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Directors Report of SKM Egg Products Export (India) Ltd.

Mar 31, 2015

Dear Shareholders,

The Board of Directors has immense pleasure in presenting the 20th Annual Report of SKM EGG PRODUCTS EXPORT (INDIA) LIMITED along with the Audited Financial Statement of Accounts for the year ended 31st March, 2015.

1. SUMMARISED FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Financial Parameters For the Year ended 31st March 2015 31st March 2014

Total Income 28,714.86 24,043.15

Profit/ (Loss) before Interest and Depreciation and Tax 5,317.06 3,072.16

Less: Financial Cost 503.62 835.86

Depreciation & Amortization 1,330.87 1,262.72

Profit Before tax 3,482.58 973.58

Less: Provision for Tax

Current 467.34 0.00

MAT Credit entitlement 0.00 0.00

Deferred Tax 496.50 292.99

Profit After Tax and available for appropriation 2,518.74 680.59

Appropriations

Proposed dividend 263.30 0.00

Dividend Distribution Tax 53.91 0.00

Surplus carried to Balance Sheet 2,201.53 680.59

2. OPERATIONS:

The Company's total revenue is Rs.287.15 Crores during the current year as against Rs.240.43 Crores during the previous year. The export during the year has been Rs.258.74 Crores as compared to Rs.216.53 Crores during the previous year 2013-14.

3. DIVIDEND:

The Board of Directors have recommended a dividend of 10%, i.e., Re. 1/- per equity share on face value of Rs.10/-each for the year 2014-2015, subject to the approval of the members in the Annual General Meeting. Enhancing the Shareholders value has always been a guiding philosophy of the Company.

4. AMOUNTS TRANSFERRED TO RESERVES:

The Board of the company has decided/proposed to carry Rs. NIL to its reserves.

Reserve Amount (Rs )

Transfer to Statutory Reserve NIL

Transfer to Capital Reserve NIL

Transfer to Investment Reserve NIL

Transfer to Special Reserve NIL

5. SHARE CAPITAL:

The paid up Equity Share Capital as on March 31, 2015 was Rs. 26, 33, 00,000 /-. During the year under review the company has not issued any shares or any convertible instruments.

6. CORPORATE GOVERNANCE:

The Company has obtained a Certificate from its Statutory Auditors regarding compliance of the conditions of Corporate governance and Brief resume of the directors seeking appointment / reappointment and other details as stipulated in Clause 49 & 49 (VIII) (E) of the Listing Agreement, which together with this Report on Corporate Governance is annexed to the Directors' Report and shall be sent to all the members of the Company and the Stock Exchanges along with the Annual Report of the Company. (Refer Appendix-A).

7. DEMATERIALISATION OF SHARES:

85% of the company's paid up Equity Share Capital is in dematerialized form as on 31st March, 2015 and balance 15% is in physical form. The Company's Registrar is M/s S.K.D.C. Consultants Ltd., having their registered office at Kanapathy Towers, 3rd Floor, 1391/A1, Sathy Road, Ganapathy, Coimbatore-641 006.

8. NUMBER OF BOARD MEETINGS HELD :

The Board of Directors duly met 6 times during the financial year from 1st April, 2014 to 31st March, 2015. The dates on which the meetings were held are as follows: 21.04.2014, 14.05.2014, 30.05.2014, 30.07.2014, 31.10.2014 and 27.01.2015.

9. INVESTOR EDUCATION AND PROTECTION FUND:

As per the Companies Act 2013, dividend unclaimed for more than seven years from the date of declaration is to be transferred to investor education and protection fund. On 22.05.2014 the Company has transferred Rs. 3, 47,627/- to the above fund, being the unclaimed dividend for the year 2004-2005.

10. BUSINESS RISK MANAGEMENT:

Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion. Therefore, in accordance with clause 49 of the listing agreement the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

11. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

In accordance with Section 135 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on 14.05.2014, have constituted the CSR Committee which comprises of 1.Dr.L.M.Ramakrishnan, 2.Shri.C.Devarajan, and Smt.S,Kumutaavalli. During the year 2014-2015, the Committee met once i.e. on 21.05.2014.The Minutes of the CSR Committee are noted by the Board.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of company.

14. RELATED PARTY TRANSACTIONS:

Related party transactions that were entered during the financial year were on an arm's length basis and were in the ordinary course of business. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Appendix-B. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules thereunder and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at www.skmegg.com.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Considering the nature of activities of the Company, the provisions of Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Appendix-C to this report.

16. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Appendix-D.

17. DETAILS OF DIRECTORS & COMMITTEES:

A. Composition:

The Company has a very balanced and diverse Board of Directors, which primarily takes care of the business needs and stakeholders' interest. The Non-executive Directors including Independent Directors on the Board are experienced, competent and highly renowned persons from the fields of manufacturing, finance & taxation, economics, law, governance etc. They take active part at the Board and Committee Meetings by providing valuable guidance to the Management on various aspects of business, policy direction, governance, compliance etc. and play critical role on strategic issues, which enhances the transparency and add value in the decision making process of the Board of Directors. The composition of the Board also complies with the provisions of the Companies Act, 2013 and the Listing Agreement. As at the end of corporate financial year 2014, the total Board strength comprises of the following:

Executive Director 2

Non-Independent Directors & Non-Executive Directors 2

Independent Directors 5

Total Strength 9

Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, annual Performance Evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee has been carried out. The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non- Independent Directors was carried out by the Independent Directors.

17.2 REMUNERATION POLICY

A. Policy on remuneration to Non-Executive Directors/Independent Directors

The policy of the Company, based on the recommendation of the Nomination & Remuneration Committee for the payment of remuneration to Non-executive Directors/Independent Directors of the company is that the Non-Executive Directors will be paid only sitting fees for attending Board and Committees of the Board which is fixed within the limits of Companies Act, 2013 and as per the Listing Agreement.

B. Policy on remuneration to MD & Executive Director, Key Managerial Personnel and other employees

The Compensation/Remuneration policy of the Company as approved by the Board contains the policy for payment of remuneration to Executive Directors including MD & Key managerial personnel and for the employees of the Company.

17.3 MEETINGS

During the year Six Board Meetings and One independent directors' meeting were held. The Details of which are given in Corporate Governance Report.

