SKM Egg Products Exp India Ltd-532143-March-2006

ELEVENTH ANNUAL REPORT
2005 - 2006
• Excellence - Our Goal

SKM EGG PRODUCTS
• Service - Our Motto • THimit-tJNe : -of • T'M*,. SKELL
Tel: +91 424 23 51 532-34 156, Gandhiji Road, Erode
Fax: +91 424 23 51 530-31 Tamilnadu, India. Pin:638001
• Quality - Our Obsession E-mail: finance@skmegg.com Website: www.skmegg.com
Silver Trophy Award from
APEDA for the year 2002-2003
tor quality and export promotion.
Excellence Award
from Institute of Economic Studies
for productivity, quality, innovation
and management
Silver Trophy Award from

APEDA for the year 2004 - 2005
for quality and export promotion.
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.WA, A.C.S.
& COMPANY SECRETARY
GENERAL MANAGER - OPERATIONS Shri. S. HARIHARAN, B.Sc, B.Tech., (Food Tech.,)
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 Eleventh Annual General Meeting of the Members of the Company will be held on
Saturday the 16th day of September, 2006 at 4.00 p.m at Kongu Kalaiarangam, E.V.K.Sampath Nagar,
Erode - 638011 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 2006.
b. The audited Balance Sheet as at 31 st March, 2006.
c. The Directors' and Auditors' Report thereon.
2. To declare a dividend for the year 2005-2006.
3. To appoint a Director in the place of Shri. SKM. Shree Shivkumar, who retires by rotation and
being eligible, offers himself for re-appointment.
4. To appoint a Director in the place of Shri. P. Kumarasamy, 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. Shree Shivkumar,
Executive Director, with effect from 1 st April, 2006.
i. Basic Pay Rs.1,30,000/- 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. Shree Shivkumar 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. Shree Shivkumar.
"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. Shree Shivkumar as minimum remuneration
subject to the provisions of Section II(A) of Part II 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."
resolution:
"RESOLVED THAT pursuant to the provisions of Section 269 read with Schedule XIII and other
applicable provisions if any, of the Companies Act, 1956 , the appointment of Shri SKM.
Maeilanandhan as Wholetime Chairman designated as Executive Chairman for a period of five
years from 25th June, 2006 to 24 th June, 2011 be and is hereby approved ."
"RESOLVED FURTHER THAT pursuant to Section 309 read with Section 198 and Schedule XI11 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 as Wholetime Chairman designated as Executive Chairman, with liberty and powers to
the Board of Directors (including its committee appointed for the purpose) to grant increments and to alter
and vary from time to time the amount and type of perquisites payable to Shri. SKM. Maeilanandhan
within the limit specified in Schedule XIII of the Companies Act, 1956 as in force in each year."
i. Basic Pay Rs. 1,50,000/- per month.
ii. House Rent Allowance at 20% of the Basic Pay.
iv. Reimbursement of expenditure incurred towards ( not exceeding 10% of the Basic Pay) gas,
two clubs.
vi. Personal Accident Insurance Premium up to Rs. 10,000/- per annum.
viii. Shri SKM. Maeilanandhan shall be eligible to the following perquisites, which shall not be in-
cluded 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.
residence of Shri SKM. Maeilanandhan.
remuneration, perquisites and benefits be paid to Shri. SKM. Maeilanandhan as minimum remuneration
resolution:
RESOLVED THAT pursuant to the provisions of Section 269 read with Schedule XIII and other
applicable provisions if any, of the Companies Act, 1956 ,the appointment of Shri. SKM. Shree
Shivkumar as Managing Director of the company for a period of five years from 25 th June, 2006
to 24 th June, 2011 be and is hereby approved."
"RESOLVED FURTHER 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. Shree
Shivkumar as Managing Director, with liberty and powers to the Board of Directors (including its committee
appointed for the purpose) to grant increments and to alter and vary from time to time the amount and type
of perquisites payable to Shri. SKM. Shree Shivkumar within the limit specified in Schedule XIII of the
Companies Act ,1956 as in force in each year."
i. Basic Pay Rs. 1,30,000/- per month.
ii. House Rent Allowance at 20% of the Basic pay.
iv. Reimbursement of expenditure incurred towards (not exceeding 10% of the Basic Pay) gas,
two clubs.
vi. Personal Accident Insurance Premium up to Rs. 10,000/-per annum.
viii.Shri. SKM Shree Shivkumar 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.
residence of Shri. SKM. Shree Shivkumar.
remuneration, perquisites and benefits be paid to Shri. SKM. Shree Shivkumar as minimum remuneration
9. To consider and if thought fit, to pass, with or without modification(s), the following resolution as a
SPECIAL RESOLUTION:
"RESOLVED THAT pursuant to the provisions of Section 61 and other applicable provisions of the
Companies Act, 1956 and all applicable provisions of the Securities Exchange Board of India (Delisting of
Securities) Guidelines, 2003 and subject to such approvals, permissions and sanctions as may be
necessary and subject to such conditions and modifications as may be considered necessary by the
Board of Directors of the Company or as may be prescribed or imposed by any authority while granting
such approvals, permissions or sanctions which may be agreed by the Board of Directors of the Company
in its sole discretion, the consent of the Company be and is hereby accorded to the Board of Directors of
the Company to delist the Equity Shares of the Company from Madras Stock Exchange Ltd and Coimbatore
Stock Exchange Ltd (hereinafter referred to as the Delisting Stock Exchanges) on such terms and conditions
and in such manner as may be considered desirable and expeditent by the Board of Directors of the
Company in its absolute discretion".
"RESOLVED FURTHER THAT for the purpose of giving effect to this resolution the Board of Directors of
the Company be and is hereby authorised to do all such acts, deeds, matters and things, including filling
of applications and other documents with the delisting Stock Exchanges, as it may in its absolute discretion
deem necessary, expedient, usual or proper or desirable and to settle all questions, difficulties or doubts
whatsoever that may arise in regard to the aforesaid voluntary delisting of the Equity Shares of the
Company, as it may in its absolute discretion deem fit without being required to seek any further approvals
of the members or otherwise to the end and intent that the members shall be deemed to have given their
approval expressly by authority of this resolution".
"RESOLVED FURTHER THAT the Board of Director of the Company be and is hereby authorised to
delegate all or any of its power which may be so delegated by law, to any of its Committee or any Director
or Officer of the Company, to give effect to the aforesaid resolution".
By order of the Board
V. JAGADEESAN.
Place: Erode GENERAL MANAGER - FINANCE
Date: 31.07.2006 & COMPANY SECRETARY
Notes:
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.
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 12.09.2006. to 16.09.2006.
(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 identification.
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 ,1956,
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 yet encashed dividend warrant(s) so far for the financial year ended 31st March 2004 and 31st
March, 2005 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., RB.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 appointment / reappointment as Executive Chairman,

Managing Director and Directors are given in REPORT ON CORPORATE GOVERNANCE.
By order of the Board
V. JAGADEESAN.
Place: Erode GENERAL MANAGER • FINANCE
Date: 31.07.2006 & COMPANY SECRETARY
ANNEXURETOTHE NOTICE
EXPLANATORY STATEMENT PURSUANTTO SECTION 173(2) OF THE COMPANIES ACT, 1956
Item No: 6
In the Ninth Annual General Meeting of the company held on 3rd September 2004, shareholders approved
revision of salary, allowances and other perquisites payable to Shri. SKM Shree Shivkumar, Executive
Director, from the existing pay scale of Rs 40,000-4,000-56,000/- plus HRA (50% of salary) with other
benefits to Rs.1,00,000 plus HRA (20% of salary) with other usual allowances and benefits. Considering
the valuable contribution made by Shri. SKM. Shree Shivkumar to the growth and development of the
Company and after taking into account the fact that the company had, during his tenure as Executive
Director, achieved tremendous growth in every area of its operation, the Remuneration Committee in its
meeting held on 28th April, 2006 recommended for the revision of salary, allowances and other perquisites
payable to Shri. SKM. Shree Shivkumar with effect from 01-04-2006. The Board of Directors in their
meeting held on 28th April, 2006, after duly considering the nature of work and responsibilities attached
to the office of the Executive Director and after analysing the performance of the company during his
tenure as Executive Director, accepted the recommendation of the Remuneration committee and
accordingly decided (subject to approval of the members in the ensuing Annual General Meeting) to
revise the salary and allowances payable to Shri SKM. Shree Shivkumar to Rs. 1,30,000 per month plus
HRA at the rate of 20% of the salary and other allowances and perquisites as per the proposed resolution
with effect from 01.04.2006. In view of his vast experience in this industry and adroit management of the
company by Shri. SKM. Shree Shivkumar, the members are requested to approve this proposal of revision
of salary to Shri. SKM. Shree Shivkumar with effect from 01.04.2006.
This proposal of revision of pay to Shri. SKM. Shree Shivkumar is in conformity with the requirement of Schedule
XIII of the Companies Act, 1956.
Memorandum of Interest of Directors.

Shri. SKM. Shree Shivkumar is interested in this resolution. Shri. SKM. Maeilanandhan and Dr. M. Chandrasekar,
who are the relative of Shri. SKM. Shree Shivkumar are deemed interested in this resolution.
Item No:7
As informed by the Directors in the Tenth Annual Report, your company established its own marketing
network and for this purpose a subsidiary company SKM Europe BV was incorporated in The Netherlands
under joint venture arrangements. In view of this, there is substantial changes in the business process
and responsibilities attached to offices in the helm of the company. The Board of Directors ,after making
full analysis of the factors having a direct bearing in the functional level of the company, decided to
evenly distribute the work and responsibilities in the top management of the company. Accordingly the
Board of directors, in the meeting held on 28th April, 2006 unanimously decided to create a new office
namely "Executive Chairman". In the said Board Meeting, the Board of Directors, after duly considering
the experience of Shri. SKM. Maeilanandhan, Managing Director which spread over more than 25 years
in poultry business its related and value-added industries and the valuable contribution made by him to
the success of the company and in particular when the company was in doldrums unanimously agreed,
subject to the approval of the members in the ensuing Annual General Meeting of the Company, to
appoint him in the newly created office of the "Executive Chairman" for a period of 5 years from 25th
June, 2006 to 24th June, 2011 on the terms and conditions as set out in the resolution. Shri. SKM.
Maeilanandhan was appointed as the Managing Director of the Company by the members at the Extra-
Ordinary General Meeting of the Company held on 26th June, 1996 for a period of five years from
26.06.1996 to 25.06.2001 and after the expiry of his office he was re-appointed as the Managing Director
by the members in the Sixth Annual General Meeting of the Company held on 27th September 2001 for
an another period of five years from 26.06.2001 to 25.06.2006. Shri SKM. Maeilanandhan is having in
depth knowledge and experience in the line of industry in which the company is engaged. As the
Managing Director of the company Shri. SKM. Maeilanandhan took various initiatives and corrective
actions which enabled the company to accelerate its growth rate over the years and hence in the interest
of the company Shri. SKM. Maeilanandhan was appointed as the Executive Chairman of the company
for a period of five years. The Board of Directors recommends the resolution to members for approval.
The Remuneration Committee determined the remuneration payable to Shri SKM. Maeilanandhan to
which the Board of Directors have, subject to the approval of the members in this Annual General
Meeting, given their consent in their meeting held on 28th April 2006. The remuneration fixed by the
Remuneration Committee is in accordance with Schedule XIII of the Companies Act, 1956. This explanatory
statement together with the accompanying notice may be treated as an abstract of the terms of
remuneration payable to Shri. SKM. Maeilanandhan, pursuant to Section 302 of the Companies Act, 1956.
The Shareholders may please note that Shri. SKM. Maeilanandhan has not drawn any remuneration from the
Company since the date of his appointment (i.e from 26.06.1996).
Memorandum of Interest of Director.

