MANAGEMENT DISCUSSION AND ANALYSIS

REVIEW OF PERFORMANCE

1. The Company recorded revenue of Rs.28,714.86 lacs (including other income of Rs.1,580.67 lacs) for the year ended 31st March,2015 as against Rs. 24,043.15 lacs (including other income of Rs.105.56 lacs) in the brvious year ended 31st March,2014

2. The Profit before tax was at Rs. 3,482.58 lacs for the year ended 31st March,2015 as compared to Rs. 973.58 lacs during the corresponding in the last year.

3. The Net Profit was at Rs. 2,518.74 Lacs as on 31.03.2015 as against Rs. 680.59 lacs in the brvious year.

4. The quantity sold during the year 2014-15 stood at 7375 MTs, when compared to 6674 MT during the brvious year ended 31st March,2014.

KEY FACTORS WHICH BOOST THE PROFITABILITY OF THE COMPANY:

a. Low volatility in prices of raw materials - Egg.

b. Positive trend in Foreign Exchange Rate Fluctuation in our favor.

c. Upward trend in international selling price , especially egg white powder in Japan.

d. Low finance cost on account of early repayment of Term Loans.

CAPITAL EXPENDITURE AND FUNDING:

I. The Capital Expenditure incurred and funded for the year is Rs. 199.03 lacs of which Rs. 138.87 lacs pertain to plant and machinery.

II. During the year under review, your company has sold /deleted /adjusted assets worth Rs. 0.46 lacs.

CORPORATE GOVERNANCE

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

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

OUTLOOK OF THE INDUSTRY:

• Demand for the Egg products including price has considerably gone up on account of the outbreak of avian influenza in USA. Many countries including Japan restrict import of egg products from US which has yielded advantage in export for Indian products.

• Though upward trend for this Industry is expected to be continued during current year, there may be a threat in such a way to replace egg products by alternate ingredients as well as reduction in egg powder percentage in the recipe of the final

product in many countries.

FUTURE PROSPECTS

Improvement in awareness of the Customers on quality parameters which supports the export price of egg products globally, the future prospects of the company seems to be bright.

SALES AND MARKETING:

In this highly competitive international markets for egg products, We have established a very wide network in Europe, Far East and South East Asian countries. Since we are able to maintain good relationship with customers, we are able to maintain our success by getting repeat orders for the past 18 years, particularly from the major markets of Japan and Europe.

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

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

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

Recently we have entered Nigeria and South Africa markets where we expect the requirement of egg product is good and hope, we will have long and more business in these regions.

All legal formalities in setting our Russian office are over and marketing of our products in Russia shall be successfully made during this year.

FIRST CONSIGNMENT TO RUSSIA

SKM Egg Products Export (India) Limited has exported first ever consignment to Russia and touched a new milestone in the export sales in addition to the exports already with Japan, Europe and middle east countries. This success was achieved due to the continuous efforts taken by the Managing Director & CEO and employees of the company for the past many years. We hope that we will achieve significant growth in the Russian market in the coming years ahead and the expected potential is very high.

SUBSIDIARY COMPANY:

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

HUMAN RESOURCES:

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

CREDIT RATING

We are glad to inform that the credit rating of our company has been upgraded by CRISIL as detailed below.

1) Long -Term Rating - CRISIL BBB-/Stable (Upgraded from CRISIL BB/Stable)

2) Short-Term Rating - CRISIL A3 (Upgraded from CRISIL A4+)

TOP TAX PAYER AWARD AND CERTIFICATION

Further, with a great sense of pride, we have to inform that the company has been awarded TOP Tax payer award and certification by the Central Excise Department on 24th Feb,2015 (Central Excise day) at Salem by the Joint Commissioner of Central Excise for the period 2013-14.