,91,354 5,55,56,937
35

Particulars 31.03.2006
31.03.2007
SCHEDULE - Q - MARKETING EXPENSES
Foreign Trip Expenses 12,09,166 24,31,373
Sales Commission to Foreign Collaborators and Others 92,93,321 50,10,566
Foreign Exhibition Expenses 7,82,252 30,93,821
Sales Promiton Expenses 5,43,357 4,29,765
Sample Courier Charges 4,70,796 4,79,189
Foreign Delegates Expenses 8,28,876 22,92,260
1,31,27,768 1,37,36,974
SCHEDULE - R - INTEREST AND FINANCIAL CHARGES
Working Capital Loan Interest 80,79,070 25,87,609
Bank Charges & ECGC Charges 14,99,234 15,03,230
Export bills discount interest 56,48,499 55,43,710
Export bills-overdue interest 8,46,121 5,69,129
Interest paid - others (Vehicles loan etc.) 40,189
Interest on Corporate Loan from SBI 47,38,949 61,10,536
SBI FD Loan Interest 90,185
Bill Discount & Collection Charges 14,52,635
2,23,94,882 1,63,14,214
Schedule S NOTES ON ACCOUNTS
1. Previous year figures are regrouped, rearranged and reclassified wherever necessary to facilitate
comparison with current year's figures and figures have been rounded off to nearest rupee.
2. Contingent Liability :
Export Bills discounted with the State Bank of India, Commercial Branch, Erode Rs. 2032.25 Lacs.
(Previous year Rs. 905.99 Lacs)
3. Balances of Sundry creditors and Sundry debtors are subject to confirmation. Classification of
Creditors due to the Small Scale Inustries has not been made, since the company has requested for
the details from the parties and which are yet to be received.
4. Additional Information pursuant to the provisions of paragraph (4D) of part - II of schedule VI to

Companies Act, 1956 :
I. Details of Licensed Capacity, installed capacity.
a. Licensed Capacity not applicable.

b. Installed capacity 4,300 Metric Tonnes per annum.
36
I1. Quantitative particulars of sales : (in Metric Tonnes)

2006-2007 2005-2006
Egg powder sales 4,580 4,005
III. Stock and Production (in Metric Tonnes)
a. Opening stock 871 622

b. Production & Purchase 4,525 4,254
c. Closing Stock 815 870
1 1
d. Semi-finished goods
IV. Consumption of Raw materials,

3,712.31 3,588.87
a.. Egg (Nos. in lakhs)
V. Consumption of imported and indigenous materials :

2006-2007 2005-2006
Particulars Rs. in lacs % Rs. in lacs %
Raw Material
Indigenous 5,069.80 100.00 4,455.23 100.00
Imported Nil Nil Nil Nil
Packinq Material
Indigenous 178.55 97.27 160.06 96.50
Imported 5.02 2.73 5.81 3.50
Consumable. Stores and Spares
Indigenous 322.48 61.06 221.00 53.01
Imported 205.68 38.94 195.96 46.99
Fuel
Indigenous 284.42 100.00 437.96 100.00
Imported ... ... ... —
VI. Expenditure in Foreign Currency : (Rs in Lacs)
Particulars 2006-2007 2005-2006

A. Packing Material & Additives 195.44 161.24
B. Stores and Spares 46.62 27.70
C. Foreign Travel Expenses 10.11 18.67
D. Analysing Charges 64.52 11.65
E. Sales Commission 72.46 144.65
F. Others ' 68.83 6.97
Total 457.98 370.88
VII. FOB Value of goods exported 8,451.63 6,841.14
37
5. Remuneration to Executive Chairman and Directors: (in Rs.)
2006-2007 2005-2006
Executive Chairman 17,64,000 NIL

Managing Director 22,14,920 17,66,604
(i) The Executive Chairman and Managing Director's remuneration is covered under part II of Schedule
XIII of the Companies Act, 1956.
6. Details of Fees to Auditors: (in Rs.) 2006-2007 2005-2006

(Including Service Tax)
(i) For Statutory Audit Fee 56,180 50,000

(ii) For Taxation Matter - Income Tax 1,12,360 1,00,000
Sales Tax 15,500 -
(iii) For Certification Services 27,190 16,000
7. Related Party Disclosures:
i. Sale of Egg Shellgrits to SKM Animal Feeds and Foods (India) Limited - Rs.5.49/- lacs.
ii. SKM Animal Feeds and Foods (India) Limited has invested Rs. 1,062.00 lacs and SKM Siddha
and Ayurvedic Medicines (India) Private Limited has invested Rs.40.00 lacs in the equity share
capital of the Company.
iii. Amount advanced to SKM Siddha & Ayurvedic Medicines India Pvt. Limited - Rs.2.50 Crores
(Opening Balance Rs. 1.50 Crores and Advance made during the year Rs. 1.00 Crore towards
advance for acquisition of Capital Assets) and Interest on the above advance received Rs.11.37
lacs. The entire amount has been recovered due to re-organisation of management of group
companies.
Nature of Relationship - The above companies are related by virtue of common Chairmanship and
Directorship of 1) Shri. SKM.Maeilanandhan (Chairman) 2) Shri SKM. Shree Shivkumar (Director) and
3) Dr. M.Chandrasekar (Director)
8. Loans and Advances includes advance of Rs. 1.13 Crores (Last Year - Rs.75.70 lakhs) to subsidiary
company of SKM Europe BV, the Netherlands.
9. Provision for Income Tax:
a. Provision for Income Tax has been made in respect of current tax liability arising out of MAT and
for Corporate dividend tax on Proposed Dividend under Income Tax Act. No provision has been
made in respect of deferred tax liability as per Accounting Standard No.22 issued by the Institute
of Chartered Accountants of India since it is inapplicable to the Company because of enjoyment
of benefit of deduction u/s.10B of the Income Tax Act, 1961. Accordingly, the accounts have
been prepared on the basis of the existing system.
b. No provision has been made in respect of demand of excise duties of Rs.1.69 Lacs and service
tax of Rs.9.08 Lacs, for which the company has filed appeal with various Higher Appellate
Forums, against the orders of the Lower Authorities.
38
10. Significant Accounting Policies:
(a). Accounting Convention:
The Financial statements have been prepared under historical cost convention. The Financial
Statements materially comply with the Accounting Standards issued by the Institute of Chartered
Accountants of India.
(b). Estimates and Assumptions:
Preparation of financial statements requires management to make estimates and assumptions

that affect the reported amount of assets and liabilities at the date of the Balance sheet and the
reported amounts of income and expenses during the reporting period. Examples include bad
debts written off, useful life of the assets, etc. Actual results may differ from these estimates.
(c). Inventories:
Inventories are valued as under:
1. Raw materials At cost following FIFO method.

2. Packing Materials At weighted average cost.
3. Additives At weighted average cost.
4. Stores & Spares
Imported : At weighted average cost.

Indigenous : At weighted average cost.
5. Semi-finished goods : At weighted average cost.