Shri. SKM. Maeilanandhan is interested in this resolution. Shri. SKM.Shree Shivkumar and
Dr. M. Chandrasekar, who are the relative of Shri. SKM. Maeilanandhan are deemed interested in this
resolution.
Item No: 8
Consequent to the proposal of appointment of the Managing Director Shri. SKM. Maeilanandhan to the
office of the Executive Chairman, there arise a vacancy in the office of the Managing Director of the
Company. The Board of Directors in their meeting held on 28th April, 2006 unanimously agreed, subject
to the approval of the members in this Annual General Meeting, to elevate the Executive Director
Shri.SKM.Shree Shivkumar to the office of the Managing Director. Shri. SKM. Shree Shivkumar was
appointed as the Executive Director of the company by the members in the Extra-ordinary General
Meeting held on 26th June, 1996 for a period of 5 years from 26.06.1996 to 25.06.2001 and after the
expiry of this period the members in the Sixth Annual General Meeting of the Company held on 27th
September 2001 re-appointed Shri. SKM. Shree Shivkumar as the Executive Director for an another
period of five years from 26.06.2001 to 25.06.2006. The marketing strategy adopted by Shri. SKM. Shree
Shivkumar coupled with formulation of plans and its effective implementation make the company to
withstand the stiff competition in the international market. The Company's performance did not suffer
during the period of unfavourable conditions also due to the strenuous efforts taken by Shri. SKM. Shree
Shivkumar. In order to keep pace the momentum in the administration of the company Shri. SKM. Shree
Shivkumar was elevated and appointed as the Managing Director of the company for a period of five
years from 25.06.2006 to 24.06.2011. The Board of Directors recommends the resolution to the members
for approval.
The Remuneration Committee of the Board of Directors determined the remuneration payable to
Shri. SKM. Shree Shivkumar and the same was, subject to the approval of members in this Annual
General Meeting, consented by the Board of Directors in their meeting held on 28th April, 2006.The
remuneration determined by the Remuneration Committee for which the members approval is requested,
is in conformity with Schedule XIII of the Companies Act, 1956. The explanatory statement together with
the accompanying notice may be treated as an abstract of the terms of remuneration payable to Shri.
SKM. Shree Shivkumar, pursuant to Section 302 of the Companies Act, 1956.

Shri. SKM. Shree Shivkumar is interested in this resolution. Shri. SKM. Maeilanandhan and
Dr. M. Chandrasekar, who are the relative of Shri SKM. Shree Shivkumar are deemed interested in this
resolution.
Item No: 9
The Equity Shares of the Company are currently listed on the following Stock Exchanges in India:
1. The Bombay Stock Exchange Limited
2.The National Stock Exchange of India Limited
3. The Madras Stock Exchange Limited
4. The Coimbatore Stock Exchange Limited
Out of the above Stock Exchanges in which the Equity Shares of the company are listed, the Bombay
Stock Exchange Limited and the National Stock Exchange of India Limited are having extensive and
Nationwide trading terminals. The bulk of the trading in the Company's Equity Shares takes place in The
Bombay Stock Exchange Limited and The National Stock Exchange of India Limited and the trading on
the other two Stock Exchanges is either negligible or nil.
The listing fees paid to the Madras Stock Exchange Limited and the Coimbatore Stock Exchange Limited
is disproportionately higher considering the volume of trading of Equity Shares of the Company. In view
of this the Board of Directors of the Company in its meeting held on 31.07.2006 unanimously resolved
subject to approval of members by means of special resolution, to delist the Equity Shares of the company
from the Madras Stock Exchange Limited and the Coimbatore Stock Exchange Limited. Guideline 5 of
the Securities Exchange Board of India (Delisting of Securities) Guidelines, 2003 permits a company to
voluntarily delist its securities from any Stock Exchanges where its securities are listed after obtaining
approval of Members by means of Special Resolution passed at its general meeting. As per the said
guildeline an exit opportunity need not be given to the shareholders in cases where the securities are
continued to be listed in a Stock Exchange having nationwide trading terminals. According to the
Explanation to the said guideline the Bombay Stock Exchange Limited and the National Stock Exchange
of India Limited are considered having nationwide trading terminals. As the Company's Equity Shares
will continue to be listed on the Bombay Stock Exchange Limited and the National Stock Exchange of
India Limited, the proposed delisting of the Equity Shares from the Madras Stock Exchange Limited and
the Coimbatore Stock Exchange Limited, as and when it takes place, will not affect the investors
adversely. The delisting will take effect after all approvals, permissions and sanctions are obtained. The
Board of Directors recommends this special resolution for the approval of the Members.
None of the Directors of the Company is, in any way, concerned or interested in this Resolution.
SHAREHOLDERS' INFORMATION
Date and Venue of Annual General Meet ing: Saturday, 16th September 2006, at 4.00 p.m, at Kongu
Kalaiarangam, E.V.K. Sampath Nagar, Erode - 638011.
Tentative Financial Calender:
Fourth quarter Unaudited results 2005-2006 April 28,2006.
First quarter results for 2006-2007 and audited results for 2005-2006 July 31, 2006.
Eleventh Annual General Meeting September 16,2006.
Second quarter results for 2006-2007 on or before October 31,2006.
Third quarter results for 2006-2007 on or before January 31,2007.
Date of book closure 12.09.2006 to 16.09.2006.
Listing on Company's Equity Shares
Coimbatore Stock Exchange Ltd The Bombay Stock Exchange Limited
Stock Exchange Building Phiroze Jeejeebhoy Towers
Trichy Road Dalai Street
Coimbatore - 641 005. Mumbai - 4 0 0 001.
Madras Stock Exchange Ltd National Stock Exchange of India Ltd
Exchange Building Exchange Plaza, 5ft_Floor
Post Box No. 183 Bandra - Kurla Complex
11, Second Line Beach Bandra (E)
Chennai - 600 001. Mumbai - 400 051.
Annual listing fees has been paid to all Stock Exchanges for the year 2006-07 except to Coimbatore Stock
Exchange, for which the Company did not receive 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, 2005 and March, 2006 are as under:
Month Bombay Stock Exchange Limited National Stock Exchange Limited

High Low Quantity High Low Quantity
Apr-05 25.30 20.25 28,279 25.40 20.50 1,20,865
May-05 25.20 19.05 75,271 25.25 19.85 2,27,891
Jun-05 30.70 22.05 2,14,432 29.45 22.00 6,65,808
Jul-05 27.95 22.35 91,548 28.05 22.50 2,73,823
Aug-05 29.95 23.25 1,89,166 30.00 23.50 4,71,072
Sep-05 30.80 23.55 4,42,588 31.90 23.50 17,67,073
Oct-05 26.90 19.05 61,461 26.90 18.10 4,09,881
Nov-05 21.95 19.50 95,404 23.40 19.20 2,94,802
Dec-05 21.30 17.65 53,162 22.90 17.30 2,12,943
Jan-06 32.10 19.55 3,98,190 32.00 19.00 11,86,665
Feb-06 . 25.45 18.05 3,22,078 25.50 18.60 9,90,706
Mar-06 32.10 19.20 9,88,712 33.00 19.25 19,47,886
32.01 17.65 29,60,291 33.00 17.30 85,69,415
10
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 proposed to be delisted from the Madras Stock Exchange Ltd and the
Coimbatore Stock Exchange Ltd.
Share Transfer System :
Share transfers are approved by a 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.
Compliance 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 :
31.03.2006 31.03.2005
No. of
Equity Shares No. of %of No. of %of No. of %of %of
No. of
held Share Share Shares Share Share Share Share
Shares held
holders holders held holding holders holders holding
1-500 6,019 66.22 20,79,680 7.90 5,177 62.83 19,88,924 7.55
501-1000 1,515 16.67 13,02,851 4.95 1,504 18.25 12,87,660 4,89
1001-2000 389 4.28 5,90,269 2.24 312 3.79 4,68,664 1.78
2001-3000 823 9.05 20,46,175 7.77 938 11.38 23,26,027 8.83
3001-4000 51 0.56 1,83,962 0.70 36 0.44 1,29,693 0.49
4001-5000 162 1.78 7,97,111 3.03 173 2.10 8,48,579 3.23
5001-10000 80 0.88 6,68,830 2.54 66 0.80 5,55,675 2.11
10001 & above 50 0.56 1,86,61,122 70.87 34 0.41 1,87,24,778 71.12
Total 9,089 100.00 2,63,30,000 100.00 8,240 100.00 2,63,30,000 100.00
11
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 :
31.03.2006 31.03.2005
No. of %of No. of %of No. of %of %of
Category No. of
Share Share Shares Share Share Share Share
Shares held
holders holders held holding holders holders holding
Promoters 21 0.23 1,77,08,188 67.25 21 0.25 1,83,34,658 69.64

Corporate 251 2.76 3,91,489 1.49 189 2.29 1,89,486 0.72
Individuals 8,792 96.73 79,53,139 30.21 8,025 97.40 77,80,952 29.55
NRIs/OCBs 25 0.28 2,77,184 1.05 5 0.06 24,904 0.09
TOTAL 9,089 100.00 2,63,30,000 100.00 8,240 100.00 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 31.03.2006
Name of the Depository No.of Shares %
National Securities Depository Ltd 77,89,867 29.59
Central Depository Services (India) Ltd 50,33,621 19.11
Total 1,28,23,488 48.70
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: 31.07.2006 EXECUTIVE CHAIRMAN
12
DIRECTORS' REPORT AND MANAGEMENT ANALYSIS
Your directors are pleased to present the ELEVENTH ANNUAL REPORT on the business and operations of your
company for the year ended 31 st March 2006.
FINANCIAL HIGHLIGHTS
Rs. in lacs
DESCRIPTION 2005-2006 2004-2005
Net Sales 7,164.70 6,600.90

Profit Before Interest and Depreciation 1,347.76 946.26
Less : Interest 163.15 170.36
Depreciation 249.03 210.64
Profit before tax 935.58 565.26
Less : Provision for Taxation 4.03 0.40
Profit after tax and available for appropriation 931.55 564.86
APPROPRIATIONS:
Proposed dividend 263.30 184.31
Corporate dividend tax 36.93 25.85
Balance carried to Balance Sheet 631.32 354.70
DIVIDEND
The Board of Directors recommended dividend of 10% amounting to Rs. 300.23 lakhs (including dividend distri-
bution tax) for the accounting year 2005-06.
PERFORMANCE
Your company has achieved record results during this year with total sales revenue of Rs.7,164.70 lakhs, up from
Rs. 6,600.90 lakhs in the previous year .Profit after tax up at Rs.931.55 lakhs (Previous year Rs. 564.86 lakhs) -
the highest ever earned by the company.
During this year under review your company produced 4,254 MT of egg powder and sold 4,005 MT which was
respectively at 3,235 MT and 3,115 MT during the previous year. Your directors are pleased to inform that the
quantity of production and sale during this year is the highest since the formation of the Company.
INDUSTRY OVERVIEW
The cost of producing eggs in India is the lowest in the world. However, the continued imposition of high import
duty by the European Union on egg powders makes the egg products produced in India becomes dearer. Inspite
of the high import levy, Indian egg powder industries have able to maintain their competitive edge over the other
players in the international market due to low egg price and cheap labour and other manufacturing cost in
India.The growth rate of global egg products market is expected to register at healthy level. The sudden outbreak
of bird flu in the northern part of India, during the financial year under review,created panic in the poultry and its
value added industries. However, due to the swift action taken by the Government of India, the situation was
brought under control. The various preventive measures initiated by the Tamil Nadu Government and the poultry
farm owners have made this state free of bird flu. The European and Japanese authorities did not impose any ban
on the import of processed egg products from India, after the news about outbreak of bird flu in India and hence
there was insignificant impact in the production and delivery schedule during the year under review.
13
PROSPECTS FOR THE FINANCIAL Y E A R 2006-2007:

The company continue to enjoy good patronage from its customers and all the prestigious customers are placing
repeated orders for the products of the company and this shows evidence of the quality of the products marketed
by the company. Because of the aggressive marketing strategy adopted by the company and due to primary
focus on the quality of the product, the order book of the company is full for the financial year 2006-07. The
company is initiating various cost reduction measures in all the areas and the benefits arising out of these
measures is expected to have a favourable effect in the ensuing years. Egg price is fluctuating widely and hence
the industry is sensitive with egg price. In order to insulate itself from the raw material price fluctuations, the
company is in the advanced stage of implementation of its own poultry farm and this will enable the company to
keep a check on the raw material price and avoid the cost of monitoring the quality of eggs procured from the
contract farms.
SUBSIDIARY COMPANY:
Your company formed a subsidiary company SKM Europe BV in The Netherlands with an authorised share capital
of Euro 90,000 and paid-up capital of Euro 18,000,under joint venture arrangement with the foreign partner B.K.
Holding BV. The subsidiary company SKM Europe BV is an incorporated entity under the laws of The Netherlands,
in which your company holds 85% of the Equity Share Capital of the subsidiary and the balance 15% of the equity
stake is owned by the foreign partner B.K. Holding B.V. The subsidiary company commissioned for commercial
operation of marketing of the company's product in Europe. With the formation of its own subsidiary for marketing
its' product in European market, your company is able to exercise full control over the end price of its product and
also to keep a control over the marketing expenditures. The subsidiary will also help your company to promote its
brand name and such brand building will help in diversifying your company's product in future. Under this new
arrangement of sales through the subsidiary company the delivery time will be substantially reduced as the SKM
Europe BV will keep in its stock the products of the company. The Annual Accounts along with Auditor's Report
on the operation of the subsidiary for this financial year under review are attached with this report.
MARKETING ARRANGEMENT IN JAPAN:

Your company appointed a new agent SKM Japan Ltd for marketing its product in Japan.Your company did not
make any investment in SKM Japan Ltd and the entire stake is held by persons resident in Japan. In this
arrangement the company hopes that the company's brand name "SKM" will be popularised in Japan, the important
market for your company's products. These new marketing arrangements will help your company to develop retail
supply chain over a period of time in Japan.
HUMAN RESOURCES:
Your company attaches importance to its human resources and treat the Employees as the most important
assets. The company depute its employees to specialised training and seminars to sharpen their skills and
knowledge.The relationship between the company and its employees continued to be cordial throughout this
financial year.
DIRECTORS:
The directors, Shri SKM. Shree Shivkumar and Shri P. Kumarasamy retire by rotation at this Annual General
Meeting and are eligible for reappointment. The retiring directors offer themselves for re-appointment.
Shri SKM. Maeilanandhan, Managing Director is proposed to be appointed as the whole time chairman, designated
as the Executive Chairman of the company. Consequent to this proposal, Shri SKM.Shree Shivkumar, Executive
Director, is proposed to be appointed as the Managing Director of the company.
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.
14
DELISTING OF COMPANY'S EQUITY SHARES:

The Equity Shares of the company is proposed to be delisted from the Madras Stock Exchange Limited and the
Coimbatore 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 Bombay Stock Exchange Limited and in the
National Stock Exchange of India Limited.
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, for which
Writ Petition has been filed by the Company and an interim stay from operation of AS 22 has been granted
by the Honourable High Court of Madras), has been followed and that there 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
p|ace. Erode SKM. MAEILANANDHAN

Date : 31.07.2006 EXECUTIVE CHAIRMAN
15
ANNEXURETOTHE 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 2005-2006 2004-2005
(1) POWER AND FUEL CONSUMPTION

(1) Electricity
a. Purchased units (Kwh) 22,40,417 11,77,832
Total Amount (Rs.) 1,06,21,811 62,94,173
Rate/unit (Rs.) 4.74 5.34
h Own Generation through Diesel Generator
Units (Kwh) 34,48,217 31,20,147
Total Amount 2,26,46,525 1,81,46,243
Units per litre of Diesel Oil 3.51 3.32
Cost/Unit (Rs.) 6.56 5.80
(2) Furnace Oil
Quantity (Litres) 3,54,800 18,22,881
Total Cost (Rs.) 39,80,708 2,01,77,825
Average rate (Rs.) 11.22 11.07
(3) Fire wood
Quantity (Metric Tonnes) 9,626 1,020

Total Cost (Rs.) 1,68,67,022 17,45,116
Average rate (Rs.) 1,752.31 1,710.90
(II) CONSUMPTION PER UNIT OF PRODUCTION

Product - Egg Powder (MetricTonnes) 4,254 3,235
Electricity (Rs. Per Metric Tonne) 7,820 7,555
Fuel (Rs. Per Metric Tonne) 4,901 6,777
FOREIGN EXCHANGE EARNINGS AND OUTGO : (Rs. in lacs)

Earnings : 6,997.01 6,571.01
Outgo : 370.88 406.32
16
CONSERVATION OF ENERGY:
The cost of generation of power through Diesel Generators is costlier than the purchase cost of power from the
Electricity Board. Hence during this year the existing demand of 450 kva have been increased to 1350 kva. The
benefits arising out of this energy conservation measures will have a sizable impact on the results of the company
in the ensuing years.
Certain special control system for certain Process Equipments were introduced during this year and uninterrupted
Power Supply systems were installed in important process like driers, pasteurizations, fermentation etc. As these
energy conservation measures were taken during the end of this financial year, the saving in the form of reduction
in power consumption will be realised in the ensuing years.
TECHNOLOGY ABSORPTION:
The company identified areas for improvement in process technology and product development.The company is
continuously taking advice from outside consultants for developing new products and towards adopting new
process techniques to improve yield.The new laboratory constructed at an investment of Rs. 2.25 crore became
operational during the later part of this financial year. The new laboratory is equipped with latest equipments to
facilitate new products developments and testing and to implement to new process techniques.
RESEARCH AND DEVELOPMENT:

Research and Development activities are being carried out on an on going basis for improving production process
and for improving the quality of Egg Powders.The in-house Research and Development department successfully
develops new products to meet the customers' requirement. R & D division of the company fine tunes recipes and
with the consultation of the customers of their requirements develops new products.

Date: 31.07.2006 EXECUTIVE CHAIRMAN
17
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:
India is the fifth largest producer of eggs in the world and the growth rate of Indian poultry sector is astonishing
and the current production is estimated to exceed 40 billion eggs in a year. Bulk of the eggs produced in India is
either directly consumed or exported and only a meager quantity is consumed as raw material in the egg
^processing plant for the manufacture of egg powders. Although the consumption of eggs in this industry is not
considerable, the presence of egg processing industries in India eliminate mis-match between supply and demand
of eggs in the local market thereby helps the poultry farmers to realise remunerative price for the eggs they
produce. Hence this industry is a catalyst for the orderly development of poultry industries and make substantial
contribution to India's rural economy. Inspite of being one of the largest producer of eggs in the world, there is
virtually no market for processed eggs in India and the bulk of the market for egg powders are concentrated in the
economically developed countries as these products require certain economic development for growth.The egg
price in Indian market is fluctuating widely and in some occassion goes uptoRs.1.70 per egg and this make the
results of the company uncomparable between the year.
India's cost of producing eggs is the lowest among the world and this gives Indian players competitive edge in the
processed egg markets. As the main markets are protected with heavy import duty tariff, the Indian players in the
processed egg markets are facing challenges from its counterpart operating in the economically developed
nations. Because of the absence of local market for processed eggs and due to competition in the international
markets, the number of players in India in this industry is few and whereas globally the number of industries are
numerous.
3. Industry Performance:
There are only five egg powder manufacturing industries in India, out of which some industries are either not
functioning or being operated as a part of other industrial undertaking. Hence the details of performance of this
industrial sector during this year are not available. During this year under review the production capacity of the egg
powder unit owned by this company was expanded to 4,300 MT of egg powder a year and the pre-expanded
capacity of the plant was 3,500 MT. The capacity was expanded to meet the increase in demand from the foreign
buyers for the products being manufactured by the company and the expanded capacity was made available from
the month of May,2006.ln view of this, the company produced 4,254 MT of egg powders during this year under
consideration.The exchange rate between Indian Rupee and US dollar and Euro varies significantly. In the begining
of the year under consideration the monthly average exchange rate between Rupee and US dollar was at 43.73
and at the close of the year the monthly average rate was at 44.48. But the performance of Rupee against EURO
was quite opposite and the opening monthly average rate was at 56.60 and at the end the monthly average rate
was pegged at 53.49. The substantial and unpredictable depreciation of Euro against the Indian Rupee had a little
impact on the bottom line of the company due to hedging the risk by forward contract booking.
18
GOVERNMENT POLICIES:
The Government of India, with the objective to promote export of food products, introduced an incentive scheme
called "Vishesh Krishi and Upaj Yojana scheme". Under this scheme the units which export notified products
were entitled for duty credit scrip equivalent to 5% of the FOB value of exports.The Government latter confirmed
that EOU units were also eligible for this benefits. Egg powder was one of the eligible item for this benefits and
hence the company filed application with the Deputy Director of Foreign Trade for obtaining the scrip and the
estimated income out of this scrip Rs.331 lakhs accounted as other income in this year under review.
In the Foreign Trade Policy for the year 2005-2006, the Government of India introduced Vishesh Krishi and Gram
Udyog Yojana scheme in replacement of the Vishesh Krishi and Upaj Yojana scheme. In the said Foreign Trade
Policy, the benefits available under "Vishesh Krishi and Gram Udyog Yojana scheme is not extended to EOU
units.
The Export Promotion Council for EOU had represented to the Commerce Ministry for extension of this benefit to
eligible units in EOU.The company and the Indian Egg Producer association had also made representation to the
Government for the withdrawal of the policy of the Government disentiling units in the EOU to this sops. The
Export Promotion Council for EOU and the Indian Egg Producer association are still pursuing the cause of egg
processing unit in the EOU.
INDUSTRY OUTLOOK:
The supply of eggs in the local markets continued to be more than demand and hence raw material cost of Indian
egg processing industries remains the lowest compared to egg processing industries operating in the economi-
cally developed countries. As the raw material cost is the major component in the total cost of production, this
favourable climate makes the egg powders produced in India more competitive in the international market.
The exchange rates between Indian Rupee and other major currencies like US dollar and Euro are on the increas-
ing trend and in view of this the ultimate sales realisation of Indian egg processing industries, in terms of home
currency, is expected to be better during the financial year 2006-07.
STRENGTH OFTHE COMPANY:

The Company's quality system is fully developed and integrated. The Company has received ISO 9002 certifica-
tion in the year 1998.The continued commitment to quality and process was exhibited through a recertification in
the year 2001 based on ISO 9001:2000 and HACCP certification since 1999 which conform to global food safety
standard. The Company has also developed an integrated system called "TRACKKER" to trace the full history of
the products manufactured by it.The farm project under implementation when completed will improve the safety
of the products and ensure traceability up to the level of feed stock.This is a competitive advantage for the
company as it would become a unique company giving such guarantee with respect to product safety.
The company has also invested over Rs. 22.5 million on new laboratory to strengthen product analysis and to
monitoring pesticide and other heavy metal residues in the egg powder being produced by the company. Hence
the company is equipped with production and quality assurance resources which are of international standards.
FUTURE PROSPECTS:
As an outcome of the Company's quality policy, it prescribes many restrictions on the contract poultry farm to
ensure that the eggs supplied by it are of superior quality. The restrictions with respect to feeds to be used and
hygiene conditions to be maintained at the farm level are the important restrictions imposed by the company on
the farmers. The company was paying 2 paisa per egg above the price fixed by the NEEC to compensate the
farmers the extra expenditures arising from these restrictions. Considering that the company is purchasing the
entire eggs produced by these farms thereby obviating marketing and delivery expenditures, the company after
negotiation reached an agreement with the farmers to supply eggs at a discount of 2 paisa per egg and the new
agreement was made effect in the middle of the first quarter 2006-07. In view of this, the financial performance
of the company for the financial year 2006-2007 appears to be bright.
19
OPPORTUNITIES AND THREATS:

Opportunities:
During this current year the Company has obtained BRC (British Retail Consortium) certificate which is the
requirement to enter UK market which the company has so far not marketed its products. This move of the
Company to penetrate in to new market is expected to bring sizable demand for the company's product.
The company's marketing strategy entered into a new era by the formation of its own marketing subsidiary in The
Netherlands. Now the foreign marketing subsidiary of the company is devoting wholly for marketing the compa-
ny's product and is working on the possibility of entering into new markets in Europe.This initiatives are expected
to improve the volume of sales in the coming years.
The company is in the advance stage of setting up of its own farm and after implementation the raw material cost
would be reduced further and the company will also save administrative expenses relating to supervision of
contract farms. Besides the above monetary advantages, the implementation of own farm would enable the
company to keep a check on the quality of the eggs produced through direct control on the feed used and to
maintain hygiene conditions as prescribed by the EU authorities.
The company expects that there would be significant improvement in the margin in the long run.
Threats:
The poultry industry all over the world is facing the challenge of the dreaded bird flu disease and India is no
exception to this threat. Any sudden outbreak of this disease may seriously hamper the supply of eggs. However
the poultry farmers in Tamilnadu follows stringent bio-security and other hygienic measures and because of this
control mechanism the poultry industries are free from this virus attack.
The proposed poultry farm would ensure availability of eggs to the company and thus the company is in the
process of safeguarding itself from any such threat which affects availability of raw materials under any extra-
neous situations like outbreak of bird flu or other disease.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate system and internal controls to safeguard the assets of the Company and to ensure
maintenance of proper accounting records.With a view to make an improvement over the present management
system, the company is implementing ERP system which is designed to capture, present and analyse the data
for effective management information and decision making.The audit committee makes periodical review of the
functioning of the entire system.The ISO 9001:2000 Audit System assist the company to improve documentation
system.
INDUSTRIAL RELATION:
The industrial relation at your company continue to be cordial. The company continue to review the requirement
of manpower at various levels and ensure that adequate number of manpower with requisite qualifications and
experience is positioned at all levels and in every discipline. The total number of manpower employed by the
company aggregates to 138.

20
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 at the last Annual General Meeting and the number of other Directorship /
Committee Memberships held by them are as follows.
No. of other Committee

Promoter/
Companies in which
Chairman/ Independent/
S.No. Name of Directors in which lie 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 Director 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
Changes in the composition of the Board during the year 2005-06
S.No Name Date of Appoinment Date of Cessation
1 Shri. P. Shanmugasundaram 24.07.2005
2 Shri. B. Ramakrishnan 25.07.2005

>
During the year, Five Board Meetings were held on 29.04.2005, 25.07.2005,12.09.2005, 28.10.2005,
30.01.2006. The Tenth Annual General Meeting was held on 12th September, 2005.
21
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 5 5 Yes

2 Shri. SKM. Shree Shivkumar 5 5 Yes -
3 Dr. M. Chandrasekar 5 4 Yes -
4 Shri. P. Shanmugasundaram* 1 1 - Not applicable
5 Shri.B. Ramakrishnan** 4 3 Yes -
6 Shri. S.M. Venkatachalapathy 5 5 Yes -
7 Dr. L.M. Ramakrishnan 5 4 Yes -
8 Shri. M. Chinnayan 5 5 Yes -

9 Shri. P. Kumarasamy 5 5 Yes -
* Resigned as a Director with effect from 24-07-2005

** Appointed as a Director with effect from 25-07-2005
DIRECTORS PROPOSED TO BE APPOINTED AS THE EXECUTIVE CHAIRMAN, MANAGING DIRECTOR

AND DIRECTORS RETIRING BY ROTATION AND BEING APPOINTED:
EXECUTIVE CHAIRMAN.
Shri SKM. Maeilanandhan, aged 61 years, is the non-rotational director appointed as the Executive Chairman of
the company and this appointed proposed to be conformed in this Annual General Meeting. Shri SKM. Maeilanandhan
was appointed as the first Director of the Company as per Clause 86 of the Articles of Association of the
company. Subsequently, he has been appointed as the Managing Director of the Company in the Extra-ordinary
General Meeting held on 26.06.1996 and he hold this position upto 24.6.2006 where he has been appointed as the
Executive Chairman of the Company by the Board of Directors and he assumed the new office on 25-06-2005.
Shri SKM. Maeilanandhan is also the Executive Chairman of SKM Animal Feeds and Foods (India) Limited and
holds directorship in SKM Siddha and Ayurvedic Medicines India Private Limited and Agro Corpex India Limited.
Shri SKM. Maeilanandhan is having more than two decades of experience in poultry and its value added industries.
MANAGING DIRECTOR:
Shri SKM. Shree Shivkumar, aged 37 years, is a Graduate in Engineering. Shri SKM. Shree Shivkumar was
appointed as the first director of the company by Clause 86 of the Articles of Association of the company. In the
Extra-ordinary General Meeting of the company held on 26-06-1996, Shri SKM. Shree Shivkumar was appointed
as the Executive Director of the company and he continue to hold this position upto 24-06-2006 where he was
appointed as the Managing Director of the company by the Board of Directors and he assumed the new office on
25-05-2006. Shri SKM. Shree Shivkumar is possesing expertise and wide knowledge in International marketing in
egg powders. Shri SKM. Shree Shivkumar is a director in SKM Animal Feeds and Foods (India) Limited and in
SKM Siddha and Ayurvedic Medicines India Private Limited.In this Annual General Meeting he retires by rotation
and is seeking re-appointment as a director and his appointment as Managing Director by the Board of Directors
is also proposed to be confirmed.
22
DIRECTOR RETIRING BY ROTATION BEING RE-APPOINTED:
Shri P. Kumarasamy, aged 71 years is associating with this company from 28.02.1997 as a Director.
Shri P. Kumarasamy served over 34 years in the Central Excise Department and retired as Superintendent in the
year 1993. Shri P. Kumarasamy is the Chairman of the Shareholders and Investors' Grievance Committee of the
company and also is a member in the Audit Committee and Remuneration Committee of the company.
Shri. P. Kumarasamy is a partner in Sri Senthil Autos, which is a dealer of Hero Honda. Shri P. Kumarasamy
retires by rotation in this Annual General meeting and is seeking re-appointment.
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 29.04.2005, 25.07.2005, 28.10.2005
and on 30.01.2006 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. P. Shanmugasundaram* Member 1 1
3 Shri B. Ramakrishnan** Member 3 2
4. Shri. P. Kumarasamy Member 4 4
* Resigned as a director of the company with effect from 24.07.2005 and hence ceased to be a member of the
committee from 24.07.2005. During this year when he was the member of the committee, only one meeting was
held.
** Appointed as a member of the committee in the place of Shri. P. Shanmugasundaram and became a member
of the committee with effect from 25.07.2006. During the year 2005-2006 the committee met three times
after he became the member of the committee.
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.
23
REMUNERATION COMMITTEE:
The Board of Directors constituted this committee on 29.04.2002, which comprises of 2 independent and Non-
Executive Directors and one non-independent and non-executive director and the Composition of the Committee
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 there was no necessity for the committee to meet.
OBJECTIVES:
The Committee reviews and determines the company's policy on remuneration and advise on the specific
remuneration of Executive Directors 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 OF TERMS 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 2005-06 are given below
(Amount in Rs.)
Perquisites
Sitting
Name of Directors Salary and Total
Fees
allowances
1. Shri. SKM. Maeilanandhan Nil Nil Nil Nil

2. Shri. SKM. Shree Shivkumar 12,00,000 5,66,604 Nil 17,66,604
3. Dr. M.Chandrasekar Nil Nil 4,000 4,000
4. Shri. P. Shanmugasundaram* Nil Nil 1,000 1,000
5. Shri. B. Ramakrishnan* Nil Nil 2,000 2,000
6. Shri. S.M. Venkatachalapathy Nil Nil 5,000 5,000
7. Dr. L.M. Ramakrishnan Nil Nil 4,000 4,000
8. Shri. M. Chinnayan Nil Nil 5,000 5,000
9. Shri. P. Kumarasamy Nil Nil 5,000 5,000
*PaidtoTIDCO
24
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 endeavours 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
th
2003-8 AGM E.V.K. Sampath Nagar 19.09.2003 4.00 p.m. Resolution was
Erode-638 011 passed

th
2004 - 9 AGM E.V.K. Sampath Nagar 03.09.2004 4.00 p.m. Resolution was

th
2005-10 AGM E.V.K. Sampath Nagar 12.09.2005 4.00 p.m. Resolution was
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 the last 3 years. NIL
25
MEANS OF COMMUNICATIONS :
1. Half yearly report sent to each household of Shareholders No
2. In which newspaper quarterly results normally published in Makkal Kural (Tamil)

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

Retrieval (EDIFAR)
4. Whether displayed in any official news releases Nil
5. Presentation made to institutional investors or to the analysts Yes
6. Whether Management Discussions and Analysis is part

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

26
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 st March 2006, 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 ensuring
the compliance of the conditions of the corporate governance. It is neither an audit nor an expression
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 NC . SAMPATH

Date : 31.07.2006 PARTNER
27
AUDITORS' REPORT
TO THE SHAREHOLDERS OF SKM EGG PRODUCTS EXPORT (INDIA) LIMITED
We have audited the attached Balance Sheet of M/s. SKM EGG PRODUCTS EXPORT
(INDIA) LIMITED, 156, Gandhiji Road, Erode-638001 as at 31 st March 2006 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 31.03.2006 and taken
on record by the Board of Directors, we report that none of the Directors are disqualified
as on 31.03.2006 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 :-
28
i. In the case of the Profit and Loss Account, of the Profit for the period ended 31st
March 2006 and
ii. In the case of the Balance Sheet of the state of affairs of the Company as at 31st
March 2006
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 N.C.SAMPATH

Date: 31.07.2006 PARTNER
29
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 quantitative
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.1.5 crore to M/s. SKM Siddha and
Ayurvedic Medicines India Private Limited which company is covered in the Register maintained
under Section 301 of the Companies Act, 1956. The Company had received interest income of
Rs.5.41 lakhs on the above loan. The balance loan amount as on 31.03.2006 is Rs.1.5 crore.
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 market 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 2006, 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:
30
Period to which it Amount Due Forum where the appeal

Particulars Relates to be paid is preferred
16.11.1997 to Rs.19,561/- Commissioner of Central Excise,

Service Tax
01.06.1998 Salem.
27.05.1997 to Rs.7,32,445/- Joint Commissioner of Central

Excise Duty
01.07.1999 Excise [Appeal] Salem
01.04.2003 to Rs.64,288/- Commissioner of Central Excise,

Excise Duty
30.3.2004 Salem. CESTAT, Chennai
01.08.2002 to Duty- Rs.23,156/- Commissioner of Central Excise,