17.4 AUDIT COMMITTEE:

i) Terms of reference:

The Audit Committee reviews the audit report submitted by the Internal Auditors and Statutory Auditors, financial results, effectiveness of internal audit processes and the Company's risk management strategy. It reviews the Company's established Systems and the Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement.

ii) Composition :

The Audit Committee of the Company consists of three Independent Directors. The Chairman of the Audit Committee is financially literate and majority of them having accounting or related financial management experience. Representative of Statutory Auditor is permanent invitee. Company Secretary acts as Secretary to the Committee.

iii) No. of Meetings held during the year :

During the year the Committee had 6 Meetings i.e. 21.04.2014, 14.05.2014 ,30.05.2014, 30.07.2014, 31.10.2014 and 27.01.2015.

iv) Composition, name of Members and attendance during the year:

NO.OF MEETINGS NAME POSITION HELD ATTENDED

Shri.M.Chinnian Chairman 6 5

Shri.L.M.Ramakrishnan Member 6 5

Shri.B.Ramakrishnan Member 6 4

17.5 NOMINATION AND REMUNERATION COMMITTEE:

i) Terms of reference:

This Committee shall identify the persons, who are qualified to become Directors of the Company / who may be appointed in Senior Management in accordance with the criteria laid down, recommend to the Board their appointment and removal and also shall carry out evaluation of every director's performance. Committee shall also formulate the criteria for determining qualifications, positive attributes, Independent of the Directors and recommend to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

ii) Composition:

The Nomination and Remuneration Committee of the Company consists of one Non-Executive and two Independent Directors including Chairman.

iii) No. of Meetings held during the year:

During the year the Committee had two meetings on 27.01.2015 and 09.03.2015.

iv) Composition, name of Members and attendance during the year:

NO.OF MEETINGS

NAME POSITION HELD ATTENDED

Shri.L.M.Ramakrishnan Chairman 2 2

Shri.S.M. Venkatachalapathy Member 2 2

Shri.M.Chinnian Member 2 2

i) Terms of reference:

The Committee focuses primarily on monitoring expeditious Redressal of investors / stakeholders grievances and also functions in an efficient manner that all issues / concerns stakeholders are addressed / resolved promptly.

ii) Composition of the Committee:

The Committee consists of one Non-Executive and two Independent Directors.

iii) No. of meetings held and attended during the year :

During the year the 4 Stakeholders Relationship Committee Meetings were held i.e. on 21.04.2014, 14.05.2014, 30.07.2014 and 31.10.2014.

The attendance of the Members at the meeting was as under :

NO.OF MEETINGS

NAME POSITION HELD ATTENDED

Shri.PKumarasamy Chairman 4 4

Shri.LM.Ramakrishnan Member 4 3

Shri.M.Chinnian Member 4 3

iv) Name and Designation of Compliance Officer:

Mr. Sekar. P Company Secretary and Compliance Officer. Shareholder's Services:

Nature of Complaints

S.No. 2014-2015 Received Answered

1st Quarter - - -

2nd Quarter - - -

3rd Quarter - - -

4th Quarter - - -

Location and time for the last two AGMs:

Year Date Venue

N.S.A Mahal, Club Melaange, 2012- 2013 30.09.2013 314,315, Perundurai Road, Erode - 638 011

N.S.A Mahal, Club Melaange, 2013- 2014 10.09.2014 314,315, Perundurai Road, Erode - 638 011



Year Time Special Resolution

2012- 2013 No Special Resolution 4.00 P.M. was passed

2013- 2014 Special Resolutions 4.00 P.M. have been passed

18. INDEPENDENT DIRECTORS MEETING:

During the year under review, the Independent Directors of the Company met on 27.01.2015, inter alia, to discuss:

i) Evaluation of performance of Non- Independent Directors and the Board of Directors of the Company as a whole.

ii) Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. DECLARATION BY INDEPENDENT DIRECTOR:

The Company has received necessary declaration from each independent director under section 149(7) of the Companies Act, 2013 that he meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013, and clause 49 of the Listing Agreement. (Refer Appendix-E).

20. INTERNAL COMPLIANTS COMMITTEE:

Your company has upheld the letter and spirit contained in "The Sexual Harassment of Women at Workplace (Prevention, prohibition and Redressal) Act, 2013". (the act). Board of Directors had resolved to constitute Internal Complaints Committees to function as per the provisions laid down in the Act and also to support the women employees by way of counseling.

a. No. of complaints received in the year 2014: NIL

b. No. of complaints disposed of during the year 2014: NIL

c. Nature of action taken by the employer/district officer: NIL

21. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the stock exchanges in India is presented in a separate section forming part of this Annual Report in Appendix-F.

22. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

24. AUDITORS:

24.1 STATUTORY AUDITORS

M/s. N.C. Rajagopal & Co., Chartered Accountants, Erode (Firm Registration No.003398S), the present statutory auditors of the company retires at the ensuing Annual General Meeting and are eligible for reappointment, and the Company proposes to reappoint M/s. N.C. Rajagopal & Co., Chartered Accountants as statutory auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of next Annual General Meeting of the Company.

24.2 SECRETARIAL AUDITOR

The Board had in its meeting dated 30th July 2014, appointed Mr. V. Ramkumar, Company Secretary in Practice, Coimbatore. (CP No.:3832, Membership No: 11402), to undertake the secretarial audit of the company for the year ended 31st March 2015, in compliance with the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,.

24.3 INTERNAL AUDITOR

Mr. R.Muralidharan, B.Com, FCA., Chartered Accountant performs the duties of internal auditor of the company and their report is reviewed by the audit committee from time to time.

25. AUDITORS' REPORT:

The Auditors' Report to the members on the Accounts of the Company for the financial year ended 31st March 2015 does not contain any qualifications, reservations, or adverse remark..

26. CONSOLIDATED FINANCIAL STATEMENTS:

Pursuant to Section 129 of the Companies Act, 2013, the Company has prepared a Consolidated Financial Statements of the Company and also of its Subsidiary, "SKM Europe BV", Utrecht, the Netherlands, in same form and manner as that of the Company which shall be laid before the ensuing Annual General Meeting of the Company along with laying of the Company's Financial Statement under section 129 sub-section (2) i.e. Standalone Financial Statement of the Company.

27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given below:

28. PARTICULARS OF EMPLOYEES:

As required by the provisions of section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees who were in the receipt of remuneration not less than Sixty Lakh Rupees for the financial year 2014-2015 are set out in the Appendix-G.

29. STOCK EXCHANGE INFORMATION:

The Company's Equity Shares are listed on:

1. BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001 and

2. NSE Limited, "Exchange Plaza", Bandra-Kurla Complex Bandra East, Mumbai -400 051.

The annual listing fees have been paid to all the Stock Exchanges as mentioned above..