6. Finished goods : At weighted average cost.
(d). Cash Flow Statements
Cash Flow Statement has been prepared under "Indirect Method", Cash and Cash Equivalents
Comprise Cash in Hand, Current and Other accounts (Including Fixed Deposit) held with bank.
(e). Events Occurring after the Balance Sheet Date
i. Assets and Liabilities are adjusted for events occurring after the balance sheet date that
provide additional evidence to assist the estimation of amounts relating to conditions existing at
the balance sheet date.
ii. Dividends, Which are proposed / declared by the company after the balance sheet date but
before the approval of the financial statements are adjusted.
(f). Net Profit or Loss for the Period. Prior Period Items and Changes in Accounting Polices:
i: Net Profit for the Period:
All the items of income and expenses in the period are included in the determination
of net profit for the period, unless specifically mentioned elsewhere in the financial
statements or is required by the Accounting Standard.
39
ii. Prior Period Items:
Income / Expenditure are disclosed in Prior period adjustments, only when

considered by the management to be material to impact the financial statement
significantly.
iii. Extra - ordinary items:
Extra - ordinary items are accounted in accordance with the Accounting Standard - 5
(g). Depreciation Accounting
Depreciation is provided on straight line method as per the rates provided in schedule XIV of
the Companies Act 1956, except for imported plant & machinery for which the rate has been
taken as 3.80%, based upon the technical evaluation by the expert committee on the useful life
of the assets. In respect of assets added/adjusted during the year, depreciation is provided on
pro-rata basis.
(h). Revenue Recognition:
Sales are recognised on accrual basis and are accounted for in the books of accounts _on the
dates on which the goods are actually despatched from the factory.
(i). Accounting for Fixed Assets:
Fixed Assets:
Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and
incidental expenses related to acquisition. In respect of major projects involving construction,
related preoperational expenses form part of the value of assets capitalised. Expenses
capitalised also include applicable borrowing costs.
Capital work-in-progress:
Advances paid towards the acquisition of fixed assets and the cost of assets under installation
/ construction / not put to use before the year end are disclosed under capital work-in-progress.
(j). Accounting for Effect of Change in Foreign Exchange Rates:
Transaction in Foreign Exchange are accounted at the monthly average rates.
Foreign currency Liabilities / Assets at the close of the year are restated, adopting the contracted/
year and rates, as applicable. The resultant difference, if any, is suitably dealt with in the
accounts.
Exchange difference, arising on forward contract, is recognised as income or expense over the
life of the contract.
(k). Accounting for Government Grants:
Grants and Subsidies in the nature of revenue are treated as revenue income and credited to
the respective expenses accounts and subsidies in the nature of capital are adjusted to the
value of assets.
40
(I). Accounting for Investments:
i. Long Term investments are valued at cost. Provisions, if any, is made to recognize a decline
other than a temporary decline, in the value of long-term investments.
ii. Current Investments are stated at lower of cost and fair market value,
(m). Accounting for Retirement Benefits:
Provision for statutory liability as on 31 st March 2007 has been made in the books of accounts.
Gratuity charged to Profit and Loss Account is on the basis of premium charged by LIC under its
group Gratuity Scheme. Leave encashment determined based on actuarial valuation at the year
end, is fully provided for. Contributions for Provident fund under the Provident Funds and
Miscellaneous Provisions Act, 1952 are charged to the Profit and Loss Account.
(n). Borrowing Cost:
Borrowing costs attributable to acquisition and construction of assets are capitalised as part of
the cost of such asset up to the date when such asset is ready for its intended use. Other
Borrowing Costs are treated as revenue expenditure.
(o). Segment Reporting:
Since the company is concentrating on only one product and the area of operation is only in
India, the disclosure requirement as required by the Accounting Standard 17 issued by the
Institute of Chartered Accountants of India, dealing with Segment Reporting, does not arise.
(p). Earning per Share:
i. Basic earning per share has been computed with reference to Weighted Average number of
Shares based on monthly rests.
ii. Diluted earnings per shares has been computed based on the fully paid-up value of the
shares issued.
(q) Impairment of Assets:
There are no impairment of assets in terms of Accounting Standard No.28 issued by The Institute
of Chartered Accountants of India.
(r). Provisions. Contingent Liabilities and Contingent Assets:
i. A present obligation, which could be reliably estimated, is provided for in the accounts, if it
is probable that an outflow of resources embodying economic benefits will be required for
its settlement.
ii. All the liabilities have been provided for in the accounts except liabilities of a contingent
nature, which have been disclosed at their estimated value by way of notes in the Balance
Sheet.
iii. Contingent Assets are neither recognised nor disclosed.
41
(s). Sundry Debtors / Loans and Advances:
Sundry Debtors and Loans and Advances are stated after making adequate provisions for
doubtful balances.
(t). Expenditure:
Expenses are accounted on accrual basis and provisions is made for all known losses and
liabilities.
11. Interest subsidy of Rs.106 lacs under the head "Other Income" in Schedule "L" represents interest
subvention granted by the RBI for Poultry industries, which is calculated at 4% of the balance
of Term Loan and Working Capital Loan as on 31/03/2006 as per the terms of the subsidy
scheme.
For N.C.RAJAGOPAL & CO., SKM. MAEILANANDHAN S.K.M. SHREE SHIVKUMAR

N.C.SAMPATH V.JAGADEESAN
Partner General Manager - Finance &
Place : Erode
Date : 30.07.2007
42
Additional Information as per part IV, Schedule VI to the Companies Act, 1956.
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
1. Registration Details
Registration No. 181-6025
State Code No. 18
Balance Sheet Date 31.03.2007
II. Capital Raised during the year(Rs. in Thousands)
Public Issue Nil
Rights Issue Nil
Bonus Issue Nil
Private Placement Nil
III. Position of Mobilisation and Deployment of Funds (Rs. in Thousands)
Total Liabilities 7,14,535
Total Assets 7,14,535
Sources of Funds
Paid-up Capital 2,63,300
Reserves and Surplus 2,45,083
Share application money -
Secured Loans 1,63,977
Unsecured Loans -
Application of Funds
Net Fixed Assets 3,90,818
Investments 28,136
Current Assets 2,95,581
Misc. Expenditure (not written off) -
Accumulated Loss -
IV. Performance of the Company (Rs. in Thousands)
Turnover including other Income 9,24,663
Total Expenditure 8,14,901
Profit Before Tax 1,09,762
Profit After Tax 1,08,252
Earnings per Share (in Rupees) 4.11
Dividend Rate % 5.00
V. Generic names of three Principal Products of the Company
Item Code No. 4081100
Product Description EGG POWDER
For and on behalf of the Board
SKM. MAEILANANDHAN S.K.M. SHREE SHIVKUMAR

Executive Chairman Managing Director
V. JAGADEESAN
Place : Erode General Manager - Finance &
Date : 30.07.2007 Company Secretary
43
SKM EGG PRODUCTS EXPORT (INDIA) UMITED
STATEMENT PURSUANTTO SECTION 212 OFTHE COMPANIES ACT

