MIRA INFORM REPORT

Report Date :

30.06.2012

IDENTIFICATION DETAILS

Name :	SKM EGG PRODUCTS EXPORT INDIA LIMITED
Registered Office :	185 Chennimalai Road, Opposite to Railway Station, Erode – 638001, Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	06.04.1995
Com. Reg. No.:	18-006025
Capital Investment / Paid-up Capital :	Rs. 263.300 Millions
CIN No.: [Company Identification No.]	L01222TZ1995PLC006025
TAN No.: [Tax Deduction & Collection Account No.]	CMBS05632E
PAN No.: [Permanent Account No.]	AACCS7106G
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.
Line of Business :	Manufacturer and Supplier of Egg Products.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (28)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 1900000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. The company has incurred some losses during the year. However, trade relations are reported to be fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some cautions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.09.2011)	Current Rating (31.12.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered/ Corporate Office :	185 Chennimalai Road, Opposite to Railway Station, Erode – 638001, Tamilnadu, India
Tel. No.:	91-424-2262963/ 2351532/ 2351534
Fax No.:	91-424-2258419/ 2351531
E-Mail :	shares@skmegg.com
Website :	http://www.skmegg.com
Factory :	Erode to Karur Main Road, Cholangapalayam, Punjal Kilambadi Village, Erode District – 638154, Tamilnadu, India

DIRECTORS

AS ON 30.09.2011

Name :

Mr. Shivkumar S K M

Designation :

Managing director

Address :

441 Periyar Nagar, Erode – 638001, Tamilnadu, India

Date of Birth/Age :

21.11.1968

Qualification :

B.E

Date of Appointment :

25.06.2006

DIN No.:

00002384

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U01533TZ1981PLC001076	S K M ANIMAL FEEDS AND FOODS INDIA LIMITED	Director	27-12-93	27-12-93	25-08-09	Active	NO
2	U02921TZ1985PLC001572	SKM SIDDHA AND AYURVEDHA COMPANY (INDIA) LIMITED	Managing director	24-10-07	01-08-01	-	Active	NO
3	L01222TZ1995PLC006025	SKM EGG PRODUCTS EXPORT INDIA LIMITED	Managing director	01-04-08	25-06-06	-	Active	NO
4	U74999TZ2009PLC015311	SKM UNIVERSAL MARKETING COMPANY INDIA LIMITED.	Director	02-07-09	02-07-09	-	Active	NO

Name :

Mr. Maeilanandhan SKM

Designation :

Executive Chairman

Address :

441 Periyar Nagar, Erode – 638001, Tamilnadu, India

Date of Birth/Age :

18.06.1945

Qualification :

S.S.L.C

Experience :

28 Years

Date of Appointment :

25.06.2006

DIN No.:

00002380

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U01533TZ1981PLC001076	S K M ANIMAL FEEDS AND FOODS INDIA LIMITED	Whole-time director	25-06-11	03-07-81	Active	NO
2	U02921TZ1985PLC001572	SKM SIDDHA AND AYURVEDHA COMPANY (INDIA) LIMITED	Director	11-03-85	11-03-85	Active	NO
3	U15400AP1982PLC070673	AGROCORPEX INDIA LIMITED	Director	24-11-90	24-11-90	Active	NO
4	L01222TZ1995PLC006025	SKM EGG PRODUCTS EXPORT INDIA LIMITED	Whole-time director	01-04-08	25-06-06	Active	NO
5	U74999TZ2009PLC015311	SKM UNIVERSAL MARKETING COMPANY INDIA LIMITED.	Director	02-07-09	02-07-09	Active	NO

Name :

Mr. Bangaru Ramakrishnan

Designation :

Director

Address :

31/ 1, Muthu Mohamed Street, Puzhuthi Vakkahi, Chennai – 600097, India

Date of Birth/Age :

24.07.1970

Qualification :

B.E., M.B.A

Date of Appointment :

25.07.2005

DIN No.:

00182214

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U01120AP1994PLC017789	SUVARNA FLOREX LIMITED	Nominee director	09-08-01	09-08-01	20-01-11	Active	NO
2	U85110KA1995PLC027861	BLOOMING MEADOWS LIMITED	Nominee director	16-09-01	16-09-01	08-09-08	Active	NO
3	L24121TN1989PLC018170	TANTECH AGRO CHEMICALS LIMITED	Nominee director	22-09-01	22-09-01	29-03-12	Active	NO
4	U24117TN1989PLC017845	MALLADI SPECIALITIES LIMITED	Nominee director	27-06-02	27-06-02	26-09-08	Active	NO
5	L17124TN1989PLC017807	SPL POLYMERS LIMITED	Director	29-10-04	29-10-04	-	Amalgamated	NO
6	L01222TZ1995PLC006025	SKM EGG PRODUCTS EXPORT INDIA LIMITED	Director	25-07-05	25-07-05	-	Active	NO
7	L15499TN1992PLC022192	SAPTARISHI AGRO INDUSTRIES LIMITED	Director	30-07-05	30-07-05	-	Active	NO
8	L15421TZ1961PLC000396	SAKTHI SUGARS LIMITED	Nominee director	10-08-05	10-08-05	29-07-08	Active	NO
9	U02423KA2005PTC035749	BIOPURE HEALTHCARE PRIVATE LIMITED	Nominee director	12-04-07	12-04-07	11-07-08	Active	NO
10	U01133TN2005PTC058369	SATTVA AGRO EXPO PRIVATE LIMITED	Nominee director	31-08-07	31-08-07	-	Active	NO
11	U74900TN2008PTC066686	DEVARAJ AGRO INDUSTRIES PRIVATE LIMITED	Nominee director	24-04-08	24-04-08	-	Active	NO
12	U01122TZ2006PLC013006	NILGIRIS FLOWER COMPANY LIMITED	Nominee director	05-05-08	05-05-08	-	Active	NO
13	U01403TN2009PLC070384	INTGEN AGRO PRODUCTS LIMITED	Nominee director	08-05-09	08-05-09	-	Active	NO
14	L32201TN1988PLC015705	TAMIL NADU TELECOMMUNICATION LIMITED	Nominee director	31-12-09	31-12-09	-	Active	NO

Name :

Mr. S M Venkatachalapathy

Designation :

Director

Address :

No. 7, Uzhavan Nagar, Erode – 638009, Tamilnadu, India

Date of Birth/Age :

12.06.1939

Qualification :

B.Com., B.L

Date of Appointment :

28.02.1997

DIN No.:

00043288

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	L01222TZ1995PLC006025	SKM EGG PRODUCTS EXPORT INDIA LIMITED	Director	28-02-97	28-02-97	Active	NO
2	U02921TZ1985PLC001572	SKM SIDDHA AND AYURVEDHA COMPANY (INDIA) LIMITED	Director	28-09-10	24-08-10	Active	NO

Name :

Mr. Marutha Gounder Chinnian

Designation :

Director

Address :

M 64 Periyar Nagar, Erode – 638001, Tamilnadu, India

Date of Birth/Age :

27.09.1940

Qualification :

B.Com., FCA

Date of Appointment :

28.02.1997

DIN No.:

01497482

Name :

Mr. P Kumarasamy

Designation :

Director

Address :

New No. 36, Kumarasamy Street, Erode – 638001, Tamilnadu, India

Date of Birth/Age :

02.02.1935

Qualification :

S.S.L.C

Date of Appointment :

28.02.1997

DIN No.:

00046090

Name :

Mr. Lakkapuram Muthusamy Ramakrishnan

Designation :

Director

Address :

No. 294, Hettur Road, Erode – 638009, Tamilnadu, India

Date of Birth/Age :

20.09.1942

Qualification :

MBBS

Date of Appointment :

28.02.1997

DIN No.:

00001978

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U02893TZ1974PTC000720	KNITVEL NEEDLES PRIVATE LIMITED	Director	27-06-86	27-06-86	Active	NO
2	L01222TZ1995PLC006025	SKM EGG PRODUCTS EXPORT INDIA LIMITED	Director	28-02-97	28-02-97	Active	NO
3	L15422TN1996PLC037200	PONNI SUGARS (ERODE) LIMITED	Director	19-12-01	19-12-01	Active	NO
4	U24231TZ1947PTC000051	ERODE MEDICAL SUPPLIES PRIVATE LIMITED	Managing director	25-08-06	25-08-06	Active	NO
5	U74140TN2008PTC065959	HAWKER AND WEST OFFSHORING CONSULTING SERVICES PRIVATE LIMITED	Director	07-01-08	07-01-08	Active	NO