30. SECRETARIAL AUDIT REPORT:

Secretarial Audit Report in prescribed format MR 3 given by the Company Secretary In Practice is annexed to the Board Report. (Refer Appendix-H).

31. INTERNAL CONTROLS:

The Company has a system of internal control which examines both the financial effectiveness and operational effectiveness to ensure reliability of financial and operational information and all statutory/ regulatory compliances.

32. INSIDER TRADING CODE:

The Company has formulated a code for prevention of Insider Trading pursuant to Securities and Exchange Board of India (Insider Trading) (Amendment) Regulation 2002 to prevent the practices of Insider Trading. Mr. FI Sekar, Company Secretary has been designated as Compliance Officer for this purpose. Senior Management of the Company has affirmed compliance with the Code of Conduct. The Company has duly complied with all the mandatory listing agreement.

33. INDUSTRIAL RELATIONS:

The industrial relations continued to be generally peaceful and cordial during the year.

34. CEO/CFO CERTIFICATION:

In terms of Clause 49 (IX) of the Listing Agreement, with the Stock Exchanges, the Chairman & Managing Director and Chief Financial Officer of the Company have certified regarding the Financial Statements for the year ended March 31, 2015 which is annexed to this Report in Appendix-I.

35. MEANS OF COMMUNICATION:

The quarterly, unaudited and annual audited financial results were published in nationally circulated newspapers in English, such as, Business Line and in regionally circulated in Daily Thanthi and Dhinamalar. The results were also displayed on the Company's website - www.skmegg.com.

36. GENERAL INFORMATION FOR SHAREHOLDERS

ANNUAL GENERAL MEETING

Date:23.09.2015 Time: 4.00 PM

Venue: NSA Mahal, Club Melaange, 314, 315, Perundurai Road, Erode-638 011

Financial Year: 1st April 2014 to 31st March 2015

Period of Book Closure: 17.09.2015 to 23.09.2015

Dividend Payment Date: 24.09.2015

FINANCIAL CALENDER:

Approval of quarterly results for the period ending:

1.30th June 2014:30th July 2014

2. 30th September 2014: 31st October 2014

3. 31st December 2014: 27" January 2015

4. 31st March 2015: 20th May 2015

37. REGISTRAR AND SHARE TRANSFER AGENT:

S.K.D.C. Consultants Limited Kanapathy Towers,

3rd Floor,

1391/A1, Sathy Road,

Ganapathy, Coimbatore-641 006.

38. COMPLIANCE OFFICER:

Mr. Sekar. P Company Secretary

Address: 185, Chennimalai Road, Erode.

Email: shares@skmegg.com

Mob No: 9585558325

39. ACKNOWLEDGEMENTS:

The company has been very well supported from all quarters and therefore your directors wish to place on record their sincere appreciation for the support and co-operation received from Employees, Dealers, Suppliers, Central and State Governments, Bankers and others associated with the Company. Your Directors wish to thank the banks, financial institutions, shareholders and business associates for their continued support and cooperation. We look forward to receiving the continued patronage from all quarters to become a better and stronger company.

40. CAUTIONARY STATEMENT:

The statements contained in the Board's Report and Management Discussion and Analysis contain certain statements relating to the future and therefore are forward looking within the meaning of applicable securities, laws and regulations.

Various factors such as economic conditions, changes in government regulations, tax regime, other statues, market forces and other associated and incidental factors may however lead to variation in actual results.

For and on behalf of the Board of Directors

Date: 20.05.2015

Place:Erode Chairman of the Board

DIN: 00002380


Mar 31, 2014

Dear Members,

The directors are pleased to present the 19th ANNUAL REPORT with audited accounts for the year ended 31st, March 2014. The summarized financial results of the Company are given hereunder.

FINANCIAL HIGHLIGHTS (Rs. in lacs) DESCRIPTION 2013-14 2012-13

Total Income 24,043.15 20,038.49

Profit Before Interest, Depreciation and Tax 3,072.16 3,157.51

Less : Financial Cost 835.86 1,175.97

Depreciation & Amortization 1,262.72 1,845.00

Profit Before Tax 973.58 136.54

Less: Provision for Tax

-Current - -

-MAT Credit entitlement - -

-Deferred Tax 292.99 33.09

Profit After Tax and available for appropriation 680.59 103.45

APPROPRIATIONS

Proposed dividend - -

Dividend Distribution Tax - -

Surplus carried to Balance Sheet 680.59 103.45

DIVIDEND

Your directors have not recommended any dividend for the financial year.

CORPORATE GOVERNANCE

A detailed report on corporate governance together with a certificate from the Statutory Auditors, in compliance with Clause 49 of the Listing Agreement, is attached as part of this report. Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.

MANAGEMENT DISCUSSION ANDANALYSIS REVIEW OF PERFORMANCE

1. The Company recorded revenue of Rs. 24,043.15 lacs (including other income of Rs.105.56 lacs) for the year ended 31st March,2014 as against Rs. 20,038.49 lacs (including other income of Rs. 700.36 lacs) in the previous year ended 31.03.2013.

2. The Profit before tax was at Rs. 973.58 lacs for the year ended 31st March,2014 as compared to Rs.136.54 lacs during the corresponding in the last year.

3. The Net Profitwas at Rs.680.59 lacs as on 31.03.2014 as against Rs.103.45 lacs in the previous year.

4. The quantity sold during the year 2013-14 stood at 6674 MTs, when compared to 6215 MT during the previous year ended 31st March,2013.

KEY FACTORS WHICH AFFECT THE PERFORMANCE OF THE COMPANY

a. Adverse movement in Egg Powder rates.

b. Volatility in prices of raw materials like egg etc.

CAPITAL EXPENDITURE AND FUNDING

i. The Capital Expenditure incurred and funded for the year is Rs.90.78 lacs of which Rs.71.86 lacs pertain to plant and machinery.

ii. During the year under review, your company has sold/deleted /adjusted assets worth Rs.1164.57 lacs.

OUTLOOK OF THE INDUSTRY

Low cost of eggs in US, resulting in reduced egg product price by US resulting in stiff competition on price front especially in Japan and Europe.

Reduced import duty and NIL duty for certain countries like Japan is giving us stiff competition

At the same time, reduced restitution announced recently in Europe has given us a break.

The industry being Egg processing , which is predominantly raw material intensive sector and hence fluctuation in egg price widely influence cash position and operating margin of this sector.

The unprecedented increase in the prices of eggs nearly most part of the financial year had a substantial adverse effect on the bottom line of the company forthe current year.