RELATING TO SUBSIDIARY COMPANY
1. Name of the subsidiary company SKM Europe BV
2. Statement of holding Company's

interest in subsidiary company As on March 31, 2007
As on 31.03.2007
15,300 Shares of Euro 1 each 85%
3. Financial year of the subsidiary company Period ended March 31,2007
4. Net aggregate amount of Profit/(Loss)

of the subsidiary as far as it concerns
the holding company
(a) Dealt with the accounts of SKM Egg

Products Export (India) Limited by way
of dividend on the shares held in the : NIL
subsidiary for the period ending
March 31, 2007.
(b) Not dealt within the accounts of SKM

Egg Products Export (India) Limited
For the period ended March 31,2007 : Rs. 7.01 lakhs
For the previous financial years : Loss Rs. 6.41 lakhs
44
CASH FLOW STATEMENT FORTHEYEAR ENDED 31st MARCH,2007

(Rs. in Lacs)
Particulars As at 31 .03.2007 As at 31.03.2006
A. CASH FLOW FROM OPERATING ACTIVITIES

(INDIRECT METHOD)
Profit Before Tax 1,097.62 935.58

Adjustments for: — —
Loss on Sale of Fixed Assets -- --
Interest and Dividend Income (158.34) (53.19)
Interest Expenses 223.95 344.59 163.14 358.98
Operating Profit before Working Capital Changes 1,442.21 1,294.56

Adjustments for:
Increase / (Decrease) in inventories 361.05 224.51
Increase / (Decrease) in Trade and other receivables 18.09 471.44
(Increase) / Decrease in Trade and other payables 19.55 398.69 (26.31) 669.64
Cash generated from operations 1,043.53 -- 624.92
Interest paid (223.95) -- (163.14)
Direct Taxes provided (15.10) (4.03)
Net Cash from Operating Activities 804.48 457.75
B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (368.87) (422.71)
Sale of fixed assets and Subsidy received 0.01 --
Interest received 158.34 53.19
Investments including subsidiary (203.40) 188.15
Net Cash used in Investing Activities (413.92) (181.37)
C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of Share Capital — —
Increase / (Decrease) in Share Application Money -- --
Increase / (Decrease) in Term Borrowings (2.54) (122.94)
Increase / (Decrease) in Bank Borrowings (125.56) 193.10
Provision for Dividend and Corporate Dividend Tax (153.81) (300.23)
Net Cash (used in) received from financing activities (281.91) (230.07)
Net increase / (Decrease) in cash and cash equivalents 108.65 46.31
Opening Cash and Cash equivalents 123.63 77.32
Closing Cash and Cash equivalents 232.28 123.63

SKM.MAEILANANDHAN S.K.M. SHREE SHIVKUMAR
Place -. Erode
V. JAGADEESAN
Date : 30.07.2007 General Manager - Finance &
AUDITORS' CERTIFICATE Company Secretary
We have examined the Cash Flow Statement of M/s. SKM Egg Products Export (India) Limited for the year ended 31st March 2007. The
statement has been prepared by the Company in accordance with the requirements of Clause 32 of the Listing Agreement with the Stock
Exchanges and is based on and is in agreement with the corresponding Profit and Loss Account and Balance Sheet of the Company
covered by our report dated 30.07.2007 to the Members of the Company.
For N.C.RAJAGOPAL & CO.,
Place : Erode N.C.SAMPATH

Date : 30.07.2007 Partner
45
CONSOLIDATED FINANCIAL
STATEMENTS OF
SKM EGG PRODUCTS EXPORT
(INDIA) LIMITED
AND
SKM EUROPE BV,
THE NETHERLANDS
2006-2007
AUDITORS' REPORTTOTHE BOARD OF DIRECTORS ONTHE CONSOLIDATED FINANCIAL

STATEMENTS OF SKM EGG PRODUCTS EXPORT (INDIA) LIMITED AND ITS SUBSIDIARY
We have audited the attached consolidated balance sheet of SKM EGG PRODUCTS EXPORT (INDIA)
LIMITED (the Company) and its subsidiary SKM Europe BV of the Netherlands, (Collectively called SKM
Group) as at 31st March 2007, the consolidated profit and loss account and the consolidated cash flow
statement for the quarter and year ended on that date, annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with audting standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by Management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
We report that the consolidated financial statements have been prepared by the Company's management in
accordance with the requirements of Accounting Standard (AS) 2 1 , Consolidated financial Statements,
issued by the Institute ofChartered Accountants of India.
In our opinion and to the best of our information and according to the explanations given to us, the said
accounts give a true and fair view in conformity with the accounting principles generally accepted in India:
a. in the case of the consolidated balance sheet, of the state of affairs of the SKM Group as at 31
March 2007;
b. in the case of the consolidated profit and loss account, of the profit of the SKM Group for the quarter
and year ended on that date; and
c. in the case of the consolidated cash flow statement, of the cash flows of the SKM group for the
quarter and year ended on that date.
For N.C.RAJAGOPAL & CO.,

Place : Erode N.C.SAMPATH

Date : 30.07.2007 Partner
48
CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2007

BALANCE SHEET AS AT 31st MARCH, 2007
(Amount in Rs.)
SOURCE OF FUNDS
Share Capital A 26,33,00,000 26,33,00,000
Reserves & Surplus B 24,51,44,060 15,15,71,577
Secured Loans C 16,39,76,720 17,67,86,869
Minority Interest D 1,57,692 33,906
67,25,78,472 59,16,92,352
Fixed Assets
Gross Block 57,53,39,254 53,84,19,184
Less: Accumulated Depreciation E 18,44,88,268 15,65,88,952
Net Block 39,08,50,986 38,18,30,232
Investment F 2,73,03,583 1,20,00,000
Current Assets, Loans
and Advances
Inventories G 21,13,21,394 14,26,17,054
Sundry Debtors H 7,33,65,074 43,43,527
Cash & Bank Balances I 3,85,71,884 2,00,75,280
Loans & Advances J 7,10,27,727 7,63,16,613
39,42,86,079 24,33,52,474
Less: Current Liabilities K 11,90,20,112 1,31,37,247
Provisions L 2,08,42,064 3,23,53,107
Total Current Liabilities & Prov. 13,98,62,176 4,54,90,354
Net Current Assets 25,44,23,903 19,78,62,120
67,25,78,472 59,16,92,352
Notes on Accounts S

N.C.SAMPATH V. JAGADEESAN
Partner General Manager- Finance &
Place : Erode
Date : 30.07.2007
49
CONSOLIDATED PROFIT AND LOSS ACCOUNT FORTHE YEAR ENDED 31st MARCH.2007
(Amount in Rs.)
Particulars Schedule
31.03.2007 31.03.2006
INCOME
M
Sales 87,95,63,614 71,64,70,537
Other Income 1,87,53,700 3,89,88,187
Increase in Stock N 5,54,06,078 2,41,00,430
Total 95,37,23,392 77,95,59,154
EXPENDITURE
Purchase and Manufacturing Expenses 0 66,21,10,435 55,52,66,808
Employees'Cost P 3,01,47,867 2,02,22,862
Other Expenses Q 8,09,83,465 5,61,96,543
Marketing Expenses R 1,93,38,290 1,38,35,118
Total Cost 79,25,80,057 64,55,21,331
Profit Before Interest and Depreciation 16,11,43,335 13,40,37,823
Interest and Financial Charges S 2,26,57,079 1,63,30,163