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

Excise Duty
March 2005 Rs.49,650/- 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.
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.
31
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.
For N.C. RAJAGOPAL & CO.,

Place: Erode N.C.SAMPATH

Date: 31.07.2006 PARTNER
32
BALANCE SHEET AS AT 31st MARCH, 2006

(Amount in Rs.)
Particulars Schedule As at 31.03.2006 As at 31.03.2005
SOURCES OF FUNDS
Share Capital A 26,33,00,000 26,33,00,000
Reserves & Surplus B 15,22,12,221 8,90,79,642
Secured Loans C 17,77,57,502 17,07,41,512
Total 59,32,69,723 52,31,21,154

APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Accumulated Depreciation D 53,84,19,184 49,61,48,617
Net Block 15,65,88,952 13,16,85,955
38,18,30,232 36,44,62,662
Investment E 1,28,32,779 ...
Current Assets, Loans
and Advances
Inventories F 13,69,97,094 11,45,45,680
Sundry Debtors G 43,43,527 1,79,39,691
Cash & Bank Balances H 1,81,96,987 5,27,83,575
Loans & Advances I 8,22,28,539 1,39,17,895
24,17,66,147 19,91,86,841
Less: Current Liabilities J 1,08,06,328 1,22,55,435
Provisions K 3,23,53,107 2,82,72,914
Total Current Liabilities & Provisions 4,31,59,435 4,05,28,349
Net Current Assets 19,86,06,712 15,86,58,492

Total 59,32,69,723 52,31,21,154
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 &
Company Secretary
Place : Erode
Date : 31.07.2006
33
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2006
(Amount in Rs.)
Year Ended Year Ended
Particulars Schedule
31.03.2006 31.03.2005
INCOME L
Sales 71,64,70,537 66,00,89,607
Other Income 3,89,88,187 18,86,255
Increase in Stock M 1,84,80,470 1,24,73,882
Total 77,39,39,194 67,44,49,744
EXPENDITURE
Purchase and Manufacturing Expenses N 54,96,46,848 48,75,32,639
Employees' Cost 0 2,02,22,862 1,59,29,808
Other Expenses P 5,55,56,937 4,94,76,502
Marketing Expenses Q 1,37,36,974 2,68,84,575
Total Expenditure 63,91,63,621 57,98,23,524
Profit Before Interest and Depreciation 13,47,75,573 9,46,26,220
Interest and Financial Charges R 1,63,14,214 1,70,36,313
Profit After Interest 11,84,61,359 7,75,89,907

Depreciation D 2,49,02,997 2,10,63,930
Profit Before Tax 9,35,58,362 5,65,25,977
Provision for Tax 4,03,000 40,000
Profit After Tax and available for appropriation 9,31,55,362 5,64,85,977
Less: Appropriations
a) Provision for proposed dividend 2,63,30,000 1,84,31,000
b) Provision for Corporate Dividend Tax 36,92,783 25,84,948
3,00,22,783 2,10,15,948
Balance carried to Balance Sheet 6,31,32,579 3,54,70,029
Notes on Accounts S

N.C. SAMPATH V.JAGADEESAN

Company Secretary
Place : Erode
Date : 31.07.2006
34
SCHEDULES FORMING PART OF THE BALANCE SHEET

AND PROFIT & LOSS ACCOUNT
(Amount in Rs.)
Particulars As at 31.03.2006 As at 31.03.2005
SCHEDULE - A - Share Capital

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
SCHEDULE - B - Reserves & Surplus

Share Premium Account 4,00,692 4,00,692
Profit & Loss Account
- Opening Balance 8,85,63,826 5,30,93,797
- Capital Reserve 1,15,124 1,15,124
- Add: Current Year Balance after appropriation 6,31,32,579 3,54,70,029
- Closing Balance 15,18,11,529 8,86,78,950
15,22,12,221 8,90,79,642
SCHEDULE - C - SECURED LOANS
i) From State Bank of India , Commercial Branch, Erode.

Working Capital Finance 8,33,83,369 7,31,55,088
Corporate Loan 8,40,47,290 9,65,56,050
ii) AdhocLoan 90,81,353
iii) ICICI & UTI Unpaid dividend 9,70,633 4,98,975

iv) Vehicle Loan Account (Kotak Mahindra) 2,74,857 5,31,399
17,77,57,502 17,07,41,512
WORKING CAPITAL LOAN 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.
35
Schedule
SCHEDULE • D - FIXED ASSETS

(Amount in Rs.)
Gross Block Depreciation Net Block
DESCRIPTION As at As at up to During the up to As at As at

31.03.2005 Additions Deletions 31.03.2006 31.03.2005 year Deletions 31.03.2006 31.03.2006 31.03.2005
Land & Site Development 1,47,72,051 12,71,829 - 1,60,43,880 - - - - 1,60,43,880 1,47,72,051
Building 9,09,70,739 1,12,53,790 - 10,22,24,529 1,65,86,112 28,38,784 - 1,94,24,896 8,27,99,633 7,43,84,628
Plant & Machinery 36,91,47,836 84,43,636 - 37,75,91,472 10,69,99,829 1,99,78,198 - 12,69,78,027 25,06,13,445 26,21,48,007
Office & Other Equipments 99,85,955 1,94,25,070 - 2,94,11,025 37,07,940 10,16,239 - 47,24,179 2,46,86,846 62,78,015
Computers 25,12,224 13,01,982 - 38,14,206 20,39,577 4,88,498 - 25,28,075 12,86,131 4,72,647
Furniture & Fixtures 34,91,930 14,16,642 - 49,08,572 15,80,244 2,24,989 - 18,05,233 31,03,339 19,11,685
Motor Vehicles 31,35,571 12,89,929 - 44,25,500 7,72,253 3,56,289 - 11,28,542 32,96,958 23,63,318
Work in progress 21,32,311 - 21,32,311 - - - - - - 21,32,311
TOTAL 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
Previous Year 45,22,02,186 4,41,25,366 1,78,935 49,61,48,617 11,07,37,370 2,10,63,930 1,15,345 13,16,85,955 36,44,62,662 34,14,64,816
Note : Also refer clause "C" Item No. 15 under the head significant accounting policies.
Schedule (Amount in Rs.)
Particulars As at 31.03.2006 As at 31.03.2005
SCHEDULE - E - Investments _-.

SKM EUROPE BV, The Netherlands. 8,32,779
UTI Leadership Fund (Market Value - Rs. 31.71 lakhs) 30,00,000
Birla Infrastructure Fund (Market value - Rs. 20.51 lakhs) 20,00,000
UTI Master Value Funds (Market Value - Rs. 13.19 lakhs) 20,00,000 ___
Reliance Equity Fund (Market Value - Rs. 50.80 lakhs) 50,00,000 —
1,28,32,779 —
CURRENT ASSETS, LOANS AND ADVANCES

Schedule F - Inventories
(As Valued and Certified by the Management)
Raw Material 44,97,712 27,37,723
Additives, stores, spares and consumables 1,68,08,072 1,46,95,117
Finished Goods 11,56,91,310 9,71,12,840
13,69,97,094 11,45,45,680
Schedule G - Sundry Debtors
Unsecured and Considered Good
Sundry Debtors - Considered Good
Less than Six Months 43,43,527 1,79,39,691
43,43,527 1,79,39,691
^^V _ 1—^ . ^BBB B 1 ^ * . 1 1 B^^* d k ^*B BBL * • > Bflh ^ J B^S ^Bl Aflh M^ B^S ^Bt I d B BRL ^Bh « h rfh.
Schedule H - cash and Bank Balances

i. Cash on hand 1,51,829 3,14,377
ii. In Current Accounts with Scheduled Banks 1,22,12,137 74,18,636
iii. Fixed deposit with SBI, Commercial Branch, Erode 58,33,021 4,50,50,562
1,81,96,987 5,27,83,575
Schedule 1 - Loans and Advances
i. Advances recoverable in Cash or in kind
for value to be received - unsecured and
considered good 7,88,25,852 1,26,92,387
ii. Deposits - considered good 28,42,136 10,10,245
iii. Advance Income Tax 5,60,551 2,15,263
8,22,28,539 1,39,17,895
Schedule J - Current Liabilities and Provisions

i. Trade Creditors 64,12,048 38,08,448
ii. Creditors for Expenses & Others 43,94,280 84,46,987
1,08,06,328 1,22,55,435
37
Schedule
(Amount in Rs.)

Particulars 31.03.2006 31.03.2005
Schedule K - Provisions
i. Provision for Income Tax 4,03,000 40,000
ii. Provision for Proposed Dividend 2,63,30,000 1,84,31,000
iii. Provision for Corporate Dividend Tax 36,92,783 25,84,948
iii. Provision for Earned Leave 3,43,760 68,101
iv. Provision for Sales Commission 2,28,008 63,90,833
v. Provision for Electricity Generation Tax 4,50,000 ...
vi. Provision of Expenses 9,05,556 7,58,032
3,23,53,107 2,82,72,914
SCHEDULE - L - SALES AND OTHER INCOME
Sales:
Export sales 69,97,01,234 65,71,00,630
Domestic sales 1,67,69,303 29,88,977
Other Income : 71,64,70,537 66,00,89,607
Sale of shell eggs and scrap 5,36,171 2,31,038

Interest received, fluctuation difference and income from
Vishesh Krishi Upaj Yojna Scheme 3,84,52,016 16,55,217
3,89,88,187 18,86,255
SCHEDULE - M- INCREASE / (DECREASE) IN STOCK

Opening Stock - Finished Goods (+) 9,43,80,906 7,39,66,685
Rework Powder (+) 27,31,934 17,55,281
Egg Powder Purchase (+) 98,000 89,16,992
Closing Stock - Finished goods (-) 11,56,11,914 9,43,80,906
Semi-finished goods (-) 79,396 27.31.934
1,84,80,470 1,24,73,882
SCHEDULE - N - PURCHASE AND MANUFACTURING EXPENSES
Raw material - Eggs Consumed 44,55,22,732 40,48,62,881
Egg Purchase 2,47,645 22,05,259
Packing Material - Consumed 1,65,87,804 1,09,89,156
Power and Fuel 5,44,17,528 4,66,66,787
Procurement Expenses 6,08,557 3,05,891
Additives and Consumables 3,22,62,582 2,25,02,665
54,96,46,848 48,75,32,639
38

Particulars 31.03.2006 31.03.2005
SCHEDULE - 0 - EMPLOYEES' COST

Salaries and Wages 1,03,38,010 84,24,848
PF Contribution 9,77,912 7,80,337
Contract Wages 77,67,198 55,08,215
Welfare Expenses 11,39,742 12,16,408
2,02,22,862 1,59,29,808
SCHEDULE - P - OTHER EXPENSES
Repairs and Maintenance
a. Building 11,97,394 10,52,890
b. Plant and Machinery 12,02,484 12,02,707
c. Others 11,46,078 11,52,062
d. Vehicle (Car, Van and Two wheelers) 20,65,601 21,00,468
56,11,557 55,08,127
Stores and Spares - consumed 94,32,785 82,63,836
Analysing Charges 22,20,374 44,24,262
Rent, Rates and Taxes 7,02,364 7,13,465
Postage, Courier and Telephone Charges 19,01,910 12,71,892
Printing and Stationery 7,01,026 5,70,497
Insurance Premium 14,47,798 13,84,804
Advertisement and Publicity 4,83,253 4,31,542
Travelling Expenses 30,94,953 23,80,179
Freight, Insurance and Forwarding Charges 2,47,85,829 2,21,53,197
Professional Charges 18,56,645 7,93,896
ISO/HACCP-Expenses 3,87,794 1,17,286
Stock Exchange Listing Fee 2,09,120 1,50,000
Miscellaneous Expenses 7,67,319 2,38,048
Audit fees: Statutory 2,45,400 1,55,100
Donation 17,08,810 8,09,265
Loss on sale of car - 1,11,106
5,55,56,937 4,94,76,502
SCHEDULE - Q - MARKETING EXPENSES

Foreign Trip Expenses 24,31,373 15,34,745
Sales Commission 50,10,566 2,43,52,225
Foreign Exhibition Expenses 30,93,821 —
Sales Promotion Expenses 4,29,765 ...
Sample Courier Charges 4,79,189 9,41,756
Foreign Delegates Expenses 22,92,260 55,849
1,37,36,974 2,68,84,575
39

Particulars 31.03.2005
31.03.2006
SCHEDULE - R - INTEREST AND FINANCIAL CHARGES

Working Capital Loan Interest 25,87,609 20,07,322
Bank Charges & ECGC Charges 15,03,230 12,59,197
Export bills discount interest 55,43,710 54,97,342
Export bills-overdue interest 5,69,129 14,09,476
Interest on Corporate Loan from SBI 61,10,536 68,62,976
1,63,14,214 1,70,36,313
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, for Rs.905.99 lakhs.
(Previous year Rs. 1,179.88 lakhs)
3. Balances of Sundry creditors and Sundry debtors are subject to confirmation.
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 m.t. per annum
II. Quantitative particulars of sales : (in m.t.)

