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A.V. THOMAS AND COMPANY LTD.

71

St

ANNUAL REPORT & ACCOUNTS 2005 - 2006

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Late Mr. A.V. THOMAS

Founder

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A.V. THOMAS AND COMPANY LIMITED ALAPPUZHA

BOARD OF DIRECTORS Mr. J. THOMAS (Chairman) Mrs. LILY THOMAS (Managing Director) Mr. AJIT THOMAS Mr. DILIP THOMAS Mrs. PRIYALATHA THOMAS Mr. K. BHAGAVATHEESWARAN Mr. V.H. PRASAD Mr. Mr. Mr. Mr. Mr. K.M. CARIAPPA L.D. OLIVER RAGHU BHALE RAO M.K. KOSHY (Chief Executive Director) A. RAVI SANKER (Executive Director)

AUDITORS SURI & CO. Chartered Accountants

BANKERS Bank of Baroda Corporation Bank

REGISTERED OFFICE W-21/674, Beach Road, Alappuzha - 688 012.

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A.V. THOMAS AND COMPANY LIMITED

Registered Office: W-21/674, Beach Road, Alappuzha-688012

NOTICE TO SHAREHOLDERS
NOTICE is hereby given that the SEVENTY FIRST ANNUAL GENERAL MEETING of the Company will be held at the Registered Office, at W-21/674, Beach Road, Alappuzha-688 012, at 11.00 A.M. on Monday, the 7th August, 2006 to transact the following business: 1. 2. To-receive, consider and adopt the Audited Balance Sheet as at 31st March, 2006 and the Audited Profit and Loss Account for the year ended 31st March, 2006 and the Reports of Directors and Auditors. (a) To confirm and record the Interim Dividend at 100% on Equity Shares already paid for the year ended 31st March, 2006. (b) To declare a final dividend on Equity Shares for 2005-2006 (The Directors have recommended a dividend of 600%) 3. 4. To elect Directors in place of Mr. J. Thomas. Mr. Ajit Thomas, Mr. K. Bhagavatheeswaran and Mr. M. K. Koshy who retire by rotation and are eligible for re-election. To appoint Auditors to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to fix their remuneration.

SPECIAL BUSINESS: 5. To consider and if thought fit to pass with or without modification the following resolution as an ORDINARY RESOLUTION: RESOLVED : "That Mr.Raghu Bhale Rao, who was co-opted as an Additional Director of the Company on 30th December, 2005 and who holds office upto the date of this Annual General Meeting under Section 260 of The Companies Act, 1956, be and is hereby appointed as a Director of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation".

Explanatory Statement as required under Section 173 of The Companies Act, 1956 in respect of the above resolution, is annexed. Chennai 12th June, 2006 NOTES: 1. 2. 3. 4. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company. The Register of Members and Share Transfer Books of the Company will remain closed from 01-08-2006 to 07-08-2006 both days inclusive. Members are requested to notify, immediately, any change in their addresses to the Company. Shareholders who have multiple folios in identical names or in joint names in the same order, are requested to intimate to the Company these folios, to enable the Company to consolidate all such shareholdings into one folio. '" Shareholders of the Company, may avail the nomination facility by executing the prescribed nomination form which can be obtained from the Registered Office of the Company. By Order of the Board J. THOMAS CHAIRMAN

5.

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A.V. THOMAS AND COMPANY LIMITED, ALAPPUZHA

6. Company's shares are listed at the Cochin Stock Exchange Ltd., MES Dr. RK. Abdul Gafoor Memorial Cultural Complex, 36/1565, 4th Floor, Judges Avenue, Kaloor, Cochin - 682 017 and Madras Stock Exchange Ltd., Exchange Building, Post Box No, 183,11, Second Line Beach, Chennai-600001. The Annual Listing fee as prescribed has been paid to the above Stock Exchanges. The Dividend cheques/drafts will be posted to the members within the time limit prescribed by law. Members are requested to furnish the Bank Account details in order to enable the Company to mention the same on the Dividend cheques/drafts. Shareholders are once again informed/reminded that the Company shall be liable to transfer dividends remaining unpaid or unclaimed for a period of seven years from the date they became due for payment to the Investor Education and Protection Fund established by the Central Government pursuant to Section 205C (2) of The Companies Act, 1956. Members shall not be able to claim any unpaid dividends from the said Fund or from the Company once they are transferred. Accordingly, all unpaid/ unclaimed dividends for the years 1994-1995, 1995-1996,1996-1997 &1997-1998 have been transferred to the Fund. Dividend declared for the year 1998-1999 and remaining unpaid or unclaimed is liable to be transferred to the Fund during the month of November, 2006 and the shareholders are, therefore, advised to claim immediately from the Company the dividends, if any, for the said year remaining unpaid before they are transferred to the Fund. All unpaid or unclaimed dividends upto the year 1993-1994 have been transferred to the General Revenue Account of the Central Government and the shareholders, who have not encashed the dividend cheques for the period upto 1993-1994, are advised to claim the amount from the Registrar of Companies, Kerala at Ernakulam. 10. In terms of clause 49 of the Listing Agreements with the Stock Exchanges, a brief resume of directors who are retiring by rotation and seeking re-election and to be appointed at this Annual General Meeting is attached hereto. Explanatory Statement as required under Section 173 of The Companies Act, 1956 SPECIAL BUSINESS: Item No. 5 of the Notice Mr. Raghu Bhale Rao was co-opted as an Additional Director of the Company by the Board of Directors at their "/leeting held on 30th December, 2005 pursuant to Article 107 of the Articles of Association of the Company. In accordance with Section 260 of The Companies Act, 1956, Mr.Raghu Bhale Rao shall hold office only up to the date of this Annual General Meeting. Mr.Raghu Bhale Rao has filed his letter of consent to act as a Director of the Company, if appointed. The Company has received a notice from a Member with the requisite deposit proposing the candidature of Mr. Raghu Bhale Rao for the office of Director under the provisions of Section 257 of The Companies Act, 1956. Mr.Raghu Bhale Rao, aged 75 years, holds a Masters Degree in Political Science and also holds M B A (Management) Degree from Columbia University, New York. He is a retired business man and was dealing in manufacture of Auto Parts, manufacture of Nylon yarn into fishnet twine and fish nets. In view of the overall growth of the Company, it is desired by the Board of Directors to appoint Mr.Raghu Bhale Rao as Director who has considerable knowledge and rich experience in business and his appointment as a Director is therefore considered to be in the best interests of the Company and the appointment is subject to accord of approval by the shareholders at the Annual General Meeting.

7. 8. 9.

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A.V. THOMAS AND COMPANY LIMITED, ALAPPUZHA

Mr. Raghu Bhale Rao is interested in the Resolution. None of the other Directors of the Company are concerned or interested in the said resolution. The Directors recommend the resolution as set out in Item No.5 of the Notice for approval of the shareholders. By Order of the Board J. THOMAS CHAIRMAN

Chennai 12th June, 2006

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A.V. THOMAS AND COMPANY LIMITED, ALAPPUZHA

Information of Directors retiring by rotation seeking re-election at this Annual General Meeting and Director to be appointed. (Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges). Name
Age

Mr. J. Thomas 81 years FCI (England) Mr. J. Thomas has rich experience in Plantation, Administrative matters, Finance and Business Management.

Qualifications Expertise

Other Directorships: Name of the Company : A.V.Thomas International Ltd. L.J.International Ltd. A.V.Thomas Investments Company Ltd. Name
Age

Position held: Chairman & Managing Director Chairman Chairman

Mr. Ajit Thomas 52 years B.Sc (Statistics) Mr.Ajit Thomas is an Industrialist and has vast experience in Plantation, business and Management.

Qualifications Expertise

Other Directorships: Name of the Company : AVT Natural Products Ltd. Neelamalai Agro Industries Ltd. he Midland Rubber & Produce Co.Ltd. The Nelliampathy Tea & Produce Co.Ltd. AVTMcCormick Ingredients Pvt.Ltd. Teleflex Medical Pvt. Ltd. Sermatech Pvt. Ltd. Midland Latex Products Ltd. A.V.Thomas Leather & Allied Products Pvt.Ltd. AVT Natural Pte Ltd., Singapore. A.V.Thomas International Ltd. Position held: Chairman and Chairman of Shareholders/ Investors Grievance Committee. Chairman & Managing Director Chairman & Managing Director Chairman Chairman Chairman Chairman Chairman Chairman Director Director

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A.V. THOMAS AND COMPANY LIMITED, ALAPPUZHA

A.V.Thomas Investments Company Ltd. A.V.Thomas Exports Ltd. AVT Infotech Pvt. Ltd. IQ Tech Pvt. Ltd. Cholamandalam Cazenove AMC Ltd. Name
Age

Director Director Director Director Director

Mr. K. Bhagavatheeswaran 79 years B.Sc., F C A Mr. K. Bhagavatheeswaran was a Practising Chartered Accountant and has vast experience in Accounting, Audit, Taxation and Corporate Law Matters. He is a member of Institute of Internal Auditors.

Qualifications Expertise

Other Directorships: Name of the Company : A.VThomas International Ltd. Name : Position held: Director & Member of Remuneration Committee Mr. M.K. Koshy 63 years B.Sc., (Agriculture) Mr. M. K. Koshy has vast experience in Trading and Logistics operations.

Age
Qualifications Expertise Other Directorships: Name of the Company : L.J.International Ltd.

:
: :

Position held: Chief Executive Director Director & Member of Remuneration Committee

The Highland Produce Company Ltd. Mr. Raghu Bhale Rao:-

Details in respect of Mr.Raghu Bhale Rao have been furnished in the Explanatory Statement annexed to the Notice. These details are not given here so as to avoid repetition. Other Directorships: None.

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A.V. THOMAS AND COMPANY LIMITED, ALAPPUZHA

REPORT OF THE DIRECTORS
Your Directors have pleasure in presenting the SEVENTY FIRST ANNUAL REPORT with the audited accounts of the Company for the year ended 31st March, 2006. (Rs. in Lakhs) FINANCIAL RESULTS : 2006 2005 Income from Operations and Other Income Profit Before Depreciation and Interest Less: Depreciation Interest 19,625.66 991.15 112.54 36.59 149.13 Profit Before Tax Less: Provision for Tax (Including Fringe Benefit Tax) Profit After Tax Add: Surplus brought forward 842.02 360.00 482.02 55.00 537.02 Which your Directors recommend to appropriate:Transfer to General Reserve Interim Dividend on Equity Shares @ 100% already paid Tax on Interim Dividend Proposed Final Dividend on Equity Shares @ 600% Provision for Tax on Final Dividend Balance carried forward 282.12 39.57 111.72 537.02 DIVIDEND: <\n Interim Dividend @ 100% on Equity Shares was paid during the financial year ended 31st March, 2006. A Final Jividend of 600% on Equity shares has been recommended to the shareholders for approval at the Annual General Meeting. The aggregate of the dividends for the year 2005-2006 works out to 700% thus making it as the Record highest Dividend in the history of the Company. OPERATIONS: Consumer Products Division: The sale of packet tea has shown a growth of 5% in the unit sales and 11% in value terms, despite the fact that the industry has not shown any growth. The Company has been able to maintain its market share both in TamilNadu as well as in Kerala and is in the process of improving the same in Andhra Pradesh and Karnataka. The Company launched roasted ground coffee during the third quarter of the year in TamilNadu and Kerala and the response has been encouraging. 47.02 6.59 55.01 411.78 50.00 47.02 6.59 14,875.71 690.12 104.23 54.56 158.79 531.33 215.00 316.33 95.45 411.78 250.00 47.02 6.14

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A.V. THOMAS AND COMPANY LIMITED, ALAPPUZHA

Trading Division: The materials Division has shown a growth of 33% compared to last year. The addition of new products and value added service to provide complete roofing solution to customers continues. The Company stands second on All India Basis for sale of rolled products of M/s HINDALCO Industries Ltd. The Agency division shows a multifold growth. The association with Mitsubishi Japan has contributed to a major part of this growth. Logistics Division: The Logistics Division also showed considerable growth and has gone up by 26% during the year. The Company has also received performance awards from British Airways, Sri Lankan Airways, Air India, Emirates, Cathay Pacific and Gulf Air. Export Division: The Commodity Export Division has achieved substantial progress during the year and has attained Star Export House Status. The export of natural rubber contributed to this progress in a very significant way. FINANCE: The Company has undertaken considerable efforts to streamline the working capital cycle on all its business divisions with special focus and has succeeded in its efforts to reduce the bank borrowings and consequently the benefits of cost reduction in interest has been reflected in the Accounts. DEPOSITS: The Directors report that there are no unclaimed/unpaid deposits. SUBSIDIARY: During the year, the Company has reduced its shareholding in A.V.Thomas Investments Company Limited to 48.77% by which A.V.Thomas & Company Limited ceased to be the holding Company of A.VThomas Investments Company Limited. Therefore the statement pursuant to Section 212 of the Companies Act, 1956 is not attached. PARTICULARS OF EMPLOYEES: A Statement showing particulars of employees under The Companies (Particulars of Employees) Rules, 1975, required to be included in the Directors' Report, pursuant to Section 217 (2A) of The Companies Act, 1956 is attached. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION: The company has no activities relating to conservation of energy and technology absorption on account of the nature of its business. FOREIGN EXCHANGE EARNINGS/OUTGO: The Company's earnings in foreign exchange on FOB value of Exports during the year amounted to Rs. 1536.61 lakhs compared to Rs.58.02 Lakhs during the previous year. The foreign exchange outgo during the year was

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