Profit After Interest 13,84,86,256 11,77,07,660
Depreciation E 2,78,99,316 2,49,02,997
Profit Before Tax 11,05,86,940 9,28,04,663
Provision for Tax 4,10,000 4,03,000
Provision for Fringe Benefit Tax 11,00,000 —
Profit After Tax and available for appropriation 10,90,76,940 9,24,01,663
Add: Minority Interest (1,23,787) 1,13,055
Less: Appropriations
a) Provision for proposed dividend 1,31,65,000 2,63,30,000
b) Provision for Corporate Dividend Tax 22,15,670 36,92,783
1,53,80,670 3,00,22,783
Balance carried to Balance Sheet 9,35,72,483 6,24,91,935
EPS (Basic) 4.14 3.51
EPS (Diluted) 4.14 3.51
Notes on Accounts T
• Chartered Accountants Executive Chairman Managing Director
N.C.SAMPATH
Partner V. JAGADEESAN
Membership No. 009592 General Manager - Finance &
Company Secretary
Place : Erode
Date : 30.07.2007
50
CONSOLIDATED SCHEDULES FORMING PART OF THE BALANCE SHEET

AND PROFIT & LOSS ACCOUNT
(Amount in Rs.)

Authorised Capital:
3,00,00,000 Equity Shares of Rs.10/- each 30,00,00,000 30,00,00,000
Issued. Subscribed & Paid-up Capital:
2,63,30,000 Equity Shares of Rs. 10/-each fully paid-up 26,33,00,000 26,33,00,000

Share Premium Account 4,00,692 4,00,692
General Reserve
- Revenue Reserve 1,15,124 1,15,124
- Opening Balance 15,10,55,761 8,85,63,826
- Add: Current Year Balance after appropriation 9,35,72,483 6,24,91,935
- Closing Balance 24,47,43,368 15,11,70,885
24,51,44,060 15,15,71,577
SCH EDU LE - C - Secured Loans *
i) From State Bank of India , Commercial Branch, Erode.

Working Capital Finance 11,99,65,712 8,33,83,369
Corporate Foreign Currency Term Loan 4,39,89,867 8,40,47,290

ii) AdhocLoan 90,81,353
iii) Vehicle Loan Account (Kotak Mahendra) 21,141 2,74,857
16,39,76,720 17,67,86,869
SCHEDULE -D - Minority Interest

Share Capital 1,46,961 1,46,961
Profit/Loss 10,731 (1,13,055)
1,57,692 33,906
WORKING CAPITAL FINANCE AND CORPORATE LOAN ARE SECURED BY :
a. Hypothecation of stocks consisting of caw materials, semi-finished goods, finished goods and stores, spares
and other current assets of the Company.
b. First charge on the entire fixed assets of the Company.
c. Personal guarantees of Executive Chairman, Managing Director and Dr. M. Chandrasekar, Director and
Corporate guarantee of M/s. SKM Animal Feeds and Foods (India) Limited.
51
Schedule
SCHEDULE - E - FIXED ASSETS

(Amount in Rs.)
Gross Block Depreciation Net Block

Adjustments Adjustments
As at Additions As at up to During the deductions up to As at As at
DESCRIPTION deductions
31.03.2006 during the 31.03.2007 31.03.200f year 31.03.2007 31.03.2007 31.03.2006
during the during the
year vear
Egg Products Division
Landt 1,47,72,051 - - 1,47,72,051 - -- -- -- 1,47,72,051 1,47,72,051
Building 10,22,24,529 4,81,863 - 10,27,06,392 1,94,24,896 31,75,306 -- 2,26,00,202 8,01,06,190 8,27,99,633
Plant & Machinery 37,75,91,472 1,24,36,161 - 39,00,27,633 12,69,78,027 2,13,10,734 14,82,88,761 24,17,38,872 25,06,13,445
Office & Other Equipments 2,94,11,025 35,83,492 - 3,29,94,517 47,24,179 19,55,535 -- 66,79,714 2,63,14,803 2,46,86,846
01
Computers 38,14,206 8,65,580 - 46,79,786 25,28,075 6,93,199 -- 32,21,274 14,58,512 12,86,131
Furniture & Fixtures 49,08,572 2,02,383 - 51,10,955 18,05,233 3,30,550 -- 21,35,783 29,75,172 31,03,339
Motor Vehicles 44,25,500 14,64,456 1,333 58,88,623 11,28,542 4,33,992 -- 15,62,534 43,26,089 32,96,958
Work in progress-Egg - 6,61,811 - 6,61,811 - -- - -- 6,61,811
TOTAL 53,71,47,355 1,96,95,746 1,333 55,68,41,768 15,65,88,952 2,78,99,316 - 18,44,88,268 37,23,53,500 38,05,58,403
Poultry Farm Division
Land 12,71,829 29,67,144 - 42,38,973 -- -- - -- 42,38,973 12,71,829
WIP Plant & Mach. -- 20,74,342 - 20,74,342 - - - - 20,74,342 --
WIP Building 1,21,84,171 - 1,21,84,171 -- -- -- - 1,21,84,171 --
GROSS TOTAL 53,84,19,184 3,69,21,403 1,333 57,53,39,254 15,65,88,952 2,78,99,316 - 18,44,88,268 39,08,50,986 38,18,30, 232
Previous Year 49,61,48,617 4,44,02,878 21,32,311 53,84,19,184 13,16,85,955 2,49,02,997 -- 15,65,88,952 38,18,30,232 36,44,62,662
Note : Rs.12,71,829 in the Land Account in Poultry Farm Division denotes inter division transfer i.e, transfer of opening balance of land from Egg Products.
SCHEDULE - E - Investments
Investments in Mutual Funds
Current Investments (Valued at lower of cost of fair value)
Quoted:
UTI Leadership Fund, — 30,00,000
Birla Infrastructure Fund ... 20,00,000
Reliance Equity Fund ... 50,00,000
Templeton Indian Equity Income Fund - (MV - Rs.1.76 lacs) 1,52,137 ...
SBI MF MSFU Contra Fund (MV - Rs.1.90 lacs) 1,71,101 ...
Sundaram BNP Paribas Select Midcap Fund (MV - Rs.12.17 lacs) 12,16,832 ...
Birla Midcap Fund (MV- Rs. 16.24 lacs) 16,23,918 ...
Franklin India Prima Plus Fund (MV - Rs.15.00 lacs) 15,00,504 ...
Sundaram BNP Paribas Rural Fund (Dividend Option) (MV - Rs.8.26 lacs) 8,26,287 ...
Sundaram BNP Paribas Rural Fund (Growth Option) (MV - Rs.1.80 lacs) 1,68,839 —
Long Term Investments (Valued at cost)