Performance of the previous year was reported to be good and it is a high record of achieving the turnover of Rs.237.10 crores, predominantly in view of the fact that higher selling price and addition of egg yolk liquid resulting in more separation of Egg albumen powder. Most importantly, increased volume of the egg yolk powder and whole egg powder in Japanese market and also entered the new market Nigeria.

Egg processing industries in India do not have any domestic market for processed eggs and therefore the performance of the company is having a direct correlation to the performance of the global economy. Dollar/Euro Vs Indian rupee is comparatively better than the past and has given considerable increase in price realization.

Overall for the financial year ended 31st March 2014, the company has evolved strategies in such a way to increase the selling price levels and volume with the existing buyers. Egg albumen price has increased by US $ 2.0/kg is a good sign. Developed new products with additives in the egg liquid enhancing the shelf life, thereby we can export these egg liquids to other Asian countries. We have captured long term contract with two countries forthe enhanced shelf life product of egg liquid with additives. Also, in the process of developing new products using egg powders. Ready to use egg blends [bakery mix] for both the export and domestic market for bakery applications.

OTHER RELATED REASONS FORTHE PERFORMANCE OFTHE COMPANYAND INDUSTRY

Demand for the egg powder in the export market expected to improve substantially.

Recovery in global demand considered as a major growth drive.

High input costs including cost of raw material is a major challenge faced by the players in the poultry sector during Financial Year 2013-2014.

Registered ourpoultryfarms under compartmentalization /establishment.

The Egg powder sector had suffered a setback due to export dependence, with the advent of the global economic crisis. At this backdrop, it is believed to tap other export markets to be the most important or an important strategic focus in Financial Year 2013-2014.

The company is looking at various options to improve the performance of the company.

It is focused that demand for the egg powder in the export market expected to improve substantially in the ensuing years.

The major growth stimulant is the recovery of global demand for end product.

A major challenge faced by the players in the poultry sector during the current year is high input costs including cost of raw material.

The most important strategic focus of the company during the current year would be penetrating the Russian market.

Approval got from the Russian Government. Trial shipment under process.

The sector in which the company is now focusing has being encountering setbacks due to export dependence, with the advent of the global economic crisis.

At this backdrop, it is believed to tap other export markets to be the most important or an important strategic focus in the coming years.

Indian government incentives helps us a lotto export more sales volume.

A major shift in the export market segment might be required to improve price realization and a marked improvement in operational efficiencies.

FUTURE PROSPECTS

Reckoning with the customers'' awareness improving for the quality parameters on the one hand and the pricing of the products on taking place in the supply side on the other hand, the future prospects of the company is ensured.

Though operating in a competitive environment, the uniqueness of the model ensures a comfortable level of net margin availability to your organization.

SALES AND MARKETING

In this highly competitive international markets for egg products, we SKM Egg Products Export (India) Limited has established a very wide network in Europe, Far East and South East Asian countries. Since we are able to maintain good relationship with customers and getting repeatorders forthe past 18 years, particularly fromthemajormarkets ofJapan and Europe.

Normally it is very difficult to enter Japan and Europe markets where USA and European suppliers are delivering at competitive prices. But, with our management''s high support our marketing and sales team has successfully established our market share in this high competition markets and sell our products at competitive prices where quality of our products is at par with Europe and USA suppliers.

Our recent new product of Egg Liquid is highly acceptable in Europe and Middle East countries, and successfully penetrating in these markets.

In orderto increase our market share and understand customer requirements, we are participating in big international food shows and visiting customers at their place at regularintervals.

Recently we have entered Nigeria and South Africa markets where we expect the requirement of egg product is good and hope, we will have long and more business in these regions. We are confident that we will spread over our sales in Russian market also in the coming year.

SUBSIDIARY COMPANY

The subsidiary helps the company in a big way in identifying new customers in Europe and improved the confidence level of customers through timely and qualitative services. The subsidiary is also taking initiatives to explore into markets which are untapped by the company till now.

HUMAN RESOURCES

Your Company believes that its greatest assets are its people and training is an investment in long term people development, for organizational excellence. During the year under review, your Company has taken several new initiatives to ensure that the knowledge and wisdom gained over decades is handed down to the next generation of employees. A well balanced mix of domain knowledge and behavioral training was taken up towards talent transformation. These initiatives have paid good dividends in the form of a strong group of in-house facilitators of domain knowledge and an inspired team of employees geared up to serve the needs of your company''s valued customer.

INTERNAL CONTROL SYSTEMS AND INTERNAL AUDIT

The Company maintains adequate internal Control systems and the Internal Audit is handled by a qualified Chartered Accountant and his team of subordinates.

DIRECTORS

1. Smt. S. Kumutaavalli (DIN: 00002390), Non executive director retiring by rotation, being eligible offers herself for reappointment.

2. Shri. FI Kumarasamy (DIN: 00046090), Non executive director retiring by rotation, being eligible offers himself for reappointment.

3. Shri. Chinnusamy Devarajan (DIN: 00109836) who meetsthe criteria of Independence as provided under Section 149(6) of the Companies Act, 2013 is appointed as Independent Director.

4. Shri. Marutha Gounder Chinnayan (DIN: 01497482) who meets the criteria of Independence as provided under Section 149(6) of the Companies Act, 2013 is appointed as Independent Director.

5. Dr. L.M. Ramakrishnan (DIN: 00001978) who meets the criteria of Independence as provided under Section 149(6) of the Companies Act, 2013 is appointed as Independent Director.

FIXED DEPOSITS

The Company has not accepted deposits from the public during year under review.

CEO/CFO CERTIFICATION

In compliance with the requirements of Clause 49 of the listing agreement entered into with the Stock Exchanges, the Managing

Director has submitted to the Board a certificate relating to financial statements and other matters as envisaged in the said clause.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2014, the applicable accounting standards have generally been followed exceptfor small deviations as explained in the Notes on accounts.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company forthe year under review.

iii) That the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2014 on a going concern'' basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement a report on corporate governance is given in the section titled "Report on Corporate

Governance forming part of this Annual Report.

A certified from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under

Clause 49 of the Listing Agreement entered into with the Stock Exchanges is attached to this report.

AUDITORS

M/s.N.C.Rajagopal & Co., the present statutory auditors retire at the ensuing Annual General Meeting and are eligible for reappointment u/s 224(1B) of the Companies Act, 1956. The Company proposes to reappoint M/s.N.C.Rajagopal & Co., Chartered Accountants as Statutory Auditors of the company from the conclusion ofthe ensuing Annual General Meeting up to the conclusion ofthe next Annual General Meeting ofthe Company. In respect ofthe observations made bythe Auditors in their report, your Directors wish to state that the respective notes to the accounts read with relevant accounting policies are self explanatory and therefore do not call for any further comments.