2005-2006 2004-2005
Egg powder sales 4,005 3,115
III. Stock and Production (in m.t.)

a. Opening stock 622 526
b. Production 4,254 3235
c. Closing stock 870 622
d. Semi - finished goods 1 24
IV. Consumption of Raw materials,
a. Egg (Nos. in lakhs) 3,588.87 2898.67
40
V. Consumption of imported and indigenous materials :
2005-2006 2004-2005
Particulars % %
Rs. in lacs Rs. in lacs
Raw Material
Indigenous 4,455.23 100.00 4,048.63 100.00
Imported Nil Nil Nil Nil
Packing Material
Indigenous 160.06 96.50 106.71 97.11
Imported 5.81 3.50 3.18 2.89
Consumable, Stores and Spares
Indigenous 221.00 53.01 291.75 94.83
Imported 195.94 46.99 15.90 5.17
Fuel
Indigenous 437.96 100.00 403.73 100.00
Imported — — — —
VI. Expenditure in Foreign Currency : (Rs in Lacs)
Particulars 2005-2006 2004-2005
A. Packing Material & Additives 161.24 93.26

B. Stores and Spares 27.70 18.12
C. Foreign Travel Expenses 18.67 2.64
D. Analysing Charges 11.65 37.49
E. Sales Commission 144.65 244.44
F. Others 6.97 10.37
Total 370.88 406.32
VII. FOB Value of goods exported : 6,841.14 6,366.76
5. Export Sales inclusive of Foreign Exchange conversion charges of Rs.7.21 lakhs. (Last Year Rs.64.48
lakhs)
6. Other Income includes Rs.331 lakhs being duty scrip value equivalent to 5% of FOB value of Exports
for the period from 01.04.2005 to 31.03.2006 under "Vishesh Krishi Upaj Yojana Scheme".
7. Remuneration to Directors: (in Rs.)
Executive Director 17,66,604 17,46,420
(i) The Managing Director is not drawing any remuneration from the Company.
(ii) The Executive Director's remuneration is covered under part II of Schedule XIII of the Companies
Act, 1956.
41
8. Details of Fees to Auditors: (in Rs.) 2005-2006 2004-2005

(i) Statutory Audit Fee 50,000 50,000
(ii) For Taxation Matter 1,00,000 1,00,000
(iii) Fee for Certification 16,000 14,500
9. Related Party Disclosures:
i. Sale of Egg Shellgrits to M/s. SKM Animal Feeds and Foods (India) Limited - Rs.1.75 lakhs
(Qty. 990.610 Tonnes),
ii. M/s. SKM Animal Feeds and Foods (India) Limited has invested Rs.1,062.00 lakhs and
M/s.SKM Siddha and Ayurvedic Medicines India Private Limited has invested Rs.40.00 lakhs
in the equity share capital of the Company,
iii. Amount advanced to M/s.SKM Siddha and Ayurvedic Medicines India Private Limited -
Rs. 1.5 crore and Interest on the above advance received Rs.5.41 lakhs - Balance as on 31.3.2006
Rs.1.5 crore.
Nature of Relationship - T h e above companies are related by virtue of common directorship of

1) Shri. SKM.Maeilanandhan 2) Shri SKM. Shree Shivkumar and 3) Dr. M.Chandrasekar.
10(a). Earnings Per Share :
Particulars 2005-2006 2004-2005
1. Profit After Tax Rs.931.55 lakhs Rs.564.86 lakhs

2. Weighted Average No. of Shares 2,63,30,000 2,63,30,000
3. Earning Per Share Rs.3.53/- Rs.2.15/-
11. Loans and Advances includes advances of Rs 75.70 lakhs to subsidiary company SKM Europe BV,
The Netherlands.
12. Provision for Income Tax:

a. Provision for Income Tax has been made in respect of current tax liability arising out of MAT 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. Nevertheless the Company has
obtained an interim stay against the application of Accounting Standard - 22 issued by'the
Institute of Chartered Accountants of India, vide the order of the Madras High Court Ref. WPMP
No. 20507 of 2005 in WP No. 18947 of 2005, Dt. 15.06.2005. Accordingly, the accounts have
been prepared on the basis of the existing system.
b. The Company had paid Fringe Benefit Tax of Rs.1.96 Lacs in total for the First and Second
Quarter ending 30.6.2005 and 30.09.2005 and did not pay the Fringe Benefit Tax for the remaining
two quarters of the year and also no provision has been made in respect of Fringe Benefit Tax,
in view of the stay obtained by the "Indian Chamber of Commerce and Industry", Tuticorin on
behalf of its members to which the Company is also a member.
c. No provision has been made in respect of demand of Excise duty of Rs.7.32 Lacs, since an
appeal has been preferred by the Company with the Joint Commissioner of Central Excise
(Appeal) Salem and the company is confident that the appeal would be decided in favour of the
company.
42
d. No provision has been made in respect of demand of Excise duty of Rs.0.64 Lacs and for
Rs.0.50 Lacs, for which also the company has preferred appeal with the CESTAT, Chennai
against the order of the Commissioner of Central Excise (Appeal), Salem.
13. 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.
14. There are no impairment of assets in terms of Accounting Standard No.28 issued by The Institute of
Chartered Accountants of India.
15. Significant Accounting Policies:
a. Basis of Accounting:
The financial statements are prepared under historical cost convention and based on accrual
basis of accounting.
b. Fixed Assets:
Fixed Assets are stated at cost less accumulated depreciation.
c. Depreciation:
Depreciation is provided on straight line method as per the rate 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.
d. Inventories:
Inventories are valued in line with the mandatory Accounting Standards - 2 (Revised) issued by
the Institute of Chartered Accountants of India, as follows :
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.
e. Foreign Currency Transactions:

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.
43
f. Retirement Benefits:
Provision for statutory liability as on 31 s t March 2006 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 ior Provident fund under the Provident Funds and
Miscellaneous Provisions Act, 1952 are charged to the Profit and Loss Account.
g. Treatment of Interest on Borrowings:
The Interest expenditure on Borrowings is accounted for on accrual basis,
h. Grants and Subsidies
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.
i. Revenue Recognition:
Revenue is recognised on accrual basis.

N.C.SAMPATH V.JAGADEESAN
Company Secretary
Place : Erode
Date : 31.07.2006
44
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 31.03.2006
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 6,36,429
Total Assets 6,36,429
Sources of Funds
Paid-up Capital 2,63,300
Reserves and Surplus 1,52,212
Share application money Nil
Secured Loans 1,77,757
Unsecured Loans -
Application of Funds
Net Fixed Assets 3,81,830
Investments 12,833
Current Assets 2,41,766
Misc. Expenditure (not written off) Nil
Accumulated Loss Nil
IV. Performance of the Company (Rs. in Thousands)
Turnover including other Income 7,73,939
Total Expenditure 6,80,381
Profit Before Tax 93,558
Profit After Tax 93,155
Earnings per Share (in Rupees) 3.53
Dividend Rate % 10.00
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 SKM. SHREE SHIVKUMAR

Executive Chairman Managing Director
V. JAGADEESAN
Place Erode
General Manager - Finance &
Date 31.07.2006
Company Secretary
45
STATEMENT PURSUANT TO 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, 2006
15,300 Shares of Euro 1 each : 85%
3. Financial year of the subsidiary company : Period ended March 31, 2006
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 31st, 2006.
(b) Not dealt within the accounts of SKM

Egg Products Export (India) Limited
For the period ended March 31st, 2006 : Loss Rs. 6.41 lakhs
For the previous financial year : Loss Rs. 6.41 lakhs
46
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2006
(Rs. in Lacs)
Particulars As at 31 .03.2006 As at 31.03.2005
A. CASH FLOW FROM OPERATING ACTIVITIES

(INDIRECT METHOD)
Profit Before Tax 935.58 565.26

Adjustments for: -- --
Depreciation 249.03 210.05
Loss on Sale of Fixed Assets -- 1.11
Interest Expenses 163.14 412.17 170.36 381.52
Operating Profit before Working Capital Changes 1,347.75 946.78

Adjustments for:
Increase / (Decrease) in inventories 224.51 257.04
Increase / (Decrease) in Trade and other receivables 471.44 4.14
(Increase) / Decrease in Trade and other payables (26.31) 669.64 5.26 266.44
Cash generated from operations -- 678.11 -- 680.34
Interest paid -- (163.14) -- (170.36)
Direct Taxes provided (4.03) (0.40)
Cash Flow from Extra-ordinary Items -- --
Net Cash from Operating Activities 510.94 509.58
B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (422.71) (441.25)
Sale of fixed assets and Subsidy received -- 1.27
Interest received -- --
Investments including subsidiary 188.15 --
Net Cash used in Investing Activities (234.56) (439.98)
C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of Share Capital -- --
Increase / (Decrease) in Share Application Money -- --
Increase / (Decrease) in Term Borrowings (122.94) 290.05
Increase / (Decrease) in Bank Borrowings 193.10 (117.18)
Provision for Dividend and Corporate Dividend Tax (300.23) (210.16)
Net Cash (used in) received from financing activities (230.07) (37.29)
Net increase / (Decrease) in cash and cash equivalents 46.31 32.31
Opening Cash and Cash equivalents 77.32 45.01
Closing Cash and Cash equivalents 123.63 77.32
SKM.MAEILANANDHAN SKM. SHREE SHIVKUMAR
Place : Erode
V. JAGADEESAN
Date : 31.07.2006
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 2006. 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 31.07.2006 to the Members of the Company.
For N.C.RAJAGOPAL & CO.,
Place : Erode N.C.SAMPATH

Date : 31.07.2006 Partner
47
CONSOLIDATED FINANCIAL
STATEMENTS OF
SKM EGG PRODUCTS EXPORT
(INDIA) LIMITED
AND
SKM EUROPE BV,
THE NETHERLANDS
2005-2006
AUDITORS' REPORT TO THE BOARD OF DIRECTORS

ON THE 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 2006, 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 auditing 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 over-
all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of the subsidiary whose financial statements and other financial
information has been audited by other auditors whose report have been furnished to us, and our opinion is
based solely on the report of other auditor.
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 of Chartered 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
2006;
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.


51
CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2006

(Amount in Rs.)
Particulars Schedule As at 31.03.2006
SOURCES OF FUNDS
Share Capital A 26,33,00,000
Reserves & Surplus B 15,15,71,577
Secured Loans C 17,77,57,502
Minority Interest 33,906
59,26,62,985
Fixed Assets
Gross Block
Less: Accumulated Depreciation D 53,84,19,184
Net Block 15,65,88,952
38,18,30,232
Investment E 1,20,00,000
Current Assets, Loans
and Advances
Inventories F 14,26,17,054
Sundry Debtors G 43,43,527
Cash & Bank Balances H 2,00,75,280
Loans & Advances I 7,63,16,613
Total Current Assets 24,33,52,474
Less: Current Liabilities J 1,21,66,614
Provisions K 3,23,53,107
Total Current Liabilities & Provisions 4,45,19,721
Net Current Assets 19,88,32,753
59,26,62,985
Notes on Accounts S


Company Secretary
Place : Erode
Date : 31.07.2006
52
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31sMARCH, 2006
(Amount in Rs.)
Year Ended
Particulars Schedule
31.03.2006
INCOME L
Sales 71,64,70,537
Other Income 3,89,88,187
Increase in Stock M 2,41,00,430
Total 77,95,59,154
EXPENDITURE
Purchase and Manufacturing Expenses N 55,52,66,808
Employees' Cost 0 2,02,22,862
Other Expenses P 5,62,94,687
Marketing Expenses Q 1,37,36,974
Total Cost 64,55,21,331
Profit Before Interest and Depreciation 13,40,37,823
Interest and Financial Charges R 1,63,30,163
Profit After Interest 11,77,07,660

Depreciation D 2,49,02,997
Profit Before Tax 9,28,04,663
Provision for Tax 4,03,000
Profit After Tax and available for appropriation 9,24,01,663
Add: Minority Interest 1,13,055
Less: Appropriations
a) Provision for proposed dividend 2,63,30,000
b) Provision for Corporate Dividend Tax 36,92,783
3,00,22,783
Balance carried to Balance Sheet 6,24,91,935
Notes on Accounts S

N.C. SAMPATH
Partner V. JAGADEESAN
Place : Erode General Manager - Finance &
Date :31.07.2006 Company Secretary
53
CONSOLIDATED SCHEDULES FORMING PART OF THE BALANCE SHEET

AND PROFIT & LOSS ACCOUNT
(Amount in Rs.)
Particulars As at 31.03.2006
SCHEDULE - A - Share Capital

Authorised Capital:
3,00,00,000 Equity Shares of Rs.10/- each 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
SCHEDULE - B - Reserves & Surplus

Share Premium Account 4,00,692
Profit & Loss Account
- Opening Balance 8,85,63,826
- Capital Reserve 1,15,124
- Add: Current Year Balance after appropriation 6,24,91,935
- Closing Balance 15,11,70,885
15,15,71,577
SCHEDULE - C - SECURED LOANS *
i) From State Bank of India , Commercial Branch, Erode.

Working Capital Finance 8,33,83,369
Corporate Loan 8,40,47,290
ii) AdhocLoan 90,81,353
iii) ICICI & UTI Unpaid dividend 9,70,633
iv) Vehicle Loan Account (Kotak Mahendra) 2,74,857

17,77,57,502
WORKING CAPITAL LOAN 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.
h 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.
54
Schedule
SCHEDULE - D - FIXED ASSETS

(Amount in Rs.)
Gross Block Depreciation Net Block
DESCRIPTION As at As at up to During the up to As at As at

31.03.2005 Additions Deletons 31.03.2006 31.03.2005 year Deletions 31.03.2006 31.03.2006 31.03.2005
Land & Site Development 1,47,72,051 12,71,829 - 1,60,43,880 - - - - 1,60,43,880 1,47,72,051
Building 9,09,70,739 1,12,53,790 - 10,22,24,529 1,65,86,112 28,38,784 - 1,94,24,896 8,27,99,633 7,43,84,628
Plant & Machinery 36,91,47,836 84,43,636 - 37,75,91,472 10,69,99,829 1,99,78,198 - 12,69,78,027 25,06,13,445 26,21,48,007
Office & Other Equipments 99,85,955 1,94,25,070 - 2,94,11,025 37,07,940 10,16,239 - 47,24,179 2,46,86,846 62,78,015
Computers 25,12,224 13,01,982 - 38,14,206 20,39,577 4,88,498 - 25,28,075 12,86,131 4,72,647
Furniture & Fixtures 34,91,930 14,16,642 - 49,08,572 15,80,244 2,24,989 - 18,05,233 31,03,339 19,11,685
Motor Vehicles 31,35,571 12,89,929 - 44,25,500 7,72,253 3,56,289 - 11,28,542 32,96,958 23,63,318
Work in progress 21,32,311 - 21,32,311 - - - - - - 21,32,311
TOTAL 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
Previous Year 45,22,02,186 4,41,25,366 1,78,935 49,61,48,617 11,07,37,370 2,10,63,930 1,15,345 13,16,85,955 36,44,62,662 34,14,64,816
SCHEDULE - E - Investments
UTI Leadership Fund (Market Value - Rs. 31.71 lakhs) 30,00,000
Birla Infrastructure Fund (Market value - Rs. 20.51 lakhs) 20,00,000
UTI Master Value Funds (Market Value - Rs. 13.19 lakhs) 20,00,000
Reliance Equity Fund (Market Value - Rs. 50.80 lakhs) 50,00,000
1,20,00,000
CURRENT ASSETS, LOANS AND ADVANCES

Schedule F - Inventories
(As Valued and Certified by the Management)
Raw Material 44,97,712
Additives, stores, spares and consumables 1,68,08,072
Finished Goods 12,13,11,270
14,26,17,054
Schedule G - Sundry Debtors
Unsecured and Considered Good
Sundry Debtors - Considered Good
Less than Six Months 43,43,527

43,43,527
Schedule H - Cash and Bank Balances
i. Cash on hand 1,51,829
ii. In Current Accounts with Scheduled Banks 1,40,90,430
iii. Fixed deposit with SBI, Commercial Branch, Erode 58,33,021
2,00,75,280
Schedule 1 - Loans and Advances
i. Advances recoverable in Cash or in kind
for value to be received - unsecured and
considered good 7,29,13,926
ii. Deposits - considered good 28,42,136
iii. Advance Income Tax 5,60,551
7,63,16,613
Schedule J - Current Liabilities and Provisions

i. Trade Creditors 76,91,229
ii. Creditors for Expenses & Others 44,75,385
1,21,66,614
56
Year Ended
Schedule K - Provisions
i. Provision for Income Tax 4,03,000
ii. Provision for Proposed Dividend 2,63,30,000
jjj. Provision for Corporate Dividend Tax 36,92,783
iii. Provision for Earned Leave 3,43,760
iv. Provision for Sales Commission 2,28,008
v. Provision for Electricity Generation Tax 4,50,000
vi. Provision of Expenses 9,05,556
3,23,53,107
SCHEDULE - L - SALES AND OTHER INCOME
Sales:
Export sales 69,97,01,234
Domestic sales 1,67,69,303
Other Income: 71,64,70,537
Sale of shell eggs and scrap 5,36,171

Interest received, fluctuation difference and income from
VISHESH KRISHI UPAJ YOJANA SCHEME 3,84,52,016
3,89,88,187
SCHEDULE - M- INCREASE / (DECREASE) IN STOCK

Opening Stock - Finished Goods (+) 9,43,80,906
Rework Powder (+) 27,31,934
Egg Powder Purchase (+) 98,000
Closing Stock - Finished goods (-) 11,56,11,914
Semi-finished goods (-) 79,396
Egg Powder at The Netherlands 56,19,960
2,41,00,430
SCHEDULE - N - PURCHASE AND MANUFACTURING EXPENSES

Raw material - Eggs Consumed 44,55,22,732
Cost of Egg Powder Purchased 56,19,960
Egg Purchase 2,47,645
Packing Material - Consumed 1,65,87,804
Power and Fuel 5,44,17,528
Procurement Expenses 6,08,557
Additives and Consumables 3,22,62,582
55,52,66,808
57
Year Ended
SCHEDULE - 0 - EMPLOYEES' COST

Salaries and Wages 1,03,38,010
PF Contribution 9,77,912
Contract Wages 77,67,198
Welfare Expenses 11,39,742
2,02,22,862
SCHEDULE - P - OTHER EXPENSES
Repairs and Maintenance
a. Building 11,97,394
b. Plant and Machinery 12,02,484
c. Others 11,46,078
d. Vehicle (Car, Van and Two wheelers) 20,92,405
56,38,361
Stores and Spares - consumed 94,32,785
Analysing Charges 22,20,374
Rent, Rates and Taxes 7,02,364
Postage, Courier and Telephone Charges 19,43,567
Printing and Stationery 7,10,341
Insurance Premium 14,47,798
Advertisement and Publicity 4,98,634
Travelling Expenses 32,35,922
Freight, Insurance and Forwarding Charges 2,47,85,829
Professional Charges 18,56,645
ISO/HACCP-Expenses 3,87,794
Stock Exchange Listing Fee 2,09,120
Miscellaneous Expenses 11,22,250
Audit fees: Statutory 3,94,093
Donation 17,08,810
5,62,94,687
SCHEDULE - Q - MARKETING EXPENSES

Foreign Trip Expenses 24,31,373
Sales Commission 50,10,566
Foreigh Exhibition Expenses 30,93,821
Sales Promiton Expenses 4,29,765
Sample Courier Charges 4,79,189
Foreign Delegates Expenses 22,92,260
1,37,36,974
58

Year Ended
SCHEDULE - R - INTEREST AND FINANCIAL CHARGES

Working Capital Loan Interest 25,87,609
Bank Charges & ECGC Charges 15,19,179
Export bills discount interest 55,43,710
Export bills-overdue interest 5,69,129
Interest on Corporate Loan from SBI 61,10,536
1,63,30,163
Schedule : S
NOTES ON ACCOUNTS
Earnings Per Share
Particulars 2005-2006
1. Profit After Tax Rs.924.02 lakhs

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


Company Secretary
Place : Erode
Date : 31.07.2006
59
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2006
(Rs. in Lacs)
Particulars As at 31 03.2006

(INDIRECT METHOD)
Profit Before Tax 928.04

Adjustments for: --
Depreciation 249.03
Loss on Sale of Fixed Assets --
Interest Expenses 163.14 412.17
Operating Profit before Working Capital Changes 1,340,21

Adjustments for:
Increase / (Decrease) in inventories 280.71
Increase / (Decrease) in Trade and other receivables 488.02
(Increase) / Decrease in Trade and other payables (39.91) 728.82
Cash generated from operations -- 611.39
Interest paid -- (163.14)
Direct Taxes provided (4.03)
Cash Flow from Extra-ordinary Items --
Net Cash from Operating Activities 444.22

Purchase of fixed assets (422.71)
Sale of fixed assets and Subsidy received —
Interest received --
Investments including subsidiary 272.18
Net Cash used in Investing Activities (150.53)

Proceeds from issue of Share Capital 1.47
Increase / (Decrease) in Share Application Money —
Increase / (Decrease) in Term Borrowings (122.94)
Increase / (Decrease) in Bank Borrowings 193.10
Provision for Dividend and Corporate Dividend Tax (300.23)
Net Cash (used in) received from financing activities (228.60)
Net increase / (Decrease) in cash and cash equivalents 65.09
Opening Cash and Cash equivalents 77.32
Closing Cash and Cash equivalents 142.41
For and on behalf of the Board SKM.MAEILANANDHAN SKM. SHREE SHIVKUMAR

Place : Erode V. JAGADEESAN

Date : 31.07.2006
Company Secretary
AUDITORS' CERTIFICATE
We have examined the Cash Flow Statement of M/s. SKM Egg Products Export (India) Limited for the year ended 31st March 2006. 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 31.07.2006 to the Members of the Company.