Birla Infrastructure Fund (Dividend Option) (MV - Rs.0.87 lacs) 79,285 —
Birla Infrastructure Fund (Growth Option) (MV - Rs.0.87 lacs) 79,285 ...
UTI Master Value Fund (MV - Rs.5.04 lacs) 8,35,303 20,00,000
Sundaram BNP Paribas Select Midcap Fund (MV - Rs.0.50 lacs) 83,826 ...
Sundaram BNP Paribas Rural Fund (Dividend Option) (MV-Rs.2.12 lacs 2,18,185 —
Unquoted
Saravana Finance Private Limited 2,03,48,081 ...
2,73,03,583 1,20,00,000

Schedule G - Inventories
Raw Material 97,42,995 44,97,712
Additives, stores, spares and consumables 2,17,11,051 1,68,08,072
Finished Goods 14.16,48,000 11,56,91,310
Egg Powder at Netherlands 3,82,19,348 56,19,960
21,13,21,394 14,26,17,054
Schedule H- Sundry Debtors
a) Morethan 6 months — —
b) Others: 7,33,65,074 43,43,527
53
Schedule
(Amount in Rs.)

Particulars
31.03.2007 31.03.2006
Schedulel- Cash and Bank Balances

i. Cash on hand 4,32,530 1,51,829
ii. In Current Accounts with Scheduled Banks 2,27,95,780 1,22,12,137
iii. Fixed deposit with SBI, Commercial Branch, Erode 71,02,268 58,33,021
iv. Current Account with Foreign Banks 82,41,306 18,78,293
3,85,71,884 2,00,75,280
Schedule J - Loans and Advances
i. Advances recoverable in Cash or in kind
for value to be received - unsecured and
considered good 5,97,06,395 7,28,03,569
ii. Deposits - considered good 97,19,924 28,42,136
iii. Advance Income Tax and VAT credit 16,01,408 6,70,908
7,10,27,727 7,63,16,613
Schedule K- Current Liabilities and Provisions
i. Trade Creditors* 11,48,33,831 76,91,229
ii. Creditors for Expenses & Others 25,02,849 44,75,385
iii. ICICI and UTI - Unpaid Dividends 16,83,432 9,70,633
11,90,20,112 1,31,37,247
Schedule L - Provisions
i. Provision for Income Tax - MAT 4,10,000 4,03,000
ii. Provision for Proposed Dividend 1,31,65,000 2,63,30,000
iii. Provision for Corporate Dividend Tax 22,15,670 36,92,783
iii. Provision for Earned Leave 5,27,601 3,43,760
iv. Provision for Sales Commission 11,40,000 2,28,008
v. Provision for Genset Tax 9,30,000 4,50,000
vi. Provision of Expenses 13,53,793 9,05,556
vii. Provision for Fringe Benefit Tax 11,00,000 -
2,08,42,064 3,23,53,107
54

Particulars 31.03.2007 31.03.2006
Schedule -M Sales and Other Income
Sales:
Export sales 85,79,76,737 69,97,01,234
Domestic sales 2,15,86,877 1,67,69,303
87,95,63,614 71,64,70.537
Other Income:
Sale of shell eggs and scrap 6,55,005 5,36,171
Interest received, 17,72,597 21,67,724
Dividend received from Mutual Funds 28,15,633 31,51,151
Interest subsidy 1,06,63,099
VAT Refund received 10,69,682 —
Miscellaneous Income 2,48,770 —
Vishesh Krishi Upaj Yojana Scheme — 3,31,33,141
Exchange fluctuation net 15,28,914 —
1,87,53,700 3,89,88,187
SCHEDULE-N-INCREASE/(DECREASE) IN STOCK
Opening Stock - Finished Goods (+) 11,56,11,914 9,43,80,906
Semi-finished goods(+) 79,396 27,31,934
Egg Powder - Netherlands 56,19,960 ...
Egg Powder Purchase (+) 31,50,000 98,000
Closing Stock - Finished goods (-) & Semi finished 14,16,48,000 11,56,91,310
Egg Powder at Netherlands 3,82,19,348 56,19,960,

5,54,06,078 2,41,00,430
SCHEDULE - 0- PURCHASE AND MANUFACTURING EXPENSES

Raw material - Eggs Consumed 50,69,79,919 44,55,22,732
Cost of Egg Powder Purchase 1,17,62,888 45,64,900
Import Duty 55,87,470 9,77,182
Customs clearance and other expenses 3,51,316 77,878
Egg Purchase 2,27,36,713 2,47,645
Egg Powder Processing Charges 16,96,560 —
Packing Material - Consumed 1,83,57,081 1,65,87,804
Power and Fuel 5,53,80,485 5,44,17,528
Transport Hire and Cooli 9,62,640 6,08,557
Additives and Consumables 3,82,95,363 3,22,62,582
66,21,10,435 55,52,66,808
55

Particulars 31.03.2007 31.03.2006
SCHEDULE -P - EMPLOYEES' COST
Salaries and Wages 1,48,63,269 1,03,38,010
PF Contribution 9,81,434 9,77,912
Contract Wages 1,20.43,712 77,67,198
Welfare Expenses 22,59,452 11,39,742
3,01,47,867 2,02,22,862
SCHEDULE - Q - OTHER EXPENSES
Repairs and Maintenance
a. Building 10,30,775 11,97,394
b. Plant and Machinery 16,72,203 12,02,484
c. Others 18,23,844 11,46,078
d. Vehicle (Car, Van and Two wheelers) 29,50,333 20,65,601
74,77,155 56,11,557
Stores and Spares - consumed 1,37,88,416 94,32,785
Analysing Charges 83,91,844 22,20,374
Rent, Rates and Taxes 19,66,654 7,02,364
Postage, Courier and Telephone Charges 25,01,346 19,43,567
Printing and Stationery 9,25,912 7,01,026
Insurance Premium 10,29,187 14,47,798
Advertisement and Publicity 5,46,398 4,83,252
Travelling Expenses 30,36,238 32,35,922
Freight, Insurance and Forwarding Charges 2,68,09,851 2,47,85,829
Professional Charges 17,65,357 18,56,645
ISO/HACCP-Expenses -4,64,006 3,87,794
Stock Exchange Listing Fee 1,71,594 2,09,120
Audit fees: Statutory 7,36,562 3,94,093
Donation 21,55,000 17,08,810
Exchange Fluctuation 14,94,105 —
Loss on sale of Import Licence 34,96,059 —
Loss on sale of Investments (Mutual Funds) 23,18,126 • —
Diminishion in value of investments 13,32,458 —
7,35,06,310 5,05,84,986
8,09,83,465 5,61,96,543
56