SECRETARIAL AUDIT

A qualified Practicing Company Secretary carries out a secretarial audit on a quarterly basis to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the total number of shares in physical form and the total numberof dematerialised shares held with NSDL andCDSL.

SHAREHOLDER INITIATIVES

Your company adheres strictly to all the statutory and other legal compliances. Your Company has been one of the first to implement any initiatives for shareholder benefit directed from SEBI. On occurrence of any event, which has a bearing on the share price or otherwise, your company intimates the stock exchanges, within the stipulated period. Your company has in place regulations for preventing and regulating insider trading and has adhered to a code of conduct and business ethics by which the shareholder is treated at parwith an employee on availability of information about the company.

Your company has been prompt and regular in its replies to your queries. Your company also replies within the stipulated time to all legal and statutory authorities. The total numbers of shares dematted as on 31st March 2014 are shares which represent of the shares ofthe Company.

DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company strives to maintain healthy and harmonious relationships with all its employees. Efforts better ideas for a better plan are ongoing to build and renew the relationship with the workforce.

STATUTORY INFORMATION

Name Age Designation Gross Experience Remuner -ation

Shri SKM Maeilanandhan Executive (DIN: 00002380) 69 Chairman 53''82''572 30 years

ShriSKM Shree Shivkumar Managing (DIN: 00002384) 45 Director 65,/6,85/ 20 years

Date of Previous Name appointment employment

Shri SKM Maeilanandhan 26,06,96 Chairman & Managing Director (DIN: 00002380) in SKM Animal Feeds and Foods (India) Limited

ShriSKM Shree Shivkumar 26 0696 Executive Director in SKM Animal Feeds and Foods (India) Limited

CORPORATE SOCIAL RESPONSIBILITIES

The Company always places greater importance to manage its affairs with highest levels of transparency, accountability and integrity and maintain the high standards of corporate governance on sustained basis.

Your company is committed to the welfare of not only poor citizens but also to the society at large, the company has been regularly organizing various continuous social programmes, camps which provides, not only good care, but also promote awareness to the general public. During the year, the company conducted such social responsibility camps.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Clause 32 of the listing agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standard AS _21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements presentedbyyourcompany includes thefinancial information ofitssubsidiaryalso.

RELATED PARTY DISCLOSURES

(a) NameoftheRelatedParties

i) SKM Animal Feeds and Foods (India) Limited

ii) SKM Universal Marketing Company India Limited

iii) SKM Maeilanandhan (Executive Chairman) - Key Managerial Person

iv) SKM Shree Shivkumar (Managing Director) - Key Managerial Person

v) SKM Europe BV, Utrecht, The Netherlands

(b) Description of relationship between the parties Presumption ofsignificance influence.

(c) Transaction details:

i. Sale of Egg Shell waste toSKM Animal Feeds and Foods (India) Limited Rs.20.88/- Lacs (Tonnage 911.70 Tons)

ii. Details of Loans Borrowed, Repayments and Interest Payments (Rs.in Lacs)

iv Rent Paid to Managing Director, Rs. 76,500/-

v Lease Rent received from SKM Universal Marketing Co., India Limited Rs.6 lacs.(Net of VAT and Service Tax) vi. Remuneration Paid to Executive Chairman and Managing Director : (Rs. in Lacs)

The Executive Chairman and Managing Director''s remuneration is covered under part II of ScheduleXIII ofthe Companies Act, 1956. vii. Transaction with the Foreign Subsidiary:

Sales Made (CIF Value) to SKM Europe BV, The Netherlands Rs.1,927/- Lacs

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the health care sector''s objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materiallyfrom those either expressed or implied.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to the Company''s employees for the massive personal efforts as well as their collective contribution to the Company''s record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers fortheir continuous support given to the company and their confidence in the management.

CONSERVATION OF ENERGY

Various energy saving measures are under consideration and the same would be implemented in the ensuing years. During this year under review the company has adopted energy saving techniques for improving power factors. The outcomes of the initiatives taken bythe company is the improvementin powerfactor.

1. Started using wind energy to a tune of 55% by way of purchasing from third party.

2. Implemented to changing overto CFL and LED lighting system.

3. Electrical Energy saving Audit done through Kongu Engg college- Erode.

4. Steam Energy saving Audit done through Forbess Marshall Pune.

5. Started introducing variable speed drive in different areas to save power.

TECHNOLOGY ABSORPTION

The company is using the technology acquired from BELOVO, Belgium. Over the years the company''s personnel have acquired thorough knowledge and make required modification for producing various kind of new products to meetthe market demands.

RESEARCH AND DEVELOPMENT

Research and Development wing of the company developing an alternate enzyme for manufacturing Egg yolk powder - Heat stable yolk which involves process re-engineering and arriving new process parameters.

Also, in the process of changing the feed formulation to arrive the customers requirement of egg powders with a modified free fatty acid profile. The company is doing trials in its poultry farm to produce different quality of eggs by making changes in feed formulation to meetthe above requirements.

By the order of the Board

Place : Erade SKM Shree Shivkumar Date : 30.07.2014 Managing Director


Mar 31, 2013

Dear Members,

The directors are pleased to present the 18th ANNUAL REPORT with audited accounts for the year ended 31st, March 2013. The summarized financial results of the Company are given hereunder.

FINANCIAL HIGHLIGHTS Rs. in lacs

DESCRIPTION 2012-2013 2011-2012

Total Income 20,038.49 12,434.13

Profit Before Interest, Depreciation and Tax 3,157.51 338.77

Less : Financial Cost 1,175.97 1,152.77

Depreciation & Amortization 1,845.00 900.73

Profit Before Tax 136.54 (1,714.73)

Less: Provision for Tax

-Current 0.00 0.00

-MAT Credit entitlement 0.00 (13.31)

-Deferred Tax 33.09 (539.81)

Profit After Tax and available for appropriation 103.45 (1,161.61)

APPROPRIATIONS

Proposed dividend - -

Dividend Distribution Tax - -

Surplus carried to Balance Sheet 103.45 -

DIVIDEND:

Your directors have not recommended any dividend for the financial year in view of the meager profit of Rs.103.45 lacs for the year ended 31st March 2013.

CORPORATE GOVERNANCE

- A detailed report on corporate governance together with a certificate from the Statutory Auditors, in compliance with Clause 49 of the Listing Agreement, is attached as part of this report.

- Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.

Management discussion and analysis review of performance:

1) The Company recorded revenue of Rs.20,038.49 lacs (including other income of Rs.700.37 lacs) for the year ended 31st March,2013 as against Rs.12434.13 lacs (including other income of (Rs.218.40 lacs)) in the previous year ended 31st March,2012.

2) The Profit before tax was at Rs.136.54 lacs for the year ended 31st March,2013 as compared to (Rs.1,714.73 lacs) during the corresponding period in the last year.

3) The Net Profit was at Rs.103.45 lacs as on 31.03.2013 as against (Rs.1,161.61 lacs) in the Previous financial year.

4) The quantity sold during the year 2012-13 stood at 6215.269 MTs, when compared to 4218.625 MT during the previous year ended 31st March, 2012

Key factors which affect the performance of the company :

a. Adverse movement in Egg Powder rates.

b. Volatility in prices of raw materials like egg etc.

Capital expenditure and funding:

i. The Capital Expenditure incurred and funded for the year is Rs.57.80 lacs of which Rs.17.95 lacs pertain to plant and machinery.

ii. During the year under review, your company has sold /deleted /adjusted assets worth Rs.11.78 lacs.

OUTLOOK OF THE INDUSTRY :

- The revenue from operation for the current year would be more than the last financial year 2012-13.

- Performance of the previous year was reported to be good and it is a high record of achieving the turnover of Rs.193.38 crores, predominantly in view of the fact that higher selling price and addition of egg yolk liquid resulting in more separation of Egg albumen powder. Most importantly, increased volume of business in the local market too with the introduction of pasteurized whole egg liquid.

- The industry being Egg processing, which is predominantly raw material intensive sector and hence fluctuation in egg price widely influence cash position and operating margin of this sector.

- The unprecedented increase after the "prices of eggs" nearly most part of the financial year had a substantial adverse for effect on the bottom line of the company for the current year.

- Egg processing industries in India do not have any domestic market for processed eggs and therefore the performance of the company is having a direct correlation to the performance of the global economy. Dollar/Euro Vs Indian rupee is comparatively better than the past and has given the company some marginal increase in price realization.

- Overall for the financial year ended 31st March 2013, the company has evolved strategies in such a way to increase the selling price levels and volume with the existing buyers. Egg albumen price has increased by US

$ 2.0/kg is a good sign. Developed new products with additives in the egg liquid enhancing the shelf life , thereby we can export these egg liquids to other Asian countries. We have captured long term contract with two countries for the enhanced shelf life product of egg liquid with additives. Also, in the process of developing new products using egg powders. Ready to use egg blends [bakery mix] for both the export and domestic market for bakery applications. Egg blends like Scrambled eggs and Omlette mix planned for the noon meal scheme in the State Government.

Other related reasons for the performance of the company and industry:

- It is focused that demand for the egg powder in the export market expected to improve substantially in the ensuing years.

- The major growth stimulant is the recovery of global demand for end product.

- A major challenge to be faced by the players in the poultry sector during the current year is high input costs including cost of raw material.

- The most important strategic focus of the company during the current year would be penetrating the Russian market .

- Regular and periodical interaction with the officials of the Government department of both Russia and India to complete the veterinary certification and approval process for export to Russia.

- The sector in which the company is now focusing has being encountering setbacks due to export dependence, with the advent of the global economic crisis.

- At this backdrop, it is believed to tap other export markets to be the most important or an important strategic focus during the current year 2013-2014.

- The company is looking at numerous strategies to improve its performance.

- Indian government subsidy helps us a lot to export more sales volume.

- Egg albumen powder is now eligible for additional subsidy and subsidy entitlement for egg liquid is an encouraging symptom.

- A major shift in the export market segment might be required to improve price realization and a marked improvement in operational efficiencies.

FUTURE PROSPECTS

1. Product quality, cost and timely delivery are the key factors in the growth of this industry. Factors like increased public spending, favorable interest rates and general improvement in per capital income point towards higher demand for processing industry in the future.

2. Reckoning with the customers'' awareness and constantly striving to improve the quality parameters on the one hand and pricing the products in the supply side on the other , the future prospects of the company is ensured.

3. Though operating in a competitive environment, the uniqueness of the model ensures a comfortable level of net margin availability to your organization.

SALES AND MARKETING:

The efficiency of the marketing and sales network is a critical success factor for our Company. Our success lies in the strength of our relationship with our customers who have been associated with our Company for a long period. The success of our organization lies with the rapport we maintain with our customers to whom we are supplying for the past 15 years. Long term contract and repeat orders given by company''s customers shows our strength by delivering the quality product, and the services the company caters to them. Marketing team regularly participate in food exhibitions and also visit the customers place at various countries to interact & to find the needs and requirements based on their end application. Success factor of this can be attributed to the newly developed egg based blended product for a particular application in a particular market sector. Recent boon to our growth came due to the fact of a niche market which the management of the company tapped based on the efforts put in by developing an extended shelf life product on egg liquid .

SUBSIDIARY COMPANY:

The subsidiary helps the company in a big way in identifying new customers in Europe and improved the confidence level of customers through timely and qualitative services. The subsidiary is also taking initiatives to explore into markets which are untapped by the company till now.

LIQUIDATION OF FEED MILL DIVISION:

The feed mill division was started on 04.06.2009 at Ayyempalayam village at Aravakkurichi Taluk and the capacity of the plant was 200 MT/day as a back ward integration to have continuous flow of feeds to the chicks of the poultry farm of the company and to reduce cost of purchase of feeds.

Purpose of the setting up Feed Mill Division:

1. Feed cost constitutes a major component in the cost of producing eggs and the benefits out of the poultry farm can be improved.

2. The cost of feed ingredients fluctuate widely and the company is not able to take advantage of the price movements of feed ingredients which can be achieved by implementing efficient purchasing system and the company make considerable savings in the feed ingredients and processing cost.

3. The purpose of extending tracking system from present system upto feed ingredients state had been carried out so far.

4. Originally the feed mill was constructed based on 12 lacs birds. But, due to escalation in project cost by 35%, we had implemented poultry farm for 6 lacs birds only. Whereas our feed mill capacity was 200 MT/day to cater to the needs of 12 lacs birds. Capacity utilized details for the past years are given below:

Year % of capacity utilized

2009-2010 34.76%

2010-2011 37.12%

2011-2012 50.27%

2012-2013 36.71%

To reduce the huge interest burden of the company, it is necessary to reduce the huge term loan outstanding of the company. Since the poultry farm undertaking is continuously earning losses for the past 3 years, the Board of Directors has decided to dispose of poultry farm undertaking and feed mill undertaking in order to generate cash profit in the coming years by way of reduction of cost of finance on term loan availed from SBI, Erode.