60
BALANCE SHEET OF SKM EUROPE BV AS AT 31st MARCH, 2006

(Amount in Rs.)
SOURCES OF FUNDS
Authorised Capital
90,000 shares of Euro 1 each Euro 90,000
Paid up share capital

18,000 shares of Euro 1 each 9,79,740
Unsecured Loans
From the holding company 75,69,800
85,49,540
Current Assets, Loans and Advances
Inventories 56,19,960
Cash and Bank balances 18,78,293
Loans and advances 15,47,516
Other current assets 1,10,357
Total current assets 91,56,126
Less: Current liabilities and provisions
Sundry Creditors 12,79,181
Expenses Outstanding 81,105
Total Current Liabilities 13,60,286
Net Current Assets 77,95,840
Miscellaneous Expenditure
Profit and Loss Account 7,53,700
Total 85,49,540
Notes on accounts Schedule S
Place : Erode SKM. SHREE SHIVKUMAR B. KLAWER

Date : 28.07.2006 Director Director
61
PROFIT AND LOSS ACCOUNT OF SKM EUROPE BV FOR THE YEAR ENDED 31st MARCH, 2006
(Amount in Rs.)
Year ended
Particulars
31.03.2006
INCOME
Sales -
Increase in stock 56,19,960
Total Income 56,19,960
EXPENDITURE
Purchase and other expenditures 56,19,960
Other expenses 7,37,750
Interest and financial charges 15,950
Total Expenditures 63,73,660
Profit/Loss Account (7,53,700)

62
AUDITORS' REPORT
TO THE SHAREHOLDERS OF SKM EUROPE B.V.
In accordance with your instructions and on the basis of information provided by you, we have compiled the
annual accounts of SKM Europe B.V., in Utrecht, for the year 2005-06. The accuracy and completeness of
the information provided and the annual accounts bases there on are the responsibility of the management.
Our responsibility is to issue a compilation report of these annual account.
Scope:
We have compiled the annual accounts in accordance with standards for compilation engagements, generally
accepted in The Netherlands. Our procedures were limited primarily to gathering, processing, classifying
and summarising financial information. These procedures do not provide the same level of assurance about
shelter the annual accounts are free of material misstatement as that provided by an audit or a review.
Confirmation:
Based on the information provided to us, we have compiled the annual accounts in accordance with accounting
principles generally accepted in The Netherlands and the financial reporting requirements included in Part 9
of Book 2 of the Dutch Civil Code.
General:
The company SKM Europe B.V. has its registered office in Utrecht, has been active since 02.09.2005 and
is listed in the Trade Register in Utrcht under number 30207639.
Ownership:
The shares are for 15% held by BK Holding B.V. Utrecht, The Netherlands and for 85% by SKM Egg Products
Export (India) Limited, Erode, India.
Activities:
The core activities of SKM Europe B.V. is to trade in food ingredients and other products and services.
Management:
The Board of Management of SKM Europe B.V. is conducted by Mr. B. Klawer (Director).
For REININK.,
Registered Accountant
Place : Utrecht, The Netherlands
Date : 28.07.2006
T.L.J.REININK RA
63
SKM EUROPE BV - CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2006
(Rs. in Lacs)

(INDIRECT METHOD)
Profit Before Tax (7.54)

Adjustments for: --
Depreciation --
Loss on Sale of Fixed Assets --
Interest Expenses --
(Operating Profit before Working Capital Changes (7.54)

Adjustments for:
Increase / (Decrease) in inventories 56.20
Increase / (Decrease) in Trade and other receivables 16.58
(Increase) / Decrease in Trade and other payables (13.60) 59.18
Cash generated from operations -- (66.72)
Interest paid -- --
Direct Taxes provided --
Cash Flow from Extra-ordinary Items --
Net Cash from Operating Activities (66.72)

Purchase of fixed assets -.
Sale of fixed assets and Subsidy received --
Interest received --
Investments including subsidiary --
Net Cash used in Investing Activities --

Proceeds from issue of Share Capital 9.80
Increase / (Decrease) in Share Application Money --
Increase / (Decrease) in Term Borrowings 75.70
Increase / (Decrease) in Bank Borrowings --
Provision for Dividend and Corporate Dividend Tax --
Net Cash (used in) received from financing activities 85.50
Net increase / (Decrease) in cash and cash equivalents 18.78
Opening Cash and Cash equivalents --
Closing Cash and Cash equivalents 18.78

64
|6S>6O
31.03.2006 31.03.2005 ^6»rp
26,33,00,000 26,33,00,000
15,22,12,221 8,90,79,642
Gi\ 6VTSy6fT 17,77,57,502 17,07,41,512
Fr-uj.6b6Orr an
59,32,69,723 52,31,21,154
53,84,19,184 49,61,48,617
15,65,88,952 13,16,85,955
38,18,30,232 36,44,62,662
1,28,32,779
13,69,97,094 11,45,45,680
43,43,527 1,79,39,691
1,81,96,987 5,27,83,575
8,22,28,539 1,39,17,895
24,17,66,147 19,91,86,841
- 151 1,08,06,328 1,22,55,435.

3,23,53,107 2,82,72,914
4,31,59,435 4,05,28,349
19,86,06,712 15,86,58,492
iglair n>i_LJL|£ Q&trf&£i&a* 59,32,69,723 52,31,21,154
65
6OITLJ J5LL-L-
31.03.2006 ^)6BTp 31.03.2005 c^65T£U
6U^f^LDITtfUTli>
€ul jf) LJ 6JD68T 71,64,70,537 66,00,89,607
@^rj €U(JT>LDrT60Tljb 3,89,88,187 18,86,255
1,84,80,470 1,24,73,882
77,39,39,194 67,44,49,744
Q&6O6xil6vn&ja&6TT
54,96,46,848 48,75,32,639
jFibucmb 2,02,22,862 1,59,29,808
5,55,56,937 4,94,76,502
1,37,36,974 2,68,84,575
63,91,63,621 57,98,23,524
13,47,75,573 9,46,26,221
1,63,14,214 1,70,36,313
11,84,61,359 7,75,89,907
G9i£jioir««Tib 2,49,02,997 2,10,63,930

9,35,58,362 5,65,25,977
4,03,000 40,000
9,31,55,362 5,64,85,977
2,63,30,000 1,84,31,000
^)l , L^LCUIVOI\ **$!{ ir\jj^rTdlT 6XJIII 36,92,783 25,84,948
3,00,22,783 2,10,15,948
6,31,32,579 3,54,70,029
66
Registered Office: 156, Gandhiji Road, Erode - 638 001
ATTENDANCE SLIP
Regd. Folio No./ Client ID / DP ID No.:

Eleventh Annual General Meeting on Saturday, the 16th September, 2006 at
4.00 p.m. at Kongu Kalaiarangam, E.V. K.Sam path Nagar, Erode - 638 011.
I hereby record my presence at the 11th ANNUAL GENERAL MEETING of the Company
held at Kongu Kalaiarangam, E.V.K.Sampath Nagar, Erode - 638 011, on Saturday, the 16th
September, 2006 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 11 th Annual General Meeting of the Company to be held
on Saturday, 16th September, 2006 at 4.00 p.m. and at any adjournment thereof.
Affix
One Rupee
Signed this day of 2006 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.
1 5 6 , airr^igg) (Sijrr©, PT-CSITIT© - 6 3 8 OO1.
Folio No : / Client ID No./ DP ID No :

5WT Q U U J I T ,
16.09.200653^10 OO96O
2.
'"I
1 5 6 , arrrB^l^l (SUIT©, rr-CSirrr© - 6 3 8 OO1.
Folio No : / Client ID No./ DP ID No :
ST6TO.CSai.STLb. 61B, L_|ITITI 0 6\S1l£1Gll
6T6»Tl_JSWITU-|Lh
156, - 638OO1
LLi_a^^l«irr 4 8 LD6S«fl
OUR GLOBAL NETWORK
THINKING OUT OF THE SHELL

'uality Policy
, l l I >•

SKM Egg Products Exp India Ltd-532143-March-2006

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SKM Egg Products Exp India Ltd-532143-March-2006

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ELEVENTH ANNUAL REPORT

• Excellence - Our Goal

Silver Trophy Award from

BOARD OF DIRECTORS Shri. SKM. MAEILANANDHAN

Shri. SKM. SHREE SHIVKUMAR

Shri. S.M. VENKATACHALAPATHY

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

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:

b. The audited Balance Sheet as at 31 st March, 2006.

c. The Directors' and Auditors' Report thereon.

2. To declare a dividend for the year 2005-2006.

By order of the Board

9. Brief particulars of Directors proposed for appointment / reappointment as Executive Chairman,

By order of the Board

EXPLANATORY STATEMENT PURSUANTTO SECTION 173(2) OF THE COMPANIES ACT, 1956

Memorandum of Interest of Directors.

Memorandum of Interest of Director.

Memorandum of Interest of Director.

Month Bombay Stock Exchange Limited National Stock Exchange Limited

32.01 17.65 29,60,291 33.00 17.30 85,69,415

National Stock Exchange of India (NSE) SKMEGGPROD

The Bombay Stock Exchange Ltd 532143

NSDL&CSDL INE 411 D1015

Share Transfer System :

1-500 6,019 66.22 20,79,680 7.90 5,177 62.83 19,88,924 7.55

501-1000 1,515 16.67 13,02,851 4.95 1,504 18.25 12,87,660 4,89

1001-2000 389 4.28 5,90,269 2.24 312 3.79 4,68,664 1.78

2001-3000 823 9.05 20,46,175 7.77 938 11.38 23,26,027 8.83

3001-4000 51 0.56 1,83,962 0.70 36 0.44 1,29,693 0.49

4001-5000 162 1.78 7,97,111 3.03 173 2.10 8,48,579 3.23

5001-10000 80 0.88 6,68,830 2.54 66 0.80 5,55,675 2.11

10001 & above 50 0.56 1,86,61,122 70.87 34 0.41 1,87,24,778 71.12

Total 9,089 100.00 2,63,30,000 100.00 8,240 100.00 2,63,30,000 100.00

Registrar and Transfer Agent

Promoters 21 0.23 1,77,08,188 67.25 21 0.25 1,83,34,658 69.64

Extent of Dematerialisation as on 31.03.2006

Name of the Depository No.of Shares %

National Securities Depository Ltd 77,89,867 29.59

Central Depository Services (India) Ltd 50,33,621 19.11

Total 1,28,23,488 48.70

Registered Office and Address for Correspondence:

Place: Erode SKM. MAEILANANDHAN

DIRECTORS' REPORT AND MANAGEMENT ANALYSIS

DESCRIPTION 2005-2006 2004-2005

Net Sales 7,164.70 6,600.90

PROSPECTS FOR THE FINANCIAL Y E A R 2006-2007:

MARKETING ARRANGEMENT IN JAPAN:

CEO / CFO CERTIFICATION:

DELISTING OF COMPANY'S EQUITY SHARES:

4. The Annual Accounts had been prepared on a going concern basis;

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

p|ace. Erode SKM. MAEILANANDHAN

ANNEXURETOTHE DIRECTORS' REPORT

PARTICULARS 2005-2006 2004-2005

(1) POWER AND FUEL CONSUMPTION

(3) Fire wood

Quantity (Metric Tonnes) 9,626 1,020

(II) CONSUMPTION PER UNIT OF PRODUCTION

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