Particulars 31.03.2006
31.03.2007
SCHEDULE - R - MARKETING EXPENSES
Foreign Trip Expenses 12,09,166 24,31,373
Sales Commission to Foreign Promotions and Others 1,52,56,077 50,10,566
Foreign Exhibition Expenses 7,82,252 30,93,821
Sales Promotion Expenses 6,39,024 5,27,909
Sample Courier Charges 6,22,895 4,79,189
Foreign Delegates Expenses 8,28,876 22,92,260
1,93,38,290 1,38,35,118
SCHEDULE - S - INTEREST AND FINANCIAL CHARGES
Working Capital Loan Interest 80,79,070 25,87,609
Bank Charges & ECGC Charges 17,61,431 15,19,179
Export bills discount interest 56,48,499 55,43,710
Export bills-overdue interest 8,46,121 5,69,129
Interest paid - others (Vehicles loan etc.) 40,189
Interest on Corporate Loan from SBI 47,38,949 61,10,536
SBI FD Loan Interest 90,185
Bill Discount & Collection Charges 14,52,635
2,26,57,079 1,63,30,163
Schedule : T
NOTES ON ACCOUNTS ON CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated statement has been prepared to include the results of "SKM Europe BV", The
Netherlands, the subsidiary of the company in which the Company holds 85% of the Share Capital of
the Subsidiary Company.
2. Current Years figures in the Consolidated Statements is not comparable with the previous year's figures
since the subsidiary was formed in the last quarter of the previous financial year.
SIGNIFICANT ACCOUNTING POLICIES:
1. Basis of Preparation:
The Consolidated Financial Statements of SKM Egg Products Export India Limited and its subsidiary
are prepared under the historical cost convention and in accordance with the accounting standards
issued by the 'The Institute of Chartered Accountant of India.'
2. Principles of Consolidation:
a. The Financial Statements of the subsidiary company used in the consolidation are drawn upto the
same reporting date as of the company.
57
b. The Consolidated Financial Statements have been prepared on the following basis.
i.. The Financial Statements of the Parent Company and its majority owned and controlled
subsidiary company have been combined on the line by line basis by adding together the book
value of all items of Assets, Liabilities, Incomes and Expenses after eliminating inter-company
balances/ transactions and resulting unrealised gain / loss.
ii. Interest in a jointly control entity is reported using proportionate consolidation.
iii. The consolidated Financial Statements are prepared using uniform accounting policies for
similar transactions and other events in similar circumstances.
iv. Minority interest in the net assets of consolidated subsidiaries consists of the amount of
equity attributable to the minority shareholders at the dates on which investments are made
by the Company in the subsidiary companies and further movements in their share in the
equity, subsequent to the dates of investments.
3. Use of estimates:
The preparation of consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent
assets and liabilities on the date of the consolidated financial statements and reported amounts of
revenues and expenses during the period reported. Actual results could differ from those estimates.
Other Accounting Policies applicable for the holding company are equally applicable for the consolidated
financial statements wherever relevant.
Earning Per Share:
Particulars 2006-2007 2005-2006
1. Profit After Tax Rs. 1,089.53 lakhs Rs.925.15 lakhs

2. Weighted Average No. of Shares 2,63,30,000 2,63,30,000
3. Earning Per Share Rs.4.14 Rs.3.51

Place Erode
Chartered Accountants,
Date 30.07.2007
N.C.SAMPATH,
(PARTNER)
Membership No.009592.
58
CONSOLIDATED CASH FLOW STATEMENT FORTHEYEAR ENDED 31st MARCH, 2007

(Rs. in Lacs)
Particulars As at 31 .03.2007 As at 31 .03.2006

(INDIRECT METHOD)
Profit Before Tax 1,105.87 928.04
Adjustments for: -- --
Loss on Sale of Fixed Assets -. --
Interest and Dividend Income (152.51) --
Interest Expenses 226.57 353.05 163.14 412.17
Operating Profit before Working Capital Charges 1,458.92 1,340.21

Adjustments for:
(Increase) / Decrease in Trade and other payables (943.72) 380.65 (39.91) 728.82
Cash generated from operations 1,078.27 611.39
Interest paid (226.57) (163.14)
Direct Taxes provided (15.10) (4.03)
Net Cash from Operating Activities 836.60 444.22

Purchase of fixed assets (369.21) (422.71)
Sale of fixed assets and Subsidy received 0.01 —
Interest received 152.51
Investments including subsidiary (165.73) 272.18
Net Cash used in Investing Activities (382.42) (150.53)
Proceeds from issue of Share Capital .- 1.47
Increase / (Decrease) in Share Application Money — --
Increase / (Decrease) in Term Borrowings (2.54) (122.94)
Increase / (Decrease) in Bank Borrowings (125.56) 193.10
Provision for Dividend and Corporate Dividend Tax (153.81) (300.23)
Net Cash (used in) received from financing activities (281.91) (228.60)
Opening Cash and Cash equivalents 142.42 77.33
SKM.MAEILANANDHAN SKM. SHREE SHIVKUMAR
Place : Erode
V. JAGADEESAN
Date : 30.07.2007
General Manager - Finance &
AUDITORS' CERTIFICATE Company Secretary
We have examined the Consolidated Cash Flow Statement of M/s. SKM Egg Products Export (India) Limited for the year ended 31st
March 2007. The statement has been prepared by the Company in accordance with the requirements of Clause 32 of the Listing
Agreement with the Stock Exchanges and is based on and is in agreement with the corresponding Profit and Loss Account and Balance
Sheet of the Company covered by our report dated 30.07.2007 to the Members of the Company. F o r N Q RAJAGOPAL & CO
N.C.SAMPATH
Place : Erode Partner
Date : 30.07.2007. Membership No. 009592
59
BALANCE SHEET OF SKWI EUROPE BV AS AT 31st MARCH, 2007

(Amount in Rs.)
SOURCE OFFUNDS
Authorised Capital
90,000 shares of Euro 1 each Euro 90,000 Euro 90,000
Paid up Share Capital A

18,000 shares of Euro 1 each 9,79,740 9,79,740
Profit & Loss Account B 71,549
Secured Loans C 1,13,37,201 75,69,800
From the holding company 1,23,88,490 85,49,540
Fixex Assets
Gross Block 34,012
Less: Accumulated Depreciation 942 33,070 -
Current Assets, Loans and Advances
Inventories D 3,82,19,348 56,19,960
Sundry Debtors E 6,32,71,013 -
Cash and Bank balances F 82/41,306 18,78,293
Loans and advances G 3,10,908 16,57,873
Total current assets 11,00,42,575 91,56,126
Less: Current liabilties and provisions H 9,76,87,155 13,60,286
Net Current Assets I 1,23,55,420 77,95,840
Profit and Loss Account B — 7,53,700
Total 1,23,88,490 85,49,540
Notes on accounts Schedule S
Place : Erode SKM. SHREE SHIVKUMAR B. KLAWER

Date : 30.07.2007 Director Director
60
PROFIT AND LOSS ACCOUNT OF SKM EUROPE BV FOR THE YEAR ENDED 31st MARCH, 2007
(Amount in Rs.)
Schedule Year ended Year ended