Postal Ballot Compliance :

i. For sale of the poultry farm and feed mill division, the shareholders of the company have given their approval through postal ballot of Section 293 (1) (a) of Companies Act, 1956.

ii. The Executive Chairman of the company had announced Postal ballot result based on the report of Scrutinizer Mr.V.Raviganesh, M Com., B Ed., FCS, FCMA, Practicing Company Secretary on 29th June 2013 and that 99.31% voted in favour of the resolution to sell the Feed Mill and Poultry Farm Divisions.

iii. Based on the approval of the shareholders and the recommendation of Assets Sale Committee, the Board of Directors finally decided to sell the feed mill division to M/s. Hatsun Agro Products Ltd. having its Registered Office at Domain, Door No.1/20A, Rajiv Gandhi Salai (OMR), Karapakkam, Chennai – 600 097 who have given highest bid of Rs.8 Crores (Rupees Eight Crores Only) exclusive of all tax , duty, charges and that the assets are to be sold " As is where is condition".

In view of the closure of term loan availed from State Bank of India, Commercial Branch, Erode for setting of Feed Mill division, charge Id # 90003142 has been modified accordingly by uploading requisite e form in MCA Portal pursuant to Section 135 of the Act . The overall credit limit of the charge holder stood at Rs.108.89 crs as on date of the report 09.08.2013.

HUMAN RESOURCES:

Your Company believes that its greatest assets are its people and training is an investment in long term people development, for organizational excellence. During the year under review, your Company has taken several new initiatives to ensure that the knowledge and wisdom gained over decades is handed down to the next generation of employees. A well balanced mix of domain knowledge and behavioral training was taken up towards talent transformation. These initiatives have paid good dividends in the form of a strong group of in-house facilitators of domain knowledge and an inspired team of employees geared up to serve the needs of your company''s valued customer.

INTERNAL CONTROL SYSTEMS AND INTERNAL AUDIT:

The company maintains adequate internal control systems and the internal audit are handled by the qualified Internal Auditor of the company.

DIRECTORS:

The directors, Shri.P.Kumarasamy, Shri.S.M.Venkatachalapathy and Shri.M.Chinnayan retiring by rotation in the forthcoming Annual General Meeting. The retiring directors, being eligible, offer themselves for re-appointment in terms of Article Nos 87 and 96 of the Articles of Association of the company. Necessary resolutions are being moved to seek your approval at the ensuing Annual General Meeting of the company.

At the ensuing Annual General Meeting, Shri.P.Kumarasamy and Shri.S.M.Venkatachalapathy and Shri.M.Chinnayan, Directors of the company, retiring by rotation and being eligible to seeks re-appointment. Your Board recommends their Directors re-appointment.

FIXED DEPOSITS:

The Company has not accepted deposits from the public during the year under review.

CEO / CFO CERTIFICATION:

In compliance with the requirements of Clause 49 of the listing agreement entered into with the Stock Exchanges, the Managing Director has submitted to the Board a certificate relating to financial statements and other matters as envisaged in the said clause.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2013, the applicable accounting standards have generally been followed except for small deviations as explained in the Notes on accounts.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2013 on a going concern'' basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement a report on corporate governance is given in the section titled "Report on Corporate Governance" forming part of this Annual Report.

The certificate from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is attached to this report.

AUDITORS:

M/s.N.C.Rajagopal & Co., the present statutory auditors retire at the ensuing Annual General Meeting and are eligible for re-appointment u/s 224(1B) of the Companies Act, 1956. The Company proposes to re-appoint M/s.N.C.Rajagopal & Co., Chartered Accountants as Statutory Auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of the next Annual General Meeting of the Company. In respect of the observations made by the Auditors in their report, your Directors wish to state that the respective notes to the accounts read with relevant Accounting policies are self explanatory and therefore do not call for any further comments.

Cost audit :

M/s.S.Mahadevan & Co., Cost Auditors, have been appointed for conducting audit of the cost Accounting records for egg products for the financial year ended 31st March, 2013. The Cost Audit report relating to the above product will be filed within the stipulated period of 180 days from the close of the financial year.

The Company has received a letter from them, stating that the appointment, if made, will be within the limit prescribed under Section 224(1B) of the Companies Act, 1956

SECRETARIAL AUDIT

A qualified Practicing Company Secretary carries out a secretarial audit on a yearly basis to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialised shares held with NSDL and CDSL.

SHAREHOLDER INITIATIVES

Your company adheres strictly to all the statutory and other legal compliances. Your Company has been one of the first to implement any initiatives for shareholder benefit directed from SEBI. On occurrence of any event, which has a bearing on the share price or otherwise, your company intimates the stock exchanges, within the stipulated period. Your company has in place regulations for preventing and regulating insider trading and has adhered to a code of conduct and business ethics by which the shareholder is treated at par with an employee on availability of information about the company.

Your company has been prompt and regular in its replies to your queries. Your company also replies within the stipulated time to all legal and statutory authorities. The total numbers of shares dematted as on 31st March 2013 are shares which represent of the shares of the Company.

DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company strives to maintain healthy and harmonious relationships with all its employees. Efforts better ideas for a better plan are ongoing to build and renew the relationship with the workforce.

CONSERVATION OF ENERGY

The company continuously to puts its effort to adopt various energy saving measures for conservation of energy even though it is not a power intensive industry.

1) Started using wind energy to a tune of 50% by way of purchase.

2) Started changing over to CFL Lighting system.

3) Started introducing variable speed drive in different areas to save power.

CORPORATE SOCIAL RESPONSIBILITIES

The Company always places greater importance to manage its affairs with highest levels of transparency, accountability and integrity and maintain the high standards of corporate governance on sustained basis.

Your company is committed to the welfare of not only poor citizens but also to the society at large. The company has been regularly organizing various continuous social programmes, camps which provides, not only good care, but also promote awareness to the general public. During the year, the company conducted such social responsibility camps.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Clause 32 of the listing agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standard AS 21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements presented by your company includes the financial information of its subsidiary also.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the health care sector''s objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to the Company''s employees for the massive personal efforts as well as their collective contribution to the Company''s record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers for their continuous support given to the company and their confidence in the management.

By order of the Board Place : Erode Date : 09.08.2013

SKM Shree Shivkumar Managing Director


Mar 31, 2012

The directors are pleased to present the 17th ANNUAL REPORT with audited accounts for the year ended 31st, March 2012. Th§ summarized financial results of the Company are given hereunder.

FINANCIAL HIGHLIGHTS

Rs. in lacs

DESCRIPTION 2011-2012 2010-2011

Total Income 12434.13 12110.85

Profit before interest, Depreciation and Tax 338.77 387.25

Less: Financial Cost 1152.77 847.52

Depreciation & Amortization 900.73 860.70

Profit before tax (1714.73) (1320.97)

Less: Provision for Tax - -

-Current - -

-Mat Credit Entitlement (13.31) -

-Deferred Tax (539.81) (388.44)

Profit after Tax and available for appropriation (1161.61) (932.53)

APPROPRIATIONS

Proposed Dividend

Dividend Distribution Tax

Surplus carried to Balance sheet

DIVIDEND:

Your directors have not recommended any dividend for the financial year in view of the loss incurred to the tune of (Rs.1161.61) lacs for the year ended 31st March 2012.

CORPORATE GOVERNANCE

- A detailed report on corporate governance together with a certificate from the Statutory Auditors, in compliance with Clause 49 of the Listing Agreement, is attached as part of this report.

- Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors

DIRECTORS:

The directors, Dr. L. M. Ramakrishnan and Smt. S. Kumutaavalli retire by rotation in the forthcoming Annual General Meeting. The retiring directors, being eligible, offer themselves for re-appointment in terms of Article Nos 87 and 96 of the Articles of Association of the company. Necessary resolutions are being moved to seek your approval at the ensuing Annual General Meeting of the company.

At the ensuing Annual General Meeting, Dr L M Ramakrishnan and Smt S Kumutaavalli, Directors of the company, retires by rotation and being eligible seeks re-appointment. Your Board recommends their re-appointment.

1. The Sri C. Devarajan B.E. a leading industrialist of this region and one of the pioneer of well known URC Group with a two and half decades of experience in the civil engineering industry, education, software, has been co-opted on the board of the company as an additional director on 6'" August 2012 u/s. 260 of the Companies Act, 1956, with a view to avail of his rich experiernce for the development and growth of the company.

2. Your Directors wish to state that his appointed would be in the category as an Independent director and with his appointment the total strength of the board becomes 9 and the No. of Independent director stands at 4. Necessary revolutions is being moved at the ensuing AGM to seek your approval to appoint him as Director by complying provision to section 257 of the Act.

FIXED DEPOSITS:

The Company has not accepted deposits from the public during year under review.

CEO / CFO CERTIFICATION:

In compliance with the requirements of Clause 49 of the listing agreement entered into with the Stock Exchanges, the Managing Director has submitted to the Board a certificate relating to financial statements and other matters as envisaged in the said clause.

DELISTING OF COMPANY'S EQUITY SHARES:

The Equity Shares of the company is proposed to be delisted from the Bombay Stock Exchange Limited as there is no or negligible trading in the Company's Equity Shares in these Stock Exchanges. After delisting, if this proposal is approved by the members in the Annual General Meeting, the Equity Shares of the company will be continued to be listed in the National Stock Exchange of India Limited.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2012, the applicable accounting standards have generally been followed except for small deviations as explained in the Notes on accounts.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2012 on a going concern' basis.

CORPORATE GOVERNANCE:

Your company reaffirms its commitment to the good corporate governance practices pursuant to Clause 49 of the Listing Agreement with- the Stock Exchanges. Corporate Governance Report is annexed to Directors' Report and Auditors' Certificate regarding compliance of the Corporate Governance is made a part of this Annual Report. The Certificate from the Auditors of the Company, M/s.N.C.Rajagopal & Co confirming compliance of conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

AUDITORS:

M/s.N.C.Rajagopal & Co., the present statutory auditors retire at the enduing Annual General Meeting and are eligible for reappointment u/s 224(1 B) of the Companies Act, 1956. The Company proposes to reappoint M/s.N.C.Rajagopal & Co., Chartered Accountants as Statutory Auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of the next Annual General Meeting of the Company. In respect of the observations made by the Auditors in their report, your Directors wish to state that the respective notes to the accounts read with relevant Accounting policies are self explanatory and therefore do not call for any further comments.

SECRETARIAL AUDIT:

A qualified Practicing Company Secretary carries out a secretarial audit on a yearly basis to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.

SHAREHOLDER INITIATIVES :

Your company adheres strictly to all the statutory and other legal compliances. Your Company has been one of the first to implement any initiatives for shareholder benefit directed from SEBI. On occurrence of any event, which has a bearing on the share price or otherwise, your company intimates the stock exchanges, within the stipulated period. Your company has in place regulations for preventing and regulating insider trading and has adhered to a code of conduct and business ethics by which the shareholder is treated at par with an employee on availability of information about the company.

Your company has been prompt and regular in its replies to your queries. Your company also replies within the stipulated time to all legal and statutory authorities. The total numbers of shares dematted as on 31s' March 2012 are shares which represent of the shares of the Company.

DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company strives to maintain healthy and harmonious relationships with all its employees. Efforts better ideas for a better plan are ongoing to build and renew the relationship with the workforce.

CONSERVATION OF ENERGY

The company continuously to puts its effort to adopt various energy saving measures for conservation of energy likes even though it is not a power intensive industry.

1) Started using wind energy to a tune of 55% by way of purchasing from third party

2) Started changing over to CFL Lighting system

3) Started introducing variable speed drive in different areas to save power

STATUTORY INFORMATION

Particulars of employee's remuneration u/s 217 (2A) of the Companies Act. 1956.

NAME AGE DESIGNATION GROSS QUALIFI- REMUNE- CATION RATION (Rs)

Shri.SKM. 69 Executive 29,90,110 S.S.L.C. Maeilanandhan Chairman

NAME EXPERI- DATE OF PREVIOUS ENCE EMPLOYMENT EMPLOYMENT

Shri S K M Maeilanandhan 29 Years 26.06.96 Managing Director, SKM Animal Feeds and Foods (India) Ltd.,

CORPORATE SOCIAL OBJECTIVES

Corporate Social Responsibility continues to assume an important role in the activities of the Company. Afforestation, Water Management, Waste water recycling, Literacy and Health continue to be the chosen areas of work by the Company and its employees.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to the Company's employees for the massive personal efforts as well as their collective contribution to the Company's record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers for their continuous support given to the company and their confidence in the management.

By order of the Board

Place : Erode

Date : 06.08.2012 SKM Shree Shivkumar

Managing Director

 
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