Name :

Mr. Shivkumar Kumutaavalli

Designation :

Additional director

Address :

SKM House H-41, Periyar Nagar, Erode – 638001, Tamilnadu, India

Date of Birth/Age :

30.03.1973

Qualification :

MSc. Psychotherapy

Date of Appointment :

30.09.2011

DIN No.:

00002390

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U01533TZ1981PLC001076	S K M ANIMAL FEEDS AND FOODS INDIA LIMITED	Director	02-03-94	02-03-94	25-08-09	Active	NO
2	U02921TZ1985PLC001572	SKM SIDDHA AND AYURVEDHA COMPANY (INDIA) LIMITED	Whole-time director	24-10-07	24-10-07	-	Active	NO
3	U74999TZ2009PLC015311	SKM UNIVERSAL MARKETING COMPANY INDIA LIMITED.	Director	02-07-09	02-07-09	-	Active	NO
4	L01222TZ1995PLC006025	SKM EGG PRODUCTS EXPORT INDIA LIMITED	Director	30-09-11	29-10-10	-	Active	NO

KEY EXECUTIVES

Name :	Mr. S. Raghuraman
Designation :	General Manager – Finance and Company Secretary
Qualification :	B.A., F.C.A., F.C.S.
Name :	Mr. L. Suresh
Designation :	General Manager - Process and Engineering
Name :	Mr. A. Palanichamy
Designation :	General Manager - HR
Name :	Mr. V.Anandhatheerthan
Designation :	Senior Manager - Finance
Name :	Mr. V.V. Krishnan
Designation :	Deputy General Manager – Q.A.
Name :	Dr. K. Sivaraju
Designation :	Senior Manager - Technical

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2011

Names of Shareholders	No. of Shares
Maeilanandhan SKM	200,000
Shree Shivkumar S K M	3,372,752
S M Venkatachalapathy	15,005
P Kumarasamy	5,000
Shivkumar Kumutaavalli	10,005

AS ON 30.09.2011

Equity Share Breakup	Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	4.99
Bodies corporate	11.33
Directors or relatives of directors	44.88
Other top fifty shareholders	4.88
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Supplier of Egg Products.

Products :

ITC Code	Product Descriptions
4081100	Egg Powder

PRODUCTION STATUS AS ON (31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Egg powder		N.A.	6,300 Metric Tonnes per annum.	3,920

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

State Bank of India, Commercial Branch, 78/ 79 Park Road, Erode – 638001, Tamilnadu, India

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Rupee term loans banks secured	403.678	421.642
Working capital loans banks secured	409.958	406.089
Loans taken for vehicles secured	1.161	2.266
Total	814.797	829.997
Unsecured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Loans directors unsecured	58.900	9.089
Other debt unsecured	25.000	24.890
Total	83.900	33.979

Banking Relations :	--
Auditors :
Name :	N.C. Rajagopal and Company Chartered Accountants
Address :	199, Agraharam Sreet, Erode - 638 001, Tamilnadu, India
Income-tax PAN of auditor or auditor's firm :	AAAFR8818D
Subsidiaries :	SKM Europe B.V.

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity Shares	Rs. 10/- each	Rs. 300.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
26330000	Equity Shares	Rs. 10/- each	Rs. 263.300 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		263.300	263.300	263.300
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		225.096	318.032	308.580
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		488.396	581.332	571.880
LOAN FUNDS
1] Secured Loans		814.797	829.997	466.892
2] Unsecured Loans		83.900	33.979	33.889
TOTAL BORROWING		898.697	863.976	500.781
DEFERRED TAX LIABILITIES		69.654	108.870	91.440
TOTAL		1456.747	1554.178	1164.101
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1043.510	1065.733	840.986
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		12.678	0.833	0.833
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	213.775	301.126	184.834
	Sundry Debtors	86.891	73.772	37.172
	Cash & Bank Balances	23.701	29.593	26.764
	Other Current Assets	192.070	173.973	0.000
	Loans & Advances	0.000	0.000	188.204
Total Current Assets		516.437	578.464	436.974
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	102.621	72.547	46.815
	Other Current Liabilities	13.257	17.563	20.191
	Provisions	0.000	0.742	47.686
Total Current Liabilities		115.878	90.852	114.692
Net Current Assets		400.559	487.612	322.282
MISCELLANEOUS EXPENSES		0.000	0.000	0.000s
TOTAL		1456.747	1554.178	1164.101

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	1148.901	1136.135	1222.221
		Other Income	61.609	56.384	65.190
		TOTAL (A)	1210.510	1192.519	1287.411
Less	EXPENSES
		Consumption materials changes inventories	827.941	692.329
		Manufacturing service costs	182.445	185.150
		Employee related expenses	67.461	66.469
		Administrative selling other expenses	104.252	111.242
		TOTAL (B)	1182.099	1055.190	1072.069
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		28.411	137.329	215.342
Less	FINANCIAL EXPENSES (D)		90.812	81.184	54.033
	PROFIT/ LOSS BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(62.401)	56.145	161.309
Less/ Add	DEPRECIATION/ AMORTISATION (F)		69.696	53.189	41.809
	PROFIT/ LOSS BEFORE TAX (E-F) (G)		(132.097)	2.956	119.500
Less	TAX (I)		(38.844)	(6.496)	55.084
	PROFIT/ LOSS AFTER TAX (G-I) (J)		(93.253)	9.452	64.416
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		317.516	308.064	259.050
Less	APPROPRIATIONS
		Proposed Dividend	--	--	13.165
		Corporate Dividend Tax	--	--	2.237
	BALANCE CARRIED TO THE B/S		224.263	317.516	308.064
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of goods exported	956.860	1014.816	1126.904
	TOTAL EARNINGS		956.860	1014.816	1126.904
	Earnings/ Loss Per Share (Rs.)		(3.54)	0.36	2.45

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	(7.70)	0.79	5.00
Net Profit Margin (PBT/Sales)	(%)	(11.50)	0.26	9.78
Return on Total Assets (PBT/Total Assets}	(%)	(8.47)	0.18	9.35
Return on Investment (ROI) (PBT/Networth)		(0.27)	0.01	0.21
Debt Equity Ratio (Total Liability/Networth)		2.08	1.64	1.08
Current Ratio (Current Asset/Current Liability)		4.46	6.37	3.81

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1. Year of Establishment	Yes
2. Locality of the firm	Yes
3. Constructions of the firm	Yes
4. Premises details	No
5. Type of Business	Yes
6. Line of Business	Yes
7. Promoter’s background	Yes
8. No. of Employees	No
9. Name of person contacted	No
10. Designation of contact person	No
11. Turnover of firm for last three years	Yes
12. Profitability for last three years	Yes
13. Reasons for variation <> 20%	--
14. Estimation for coming financial year	No
15. Capital in the business	Yes
16. Details of sister concerns	No
17. Major suppliers	No
18. Major customers	No
19. Payments terms	No
20. Export / Import details	No
21. Market information	--
22. Litigations that the firm / promoter involved	--
23. Banking Details	Yes
24. Banking facility details	Yes
25. Conduct of the banking account	--
26. Buyer visit details	--
27. Financials, if provided	Yes
28. Incorporation details, if applicable	Yes
29. Last accounts filed at ROC	Yes
30. Major Shareholders, if available	Yes

Note: The registered address of the company has been shifted from 156 Gandhiji Road, Erode – 638001, Tamilnadu, India to the present w.e.f. 01.05.2008

DIRECTORS:

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

At the ensuing Annual General Meeting, Shri. S. M. Venkatachalapathy and Shri. P. Kumarasamy Directors of the company retires by rotation and being eligible seeks re- appointment. The Board recommends their re-appointment. The board at its meeting held on 29th October 2010, appointment Smt. S. Kumutaavalli as a Additional Director, with effect from that date, in accordance with Section 260 of the Companies Act,1956 and Article No 100A of the Articles of Association of the company. Notice has been received from a member signifying her intention to propose her appointment as a director whose office of directorship is to propose her appointment as a Director whose office of directorship is liable to retirement by rotation.

The directors wish to state that the tenure of office of Shri. SKM Maeilanandhan, Executive Chairman and Shri SKM Shree Shivkumar, Managing Director have ended on 24th June 2011. The board of directors at their meeting held on 12th August 2011 have reappointed them from 25th June 2011 subject to the approval for another five years ending 24th June 2016, at the remuneration as detailed in the notice attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

COMPANY PROFILE

India is one of the leading players in egg production and the cost of producing egg in India is also cheap. India ranks fifth in the world. India is exporting egg powder, frozen egg yolk and albumen powder to Europe, Japan and other countries. Table eggs are mostly exported to Middle East. The company uses predominantly local inputs and exporting its final products, changes in economies both locally and at international level affect the growth and performance of the company. The abnormal increase in the cost of ingredients used in the manufacture of poultry feeds put a tremendous pressure on the cost of producing eggs which will in turn have a direct bearing on the profitability of the company.

INDUSTRY PERFORMANCE

As only few companies in India are engaged in processed eggs business, data relating to performance of this industry are not available. The company operated its plant and produced 3920 MTs of egg powder as against the installed capacity of the plant 6300 Mts. As rupee strengthened against US dollar unexpectedly, the operating margin during this year is not commensurate with the increased volume of sale of 4180.37 MTs. However in the current financial year the situation of INR v US dollar took a reversed trend and it is expected that the companys operating margin would be improved to a significant level.

BUSINESS OUTLOOK

Pronouncements by several leading economists and Central Bankers across the world would suggest that the worst is over for the global economy, There are early, if feeble, signs of recovery in the US economy, which as a significant bearing on the other major economies including India. Even though headline inflation has been brought under control, the projected increase in government borrowing is likely to have an adverse impact on market liquidity and consequently, on interest rate. The company, as in the past, will continue to pursue its objective of growth with quality; The Company also continues to focus on new opportunities to improve profitability. The year under review faced with the problem of unprecedented increase in egg prices. In this current financial year also the trend of increase in raw material price continued as there is a spurt in feed ingredients cost. As the increase in feed ingredients cost experienced through out the world there is a corresponding upward movement in the final product price which neutralized the thread posed due to raw material price movements. The outlook of this industry appears to be bright by considering the present trend in movements in the end product price and raw material cost.

STRENGTH OF THE COMPANY

The entire production process of the company is well documented which helps the company to track causes for product complaints up to raw material sources level. The company has started poultry farm for captive consumption and the tracker system of the company will be extended up to the feed ingredients level. The company also made significant investment in process related and residue labs to be at par with international standards and now the company is resourced with facilities to make sample analysis in its lab and thereby obviating the need to get the sample analysis done in outside laboratories. The companys marketing subsidiary at Netherlands helps the company in servicing its customers and also provides required vital inputs for price negotiation and finalization of new contracts. The companys supply chain management is so effective which made the company to register itself as one of the preferred suppliers of renowned customers.

FUTURE PROSPECTS

The steadily increasing oil price remained the overriding concern of the company. In order to overcome this, the company is taking initiates to shift to some other cheap fuels. The future recovery in international prices will happen in tandem with the economic recovery in the US and the EU. The economic recovery will lead to higher demand for eggs pushing the price of eggs in these markets. Consequently the egg product prices will go up. On the other hand the egg producers are losing money which will affect the production capability, resulting in lower supply which will also lead to increase in egg prices. But the most important factor will be the economic recovery. Based on the past experience the industry will correct itself in the supply side in 6 months period to have better realization. Considering the economic situation, they expect normal price situation in one year.

OPPORTUNITIES

Indian economy has been, more or less, able to withstand tremors of global financial melt down. Even though the rate of GDP growth has slowed down considerably it is expected to be around 6% The Company has plans to penetrate into new markets which are untapped. Vast market for processed egg products is in existence in Russia and the company is taking efforts to enter in to such markets. The company is in the process of taking strategic action for tapping Russian markets. The companys consistent quality in products and services was very much appreciated by their customers and we achieved good capacity utilization. They realized that we could get a better price from the customers directly. Their own subsidiary company, SKM Europe in the Netherlands to cater to the EU Market. As such, an exclusive distributor SKM Japan to cater to their Japanese customers. The rest of the market was serviced through several distributors and agents. With the efforts of their partners in Europe and Japan the company was able to realize better prices and service the customers more precisely.

THREATS

The company recognizes that threats are inevitable in business and believe in identifying and reviving risks on an ongoing basis. Un-intercepted supply of raw materials at a competitive price is one of the threats that will pose risk on the profitability of the company. As the raw material cost is having direct correlation with feed cost, which predominantly uses agricultural commodities, climatic changes will affect the availability of feed ingredients. Supply of raw material will be affected during the period of monsoon failure and the company by making investment in its own farm resulted in de-risking the threat to a greater extent. It is forcing companies to plant operations effectively and produce quality products at lower costs.

EXCHANGE RISK

The change in exchange rate plays a major role in determining the realization in Rupee. The cross currency between Dollar and Euro also has an impact on the competitiveness of US offers in Europe and the exchange rate between Euro and Dollar to the Japanese Yen also plays an important role in deciding the competitiveness. The price realized in Rupee has not increased proportionately to the price increase Euro and Dollars terms. In spite of all these risks, overall prospects for the Indian poultry industry in general appears positive, considering government stimulus packages and the Indian economy recovering faster. The impact of risks will be reduced through continuous monitoring, timely action and control measures by the company.

RISK MANAGEMENT

Risk is an integral part of the business process. To enhance the risk management process, the company has mapped the risks. A system has been formulated based on Balanced Score Card with various appropriate measures and accountabilities to identify, assess, prioritise and mitigate the risks. Reports generated from the system are monitored regularly to ensure that appropriate corrective actions are taken.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The company has proper and adequate systems of internal control to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedures, applicable Acts and Rules. The companys internal controls are supplemented by sound internal audit practices. The Audit Committee at their meetings regularly reviews the financial, operating, internal audit and compliance reports to improve performance. The heads of various monitoring /operating cells are present for the Audit Committee meetings to answer queries raised by the Audit Committee.

INDUSTRIAL RELATION:

The relationship between the management and employees are continued to be cordial. The company is in the process of developing system for identification of contribution made by individual employees for rewarding them commensurate with their performance. Restructuring salaries and wages are also under taken for remunerating employees linked to the performance of the company

BANKERS CHARGES REPORT AS PER REGISTRY

Corporate identity number of the company	L01222TZ1995PLC006025
Name of the company	SKM EGG PRODUCTS EXPORT INDIA LIMITED
Address of the registered office or of the principal place of business in India of the company	185 - Chennimalai Road, Opposite To Railway Station, Erode -638001, Tamilnadu, India
This form is for	Modification of charge
Charge identification number of the modified	90003142
Type of charge	Immovable Property Book Debts Movable Property Others (Hypothecation of machineries and current assets)
Particular of charge holder	State Bank of India, Commercial Branch, 78/79 Park Road, Erode – 638001, Tamilnadu, India Email ID: sbi.04061@sbi.co.in
Nature of description of the instrument creating or modifying the charge	01 Letter regarding the grant of individual limits within the overall limit - Form C 5.
Date of instrument Creating the charge	04.04.2012
Amount secured by the charge	Rs. 1,154.900 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest EPC/FBDN (Non LC) - 2.75% above BR presently 12.75% pa, SLC - 4.75% above BR presently 14.75% pa, TL I, II and III - 5.5% above BR presently 15.5% pa and FITL at base rate 10% pa Terms of Repayment Working Capital Limits - repayable on demand. Term Loans I Rs. 252.300 Millions TL II - Rs. 154.300 Millions TL III of Rs. 66.700 Millions - reset revised and rescheduled as per repayment schedules and FITL of Rs. 78.400 Millions - as per repayment schedule Margin RM/SIP/FG - 25% LC(WC) - 25%BG (WC) 25%BG (WC) - 25%100% margin for disputed liability 50% for issue of BG in favour of subsidiary Term Loans as per sanction letter and documents executed Export order - 10% TL as per sanction letters issued to the company by the bank. 100% margin for disputed liability, 50% for issue of BG in favour of subsidiary, Export orders - 10% ( DP on EPC will be 75% on the stocks or 90% of the export orders whichever is less ) Extent and Operation of the charge EPC/S B line of credit: First charge on the entire current assets - FDB (NON LC): Bills in the course of collection and extension of charge over entire current assets LC: Goods covered under LC and extension of charge over current assets BG: Counter guarantee of the company and extension of charge over current assets. TLs remain unchanged. extension of charge over the FAs for WC facilities. extension of EM over the l and B (at Solangapalayam), and Feed Mill poultry farm ( Negamnaickenpalayam, Thulukkampalayam, Kallipalayam)
Short particulars of the property charged	In Karur RD, Karur SRO, Karur Taluk, Kuppam Village, in R.S. Nos 871/1 and 874/B totally admeasuring 12.285 acres of land In Karur RD, Chinna Dharapuram SRO, Aravakurichi Taluk, K.Paramathi Village n R.S,No.105, in this land measuring 0.25 acres In Karur RD, Karur SRO, Karur Taluk, Kuppam Village, in Old S.F.No.1032, New R.S,No.1032 in this land admeasuring 0.25 acres In Karur RD, Chinna Dharapuram SRD, Aravakurichi Tk, Nadandhai North Village, Nadandhai North Panchayat, Old S.F.Nos.444 and 441, Re S.Nos.444/4, 444/5, 444/2, 444/1, 444/3, and 444/1 - 11.6925 AC In Karur RD, Kodumudi SRD, Erode Taluk, Najai Kilampadi Village, Old S.F.No.325-A, R.S.No.161/7 after sub-divisions R.S.No.161/7B with an extent of 0.10 acre. n Karur RD, Chinnadharapuram SRD, Aravakurichi Tk, Nadanthai North Village in Re.S,No.433/1. 3, 434/1B, 2A, 2B, 441/1, 3, 442, 443/1 and 2 lands admeasuring 32.775 ac (which includes pathwayrights) In Karur RD, Kodumudi Sub RD, Erode Taluk, Nagamanikenpalayam Village, in Old S.NO.458, 46 and 47A, Re.S.F.Mo. 44/2 and 44/3 lands admeasuring 0.84 acre within specified boundaries. In Karur RD, Chinnadharapuram SRO, Aravakurichi Tk, K.Paramathi Village, in S.No.477/1, (4.64 acres) S.No.477/1, (4.64 acres and 0.50 acres S.No.457/1, (2.75 acres )S.No.457/2 (2 (4.31 acres) S.No.477/2 (4.90 acres) Total Extent of the land 21.72 acres within the specified boundaries.In Karur RD, Chinnadharapuram SRO, Aravakurichi Tk, Nandandai Vadapagam Village, in S.No.433/1, 433/2 the land admeasuring 0.10 cent + 4.14 dry acre = 4.24 dry acres within specified boundaries.In Erode, RD, Erode Taluk, Surampatti Sub-RD, Punjai Kilambadi Village, an extent of 35.55 acres of land in entire S.Nos. 42/1. 42/2. 42/3, 42/4, 42/5, 42/6, 43, 44, 46/1, 46/3 (part), 46/3 and S.No.47 with factory building D.No.5, thereon situated within specified boundaries.
Date of latest modification prior to the present modification	20.12.2010
Particulars of the present modification	There is no change in the overall credit limits availed by the company from bank of Rs. 11.549 Millions and the modification necessitated for closure of Stand by Limit of Rs. 0.500 Million and sanction of Standby line of credit of Rs. 0.500 Million. Other credit limits remained unchanged and same at the previous levels. Extension of EM on the immovable properties belonging to the company for the due repayment of the entire dues together with interest, cost, expenses and other dues to the bank by the company.

CONTINGENT LIABILITY:

a. Export Bills discounted with the State Bank of India, Commercial Branch, Erode Rs. 121.3369 Millions. (Previous year Rs. 209.331 Millions).

b. Income Tax Liability Rs. 4.376 Millions (Previous year Rs. 4.376 Millions).

c. Service Tax Liability Rs. 3.421 Millions (Previous year Rs. 3.421 Millions).

d. Excise Duty Liability Rs. 0.686 Million (Previous year Rs. 0.420 Million).

FIXED ASSETS:

· Land

· Building

· Plant and Machinery

· Office Equipment

· Computers

· Furniture and Fixtures

· Motor Vehicle

· Work in progress

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 56.31
UK Pound	1	Rs. 88.06
Euro	1	Rs. 70.91

INFORMATION DETAILS

Report Prepared by :

BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		28

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.