Particulars
31.03.2007 31.03.2006
INCOME
Sales I 35,70,44,353 -
Other Income 13,85,623 -
Increase in stock J 3,25,99,388 56,19,960
Total Income 39,10,29,364 56,19,960
EXPENDITURE
Purchase and Other Expenses K 37,82,88,967 56,19,960
Administrative Expenses L 47,92,110 6,39,606

Marketing Expenses M 62,10,523 98,144
38,92,91,600 63,57,710
Profit/(Loss) Before Interest & Depreciation 17,37,764 (7,37,750)
Interest and financial charges N 9,11,573 15,950
Prof it/(Loss) After Interest 8,26,191 (7,53,700)

Depreciation 942 -
Net Profit 8,25,249 (7,53,700)
SKM. SHREE SHIVKUMAR B.KLAWER

Director Director
61
SCHEDULES FORMING PART OF THE BALANCE SHEET

AND PROFIT & LOSS ACCOUNT OF SKM EUROPE

Share Capital:
90,000 Shares of Euro 1/- each 48,98,700 48,98,700
Paid-up Share Capital:
18,000 Shares of Euori/-each fully paid-up 9,79,740 9,79,740

- Opening Balance (7,53,700) —
- Add: Current Year Balance after appropriation 8,25,249 (7,53,700)
- Closing Balance 71,549 (7,53,700)
71,549 (7,53,700)
SCHEDULE - C - Secured Loans *
3KM Egg Products Export (India ) Limited 1,13,37,201 75,69,800,

Schedule D - Inventories
Egg Powder at Netherlands 3,82,19,348 56,19,960
Schedule E- Sundry Debtors

a) Morethan 6 months - -
b) Others: 6,32,71,013 -
Schedule F- Cash and Bank Balances
Cash on hand - -
Current Account with Schedule Banks 82,41,306 18,78,293
Schedule G-Loans and Advances
a) Advances Recoverable in cash or in kind
for value to be received - Unsecured and considered good 1,28,429 15,47,516
b) VAT to be received back 1,82,479 1,10,357
3,10,908 16,57,873
Schedule H - Current Liabilities
a) Trade Creditors 9,55,27,250 12,79,181
b) Creditors for Expenses and others 21,59,905 81,105
9,76,87,155 13,60,286
62
SCHEDULE 1 - Sales and Other Income

Egg Powder Sales 35,63,22,772 -
Other Sales 7,21,581 -
35,70,44,353 —
VAT Refund 10,69,682 _
Interest Received 67,171 -
Other Income 2,48,770
13,85,623 —
Schedule J - Increse/(Decrease) in Stock
Opening Stock - Finished Goods 56,19,960 -
Closing Stock - Finished Goods 3,82,19,348 56,19,960
3,25,99,388 56,19,960
Schedule K - Purchase and Other Expenses
Purchase of Egg Powder 37,16,07,246 45,64,900
Other Purchase 7,42,936
Import Duty 55,87,470 9,77,182
Transport Charges 11,142 1,719
Custom Clearing Charges 84,810 46,699
Loading and Unloading 2,30,176 29,460
Packing and Repacking 25,187 -
37,82,88,967 56,19,960
Schedule L- Other Expenses
Godown Rent 3,72,069 -
Postage 1,93,935 41,657
Travelling 97,164 1,40,969
VAT Expenses 7,50,696 .
Transport Charges 12,12,746 -
Audit Fees 5,25,332 1,48,693
Internet Expenses 3,301 -
Membership Fees 26,328 -
Preliminary Expenses - 1,94,913
Foreign Currency Fluctuation Difference 14,94,105 5,866
47,92,110 6,39,606
Schedule M - Marketing Expenses
Sales Commission 59,62,756 -
Sales Promotional Expenses 95,668 98,144
Sample Analysis & Courier Charges 1,52,099 -
62,10,523 98,144
Schedule N - Interest and Financial Charges
Interest Paid 6,49,376 -.
Bank Charges 2,62,197 15,950
9,11,573 15,950
63
SKM EUROPE BV - CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2007
(Rs. in Lacs)

(INDIRECT METHOD)
Profit Before Tax 8.25 7.54
Adjustments for: -- --
Depreciation 0.01 --
Loss on Sale of Fixed Assets -- --
Interest and Dividend Income -- --
Interest Expenses 9.12 9.13 -- --
Operating Profit before Working Capital Changes 17.38 (7.54)

Adjustments for:
(Increase) / Decrease in Trade and other payables (963.27) (18.04) (13.60) 59.18
Cash generated from operations 35.42 (66.72)
Interest paid (9.12) --
Net Cash from Operating Activities 26.30 (66.72)

Purchase of fixed assets (0.34) .-
Net Cash used in Investing Activities (0-34) --

Proceeds from issue of Share Capital -. 9.80
Increase / (Decrease) in Term Borrowings 37.67 75.70
Net Cash (used in) received from financing activities 37.67 85.50
Opening Cash and Cash equivalents 18.78 --
Place : Erode S.K.M. SHREE SHIVKUMAR B. KLAWER

Date : 30.07.2007 Director Director
64
efiluirus 31.03.2007 aifiST©! 31.03.2006^
26,33,00,000 26,33,00,000
24,50,83,243 15,22,12,221
16,39,76,720 17,67,86,869
67,23,59,963 59,22,99,090
57,53,05,242 53,84,19,184
18,44,87,326 15,65,88,952
rglaij Qffirsj§ja>«6rr 39,08,17,916 38,18,30,232
2,81,36,362 1,28,32,779
[Fjl—LJLj? QfflTSlgl. BL_CBTSf9T lAjf)]^llb
17,31,02,046 13,69,97,094
«L_sain6Tf)a>6ir 1,00,94,061 43,43,527
3,03,30,578 1,81,96,987
8,20,54,019 8,22,28,539
29,55,80,704 24,17,66,147
&L£laa - {5i_UL]u QurrgjiunaeiT 2,13,32,955 1,17,76,961

2,08,42,064 3,23,53,107
4,21,75,019 4,41,30,068
25,34,05,685 19,76,36,079
67,23,59,963 59,22,99,090
65
31.03.2007 a l ^ S l 31.03.2006 c5f£oip
tffilfT)LJ6Mrf5T 88,38,38,747 71,64,70,537
1,80,17,453 3,89,88,187
2,28,06,690 1,84,80,470
92.46,62.890 77,39,39.194
64,51,40,953 54,96,46,848
ffiiiUoiTiii 3,01.47,867 2,02,22,862
7,61,91,354 5,55,56,937
flfiljDLJflnai* ClSSO^riT 1,31,27,768 1,37,36,974

76,46,07,Q42 63,91,63,621
16,00,54,948 13,47,75,573
OJlLlq. LQppJLQ ig^tff Qff60«l(«6tT 2,23,94,882 1,63,14.214
ft.Mii ^H ^ f ^ ^ l 1 L_tid8T jnvfiOITLJIiD 13,76.60,066 11.84,61,359
Caff LJJ L£j FTfiOT LD 2,78,98,374 2,49,02,997
cuiRA® QPJ5M0UJ ®6Or.u.B 10.97,61,692 9,35,58,362
15,10,000 4,03,000
10,82,51,692 9,31,55,362
1,31,65,000 2,63,30,000
22,15,670 36,92,783
1,53.80,670 3.00.22.783
©(Jfjui-I i§l<»co tgnfiluiiljb® QancniT© Q&eisiip s_uifl 9,28,71,022 6,31,32,579
66
Registered Office: 156, Gandhiji Road, Erode - 638 001
ATTENDANCE SLIP
Regd. Folio No./Client I D / DP ID No.:
Twelfth Annual General Meeting on Tuesday, the 11th September, 2007 at
4.00 p.m. at Kongu Kalaiarangam, E.V.K.Sampath Nagar, Erode - 638 011.
I hereby record my presence at the 12th ANNUAL GENERAL MEETING of the Company
held at Kongu Kalaiarangam, E.V.K.Sampath Nagar, Erode - 638 011, on Tuesday, the 11th
September, 2007 at 4.00 p.m.
I am a shareholder of the Company*

I am a Proxy/Authorised Representative of the shareholder(s)*
My name is :
* Please strike off any one which is not applicable
Signature
Request to Members :
1. Shareholders and proxies should bring the attendance slip duly filled-in for attending
the Meeting and hand it over at the entrance of the Meeting Hall.
2. Members are requested to avoid being accompanied by non-members and/or children.

Registered Office : 156, Gandhiji Road, Erode - 638 001
PROXY
Regd. Folio No./ Client ID / DP ID No No. of Shares Held :
I/We of
in the district of
being a member/members of SKM EGG PRODUCTS EXPORT (INDIA) LIMITED, hereby appoint
of in the district
of or failing him ,. of
in the district of as my/our Proxy to
vote for me/us on my/our behalf at the 12 th Annual General Meeting of the Company to be held
on Tuesday, 11th September, 2007 at 4.00 p.m. and at any adjournment thereof.
Affix
One Rupee
Signed this day of 2007 Signature Revenue
Stamp
Note: The Proxy must be deposited at the Registered Office of the Company not less than
48 hours before the time for holding the Meeting.
156, am^lggl (Sirir©, ITCSITIT© - 6 3 8 OO1.
Folio No : / Client ID No./ DP ID No

6ST Quujrr,
11.09.2007^10 ir, ir-(2ipr©-638 Ollw
2. 2_1_6BI
156, «trrF,^l^l (SIJ-IT©, rr-CSirrr© - 6 3 8 0 0 1 .
Folio No : / Client ID No./ DP ID No :
6TI5J«6TT§| «(gLb 1261Jg|
156, am - 638001
-l_^^l65T 4 8
OUR GLOBAL NETWORK
To be a leader in the sectors we operate with the responsibility of building a healthy Society.
MISSION
* Contribute for social needs
$• Sustain integrity and honesty
* Maximise the value of stakeholders
% Innovate and excel in whatever we do
TOLICy
To delight our customers, we understand, develop & deliver, safe & high functional products &
services through continuous improvement.

SKM Egg Products Exp India Ltd-532143-March-2007

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SKM Egg Products Exp India Ltd-532143-March-2007

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_LL

TWELFTH ANNUAL REPORT

• Excellence - Our Goal

Silver Trophy Award from APEDA

Export Excellence Award

BOARD OF DIRECTORS Shri. SKM. MAEILANANDHAN

Shri. SKM. SHREE SHIVKUMAR

Shri. S.M. VENKATACHALAPATHY

GENERAL MANAGER - OPERATIONS Shri. S. HARIHARAN, B.Sc, B.Tech., (FoodTech.,)

BANKERS STATE BANK OF INDIA

REGISTERED OFFICE 156, Gandhiji Road,

FACTORY Erode to Karur Main Road,

SKM EGG PRODUCTS EXPORT (INDIA) LIMITED

1. To receive, consider and adopt:

c. The Directors'and Auditors'Report thereon.

vi. Personal Accident Insurance Premium up to Rs. 10,000/- per annum.

By order of the Board

By order of the Board

Madras Stock Exchange Ltd National Stock Exchange of India Ltd

Share Price Movements

Month Bombay Stock Exchange Limited National Stock Exchange Limited

National Stock Exchange of India (NSE) SKMEGGPROD

The Bombay Stock Exchange Ltd 532143

NSDL & CSDL INE 411 D1015

Share Transfer System:

Com pi iance Officer :

1-500 5,954 66.02 20,14,477 7.65 6,019 66.22 20,79,680 7.90

501-1000 1,553 17.22 13,27,926 5.04 1,515 16.67 13,02,851 4.95

1001-2000 386 4.28 5,90,119 2.24 389 4.28 5,90,269 2.24

2001-3000 774 8.58 19,20,672 7.29 823 9.05 20,46,175 7.77

3001-4000 51 0.57 1,80,711 0.69 51 0.56 1,83,962 0.70

4001-5000 148 1.64 7,23,558 2.75 162 1.78 7,97,111 3.03

5001-10000 93 1.02 7,51,171 2.85 80 0.88 6,68,830 2.54

10001 & above 60 0.67 1,88,21,366 71.49 50 0.56 1,86,61,122 70.87

Total 9,019 100.00 2,63,30,000 100.00 9,089 100.00 2,63,30,000 100.00

Registrar and Transfer Agent

Promoters 14 0.12 1,65,99,604 63.04 21 0.23 1,77,08,188 67.25

Name of the Depository No.of Shares %

National Securities Depository Ltd 78,26,833 29.73

Central Depository Services (India) Ltd 53,68,773 20.39

Total 1,31,95,606 50.12

Registered Office and Address for Correspondence:

Place: Erode SKM. MAEILANANDHAN

DIRECTORS' REPORT AND MANAGEMENT ANALYSIS

DESCRIPTION 2006-2007 2005-2006

Net Sales 8,838.39 7,164.70

PROSPECTS FORTHE FINANCIAL YEAR 2007-08:

MARKETING ARRANGEMENT IN JAPAN:

CEO / CFO CERTIFICATION:

DELISTING OF COMPANY'S EQUITY SHARES

DIRECTORS' RESPONSIBILITY STATEMENT:

Place: Erode SKM. MAEILANANDHAN

ANNEXURE TO THE DIRECTORS' REPORT

PARTICULARS 2006-2007 2005-2006

(I) POWER AND FUEL CONSUMPTION

(II) CONSUMPTION PER UNIT OF PRODUCTION

FOREIGN EXCHANGE EARNINGS AND OUTGO: (Rs. in lacs)

A few such key initiative are:

RESEARCH AND DEVELOPMENT:

Place: Erode SKM. MAEILANANDHAN

MANAGEMENT DISCUSSION AND ANALYSIS

STRENGTH OFTHE COMPANY:

INTERNAL CONTROL SYSTEM ANDTHEIR ADEQUACY: