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2014

PERFORMANCE ACCELERATED.
TRUST & QUALITY DELIVERED

(Formerly Known as : Kwality Dairy (India) Ltd.)

KWALITY LIMITED

DISCLAIMER
In this annual report, we have disclosed forward looking information, to enable investors, to
comprehend our prospects and take informed investment decisions. This report and other
statements - both written and oral that we periodically make, may contain forward looking
statements that set out anticipated result based on the managements plans and
assumptions.
We cannot guarantee that these forward looking statements will be realized. Although we
believe we have been prudent in our assumptions, the achievements of results are subject to
risk, uncertainties and even inaccurate assumption. We undertake no obligation to publicly
update any forward looking statements, whether as a result of new information, future
events or otherwise.

TABLE OF CONTENT

CORPORATE OVERVIEW & STATUTORY REPORTS


Letter from CMD
Corporate Identity
Corporate Information
Key Trends (FY 2010-2014)
Plant & Operation
Wholly Owned Subsidiary Company
Product Portfolio
New Launches
Dealers & Distributor's Meet
Marketing Initiatives
Notice
Director Reports
Annexure to The Directors' Report
Report on Corporate Governance
Auditor's Report & Balance Sheet (Standalone)
Auditor's Report & Balance Sheet (consolidated)
Statement pursuant to Section 212(8) of the Companies Act,
1956 relating to Subsidiary Company.

Letter from CMD


Dear Shareholders,
It gives me tremendous pleasure to write to you at the end of another successful year for Kwality Limited. Its the matter
of great pride to be associated with such sector where we are directly providing livelihoods to millions of small farmers.
Due to the continuous efforts of these farmers, India became the largest milk producing country in the world. Milk has
become the second largest agricultural commodity produced in our country next only to rice and its being a matter of
pride to be part of it. Over the last five years, Indias milk production has increased by about 25 million tonnes as
compared to an increase of about 6.6million tonnes in US and other countries.
To take the benefits, your company has also increased focus on procurement and processing capabilities which is
reflected in our growth. It has recorded a net profit of 126.63 Crore as against 96.53crores in Financial Year 20122013. It has also enhanced the procurement /distribution network to ensure the widespread availability of products
across the country and to meet the increasing demands for milk and its products. It continue to invest strongly behind
the procurement, processing, brands and value chain.
The demand for milk and its products is increasing worldwide. As we know 7% of total milk production is traded in the
world. However, our country is not a major player in the international market. The future outlook for export of Indian
Dairy Products is rather positive as indigenous milk products are becoming popular with ethnic population spread all
over the world and there is a strong likelihood that the export demand for these products will grow. Your Company
continues to identify attractive and significant growth opportunities both in India and around the world and have huge
potentials to expand its business in the global market and to capture the overseas market and during the year revenue
from export of products of the Company is Rs. 183.45 Crores. We export to more than 28 countries at present and plan
to tap more international markets.
Your Company has to-date taken conscious steps towards raising the quality & hygiene of raw milk obtained and also to
improve the health and life style of the farmer community. Your Company besides its commercial operations is also
committed to the upliftment of the rural community of milk producers. Some of the activities that have built faith of the
farmers in the Company includes: productivity enhancement programme, clean milk production campaign , dairy
animal health management, financial inclusion initiative, Go Green initiative and capacity building programme. Our
reach was expanded to 4000 villages situated across the states of Rajasthan, Haryana, Punjab and Uttar Pradesh.
With the support of our team, State Bank of India and Punjab National Bank have sanctioned the loan of Rs. 50 lacs to
each purchase of 50 dairy animals. The Loan sanctioned is interest free and repayment period is of 5 years.
We are grateful to Central and State Governments and Financial Institutions, Consumers, business partners, Vendors,
Farmers, Society at and to specially shareholders of the Company for their trust and support. It is the support of
stakeholders that has helped the Company to become leader in the dairy industry in India.

Sanjay Dhingra
Chairman & Managing Director

MIS
VIS

SION

To become the fastest growing


profitable Dairy Company
while maintaining
the highest standards of
quality & ethics.

CORPORATE INFORMATION
Board of Directors
Mr. Sanjay Dhingra (Chairman & Managing
Director)
Mr. Sidhant Gupta (Executive Director)
Dr. Rattan Sagar Khanna (Independent Non
Executive Director)
Mr. Arun Srivastava (Independent Non
Executive Director)
Company Secretary
Ms. Deepa Kapoor
Statutory Auditors
M/s. P.P. Mukherjee and Associates
Secretarial Auditors
M/s Mukun Vivek & Co.
Internal Auditor
M/s Mohan Gupta & Company
Registered & Corporate Office
KDIL House, F-82,
Shivaji Place, Rajouri Garden,
New Delhi 110027
CIN : L74899DL1992PLC255519

Registrars & Transfer Agents


Beetal Financial & Computer Services (P) Ltd.
Beetal House, 3rd Floor, 99 Madangir,
Behind Local Shopping Centre,
Near Data Harsukhdas Mandir, New Delhi110062
Plant Locations:
Village Softa, Palwal, Haryana
Bakra Mandi, Ajmer, Rajasthan.
Village: Kumarherha, NH-73, Sharanpur, UP
Village: Mumrejpur, Dibai, Bulandsahar, UP
Listing Detail
Bombay Stock Exchange Limited
National Stock Exchange of India Limited
Depositories Detail
National Securities Depositary Limited
Central Depositary Securities (India) Limited

Bankers
Andhra Bank
Allahabad Bank
Bank of Baroda
Bank of India
IDBI Bank Ltd.
Syndicate Bank
Canara Bank
Corporation Bank
Central Bank of India
Dhanlaxmi Bank Ltd.

KEY TRENDS
(FY 20102014)

Revenue

EBITDA

Net Profit

EPS( )

2014

4578.04

276.03

126.63

6.23*

2013

3692.29

214.04

96.53

4.75*

2012

2394.63

165.26

90.99

4.48*

2011

1608.04

99.73

45.94

2.26*

2010

1054.12

50.23

17.95

0.99*

INR in Crores
** Equity Shares of Face value of INR 1/- each
** Equity Shares of Face value of INR 10/- each

PLANT & OPERATIONS

WHOLLY OWNED SUBSIDIARY COMPANY IN DUBAI


To increase its international presence and cater to the new markets, Kwality Limited has established its wholly-owned
subsidiary, Kwality Dairy Products FZE in free trade zone of UAE. The subsidiary is mainly involved in the trading of
various milk products and imports skimmed and whole milk powder and various derivatives of milk, ghee, butter & other
dairy products. The products are sold both domestically and export to other countries.
The Revenue from sale as on 31.03.2014 is 278,168,956 AED as compared to 165,717,194 AED in the previous year.
Profit After Tax (PAT) for financial year stood at 11,011,346 AED as against 6,204,305 AED in the previous year.

DELIVERING ON OUR PROMISE OF

ONE STOP SOLUTION FOR DAIRY PRODUCTS

OUR PRODUCT PORTFOLIO

MILK IN POUCHES
Dairy Best Nutrified Milk is enriched with more vital minerals and vitamins. Compared to normal milk, Dairy Best Nutrified
Milk has more Calcium and Vitamins A & D. It also contains Vitamin B2 for releasing the body's energy and Vitamin B12 for
blood formation and healthy growth. It thus promises stronger bone development in the formative years, better muscle
strength and a tougher immune system, in short a strong foundation for life, for your child.
Dairy Best Nutrified Milk is available in 3 variants:
Dairy Best Full Cream Milk (Both in 1 ltr & Half ltr)
Dairy Best Toned Milk (Both in 1 ltr & Half ltr)
Dairy Best Double Toned Milk (Half ltr)

CURD
We launched our variety of Curd to give customers greater choice. As curd is a staple and popular food of every Indian
household, we are capturing the imagination of consumers with our 100% pure and high quality pasteurized toned cow's
milk. It has all the goodness of natural calcium, is thick, consistent, delicious and easy to digest.
Available in different packaging like:
Matka - 1 kg, 2kg, 5kg & 15kg
Pouch - 500gm, 1kg
Cup - 80gm, 200gm & 400gm

DAIRY BEST TETRA PACK MILK


We've taken the tetra pack route to give our customers more choice and convenience. This Grade A fluid requires no refrigeration until the
package is opened thanks to ultra pasteurization and the special shelf safe carton. The milk is enriched with Vitamin B2 that releases the
bodys energy and Vitamin B12 for blood formation and healthy growth.
Dairy Best Tetra Pack Milk contains:
Vitamin B2 and Vitamin 12
1.5 times more Calcium
2 times more Vitamin A
2.5 times more Vitamin D
The milk therefore promises stronger bone development in the formative years, better muscle strength and a tougher immune system, in
short a strong foundation for life, for your child.
Dairy Best Tetra Pack is available in 4 variants:
Dairy Best Skimmed Milk
Dairy Best Standarised Milk
Dairy Best Toned Milk
Dairy Best Double Toned Milk

SWEET LASSI
Lassi, the refreshing and healthy milk based natural drink now gets a delicious twist from Dairy Best. We have introduced a range of
mouthwatering flavours to enrich this traditional drink. So what you now get is the goodness of nature blended with a refreshingly
exquisite taste. This new product is available in various package sizes, one can therefore enjoy it directly on the move (small pack) or at
home, parties, picnics etc. (family pack). So be it summer or winter, India can now enjoy its favourite drink in the flavour of one's choice.
Available in: 200 ml Pack Size

DAIRY BEST CHAACH


We had entered the fray in this product segment with our own version of Chaach. Available in salted & masala flavours, our healthy and
refreshing drink is the perfect thirst quencher for all ages. It ranks high on the health meter as it contains live probiotic bacteria which
helps in digestion and improves immunity. It is manufactured using natural ingredients and a special culture that gives it a smooth, mildly
acidic taste. The product is available widely all across India in various size packs.
Available in: 500 ml Salted Chaach Pack Size
200 ml Masala Chaach Pack Size

LOW CHOLESTEROL GHEE - LIVLITE


In its endeavor to produce nutritious and innovative products, Kwality Limited launched India's first Low
Cholesterol Pure Ghee, Dairy Best Livlite.
The first-of-its-kind, Livlite has been developed and patented by National Dairy Research Institute
(NDRI) Karnal, of ICAR and licensed by National Research and Development Corporation (NRDC), which
is a Government of India body. It is the only pure ghee available with 85% Less Cholesterol. A product of
many years of research, Livlite keeps the traditional form, color, aroma, consistency, texture and flavor
of ghee intact and has a shelf life of twelve months.
Available in:
RT Packs - 194 ml, 400 ml, 800 ml & 970 ml pack
Tin- 400ml, 800ml & 1ltr

PURE GHEE
Dairy Best Desi Ghee is produced from directly supplied fresh milk of the highest quality. The ghee is
manufactured under the most hygienic conditions, using the most modern equipment and is completely
untouched by hand. The combined factors ensure that it is tasty, has a traditional granular texture and
gives off a rich and mouth-watering aroma, and is healthy too. It contains plenty of antioxidants, easily
absorbs vitamins and minerals from other foods and helps strengthen the body's immune system, and
has high concentrations of butyric acid that inhibits the growth of cancerous tumours. Our Pure Ghee
has been awarded the AGMARK certification by the Ministry of Agriculture, Government of India.
Available in:
RT - 194ml, 400ml, 485 ml, 800ml & 970 ml,
Poly Pack - 480 ml, 970 ml, 1.940 ltr, and 4.850 ltr
Tin containers 400 ml, 485 ml, 800 ml, 975 ml, 1.94 ltr, 4.85 ltr & 15 kg
Jars - 194 ml, 480 ml, 970 ml, 1.940 ltr. and 4.850 ltr

100% PURE COW GHEE


Kwality's 100% Pure Cow Ghee is another high value product manufactured exclusively from fresh cow's
milk. Such is its quality that it has come to set the standard in the perceptive and ghee appreciating
hinterland of Delhi, Punjab, Rajasthan and Haryana.
The 100% Pure Cow Ghee is totally automated and machine manufactured. It is untouched by human
hand and thus is hygienic. Its pale perfect yellow has a pleasant look and gives off a rich appetizing
aroma. The texture of the ghee is granular in the manner of traditional home-made ghee. This is highly
appreciated by our customers.
Available in:
RT - 194ml, 400ml, 485 ml, 800ml & 970 ml,
Poly Pack - 480 ml, 970 ml, 1.940 ltr, and 4.850 ltr
Tin containers 400 ml, 485 ml, 800 ml, 975 ml, 1.94 ltr, 4.85 ltr & 15 kg
Jars - 194 ml, 480 ml, 970 ml, 1.940 ltr. and 4.850 ltr

WAKE UP - INSTANT DAIRY CREMER


Contains milk solids, milk fat sucrose, and emulsifiers.
It is appropriate for making milk, tea, coffee, curd, lassi, mishthi doi, milk shake, ice cream, pudding and
sweets.
It is granular, free flowing, lump free and is white in color.
Available in:
5 gm - specially designed for railways, flight catering, and hotels etc.
25 and 50 gm - pouch pack
200 gm and 500 gm - poly jar
1kg laminated pouch

SKIMMED MILK POWDER


Skimmed Milk Powder is made from fresh milk and is completely free from artificial flavors and colors. It
can be used for making milk, tea, coffee, curd, lassi, mishti doi, milk shake, ice cream, pudding and
sweets. It has less than 1.5 % fat content and has no added colours.
Available in:
500 gm and 1 kg laminated pack

PANEER
This traditional milk product is an absolute favourite in households all over the country and consumed in
different forms, raw or cooked. In line with our commitment to quality, we have ensured that the paneer
we produce is totally pure and the softest our customers have ever tasted. Paneer is known to be a very
valuable source of protein and we ensure that our product maintains all the healthy nutrients and
conforms to the strictest testing and quality standards.
Available in:
Masala variety
and in 200gm packs. 400gm, 1kg & 5kg Brick to be launched.

Mega Credit Camp

A Mega Credit Camp was organised at MCC Durgapur (Sultanpur) on July 21, 2014 by Baroda Uttar Pradesh
Grameen Bank in collaboration with Kwality Limited and NABARD to promote self-employment through dairying
in the region in which total 453 milk producers participated. A loan of Rs. 53.26 Crores was approved for 3530
beneficiaries during the camp. A credit of Rs.30.43 Crores was disbursed, out of which Rs. 67 Lakhs was
disbursed to 67 milk producer members associated with Kwality Limited. Remaining portion of the loan was
disbursed for other agriculture allied activities and SHGs promoted by NABARD.
Shri K.R.Kanojia, Chairman, Baroda Uttar Pradesh Grameen Bank in his keynote address, emphasized on the
role of dairying as a sustainable source of livelihood in the rural areas and asked the farmers to avail dairy related
schemes run by the Govt. /NABARD etc. and pave the way for development of the region. He also appreciated the
efforts of Kwality Limited in ensuring better price realization of milk and establishing a fair and transparent milk
procurement system at the village level.
Dr. R.S.Khanna, Director, Kwality Limited chaired the programme. In his remarks, he reiterated the companys
commitment towards betterment of the milk producers of the region. Kwality Limited envisages to establish 1
more milk chilling centre (MCC) and reaching out to 20,000 families in 500 villages during the current financial
year. He also spoke about the various initiatives of the company like human health camps, farmer insurance,
animal health camps, animal insurance, SHG formation, supply of cattle feed & medicines etc.
The programme ended with vote of thanks from Shri O.P.Tiwari, Deputy Regional Manager, Baroda Uttar Pradesh
Grameen Bank. Shri Rajendra Singh, Shri Rajeev Agrawal, Shri B.K.Sinha, Shri Alok Singh, Smt. Pushplata
Tripathi were present in the programme.

Product Campaign

NOTICE FOR TWENTY SECOND


ANNUAL GENERAL MEETING
Notice is hereby given that the Twenty Second Annual General Meeting of the
Members of KWALITY LIMITED will be held on Wednesday, the 24th day of September,
2014 at 9.30 A.M. at Lavanya, G.T. Karnal Road, Palla Bakhtavarpur Mord, Alipur, New
Delhi - 110036, to transact the following business: ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2014 and Profit & Loss Account and cash flow
statement for the year ended on that date, together with the reports of the Directors and Auditors thereon.
2. To declare dividend for the financial year 2013-14.
3. To appoint a Director in place of Mr. Sanjay Dhingra (DIN: 00025376), who retires by rotation and being eligible, offers himself for
re-appointment (subject to the alteration of Article of Association).
4. To consider and if thought fit, to pass the following resolution with or without modification(s) as an Ordinary Resolution:
RESOLVED THAT pursuant to the provisions of Section 139 of the Companies Act, 2013 (Act), and other applicable provisions of the
Act, if any and the rules made there under, as amended from time to time, and subject to the approval of shareholders, M/s. P.P.
Mukerjee & Associates, Chartered Accountants (ICAI Firm Registration No. 023276N), retiring Auditors of the company be and is hereby
re-appointed as Statutory Auditors of the Company, to hold the office from the conclusion of this Annual General Meeting till the
conclusion of the Annual General Meeting of the Company to be held in the year 2019 (subject to ratification of their appointment at
every AGM) at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors.

SPECIAL BUSINESS
5. ALTERATION OF ARTICLE OF ASSOCIATION
To consider and if thought fit, to pass the following resolution with or without modification(s) as Special Resolution:
RESOLVED THAT Pursuant to Section 14 and other applicable provisions, if any, of the Companies Act, 2013 and the rules made
thereunder, the Article of Association of the Company be and is hereby altered by substitution of regulation 104 and 127 of the Article of
Association of the Company with the following new regulation:
104. At each Annual General Meeting of the Company one third of such of the Directors for the time being as are liable to retire by
rotation or if their number is not three or a multiple of three, then the number nearest to one third shall retire from office.
127 (i) Directors liable to retire by rotation shall be determined on the basis of seniority i.e. those who have been longest in office
since their last appointment and in case of Directors appointed on same day, those who are to retire shall, in default of and subject to
any agreement among themselves, be determined by lot.
127 (ii) Subject to the provisions of Section 203 of the Companies Act, 2013 and the rules made thereunder an individual may be
appointed as the Chairperson as well as the Managing Director or Chief Executive Officer of the Company at the same time.
RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to file the necessary e-forms with the
Registrar of Companies, Delhi & Haryana in relation to the aforesaid amendment to the Articles of Association and further to do all such
acts, deeds, matters and things as may be deemed necessary to give effect to the above resolution.
6.
APPOINTMENT OF MR. ARUN SRIVASTAVA AS AN INDEPENDENT DIRECTOR
To consider and if thought fit, to pass the following resolution with or without modification(s) as an Ordinary Resolution:
RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013
(Act) and the Companies (Appointment and Qualifications of Directors) Rules 2014, read with Schedule IV to the Act, Mr. Arun
Srivastava (DIN: 01121929), who has submitted a declaration that he meets the criteria for independence as provided in Section
149(6) of the Act, and who is eligible for appointment, be and is hereby appointed as Non-Executive Independent Director of the
Company with effect from 12.08.2014 up to 11.08.2019.
7.
APPOINTMENT OF DR. RATTAN SAGAR KHANNA AS AN INDEPENDENT DIRECTOR
To consider and if thought fit, to pass the following resolution with or without modification(s) as an Ordinary Resolution:
RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013
(Act) and the Companies (Appointment and Qualifications of Directors) Rules 2014, read with Schedule IV to the Act, Dr. Rattan Sagar
Khanna (DIN: 03073914), who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6)
of the Act, and who is eligible for appointment, be and is hereby appointed as Non-Executive Independent Director of the Company with
effect from 12.08.2014 up to 11.08.2019.
8.
AUTHORISATION TO BORROW MONEY UNDER SECTION 180(1)(c) OF THE COMPANIES ACT, 2013
To consider and if thought fit, to pass the following resolution with or without modification(s) as Special Resolution:
RESOLVED THAT in supersession of resolution passed earlier and subject to the provisions of Section 180(1)(c), Section 186 of the
Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 ,if any, and the rules made there under and subject

to the provisions of the Articles of Association of the Company, consent of the members be and is hereby accorded to the Board of Directors of
the Company for and on behalf of company, severally and/or jointly to borrow any sum or sums of money, give and/or receive the corporate
guarantee, from time to time as the Board of Directors may think fit, for the purpose of business of the Company on such terms and conditions
and with or without security from financial institutions and/or Banks and/or depositors and/or other parties by way of rupee loans and/or
loans in any currency or currencies and/or deposits and/or credit facilities and/ or deferred payment facilities and/or non-fund based limit
and/or issue of debentures, as the Board of Directors may in its absolute discretion think fit, notwithstanding that the money or monies to be
borrowed together with the monies already borrowed by the Company including the corporate guarantee on behalf of the Company (apart from
the temporary loans obtained from the companys Banker in the ordinary course of business) may exceed the aggregate paid up share capital
of the company and its free reserve (i.e. reserve not set apart for any specific purpose) provided, however, that the total borrowings
outstanding at any one time including the monies already borrowed shall not exceed a sum of Rs. 3,000 Crores (Rupees Three Thousand
Crores Only).
RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to file the necessary e-forms with the Registrar
of Companies, Delhi & Haryana and other concerned authorities and to take all such steps and to give all such directions and to do all such
acts, deeds, matters and things as may be necessary and/or expedient to give effect of the above resolution.
9. AUTHORISATION TO ISSUE SHARES ON PREFERENTIAL BASIS
To consider and if thought fit, to pass the following resolution with or without modification(s) as Special Resolution:
RESOLVED THAT pursuant to the provisions of Section 42 and Sections 62(1)(c) and all other applicable provisions, if any, of the Companies
Act, 2013 and the rules made thereunder (including any modification(s) or re-enactment(s) thereof, for the time being in force) and other
applicable laws, rules, regulations, notifications and circulars and in accordance with the Memorandum and Articles of Association of the
Company and Listing Agreements between the Company and the Stock Exchanges where the shares of the Company are listed and subject to
such approvals, permissions and sanctions as may be necessary from the Government of India, Reserve Bank of India (RBI), Securities and
Exchange Board of India (SEBI), Registrar of Companies, NCT of Delhi & Haryana and/or any other regulatory authorities, any other
competent authorities, institutions or bodies, within or outside India and subject to such conditions, alterations and modifications as may be
prescribed by such concerned authorities while granting such approvals, permissions and sanctions, which the Board of Directors
(hereinafter referred to as the Board which term shall be deemed to include any committee(s) duly constituted/ to be constituted by the
Board to exercise its powers including the powers conferred by this resolution) is hereby authorized at its discretion to accept, consent of the
Company be and is hereby accorded to offer, issue and allot (including with provisions for reservations on firm and /or competitive basis, of
such part of issue and for such categories of person including employees of the Company as may be permitted) by way of rights issue and/or
public issue and/or offer for sale and/or private placement and/or by issuing compulsory convertible debenture (CCD)/compulsory
convertible preference shares (CCPS) and/or Qualified Institutional Placements/Institutational Placement Programmes under SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2009 and/or against subscription in foreign/ Indian Currency, through prospectus and/or
offering circular/offer letter/ term sheet, equity shares of the Company (which shall rank pari-passu to the existing equity shares of the
Company) (the shares), and/or non-convertible and partly convertible debentures, with or without warrants, and/or Global Depository
Receipts/Global Depository Shares (GDRs/GDSs) and/or American Depository Receipts/American Depository Shares (ADRs/ADSs))
against the issue of underlying shares and/or foreign currency convertible bonds (FCCBs) convertible into equity shares, which shall rank
pari passu with the then existing (hereinafter referred to as securities), whether to remain unlisted or to be listed on any stock exchanges in
India or any other international stock exchange outside India, to resident of India or persons resident outside India including Foreign
Institutional Investors/ Qualified institutional Buyers (QIBs)/ Companies/ Individuals in India or abroad, with or without an overallotment/
Green Shoe Option, as may be permitted under applicable laws, rules & regulations and policy whether or not they are members of the
Company in such form and terms, including as to pricing, the ratio in which such securities may be offered, issued and allotted to the existing
shareholders, the number of securities to be issued, face value of the securities, rate of interest, premium, number of equity shares to be
allotted on conversion, exercise of rights attached with warrants, ratio of exchange of shares and/or warrants and/or any other financial
instruments, period of conversion/redemption/fixing of record date or book closure, adjustment conditions for corporate actions and other
related or incidental matters as may be decided and deemed appropriate by the Board up to a sum of Rupees 10,000 million (inclusive of
premium as may be determined by the Board) (or an equivalent amount in any foreign currency) in one or more tranches, at such price or
prices, at a premium or discount to market price or prices and in such manner and on such terms and conditions as the Board may in its
absolute discretion think fit, in consultation with lead managers and/or underwriters and/or advisers as may be appointed by the Board,
whether with or without an option to subscribe for additional securities.
RESOLVED FURTHER THAT without prejudice to the generality of the above and subject to all applicable laws, the aforesaid issue of securities
may have all or any terms or combination of terms in accordance with Indian laws and/or international practices and regulations including, but
not limited to, conditions in relation to payment of interest, additional interest, premium on redemption, prepayment and other debt service
payments whatsoever, and all such terms are provided in issue of securities of this nature internationally and/or domestically including terms
for issue of shares upon conversion of securities or variation of conversion price of the securities during the term of securities as the Board
deems fit and appropriate and the Board is also entitled to enter into and execute all such arrangements/agreements, as the case may be,
with any lead managers, underwriters, registrar, advisors, guarantors, trustees, agents, depositories, custodians and all such agencies as may
be involved or concerned in such offering of securities and to remunerate all such agencies including the payment of commissions, brokerage,
fees or the like and also to seek the listing of such securities or securities representing the same in one or more stock exchanges within and/or
outside India.
RESOLVED FURTHER THAT the Board may enter into any agreement with any agency or body for issue and allotment of securities in such
form(s) with such features and attributes as are prevalent in domestic as well as international capital markets for instruments of that nature
and to provide for the tradability or free transferability thereof as per the domestic as well as international practices and regulations and under
the norms and practices prevalent in the international markets and the securities issued in foreign market and/or Indian markets shall be
deemed to have been made abroad and/or in the international market and/or at the place of issue of the securities in the international market
and/or Indian market and may be governed by applicable Indian laws and/or foreign laws, as the case may be.

RESOLVED FURTHER THAT in the event of issue of securities by way of a qualified institutional placement to QIBs on Private Placement basis
shall be in accordance with SEBI (Issue of Capital & Disclosure Requirement) Regulations 2009, the relevant date on the basis of which price
of the resultant shares shall be determined as specified under the SEBI (Issue of Capital & Disclosure Requirement) Regulations 2009 shall
be the date of the meeting in which the board or the committee of the directors duly authorized by the board, decide to open the proposed issue
of securities.
RESOLVED FURTHER THAT in the event the securities are proposed to be issued through FCCBs/ADRs/GDRs, the relevant date for the
purpose of pricing the securities is the date of the meeting at which the Board decides to open the proposed issue, as specified in the Issue of
Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism), Scheme 1993.
RESOLVED FURTHER THAT the Board be and is hereby authorized to finalize and approve the offering circular/ prospectus/ placement
document/ term sheets/ agreements, in respect of the proposed issue of the securities and to authorize any director or directors of the
Company or any other officer or officers of the Company to sign the above documents for and behalf of the Company together with the authority
to amend, vary or modify the same and to give such declarations, affidavits, certificates, consents as may be required from time to time, and to
arrange for the submission of the offering circular/ prospectus/ placement document/ term sheets agreements, and any amendments and
supplements thereto, with any applicable stock exchanges, government and regulatory authorities, institutions, as may be required.
RESOLVED FURTHER THAT in case securities are offered through rights issue, the shareholders shall have right to renounce all or any the
shares offered in favor of any person or persons who are Indian residents subject to the right of the Board to refuse allotment to a person, not
being a shareholder of the company without assigning any reason. The members can apply for additional shares and they may be entitled to
allotment of additional shares at the discretion of the Board and in consultation with the stock exchanges. The renouncees may also apply for
additional shares and they may be entitled to allotment of additional shares at the discretion of the Board and in consultation with the stock
exchanges.
RESOLVED FURTHER THAT in case of any over subscription of the issue, the Board be and is hereby authorized to retain such of the amount,
and issue and allot such securities as may be permitted in accordance with applicable laws, rules & provisions in consultation with concerned
authorities including stock exchanges.
RESOLVED FURTHER THAT the Board be and is hereby entitled to vary, modify, alter any of the foregoing terms and conditions at their
discretion and in conformity with those as may be approved by the SEBI, RBI or any other appropriate authority and/or department.
RESOLVED FURTHER THAT for giving effect to this resolution, the Board be and is hereby authorized to do all such acts, deeds and things as
the Board may at its absolute discretion, consider necessary, usual and expedient, including without limitation the utilization of issue
proceeds, entering into of underwriting, memorandum of understanding, marketing and depository arrangements, and with power on behalf
of the Company to settle any question, remove any difficulty or doubt that may arise from time to time in relation to the offer, issue, allotment
and utilization of the issue proceeds of the securities for the Companys projects/ expansions/ modernizations/ acquisitions/ direct
investments in the subsidiary companies/ joint ventures/ repayment of debts/ other corporate needs, as they may deem fit.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board/ committee be and is hereby authorized to do all such
acts, deeds and things as the Board may at its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or
doubt that may arise with regard to the offer/ issue, allotment and utilization of the issue proceeds including but without limitation to the
making of listing applications, creation of such mortgage/ charge, if necessary, under applicable provisions of the Companies Act, 2013, in
respect of the aforesaid securities either on pari-passu basis or otherwise, giving or authorizing the giving by concerned persons of such
declarations, affidavits, certificates, consents and authorities as may be required from time to time, without being required to seek any further
consent or approval of the members and the members shall be deemed to have given their approval thereto expressly by the authority of this
resolution.
RESOLVED FURTHER THAT in case of any debt instrument including but without limitation to any debentures, bonds, the members shall be
deemed to have given their approval expressly by the authority of this resolution.
RESOLVED FURTHER THAT the Board, be and is hereby authorized to delegate all the above powers and authorities to any person or persons
or committee of the Board, in connection with the issue of securities, and to give effect to the above resolutions.

By Order of the Board

Place: New Delhi


Date: August 12, 2014

Sd/
(Deepa Kapoor)
(Company Secretary & Compliance Officer)

NOTES:
1. A MEMBER OF THE COMPANY ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES, IN ORDER TO BE EFFECTIVE MUST
BE RECEIVED, DULY FILLED AND AUTHENTICATED AT REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS (FORTY-EIGHT
HOURS) BEFORE THE SCHEDULED TIME OF THE MEETING.
2. The relevant Explanatory Statement pursuant to Section 102 (1) of the Companies Act, 2013 setting out material facts relating to the
business at item no. 5 to item no. 9 of the Notice as set out above, is annexed hereto.
3. Member/Proxies should bring the Attendance Slip in the Meeting duly filed in, for attending the meeting.
4. Statutory Registers under the Companies Act, 2013 is available for the inspection at the registered Office of the Company during business
hours.
5. Corporate Members are requested to send a duly certified copy of the Board Resolution, pursuant to Section 113 of the Companies Act,
2013, authorizing their representative to attend and vote at the Annual General Meeting.
6. Members are requested to bring their admission slips along with copy of the report & accounts to the Annual General Meeting.
7. Members who wish to obtain information on the Company or view the accounts for the financial year ended 31st March, 2014, may visit the
Companys website www.kdil.in.
8. The dividend as recommended by the Board of Directors, if declared at this Annual General Meeting, will be paid within 30 days after the
date of declaration:
To those shareholders whose names appear on the Companys Register of Members after giving effect to all valid share transfers in
physical form lodged with the Registrar and Transfer Agents (R&T Agents) of the Company on or before Tuesday, 16th September 2014.
In respect of shares held in electronic form (demat mode), dividend will be paid to those deemed members whose names appear in
the statements of beneficial ownership furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL) as at the close of business hours on Tuesday, 16th September 2014.
Physical shares Payment of dividend through NECS: Members holding shares in physical form are advised to submit particulars of
their bank account, viz. name and address of the branch of the bank, MICR Code of the branch, type of account and account number at the
earliest to our Registrar and Share Transfer Agent, M/s Beetal Financial & Computer Services Private Limited.
9. This may be taken as notice of declaration of dividend for the financial year 2013-14 in accordance with Article 138 of the Article of
Association of the Company in respect of dividend for that year when declared.
10. The Registered of Members and Transfer Books of the Company will remain closed from 17th September, 2014 to 24th September, 2014
(both days inclusive) for the purpose of ascertaining eligibility to dividend, if declared.
11. Members are requested to intimate the Registrar and Share Transfer Agent of the Company - M/s Beetal Financial & Computer Services
Private Limited, 99, Beetal House, Madangir, New Delhi 110062, immediately of any change in their address in respect of equity shares held
in physical mode and to their DPs in respect of equity shares in dematerialized form.
12. Members may avail nomination facility as provided under Section 72 of the Companies Act, 2013.
13. Members who hold shares in electronic form are requested to write their Client ID and DP ID numbers and those who hold shares in
physical form are requested to write their Folio number in the attendance slip for attending the meeting to facilitate identification of
membership at the meeting.
14. Across the world, there is an increasing focus on doing our share to help save our environment from further degradation. Recognizing this
trend, the Ministry of corporate Affairs (vide circular nos. 17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011 respectively), has
undertaken a Green Initiative in Corporate Governance and allowed Companies to share documents/notices (including notice calling Annual
General Meeting, Audited Financial Statements, Directors Report, Auditors Report, etc) with its shareholders through an electronic mode.
The move of the Ministry allows public at large to contribute to the green movement.
To support this green initiative of the Government in full measure, shareholders who have not registered their e-mail addresses so far are
requested to register their e-mail addresses. Shareholders holding shares in physical form can avail the said facility by filling in the ECommunication Registration Form available on Companys website (www.kdil.in) or as attached to this Annual Report and forward the same to
Companys Registrar i.e. Beetal Financial & Computer Services Private Limited. Shareholders holding shares in electronic form can also avail
said facility by registering/changing the E-mail address with the Depository through their concerned Depository Participants (DP) or by filling in
the E-Communication Registration Form as attached to this Annual Report and forward the same to the Companys Registrar i.e. Beetal
Financial & Computer Services Private Limited.
15. The Company hereby gives an opportunity to all the members, who have not get their e-mail id recorded, to get it registered to avail the
facility to receive any communication through electronic mode.
16. Members are hereby informed that Dividend which remains unclaimed / un-encashed over a period of seven years, has to be transferred
as per the provisions of Section 124 of the Companies Act, 2013 by the Company to The Investor Education & Protection Fund constituted by
the Central Government under Section 125 of the Companies Act, 2013. It may please be noted that once unclaimed / un-encashed dividend
is transferred to Investor Education & Protection Fund as above, no claims shall lie in respect of such amount by the shareholder.
17. In compliance with the provisions of Section 108 of the Companies Act, 2013 and the Rules framed thereunder and listing agreement, the
Members are provided with the facility to cast their vote electronically, through the e-voting services provided by CDSL, on all resolutions set
forth in this Notice.
18. Detail of Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting

Name of the Director

Mr. Arun Srivastava

Dr. Rattan Sagar Khanna

Mr. Sanjay Dhingra

Date of Birth

03rd April, 1968

12th April, 1945

12th October, 1970

Relationship with other


Directors Inter-se

None

None

None

Date of Appointment

25th June, 2003

18th May, 2010

18th June, 2003

Qualification

Graduate

M.Sc. (Hons) from Punjab


Agri University, Diploma in
Semen Freezing Gynecology
& Andrology from Royal
Veterinary and Agriculture
University, Copenhagen
and Diploma in Farm &
Science Journalism form
Institute of Farm & Science
Journalism, New Delhi

Graduate

Expertise in specific
functional area

Expertise in Financial
Modeling & Resource
Moblisation

Dairy, Farming and in


Agricultre Sector

Vast experience in dairy


business

Directorship held in other


Companies as on date.

DELTA AGROTECH
PRIVATE LIMITED

NIL

Kwality Dairy Investments


Pvt. Ltd.

Chairman/Member of the
committee of the Board
of Directors of the
Company as on
31 March 2014

Chairman of Audit
Committee
Member of Remuneration,
Compensation & Nomination
Committee
Member of Stakeholders
Relationship Committee
Member of Share
Transfer Committee

Member of Audit
Committee
Member of Remuneration,
Compensation & Nomination
Committee
Member of Stakeholders
Relationship Committee
Member of Share Transfer
Committee
Member of Corporate
Social Responsibility
Committee

Member of Remuneration,
Compensation & Nomination
Committee
Member of Management
Committee
Member of Corporate
Social Responsibility
Committee

Chairman/Member of the
committee of the Director
of the other companies
in which he is a director
as on 31 March 2014

NIL

NIL

NIL

Number of Shares held


in the Company

NIL

NIL

152,154,714

Instructions for members for voting electronically are as under:(A) In case of members receiving e-mail:
(i) Log on to the e-voting website www.evotingindia.com.
(ii) Click on Shareholders tab to cast your votes.
(iii) Now, select the Electronic Voting Sequence Number - EVSN along with KWALITY LIMITED from the drop down menu and click on
SUBMIT
(iv) If you are holding shares in Demat form and have already voted earlier on www.evotingindia.com for a voting of any Company, then
your existing login id and password are to be used. If you are a first time user follow the steps given below.
(v) Now, fill up the following details in the appropriate boxes:

For Members holding shares in Demat Form

For Members holding shares in Physical Form

For NSDL: 8 Character DP ID followed by 8 Digits Client ID


For CDSL: 16 digits beneficiary ID

Folio Number registered with the Company

PAN*

Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department when prompted by the system while
e-voting (applicable for both demat shareholders as well as physical shareholders)

DOB#

Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account
or folio in dd/mm/yyyy format.

Dividend Bank
Details#

Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat
account or folio.

*Members who have not updated their PAN with the Company/Depository Participant are requested to use the default number:
<ABCDE1234F> in the PAN field.
# Please enter any one of the details in order to login. In case either of the details are not recorded with the depository please enter the value
<No. of shares> in the Dividend Bank details field.
(vi) After entering these details appropriately, click on SUBMIT tab.
(vii) Members holding shares in physical form will then reach directly the EVSN selection screen. However, members holding shares in demat
form will now reach Password Creation menu wherein they are required to mandatorily enter their login password in the new password field.
Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible
to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other
person and take utmost care to keep your password confidential. Kindly note that this changed password is to be also used by the Demat
holders for voting for resolutions for the Company or any other Company on which they are eligible to vote, provided that Company opts for evoting through CDSL platform.
(viii) For members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this notice.
(ix) Click on the relevant EVSN on which you choose to vote.
(x) On the voting page, you will see Resolution Description and against the same the option YES/NO for voting. Select the option YES or NO as
desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xi) Click on the Resolutions File Link if you wish to view the entire Resolutions.
(xii) After selecting the resolution you have decided to vote on, click on SUBMIT. A confirmation box will be displayed. If you wish to confirm
your vote, click on OK, else to change your vote, click on CANCEL and accordingly modify your vote.
(xiii) Once you CONFIRM your vote on the resolution, you will not be allowed to modify your vote.
(xiv) You can also take out print of the voting done by you by clicking on Click here to print option on the Voting page.
(xv) If Demat account holder has forgotten the changed password then Enter the User ID and Captcha Code click on Forgot password & enter
the details as promoted by the system.
(xvi) Institutional shareholders (i.e other than Individuals, HUF, NRI etc) are required to log on to https://www.evotingindia.co.in and register
themselves as Corporates. After receiving the login details they have to link the account(s) which they wish to vote on and then cast their vote.
They should upload a scanned copy of the Board resolution and Power of Attorney (POA) which they have missed in favour of the Custodian, if
any, in PDF format in the system for the scrutinizer to verify the same.
(B) In case of members receiving the physical copy of Notice of Annual General Meeting [for members whose e-mail IDs are not registered with
the company/depository participant(s) or requesting physical copy]:
Please follow all steps from sl. no. (i) to sl. no. (xvi) above, to cast vote.
(C) The e-voting period begins on 18.09.2014 at 10:00 AM and ends on 20.09.2014 at 6:00 PM. During this period shareholders of the
Company, holding shares either in physical form or in dematerialized form, as on the cut-off date, may cast their vote electronically. The e-voting
module shall be disabled by CDSL for voting thereafter. Once the vote on a resolution is cast by the shareholder, the shareholder shall not be
allowed to change it subsequently.
(D) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (FAQs) and e-voting manual
available at www.evotingindia.com under help section or write an email to helpdesk.evoting@cdslindia.com.
19. Mr. Mukun Arora of M/s Mukun Vivek & Company, Company Secretaries, has been appointed as the Scrutinizer to scrutinize the e-voting
process in a fair and transparent manner.
20. The notice is being dispatched/emailed to all the members whose names appear on the register of members/list of beneficial owners as
received from the National Securities Depository Ltd. (NSDL)/Central Depository Services (India) Ltd. (CSDL) on 22 August 2014 and voting
rights shall be reckoned on the paid-up value of the shares registered in the name of the shareholders as on the same date.
21. The Scrutinizer shall, within a period not exceeding three working days from the conclusion of the e-voting period, unblock the votes in the
presence of at least two witnesses not in the employment of the Company and make a Scrutinizers Report of the votes cast in favour or
against, if any, forthwith to the Chairman of the Company.
22. The results declared along with the Scrutinizers Report shall be placed on the Companys website www.kdil.in within two days of the
passing of the resolutions at the Annual General Meeting of the Company and communicate to Stock Exchanges, where the shares of the
Company are listed.

EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF


THE COMPANIES ACT, 2013
ITEM NO. 5
In terms of Section 152 of the Companies Act, 2013 atleast two third of the Directors of the Company shall be persons whose period of office is
liable to retire by rotation and out of which atleast one third shall retire at each Annual General Meeting of the Company.
Currently the Company has two Independent Directors which are not liable to retire by rotation as per Section 152 of the Companies Act, 2013
and as per Articles of Association of the Company Managing Director and Whole Time Directors are not liable to retire by rotation.
Therefore the Company in order to comply with the provisions of Section 152 and Section 203 needs to alter its Article of Association by
substitution of regulation 104 and regulation 127 in such way that the office of Managing Director and Whole Time Directors are also come
under the preview of retirement by rotation and an individual may be appointed as Chairman and Managing Director of the Company at the
same time.
Except Mr. Sanjay Dhingra, Chairman & Managing Director and Mr. Sidhant Gupta, Director of the Company, none of the Directors and Key
Managerial Personnel of the Company and their relatives is concerned or interested, in the resolution.
ITEM NO. 6-7
Pursuant to the provisions of Section 149 of the Companies Act, 2013, every listed public company is required to have at least one-third of the
total number of directors as independent directors, who are not liable to retire by rotation.
The MCA has clarified wide its General Circular No. 18/2014 dated 11.06.2014 that the Companies are required to make fresh appointment of
Independent Directors as per the provisions of Companies Act, 2013 and any tenure of an Independent Directors on the date of
commencement of the Act shall not be counted for his appointment/holding office of director under the Act. In view of the transitional period of
one year provided under Section 149(5), it is hereby clarified that it would be neccessary that if it is intended to appoint existing Independent
Directors under the new Act, such appointment shall be made expressly under section 149(10)/(11) read with Schedule IV of the Act within one
year from 1st April, 2014 subject to compliance with eligibility and other prescribed conditions.
In view of the above the Board recommended the appointment of Mr. Arun Srivastava and Dr. Rattan Sagar Khanna as Non-Executive
Independent Directors from 12.08.2014 up to 11.08.2019.
In the opinion of the Board, Mr. Arun Srivastava and Dr. Rattan Sagar Khanna fulfils the criteria as mentioned in Section 149(6) of the
Companies Act, 2013 and recommend the appointment of these as Non-Executive Independent Directors and received a declaration from
them as specified in the above mentioned Section.
In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, the appointment of these directors as
Non-Executive Independent Directors is now being placed before the Members for their approval.
The Company and Non-Executive Independent Directors shall abide by the provisions specified in Schedule IV of the Companies Act, 2013.
The terms and conditions of appointment of the above Directors shall be open for inspection by the Members at the Registered Office of the
Company during normal business hours on any working day, excluding Saturday.
Dr. Rattan Sagar Khanna
Dr. Rattan Sagar Khanna did his M.Sc. (Hons) from Punjab Agri University. He is Diploma holder in Semen Freezing Gynecology & Anthology
from Royal Veterinary and Agriculture University, Copenhagen, Diploma in Farm & Science Journalism from Institute of Farm & Science
Journalism, New Delhi. Over 35 years, he worked at senior positions in Dairy, Farming and in Agriculture Sector in the areas of manufacturing,
consulting and marketing.
He has been providing his valuable inputs on major initiatives taken by the Company as well as the technologies introduced in the Company. He
is actively involved in introduction and launch of our anchor Brand Dairy Best - Livlite. Dr. Khanna has also extended his expertise in
implementation and establishment of collection centres and MCC's of the Company.
As an investor protection activist and proponent of good corporate governance, Dr. Khanna has been the guiding force in company's CSR
initiatives. An old war horse in Dairy Business, his experience has been a valuable asset for the company.
Arun Srivastava
Shri Arun Srivastava has been serving on various committees of Board and helps the Company in its smooth operations. He brings in corporate
finance and transaction experience to the Company and with consulting and liasoning background he remains the trouble shooter for the
Company vis--vis clients and lenders and ensure smooth execution of mandated deals.
Mr. Arun Srivastava and Dr. Rattan Sagar Khanna, are concerned or interested in the Resolutions of the accompanying Notice relating to their
own appointment.
ITEM NO. 8
Upon the commencement of new Companies Act, 2013, the Ministry of Corporate Affairs (MCA) vide its general circular no. 04 /2014 dated
March 25, 2014 has clarified the resolutions passed under Section 293(1)(d) of the Companies Act, 1956 prior to commencement of Section
180 of the Companies Act, 2013 which is to be valid upto one year from the date of notification of Section 180 of the Companies Act, 2013 and
thus fresh approval of shareholders is required to be obtained at the general meeting of the shareholders.
Therefore in order to comply with the provisions of Section 180(1)(c), Section 186 and other applicable provisions of the Companies Act, 2013,
the Company needs to obtain the fresh approval of shareholders by way of Special Resolution to authorized the Board to borrow money
including the corporate guarantee on behalf of the Company upto a sum of Rs. 3000 Crores (Rupees Three Thousand Crores Only).
Further to meet the working capital demand of the growing business of the Company, the Board is also authorized to give and/or receive the
corporate guarantee on behalf of the Company under Section 186 of the Companies Act, 2013 and the rules made there under.
None of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, in the resolution.

ITEM NO. 9
The Company has taken up and intends to take up in future several growth initiatives like expansions, modernizations, strengthening of
procurement mechanism, establishment of milk chilling centers, overseas direct investment in subsidiary companies/joint venture etc. and
therefore, there is need to strengthen its financial position by augmenting long term resources. The Company plans to achieve this by issue of
securities in international markets and/or in domestic market.
Several modes are available for raising capital by way of Public Issue, Right Issue, Offer for Sale, Private Placement, Compulsory Convertible
Debenture(s) (CCDs)/Compulsory Convertible Preference Share(s) (CCPS), QIP, Institutional Placement Programmes under Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, Private Placement, Global Depositary Receipt,
American Depositary Receipt, Foreign Currency Convertible Bonds or other equity related instruments in the domestic and in the international
market.
The Company consulting various investment bankers for raising capital through one or more such manner or such instruments up to a sum of
Rupee 10,000 million in one or more trenches, whether with or without an option to subscribe for additional securities.
The Company intends to use the funds so raised towards capital expenditure for strengthening of procurements mechanism, establishment of
milk chilling centers, expansions, modernization, new projects, overseas direct investment in subsidiary companies/joint ventures, any other
use which may be required in the normal business and as permitted under applicable law from time to time.
The detailed terms and conditions for the offer and the rights and privileges of the holders of equity related instruments, with or without
warrant, non-convertible/partly convertible debentures with or without warrant and/or Global Depositary Receipts/ Shares (GDRs/GDSs)
and/or American Depositary Receipts/shares (ADRs/ADSs) against the issue of underlying shares and/or Foreign Currency Convertible Bonds
(FCCBs) convertible at the option of the holders into equity shares (herein referred to as the Securities) to resident of India or persons
resident outside India including Foreign Institutional Investor, Qualified Institutional Buyers (QIB) will be determined in consultation with
investment banker, advisors and underwriters to be appointed by the Company considering the prevailing market conditions and other
relevant factors. The resolution seeks to afford discretions to the Board of Directors (including a committee thereof) to finalize these terms in
consultation with the agencies aforesaid in accordance with applicable India Laws and/or International Laws. The Securities would be issued
at a price determined in accordance with SEBI Regulations, FEMA Regulations and other applicable Laws. The conversion of any of the
securities into equity shares at a later stage, if any, shall not be less than the minimum price as calculated as per SEBI Regulations and/or any
other authority concerned.
In view of the above, consent of the shareholders is being sought, by way of a special resolution, pursuant to the provisions of Section 42,
Section 62(1)(c), and other applicable provisions, if any, of the Companies Act, 2013 and other applicable Laws, rules and regulations and in
accordance with the Memorandum and Article of Association of the Company and Listing Agreement between the Company and Stock
Exchanges where the shares of the Company are listed. The Equity Shares arising out of issue of securities pursuant to this resolution shall
rank pari - passu in all aspects with the existing Equity Shares of the Company.
In view of the reasons aforesaid, an enabling resolution is proposed for consideration of the shareholders to give adequate flexibility and
discretion to the Board to finalize the terms of the issue of Securities. The board recommends the resolution for the approval of the members of
the Company.
None of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, in the resolution.

Place: New Delhi


Date: August 12, 2014

By Order of the Board


Sd/
(Deepa Kapoor)
(Company Secretary & Compliance Officer)

KWALITY LIMITED
Regd. Office: KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi- 110027
CIN : L74899DL1992PLC255519
ATTENDANCE SLIP
ANNUAL GENERAL MEETING
Wednesday, 24th September, 2014 at 9.30 a.m.
VENUE: Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036

DP Id:................................................................................ Folio No:.....................................................................


Client ID:........................................................................ No. of Shares held:.....................................................
Member's Name:..................................................................................................................................................
Complete Address:...............................................................................................................................................
..............................................................................................................................................................................

I hereby record my presence at the Annual General Meeting of the Company to be held on 24th September,
2014 at 9.30 a.m. at Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036

..................................................................
Member's Signature
...........................................................................................................................................................................
If proxy attended Instead of Member:

Proxy Name:................................................................................... Proxy's Signature:........................................

Note: Members / Proxy holders wishing to attend the meeting must bring their duly filled and signed
Attendance Slip with them. NO GIFT/COUPON WILL BE DISTRIBUTED AT THE ANNUAL GENERAL MEETING.

Affix 1
Rupees
Revenue Stamp

Form No. MGT-11


PROXY FORM
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies
(Management and Administration) Rules, 2014]
CIN: L74899DL1992PLC255519
Name of Company : Kwality Limited
Registered office : KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi-110027
Name of Member (s) : ..................................................... E-mail Id : ................................................................
Folio No/Client Id : .......................................................... DP ID : .....................................................................
Registered address : ...........................................................................................................................................
.............................................................................................................................................................................
I/We, being the member (s) of ..................... shares of above named company, hereby appoint
1. Name : ........................................................................ E-mail Id : ..............................................................
Address :
Signature : ...................................., or failing him

2. Name : ........................................................................ E-mail Id : ..............................................................


Address :
Signature : ...................................., or failing him
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 22nd Annual General Meeting of
the company, to be held on the 24th day of September, 2014 at 9:30 a.m./p.m. at Lavanya, G.T. Karnal Road, Palla
Bakhtavarpur Mord, Alipur, Delhi-110036 and at any adjournment thereof in respect of such resolutions as are
indicated below :
Resolution
No.

Resolutions

Adoption of Balance Sheet and Profit & Loss Account together


with the reports of the Directors and Auditors thereon

Approval of dividend for the financial year 2013-14

Appoint Mr. Sanjay Dhingra, who retires by rotation and being


eligible, offers himself for re-appointment (subject to the
alteration of Article of Association).

Appointment of M/s. P.P. Mukerjee & Associates as Statutory


Auditor of the Company

Approval for alteration of article of association of the Company

Appoint Mr. Arun Srivastava as an independent director

Appoint Dr. Rattan Sagar Khanna as an independent director

Authorize the Board of Directors to borrow money under


section 180(1)(c) of the companies act, 2013

Authorization to issue shares on preferential basis

Votes
For

Against

Signed this ............. day of .................. 2014


Signature of shareholder

Affix
Revenue
Stamp

Signature of Proxy holder(s)


Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of
the Company, not less than 48 hours before the commencement of the Meeting.

Dear shareholders,
Your Directors have pleasure in presenting their Twenty Second Annual Report together with Audited Accounts of the Company for
the financial year ended 31st March 2014.

1. Financial Highlights
Details
Turnover
Profit before Interest, Depreciation,

Year ended 31.03.2014


INR in crores

Year ended 31.03.2013


INR in crores

4578.05

3692.29

276.03

214.04

112.61

92.28

12.91

10.29

150.51

111.48

----

3.00

150.51

108.48

23.88

11.95

126.63

96.53

Extraordinary Items & Tax


Interest & Finance Charge
Depreciation
Profit Before Extraordinary Item & Tax
Extraordinary Items
Profit before Tax

DIRECTOR'S REPORT

Tax Expense
Profit after Tax

2. COMPANY PERFORMANCE
Your Company achieved a turnover of Rs. 4578.05 crores for the year ended on March 31, 2014, registering a growth of 23.99% over
the last year turnover of Rs. 3692.29 crores.Profit before Tax at Rs. 150.51 crores is 38.75% higher than that of last year of Rs. 108.48
Crores. Profit after Tax for the Financial Year 2013-2014 stood at Rs. 126.63 crores as compared to Rs. 96.53 crores in the previous
year a growth of 31.18%.

3. THE COMPANIES ACT, 2013


The Ministry of Corporate Affairs (MCA) vide its Circular dated April 4, 2014 has clarified that the financial statements and documents
annexed thereto, auditors report and boards report in respect of financial year that have commenced earlier than April 1, 2014 shall
be governed by the provisions of the Companies Act, 1956.With respect to other provisions of the Act, appropriate references have
been made in this report to the extent these provisions have become applicable from April 1, 2014.

4. DIVIDEND
Based on the performance of your Company, the Directors are pleased to recommend a final dividend of Rs. 0.10 per equity share of
Rs. 1 each, which will be paid after your approval at the ensuing Annual General Meeting. The final dividend, if approved by the
members of the Company would involve a cash outflow of Rs. 2.03 Crores (excluding dividend tax of Rs. 0.35 crores).
The dividend will be paid to members whose names appear on the company's register of members after giving effect to all valid share
transfers in physical form lodged with the Registrar and Transfer Agents (RTA) of the company on or before 16th September, 2014, in
respect of shares held in electronic form (demat mode), dividend will be paid to those deemed members whose names appear in the
statement of beneficial ownership furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL) at the close of business hours on 16th September, 2014.

5. TRANSFER TO RESERVE
The Board of Directors of the Company have recommended a final dividend of Rs. 0.10 per equity share of Rs. 1 each for the financial
year 2013-14. As the dividend is up to 10% of the paid up capital, there is no requirement to transfer any amount to the reserve under
Companies (Transfer of Profit to Reserve) Rules, 1975.

6. SIGNIFICANT DEVELOPMENTS
Your company has during the year enhanced its manufacturing capabilities. The Company has acquired a plant situated at Village
Mumrejpur, Tehsil Dibai, District Bulandshahar, Uttar Pradesh. Your company has also taken initiatives to increase the production
capacities of the newly acquired plant as well as that of the plant situated at Softa to meet the growing demand of its products in the
market. The expanssion programme is under implementation.
The Company is also under process of launching new value added products like variants of flavored milk, UHT milk, Table butter in tubs,
Cream in tetra packs, variants of cheeses and yogurts etc. Some of the products are in production test stage and your Company is
confident of launching these products in the market in near future.

7. CORPORATE SOCIAL RESPONSIBILITY


Your Company defines Corporate Social Responsibility above the philanthropic activities and encompasses all related concepts such
as corporate sustainability, business responsibility and corporate citizenship as the way a company balances its economic, social and
environmental objectives while addressing stakeholder expectations and enhancing shareholder value. The Company is in Dairy
sector, which is an important primary source of livelihood for Indian rural families. Its main objective is to provide rural employment and
income generating opportunity particularly for small, marginal farmers and landless labour (men & women).
The Company shall continue to have among its objectives the promotion and growth of community residing in the vicinity of its plants,
MCCs etc where it seeks to actively assist to uplift the social economy, standard of living and making this community self-reliant as
community living around many of our factories comprises the weakest sections of rural and tribal India with no access to basic
amenities.

The Company has outsourced facilities to support the milk producers, who are directly linked in our commercial milk procurement activities. In
order to help such farmers to increase the productivity of their cattle and buffaloes, Kwality Limited has provided, on a principal of no-profit-noloss, good quality feed. Our Company is also providing such other technical inputs as vaccinations, artificial insemination, and free advice on
prevention and cure of common diseases.
The Sahayogi Foundation has been set up (the foundation) as a non-profit trust in July 2014. The Foundation will work closely with the Board
of Directors the CSR Committee in implementation of various CSR activities. The Foundation will also assist in reporting progress of deployed
initiatives and in making appropriate disclosures periodically.

MILK PRODUCER CENTRIC PROCUREMENT SYSTEM


Your Company is committed to the upliftment of the rural community by implementing a milk producer centric approach to procure milk and
enhance milk productivity. The approach is being operationalized by forming Village Level Collection Centres (VLCs). We have established a fair
and transparent system through Automatic Milk Collection Units (AMCUs) comprising of Electronic Weighing Scale, Eko Milk Analyser, Data
Processing Unit, printer & display to determine the rate of milk on the basis of quality to the milk producer. Milk is tested for quality parameters
of fat & SNF, quantity is weighed through the Electronic machine, the rate payable is displayed and a payment slip generated by the computer is
handed over to the milk producer. Milk payment is made on every tenth day and is transferred to the joint account, operated by the Village
Service Provider (VSP) and representative of the milk producers.
We have been able to reach out to around 4000 villages situated across the states of Rajasthan, Haryana, Punjab and Uttar Pradesh through
more than 2,70,000 farmers.
a) Productivity Enhancement Programme
Long inter-calving period is one of the greatest impediments in achieving sustainable dairying as the cost of the feed and forages are on the
rise. Nutritional deficiency across the project area is a limiting factor which attributes to infertility in dairy animals. In order to provide good and
balanced quality feed, Kwality Limited has outsourced animal feed processing under the brand of DAIRY BEST. Feed formulation is provided
by the company with an optimal mix of grains and mineral mixture as the ingredient. Feed is processed under the supervision of the competent
company representative to ensure the use of formulation ingredients during the processing.
b) Clean Milk Production Campaign
To ensure the procurement of good quality of raw milk and to create awareness among the milk producers, the Company had organised a
campaign on Clean Milk Production across the milk shed area covering more than 30,000 farmers across various villages.
c) Dairy Animal Health Management
Preventive and curative health management training programs related to dairy animals digestive system, reproductive system and mastitis
control were carried out in collaboration with Ayurvet Limited. About 50 Village Service Providers (VSPs) have been identified as KISSAN
MITRAS and were imparted elementary training at Ayurvet Training Centre. These supvisors are working under experienced veterinarians to
provide preventive treatment to dairy animals.
d) Financial Inclusion Initiative
Your Company has signed a MoUs with Allahabad Bank to assist milk producers to get access to bank credit for the purchase of dairy animals.
Similar arrangement has also been worked out with Central Bank of Indian and Bank of India. SBI and PNB has sanctioned interest free loan of
50 lacs for purchase of 50 dairy animals to two of our VSPs under Kamdhanu Scheme through our assistance.
e) Go Green Initiative
In the pursuit of the fulfillment of the environmental commitment of harnessing solar energy and saving fossil fuel, your Company has provided
75 solar panels at the VLC level which provide power to operate the AMCUs and lights.
f) Capacity Building
Your Company recognizes the need to have quality and trained manpower in order to achieve competitive advantage. With a view to unleash
the potential and sharpen the skills of the employees, a series of in-house and outbound training programs were organised. In accordance
with the skill and competency requirements of the various groups, training programmes on effective communication, team building, milk
chilling centre management, quality of milk testing, dairy animal health management were conducted.
Details of the programmes are as under:
S. No.
Training Programme
No. of programmes
No. of participants
1.
Effective communication
4
74
2.
Teambuilding
2
20
3.
Dairy animal health management
2
40

8. CREDIT RATING
BWR has assigned Long-Term rating of BWRA with Stable Outlook and BWR A1 as short term rating to Kwality Limited overall fund based
Working Capital facilities.

9. FUTURE OUTLOOK
Over the past decade, significant transformation took place in the Indian demographic space which led to heightened consumer interest in
value added products. This shift in the dynamics of the industry proved beneficial for the manufacturers since value added products have
higher margins as compared to liquid milk segment. Considering the higher rate of profit margin expected from the value added Products, your
Company has shifted focus to add new products in its existing product line. To increase procurement of milk through Producer Based Village
Centres. Your Company would be hiring more Milk Chilling Centers (MCC) and also setting up its own large MCCs with capacities of more than
50,000 LPD at different locations in North India.
Future Objectives :
Milk Procurement
Kwality Limited has developed its own comprehensive milk procurement strategy to increase the procurement of high quality milk directly
from the farmers

Setting up Company owned Milk Chilling Centre with a capacity more than 50,000 LPD.
A basis for payment for milk has been devised ensuring the supply of standardised milk by the farmers and preventing adulteration
Farmers are provided with veterinary doctors to look after animal health and artificial insemination need, subsidised animal feed and annual
FMD vaccination so as to provide incentive to farmers to be associated to us and thus increase the number of farmers under each VCC
New Products & Consumer Brands
After the launch of the Low Cholesterol Pure Ghee, Livlite, the Company plans to launch various new products catering to the increasing
health needs of the Indian Consumers
Launch of variants of flavored milk for retail consumers
Setting up manufacturing facilities for products like variant of cheese, drinking yogurt, butter in tubs, cream in tetra packs etc.
Overseas Expansion
Kwality FZE (100% subsidiary of your Company in dubai) plans to increase its import of SMP, WMP , other Dairy Products and derivatives , and
then reprocess, pack and sell these products under its brands, in Dubai and export to other countries.

10. EXPORT
With the removal of ban on the export of skimmed milk powder in June, 2012 and whole milk powder & dairy whitener in November, 2012. Your
Company started export of Dairy products and achieved the export turnover of Rs. 183.45 crores as compared to Rs. 71.74 crores in the FY
2012-13. In the next fiscal year the Company has estimated an increase in export sales based upon the rising demand of dairy products in the
international market and the acceptance of our products from our existing and prospective buyers. The strategy to develop new products and
target new export regions would continue, so that we have a broad based direction of exports.
However the export may be affected during the current year as the Government has withdrawn the VKYUG scheme on SMP.

11. SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS


Your Company has a wholly owned subsidiary under the name and style of Kwality Dairy Products FZE in free trade zone of United Arab
Emirates to increase its global foot print and to develop and cater to the new markets.
Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21 and 23 of Companies (Accounting
Standards) Rules 2006. The Consolidated Statements reflect the results of the Company and those of its subsidiary. As required by Clause 32
of the Listing Agreement with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Independent Auditors
Report thereon are annexed and form part of this Annual Report. These consolidated financial statements provide all relevant financial
information about the Company.

12. CASH FLOW STATEMENT


In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 31st March, 2014 is
attached as a part of the Annual Accounts of the Company.

13. MANAGEMENT DISCUSSION AND ANALYSIS


The management discussion and analysis of the Company for the year under review, as required under Clause 49 of the listing agreement with
the stock exchanges, is given as a separate Section in Annual Report.

14. KEY MANAGERIAL PERSONNELS (KMP):


The Companies Act, 2013 introduced the new concept of Key Managerial Personnel (KMP) which includes the Managing Director, Chief
Executive Officer or Manager, Whole Time Director, Company Secretary and Chief Financial Officer. The Key Managerial Personnel would guide
the Boards to achieve their defined objectives and purposes by adhering to good Corporate Governance practices. KMP would also be looked
upon by the Regulators for the non-compliances.
The new Companies Act, 2013 cast a significant duty on the KMPs in successful management of the company. It clearly specifies that whole
time KMP cannot hold office in more than one company except in its subsidiary at same time.
As per Section 203 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 if any, and the rules made
thereunder, Board of Directors of the Company has appointed Mr. Sunit Shangle as a Chief Financial Officer of the Company with effect from
12th August, 2014 under the preview of Key Managerial Personnel.
The Key Managerial Persons of the Company are:
Name
Designation
Mr. Sanjay Dhingra
Managing Director
Mr. Sidhant Gupta
Director
Mr. Sunit Shangle
Chief Financial Officer (CFO)
Ms. Deepa Kapoor
Company Secretary

15. DIRECTORS
The Board of your Company is constituted of four Directors comprising of Mr. Sanjay Dhingra, Chairman & Managing Director, Mr. Sidhant
Gupta, Executive Director, Mr. Arun Srivastava, Non-Executive Independent Director and Dr. Rattan Sagar Khanna, Non-Executive Independent
Director.
In terms of Section 203 of the Companies Act, 2013 an individual may be appointed as the Chairperson as well as the Managing Director of the
Company at the same if it is provided in the Article of Association of the Company or the Company carries multiple businesses.
Therefore the Company in order to comply with the provisions of Section 203 proposes to alter its Article of Association in the ensuing Annual
General Meeting in such way that an individual may be appointed as Chairman and Managing Director at the same time.
As per the Companies Act, 2013 Mr. Sanjay Dhingra, Chairman & Managing Director of Company is liable to retire by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for re-appointment.
The Board recommends his appointment/re-appointment.
A resolution seeking your approval on this item is included in the Notice convening the Annual General Meeting together with a brief profile of
the Director being re-appointed.

16. DIRECTORS RESPONSIBILITY STATEMENT


Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 with respect to Director Responsibility statement, and based on
the representation received from operating management, the Directors hereby confirm:
a) That in the preparation of the annual accounts for the period ended on March 31, 2014, the applicable accounting standards have been
followed and there are no material departure.
b) That the directors had selected appropriate accounting policies and judgments and estimates that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the company at the end of the financial year March 31, 2014 and the profit of the company for that
period.
c) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities; and
d) That the directors had prepared the annual accounts for the period ended on 31st March, 2014 as on going concern basis.

17. FIXED DEPOSITS


Your company has not raised any public deposit during the period under review. There was no public deposit outstanding at the beginning or at
the end of the period.

18. HUMAN RESOURCE DEVELOPMENT


Development of Human Resource is essential for any organization for its growth. Organizations can sustain in the dynamic changing
environment only through the efforts and competencies of their Human Resources.
Your Company recognizes human resource as its most valuable asset and believes that participation of employees in management can foster a
sense of importance amongst them, and motivates them in establishing harmonious relations so as to enhance operational efficiency
industrial peace and harmony, leading to higher productivity.
Your Company makes efforts to ensure that best talent is recruited, trained and retained. During the year, your Company has put emphasis on
performance driven work culture and appropriate HR tools and processes have been deployed to ensure clear linkage with rewards. Strong
recognition platforms have been created to encourage people to deliver stretched goals. There has been emphasis on training and
development and career development opportunities.
To retain leadership position, the Company continuously innovates and customizes its human resource (HR) strategy to meet changing
employee needs.

19. SUPPLY CHAIN AND DISTRIBUTORS NETWORK


Your Companys supply chain agenda remained focused on to maximize customer value and achieve a sustainable competitive advantage and
to manage this efficiently, improving performance on service, quality and cost. This was delivered with speed and agility in a Supply Chain setup, with the highest standards of safety and positive environmental impact. Your Company distributors network is as:
Processing Plant

C&F Agents

Retailers

Distributors

Institutions

Retailers

Depots

Institutions

Distributors

To tap emerging demand from small towns and interior markets, your Company had appointed super stockiest and distributors who service in
small markets through their network. Your Company has more than 50super stockiest and approx. 900 distributors the country for all the
product ranges under Brand Name of Dairy Best, Kream Kountry & Livlite.

20. INTERNAL AUDIT & CONTROL SYSTEM


The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from
unauthorized use or disposition, and that the transactions are authorized, recorded and reported correctly. These internal controls are
supplemented by an extensive programme of internal audit carried out by reputed firms of Chartered Accountants. Your Company has an Audit
Committee consisting of three Directors; The Audit Committee, Board of Directors, Statutory Auditors and the Business Heads are periodically
apprised of the internal audit findings and corrective actions taken. The Audit Committee, Board of Directors reviews the adequacy and
effectiveness of internal control system and suggest improvement(s) if any. The Company has a robust Management Information System which
is an integral part of the control mechanism.

21. BRANDS
Your Company has kept up the pace of innovation by working and investing aggressively behind new consumer understanding, new
technologies and capability programs. Consistent with this objective your Company launched several products i.e. milk, curd, ghee, butter,
paneer, lassi, chaach and ice-cream etc. under the brand name of Dairy Best, Kream Kountry & Livlite.
Your Company continues to invest significantly in its structured innovation process, which is reflected in the launch of varied and differentiated
offering to strengthen the business. Your Company has also initiated the process for breakthrough innovations through interactions with
reputed institutions, which is expected to help build a strong platform for sustained and significant business leadership.

22. QUALITY STANDARDS


Quality being the most powerful factor to capture, retain and enlarge customer base in the modern business scenario, your Company
concentrates on the quality standards of its products for food safety and public health, standards of milk quality and quality control of milk and
dairy products. To produce high-quality international standard milk and dairy products, quality standards for Food Safety is based on Codex
Standards for Hazard Analysis and Critical Control Points (HACCP) to ensure safe and quality products for consumers. These control programs
are aimed at avoiding abnormal and unsafe milk and dairy products entering into food channels for human consumption.
Your Company continuously works on raising the delivered quality of its products and processes. The culture of continuous improvement is
being created through deploying various initiatives like Total Productive Maintenance (TPM) and Total Quality Management (TQM) and every
new Kwality Limited product must pass through a full test to evaluate its life/yield, and overall performance under a wide range of
environmental conditions.
Your Company review its quality standards and makes them stringent and updated on regular basis. To compete in International market for
export of milk & milk products, it has become necessary to produce the dairy products with internationally acceptable quality and food safety
standards. It is an indicator of the Companys commitment for quality, food safety and maintaining environmental standards.

23. MANUFACTURING OPERATION


Your Company has made continuous improvement in its manufacturing operations in order to facilitates its processing activities and increase
its operational efficiency. In that context, capacities were created at relevant locations to meet the growing demand by the consumers. These
manufacturing operations are compatible with the health & safety standards and environment friendly.
These improved manufacturing operations increases the production capacities and capabilities both in your Companys manufacturing units
and delivers the products at relevant locations to meet the growing demand of the products by the consumers. All these have helped in creating
the right capacity with superior technology to better serve the market.
Many of the key tasks in this industry are performed by dairy process workers. In the dairy industry, dairy process workers will operate a range of
specialized equipment, often from sophisticated control room, to produce the variety of dairy products.

24. INFORMATION TECHNOLOGY


Information Technology has become a vital and integral part of every business and every company need to invest to improve its existing
technology or acquire updated technology for creating differentiating products and services to stay ahead in a competitive and challenging
environment.
Your Company continues to invest in Information Technology (IT) to improve operational efficiencies and enhance productivity. Advances in new
manufacturing process technology may allow the use of mostly dairy ingredients and small amount of fresh milk in the manufacture of dairy
product.
Your Company continuously focuses to build powerful IT capabilities for marketing. Your Company will also be implementing analytics in
procurement to enable its procurement team to gain greater visibility and better forecast commodity price trends.
Your Company is in the process of implementation of ERP Solution which will not only help in standardization of the processes but also ensure
timely corrective actions and remedial measure as the basis of MIS and information available on the real time basis.

25. ENVIRONMENT, HEALTH AND SAFETY


Your Company is sensitized to the need for responsible action that helps to sustain the environment and natural resources. At all the factories,
efficiency and controlling cost extends beyond the commercial and includes the objectives of minimizing consumption of natural resources.
During the past year, they continued to follow the two-fold approach to achieve this. On the one hand they continuously increased efficiencies in
areas within their control and have been a forerunner in conserving water, saving energy, recycling waste and reducing pollution. On the other
hand, as partners in growth, they enabled people in the community to be more aware and responsible towards the environment and its
resources.
Your Company has an environmental policy for implementing an Environmental Management System (EMS) for meeting the content & purpose
of organizations Environmental Policy & Objectives which take into account governmental policies, environmental laws and regulations, and
adheres to strict internal Kwality Environmental Management System norms and information about significant environmental aspects. It
aims at use of processes, practices and techniques to avoid, reduce or control the creation, emission or discharge of pollutant or waste, in order
to reduce adverse environmental impacts.
To maintain sustainable environmental stride, your Company took initiative for waste minimization of all its resources. With the objective to
provide a healthy and safe environment, your Company has undertaken several safety measures at all its manufacturing units that include:
Communicating the EHS Policy to all stakeholders.
Assessing and identifying unsafe conditions at work place.
Conducting Hazard and Risk Study at units.
Documenting and implementing Safe Operational Control Procedures at units.
Training people on good safety practices on the shop floor and elsewhere in the factory.
Your company has emphasized and worked towards sustainable use of natural and non-renewable resources. Within the factories there are
continuous efforts to improve operational efficiencies, minimizing consumption of natural resources and reducing CO2 emission while
maximizing production volumes. Your Company actively makes efforts to increase awareness about the need to sustain the environment and
within the factories it constantly evaluates new initiatives that could reduce waste and emissions.

26. RISK MANAGEMENT


The risk management process is continuously improved and adapted to the changing global risk scenario. The agility of the risk management
process is monitored and reviewed for appropriateness with the changing risk landscape. This includes risk assessment and mitigation at the
company level, business / functional unit level, relationship level and project level.

27. AUDITORS
The Board proposes the re-appointment of M/s P.P. Mukerjee & Associates, Chartered Accountants, as Statutory Auditors of your Company
based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting till the

conclusion of the Annual General Meeting of the Company to be held in the year 2019 (subject to ratification of their appointment at every
AGM). The Company has received a letter from them that their appointment, if made, would be in accordance with Section 139 of the
Companies Act, 2013 and that, they are not disqualified for such appointment within the meaning of Section 141 of the Companies Act, 2013.

28. LISTING
The equity shares of the Company continue to be listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India
Limited (NSE). The annual listing fees for the current year have been paid to the Bombay Stock Exchange Limited (BSE) and National Stock
Exchange of India Limited (NSE).

29. PARTICULARS OF EMPLOYEES


The information required under Section 217 (2A) of the Companies Act, 1956 and the rules made thereunder, in respect of the employees of
the Company has been excluded in terms of Section 219 (1)(b)(iv) of the Companies Act, 1956. The annual report excluding the aforesaid
information is being sent to all the members of the company and others entitled thereto. Any member interested in obtaining a copy of such
particulars may write to the Company at the registered office of the Company.

30. KWALITY EMPLOYEE STOCK OPTION PLAN 2014 (ESOP 2014)


The Company appreciates the critical role played by the people in the organizational growth. It strongly feels that the value created by its people
should be shared with them. Keeping in view this objective and to promote the culture of employee ownership in the Company, it introduced
Employee Stock Options to the employees of the Company under an Employee Stock Option Plan. Accordingly, a Plan namely the "Kwality
Employee Stock Option Plan 2014" ("ESOP 2014") has been drafted. Shareholders' approval is sought as per Section 62(1)(b) of the
Companies Act, 2013 and Clause 6 of the SEBI ESOP Guidelines through Postal Ballot, result of which was declared on July 07, 2014.
However till date no ESOPs have been granted to any employee.

31. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.
Information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure on particulars in the report of
the Board of Directors) Rules, 1988 is set out in an Annexure to this report.

32. CORPORATE GOVERNANCE


A separate section on Corporate Governance and a certificate from the statutory auditors of the Company regarding compliance with the
conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form part of this
Annual Report.

33. APPRECIATION
We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every member of the
Kwality Limited. To them goes the credit for the Companys achievements.
We are very grateful to National Dairy Research Institute (NDRI) for providing us with invaluable support. National Dairy Research Institute
(NDRI) had played a significant role in our growth and development.
Our Bankers, Insurers, Suppliers and Transport Contractors have been of great help to us in managing our growth and are our partners in
success.
We acknowledge their contributions and commit ourselves to continue and strengthen this fruitful alliance in all times to come.
Your Directors take this opportunity to express their deep sense of gratitude to the Central and State Governments, customers, vendors and the
society at large for their continues support.
And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

Place: New Delhi


Date: 12th August, 2014

For & on behalf of the Board of Directors


Sd/Sanjay Dhingra
Chairman & Managing Director
DIN: 00025376

ANNEXURE TO THE DIRECTORS' REPORT

INFORMATION AS PER SECTION 217(1)(e) READ WITH COMPANIES (DISCLOSURE


OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND
FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED MARCH 31,
2014
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO

CONSERVATION OF ENERGY
Power & Fuel Consumption
(a) Electricity
Purchased
Units
Total Amount (Rs.)
Rate Per Unit (Rs.)
(b) Fuels
(Diesel, FO, Burada,
Husks & Turi)
Quantity (ltrs/Kgs)
Total Amount (Rs.)
Rate per Unit (Rs.)

2013-14

2012-13

59,36,645
4,67,81,559
7.88

31,86,389
2,07,95,923
6.53

1,64,99,774
14,03,41,352
8.51

1,26,84,245
12,27,53,817.80
9.68

TECHNOLOGY ABSORPTION
R & D / PRODUCT DEVELOPMENT
The Company has an in-house R & D / Product Development Laboratory to develop pure, hygienic, and nutritious products adhering
to best Quality Standards. Continuous efforts are made to ensure qualitative improvement and safety of products and optimum
efficiency in operations.
Specific Areas in which R & D / Product Development have been undertaken:
Processing of Fresh Raw Milk.
Nutrification of milk with appropriate nutrients.
Improvement of Shelf life of Dairy products.
Tamper Proof Packaging of Products.
Development of desi ghee LivLite brand containing 85% less cholesterol as compared to the normal ghee marketed across the
world.
Consumer acceptance of new Dairy products.
Benefit Derived
Enhanced shelf Life of the Products.
Nutritious and Superior Products have allowed Company to expand its market share.
Creation of a niche market for low cholesterol ghee.
Future plan of action
Invent and develop new present age nutritionally-balanced healthy products.
Foraying in the nutraceuticals market.

FOREIGN EXCHANGE EARNINGS & OUTGO:


INR in crores
Total Foreign Exchange
Earned And Used:
(i) Earnings
(ii) Expenditure*

2013-14

2012-13

183.45
73.46

34.18
9.09

*Foreign Exchange Expenditure incurred on capital goods, raw material, professional fees, capital investments in subsidiary, loan to
subsidiary, foreign tour and travel and miscellaneous expenses.

Place: New Delhi


Date: 12th August, 2014

For & on behalf of the Board of Directors


Sd/Sanjay Dhingra
Chairman & Managing Director
DIN: 00025376

MANAGEMENT DISCUSSION & ANALYSIS REPORT

MANAGEMENT DISCUSSION & ANALYSIS REPORT


Management Discussion & Analysis
Management Discussion and Analysis detailing the companys objectives and expectations is a forward looking statement within
the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impaired
depending upon global and Indian demand, supply conditions, changes in government regulations, tax regimes, economic
developments within India and overseas.
Outlook-Structure & Development of Indian Dairy
The dairy industry in India has been on a steady path of progression since Indian independence. Today, India is one of the largest milk
producing countries in the world. This solid progress is primarily attributable to structural changes in the Indian dairy industry
brought about by the advent of dairy cooperatives.
India is the worlds largest milk producer, accounting for around 17% of the global milk production. Besides, it is one of the largest
producers as well as consumers of dairy products. Due to their rich nutritional qualities, the consumption of dairy products has been
growing exponentially in the country.
Despite being the worlds largest producer, the dairy sector is by and large in the primitive stage of development and modernization.
The sector is plagued with various other impediments like shortage of fodder, its poor quality, dismal transportation facilities and a
poorly developed cold chain infrastructure. As a result, the supply side lacks in elasticity that is expected of it.
In India, the dairy sector plays an important role in the countrys socio-economic development, and constitutes an important
segment of the rural economy. Dairy industry provides livelihood to millions of homes in villages, ensuring supply of quality milk and
milk products to people in both urban and rural areas. With a view to keeping pace with the countrys increasing demand for milk and
milk products, the industry has been growing rapidly.
Milk Production and Per Capita Availability in Indian scenerio from 1960 to 2012 is as :
Trends in Milk Production and Per Capita Availability : 1960 to 2012
140

300

120
100
97

80

116

122

128

150
100

56

40
20

22

32

1960-61

1970-71

1980-81

250
200

81

60

20

108

112

50

0
1991-92

2000-01

Production (million tonnes)

2005-06

2007-08

2008-09

2009-10

2010-11

2011-12

Per capita availability grams/day

Quality & Food Safety policy


The company is being an ISO 22000:2005, HACCP-IS: 15000 and Agmark approved company. To produce high-quality international
standard milk and dairy products, quality standards for Food Safety is based on Codex Standards for Hazard Analysis and Critical
Control Points (HACCP) to ensure safe and quality products for consumers. These control programs are aimed at avoiding abnormal
and unsafe milk and dairy products entering into food channels for human consumption.

Your Company review its quality standards and makes them stringent and updated on regular basis. To compete in International market for
export of milk & milk products, it has become necessary to produce the dairy products with internationally acceptable quality and food safety
standards. It is an indicator of the Companys commitment for quality, food safety and maintaining environmental standards.
Segment Wise /product Wise Reporting
The Company is engaged in the dairy business with a wide range of milk products. The details of companys product segment is as:

Segment Snapshot

Business Description

Product Portfolio
1. Fat Based Products (Fat/Butter/Cream/Ghee)
1.1 Pure Ghee

Dairy Best Pure Ghee is produced from fresh milk under hygienic conditions, using modern automated process

Dairy Best Pure Ghee has the AGMARK certication from the Ministry of Agriculture, Government of India

The ghee is sold through multiple sales channels to both retail and institutional customers
1.2 Pure Cow Ghee
Kwalitys 100% Pure Cow Ghee is a high value product manufactured exclusively from fresh cows milk
The texture of the ghee is granular and is similar to the traditional home-made ghee
Cow Ghee is sold under Dairy Best brand and sold to retail customers
1.3 Low Cholesterol Ghee
The Company recently launched a Low Cholesterol Pure Ghee, Livlite, which contains 85% less cholesterol
Livlite has been licensed by National Research and Development Corporation (NRDC) to the Company for 10 years (5 years exclusive)
Shelf life of 12 months
The Company has launched aggressive marketing campaigns to position Livlite as a premium FMCG product
2. Milk Powders
Manufactures Whole Milk Powder (WMP), Skimmed Milk Powder (SMP), Dairy Creamer (DC), Dairy Whitener (DW) by segregating the
SNF (Solids, Not Fat) from the liquid milk

These products are used for making biscuits, ice creams, sweets and other milk based products
Mainly sold to institutional customers under multiple brands like Good-Health, Kream-Kountry and Dairy Best
3. Curd
Manufactures both set curd and pouched curd
Sold to both dealers/ distributors and retailers
The product is marketed in 1kg, 2kg, 5kg & 15kg matkas, 500gm, 1kg pouches and 80gm, 200gm & 400gm cups.
4. Milk
Derives 74.24% of its revenues by selling milk in various forms full cream milk, Skimmed Milk, Toned Milk, Double Toned Pasteurized
Milk
After extracting the fat content from the full fat milk to produce pure ghee, the Company either manufactures Skimmed Milk Powder from
the remaining skimmed milk or sells the skimmed milk as it is depending on market demand
As milk is a perishable product, the sale of skimmed milk is signicantly dependent on the immediate market demand for both skimmed
milk and Skimmed Milk Powder

Risk and concerns


The major risk and concerns attributed to the performance of the company are:
a) Although the export sales are less in comparison to domestic sales, fluctuation in the foreign rates, international prices of dairy products
and withdrawal of export benefits may influence the performance of the company.
b) Increase in input costs, change in tax structure ,change in interest rates ,change in Government polices /laws of land , development and
stability of Indian economy against the negative external and internal forces may also impacts the overall performance of the company.
c) Profitability may be affected on account of competition from existing and prospective manufacturers of the companys products.
d) Dairy business is primarily influenced by monsoon. Unfavorable monsoon may affect the milk availability.
e) Spread of animal disease may effect the production of milk.

Growth Factors
The Company has to take care of those factors that helps it to grow its business operations. Some of them are as follows:

Adequacy of Internal Control System


The company believes in sound internal control systems as a necessary prerequisite of good governance in which management authority
should be exercised within a framework of appropriate checks and balances. The internal control system of the Company are commensurate
with its size and nature of operations They have been designed to provide reasonable assurance with regard to recording and providing
reliable financial information, complying with applicable statutes, safeguarding of assets from unauthorized user or losses, authorization of
transactions and adherence to corporate policies.
The internal controls are duly checked for their adequacy by carrying out regular and exhaustive internal audits. The Company has appointed
firm of Chartered Accountants to carry out the internal audit of the Company various Divisions. The audit is carried out through an internal
audit plan, which is reviewed each year in consultation with the Audit Committee which reviews of adequacy of internal control checks in the
system and covers all significant areas of Company operations.

REPORT ON CORPORATE GOVERNANCE

1. Corporate Governance :
Effective Corporate Governance practices constitute a strong foundation on which successful commercial enterprises are built to
last.
Your Companys philosophy on the Corporate Governance is based on fairness, accountability, disclosure, transparency, value and
ethics. Sound and effective Corporate Governance practices enabled it to achieve the sustainable growth and meet the expectations
of the stakeholders.
Your Company is committed to follow the best Corporate Governance Practices in all its pursuits and is constantly striving to better
them and adopt emerging best practices. Comprehensive disclosures, structured accountability in exercise of powers, adhering to
best practices and commitment to compliance with regulations have enabled your Company to enhance shareholder value. In fact,
this has become an integral part of the way the business is done. The governance practices followed by your Company are
continuously reviewed and the same are benchmarked with the best governed companies. The Company is in compliance with the
requirements stipulated under clause 49 of the Listing Agreement entered into with Stock Exchange with regard to Corporate
Governance.

2. Board of Directors:The Board of Directors is the governing body of the Company and holds the ultimate responsibility for the success or failure of the
Company. The Board formulate the strategies to be followed to be successful in achieving the goals and objectives of the Company.
The composition of the Board is to have an appropriate mix of Executive and Non- executive Independent Directors to maintain the
independence of the Board and to separate its functions of governance and management.
The Board of Directors possess the requisite qualification, knowledge and experience which enables them to provide effective
leadership to the business. The Board is at the core of the corporate governance practice and overseas how the management serves
and protects the long term interest of all the stakeholders.
Composition of the Board:
The Composition of Board of Directors is in conformity with clause 49 of the Listing Agreement, which stipulates that atleast 50% of
the Board shall consist of Independent Directors, if the chairman of the Board is an Executive Director.
As on 31st March, 2014 the Board comprised of 4 (four) Directors. Out of these, two are Executive Director, including the Chairman &
Managing Director and two are Non- Executive & Independent Directors.
All the Directors possess the requisite qualification and experience in Management, finance, banking and other allied fields enabling
them to contribute effectively in their capacity as Directors of the Company.
The name and categories of the directors on the Board, their attendance at the board meeting held during the year, attendance at the
last Annual General Meeting of the members of the company, the number of directorship and committee chairmanship/membership
held by them in other companies is given below:

I Composition and categories of Board of Directors as on 31st March, 2014

Name of the Director

Category

Designation

Mr. Sanjay Dhingra

Executive Director

Chairman & Managing Director

Mr. Sidhant Gupta

Executive Director

Executive Director

Mr. Arun Srivastava

Non-Executive-Independent Director

Director

Dr. Rattan Sagar Khanna

Non-Executive-Independent Director

Director

None of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees as specified
in Clause 49 of the Listing Agreement, across all the companies in which he is a director. The Directors have made the necessary
disclosures regarding Committee positions.

II. Attendance of Each Director at the Board Meetings and the Previous Annual General Meeting

Name of the Director

No. of Board Meeting


Held
Attended

Attendance at the previous


AGM held on 30.09.2013

Mr. Sanjay Dhingra

10

10

Yes

Mr. Sidhant Gupta

10

10

Yes

Mr. Arun Srivastava

10

10

Yes

Dr. Rattan Sagar Khanna

10

10

Yes

III. Number of Board/Committees of which a Director is a member or chairman as on 31st March, 2014

Name of the Director

No. of Directorship held


in other Companies

Number of Committee Memberships


held in other public companies

Mr. Sanjay Dhingra

Nil

Mr. Sidhant Gupta

Nil

Nil

Mr. Arun Srivastava

Nil

Dr. Rattan Sagar Khanna

Nil

Nil

IV. Date of the Meetings of the Board of Directors


During the Financial Year 2013-14 the Board met ten times. The dates of the meetings are as under:

Date of Board Meetings


17.05.2013

05.07.2013

14.08.2013

23.09.2013

10.11.2013

30.12.2013

25.01.2014

14.02.2014

13.03.2014

24.03.2014

Director's Profile
Sanjay Dhingra (DIN : 00025376)
Kwality Limited is managed by a Board of Directors headed by Shri Sanjay Dhingra. He has rich experience over two decades in diversified
activities such as Manufacturing, Trading & International Marketing in the FMCG sector. He has led the group's activities from the front. It is his
visionary attributes that has manifested in the expansion of the business and enlargement of the value chain both in upstream and
downstream sectors.
His business acumen combined with his grass root level exposure in the FMCG Industry has been instrumental in making Kwality limited one of
the fastest growing companies in the Dairy Sector. Under his able leadership the company has successfully established itself as a dominant
player in the dairy industry in the country. The company has crossed a remarkable figure of Rs. 4578 Crs. of turnover for financial year 20132014.
Shri Dhingra was felicitated by Hon'ble Union Finance Minister Mr. Pranab Mukherjee (currently our Hon'ble President) for being a successful,
self-made industrialist and for his immense contribution to the Dairy sector.
Sidhant Gupta (DIN : 00555513)
Shri Sidhant Gupta was appointed on the Board of Directors of the Company on April 18, 2011. He is responsible for growth and strategic
planning for the Company. A Management Graduate in Finance from one of the reputed college Shri Venkateswara College, University of Delhi,
India.
Shri Sidhant Gupta has been instrumental in bringing about technological and managerial excellence in the Company's operations. His rich
experience, expertise in business management and foresightedness has been instrumental in elevating Kwality Limited to its current position
wherein the Company has seen fresh growth perspectives including the initiative to incorporate foreign subsidiary, expand the company's
global footprint and tap various international markets with tremendous growth in terms of both top-line and bottom-line.
He brought about radical changes, implemented business strategies, removed lacunas of internal system and enhanced the group's value by
launching new dairy products. A person of strong will and focused mind, he has been instrumental in bringing about coherency in operation
matters leading to better efficiencies all around including optimum fund building and utilization.
Dr. Rattan Sagar Khanna (DIN : 03073914)
Dr. Rattan Sagar Khanna did his M.Sc. (Hons) from Punjab Agri University. He is Diploma holder in Semen Freezing Gynecology & Andrology
from Royal Veterinary and Agriculture University, Copenhagen, Diploma in Farm & Science Journalism from Institute of Farm & Science
Journalism, New Delhi. Over 35 years, he has worked at senior positions in Dairy, Farming and in Agriculture Sector in the areas of
manufacturing, consulting and marketing. He has joined the Board of Kwality Limited in May 2010.
Dr. Khanna is presently the trustee of M/s Ganesh Scientific Research Foundation New Delhi, Consultant of Namastey India Foods, Kanpur,
Council Member and Consultant of Gerson Lehrman Group, New York, USA, Vice Chairman & Consultant of Centre for Institute of Animal
Husbandry and Dairy Development, Noida, Member, Research Advisory Council, World Buffalo Trust, Noida.
In the past, Dr. Rattan Sagar Khanna has served, among others, as a Member & Chairman of various Dairy Associations including Consultant of
Department of Animal Husbandry, Fisheries & Veterinary Services, Chief Executive Officer Animal Feeds Business in Dabur Ayurved Limited.,
Advisor to the GCMMF, General Manager in Gujrat Co-operative Milk Marketing Federation, New Delhi, Managing Director of Rajasthan
Cooperative Dairy Federation, Jaipur, Resident Representative (Northern Region) of National Dairy Development Board, New Delhi, and Head
(Projects) of Indian Dairy Corporation, Baroda.
He has been providing his valuable inputs on major initiatives taken by the Company as well as the technologies introduced in the Company. He
is actively involved in introduction and launch of our anchor Brand Dairy Best - Livlite. Dr. Khanna has also extended his expertise in
implementation and establishment of collection centres and MCC's of the Company.
As an investor protection activist and proponent of good corporate governance, Dr. Khanna has been the guiding force in company's CSR
initiatives. An old war horse in Dairy Business, his experience has been a valuable asset for the company.
Arun Srivastava (DIN : 01121929)
Shri Arun Srivastava joined the Board of Kwality Limited on 25th June 2003. He brings to the Board an extensive experience of Financial

Modeling and Resource Mobilisation. A commerce graduate by profession, Shri Arun's endeavors, valuable inputs and consultation to the
Board helps in managing complex banking products required in the international trade to ensure the safety of the material and the cash
register of the Company.
He has been serving on various committees of Board and helping the Company in its smooth operations. He brings in corporate finance and
transaction experience to the Company and with consulting and liasoning background he remains the trouble shooter for the Company vis--vis
clients and lenders and ensure smooth execution of mandated deals.
None of the Non-Executive Directors of the Company has any material pecuniary relationship or transaction with the company.
The Board meets at regular intervals and a detailed agenda is send to each director prior to the Board and committee meetings. During the
Financial Year 2013-2014, ten Board meeting were held and the gap between two meetings did not exceed four months.

3. Board Committees
To enable better and more focused attention on the affairs of the Company, the board delegates particular powers to committees of the
directors set up for the purpose.
Currently, the Board has 6 (Six) Committees i.e. Audit Committee, Remuneration, Compensation & Nomination Committee, Share Transfer
Committee, Stakeholders Relationship Committee, Management Committee and Corporate Social Responsibility Committee. The quorum for
meetings is either two members or one-third of the members of the committee, whichever is higher. The composition, scope of work, numbers
of the total meetings held during the financial year 2013-14 are as under:
1. Audit Committee:
The Audit Committee covers the areas as contemplated under Clause 49 of the Listing Agreement, Section 177 of the Companies Act, 2013
and Section 292A of the Companies Act 1956, besides other terms as may be referred by the Board of Directors. Statutory Auditors and Internal
Auditors were regular invitees to the committees meeting.
I. Composition of Audit Committee:
The Audit Committee comprised of 3 (three) Directors. Out of these, two are Non-Executive & Independent Director and one Executive Director.
All of whom are financially literate and they have accounting or related financial management expertise.
The Company Secretary acts as Secretary of the Committee.

Name of Director

Category

No. of Meeting Held

No. of Meeting Attended

Mr. Arun Srivastava

Non-Executive-Independent Director

10

10

Mr. Sidhant Gupta

Executive Director

10

10

Dr. Rattan Sagar Khanna

Non-Executive-Independent Director

10

10

II. Scope/term of reference of Audit Committee:


The terms of reference/power of the Audit Committee has been specified by the Board of Directors in consonance with Section 177 of the
Companies Act, 2013 and Section 292A of the Companies Act 1956 and Clause 49 of the Listing Agreement, which inter alia includes.
1) Oversight of Company's financial reporting process and disclosure of its financial information to ensure that the financial statements are
correct, sufficient and credible.
2) Reviewing with the management the quarterly and annual financial statements before submission to the Board of Directors focusing
primarily on:
I)
Any changes in accounting policies and practices.
ii)
Major accounting entries based on exercise of judgment by management.
iii) Significant adjustments arising out of audit.
iv) Compliances with Stock Exchanges and legal requirements concerning financial statements.
v)
Any related party transaction i.e. transaction of the Company of material nature, that may have potential conflict with the interest of the
company at large.
3) Reviewing with the management, statutory and internal auditors, the adequacy of internal control system.
4) Recommending the appointment and removal of statutory auditors, and terms of remuneration.
5) Discussing with the internal auditors any significant findings and follow-up thereon.
6) Discuss with the statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion for
area of concern.
7) Reviewing the company's financial and risk management policies.
8) Carrying out such other function as may be specifically referred to the committee, by the Board of Directors.
Minutes of Meeting of Audit Committee are circulated in the Board meeting.
III. Dates of Audit Committee Meetings are as follows:
During the Financial Year 2013-14 the audit committee met 10 (Ten) time. The date on which meeting of the Audit Committee held are as
under:

17.05.2013

05.07.2013

14.08.2013

23.09.2013

10.11.2013

30.12.2013

25.01.2014

14.02.2014

12.03.2014

24.03.2014

2. Remuneration, Compensation and Nomination Committee


The Board has constituted a Remuneration, Compensation & Nomination Committee in terms of Section 178 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement to make recommendation on Directors' appointment to the Board, appointment to the Management
Committee and the senior most level of executive management below the Executive Director, review and approve the annual salaries,
commission, service agreement and other employment conditions for Executive Directors.
The Remuneration, Compensation & Nomination Committee has been constituted to formulate the criteria for determining qualifications and
independence of Directors and to recommend/review the remuneration of Managing Directos/Whole Time Director and employees of the
Company. The remuneration policy is directed towards rewarding performance base on review of achievements on a peridical basis. The
remuneration policy is in consonance with industry practice.
The Remuneration policy of the Company for employees is based on the performance of the individual and performance of the Company. The
policy aims at attracting and retaining high calibre talent and ensures equity, fairness and consistency inrewarding the employees.
The annual variable pay of senior managers is linked to the Company's performance in general and the performance of their
functions/business units for the relevant year and is measured against specific major performance areas which are closely aligned to the
Company's objectives.
The Committee is also responsible to formulate the ESOP Scheme and to discharge all the function of the compensation committee under
Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
I. Composition of Remuneration, Compensation and Nomination Committee

Name of Director

Category

Mr. Arun Srivastava

Non-Executive-Independent Director

Mr. Sanjay Dhingra

Chairman & Managing Director

Mr. Sidhant Gupta

Executive Director

Dr. Rattan Sagar Khanna

Non-Executive-Independent Director

The Details of Remuneration during the year ended 31st March, 2014 as follows:-

Gross Remuneration

Sitting Fees

Total

Mr. Sanjay Dhingra (Managing Director)

1,30,20,000

1,30,20,000

Mr. Sidhant Gupta (Executive Director)

1,00,00,000

1,00,00,000

Name

During the Financial Year 2013-14 the committee met 1 (one) time on 11.7.2013 at which all the members of the committee were present.
3. Management/ Executive Committee
The Management Committee was constituted on November 10, 2011 by the Board to manage the day to day business and operations of the
company and to improve the efficiency. The terms of reference of the Management Committee is to consider and dispose of any day to day
matters, with a view to ensure smooth operation and timely action/compliances. The Committee meets at frequent intervals and disposes
matters which are of routine and day to day operations.
I. Composition and numbers of meeting held of Management Committee:
The Management committee comprised with four members, Mr. Sanjay Dhingra (Managing Director), Mr. Sidhant Gupta (Executive Director),
Mr. Rajesh Verma (Vice President International Trade) and Mr. Manjeet Singh Dahiya (Vice President Technical).

Name of the Director

Category

Mr. Sanjay Dhingra

Chairman & Managing Director

13

13

Mr. Sidhant Gupta

Executive Director

13

11

Mr. Rajesh Verma

VP-International Trade

13

11

Mr. Manjeet Singh Dahiya

VP-Technical

13

13

No. of Meeting Held

No. of Meeting Attended

II. During the year, thirteen meetings of the committee were held:
08.04.2013

06.05.2013

12.06.2013

05.07.2013

03.08.2013

03.09.2013

04.10.2013

04.11.2013

05.12.2013

10.01.2014

15.01.2014

13.02.2014

13.03.2014

4. Stakeholders Relationship Committee


The Board has constituted a Stakeholders Relationship Committee to specifically look into redressal of shareholder's and investor's grievances
such as transfer, dividend, demat and related matters.
The Stakeholders Relationship Committee has been constituted as per the provisions of Section 178 of the Companies Act, 2013 and Listing
Agreement. The Company Secretary acts as Compliance Officer for the purpose of Stakeholders Relationship Committee.
I. Composition of the Stakeholders Relationship Committee

Name of the Director

Categories

Chairman/Member

Dr. Rattan Sagar Khanna

Non-Executive-Independent Director

Member

Executive Director

Mr. Sidhant Gupta


Mr. Arun Srivastava

Member

Non-Executive-Independent Director

Member

II. The Terms of Reference of The Stakeholders Relationship Committee are as under:
Review complaints of shareholders and action taken thereon.
Look into all securities filing every quarter.
Monitor implementation and compliances of company's Code of Conduct.
As the Securities and Exchange Board of India has introduced a new system for the registration & redressal of investors complaints online
popularly known as SCORES (SEBI Complaints Redress System). The committee periodically review the complaints registered in SCORES.
III. Details of meeting held and attended by members for financial year 2013-2014 are given below:

Name of the Director

No. of Meeting Held

No. of Meeting Attended

Dr. Rattan Sagar Khanna

Mr. Sidhant Gupta

Mr. Arun Srivastava

IV. Date of the Meetings


17.05.2013

14.08.2013

10.11.2013

13.03.2014

V. Status Report of investor's complaint/ request for the year ended 31st March, 2014
Number of Complaint/request Received- 12
Number of Complaint/request Resolved- 11
Number of Complaint/request Pending - 01
5. Share Transfer Committee
Share Transfer Committee was constituted as per the requirement of listing agreement and agreement with RTA for approval and registration
of transfer. The terms of reference of the Share transfer Committee is to approve transfer and transmission of shares and to approve Subdivision, Consolidation and issue of new/duplicate share certificates, whenever requested for by the shareholders of the company.
The committee consists of Dr. Rattan Sagar Khanna, Mr. Arun Srivastava and Mr. Sidhant Gupta. The Share Transfer Committee meets on
fortnightly basis and review, monitor the responsibility of Share Transfer Agents and review all the matters connected with shares. All valid
requests for share transfer received during the year have been acted upon and no such transfer is pending.
I. Composition of the Committee

Name of the Director

Category

Dr. Rattan Sagar Khana

Non-ExecutiveIndependent Director

36

36

Mr. Sidhant Gupta

Executive Director

36

33

Mr. Arun Srivastava

Non-ExecutiveIndependent Director

36

36

No. of Meeting Held

No. of Meeting Attended

II. Date of the Committee Meetings:


During the financial year 2013-14 the members of the committee met 36 (Thirty Six) times. The detail of the same is as under:

08.04.2013
05.06.2013
10.08.2013
09.10.2013
07.12.2013
07.02.2014

20.04.2013
14.06.2013
14.08.2013
21.10.2013
14.12.2013
18.02.2014

30.04.2013
29.06.2013
21.08.2013
30.10.2013
27.12.2013
28.02.2014

07.05.2013
08.07.2013
02.09.2013
09.11.2013
10.01.2014
04.03.2014

21.05.2013
20.07.2013
20.09.2013
20.11.2013
23.01.2014
14.03.2014

30.05.2013
29.07.2013
30.09.2013
30.11.2013
31.01.2014
28.03.2014

6. CSR Committee
The Board has constituted Corporate Social Responsibility Committee to formulate and recommend the Corporate Social Responsibility Policy
and to undertake the CSR activities.
Composition of the Corporate Social Responsibility Committee is as follows:

Name of the Director

Category

No. of Meeting Held

No. of Meeting Attended

Mr. Sanjay Dhingra

Executive Director

Mr. Sidhant Gupta

Executive Director

Dr. Saraswat

Non-Executive
Independent Director
Head procurement-New
Business Development

Mr. Rajinder Singh

Head Procurement-U.P.

Mr. Sunit Shangle

V.P. Finance

Mrs. Pushplata Tripathi

Manager - Training
and Development

Dr. Rattan Sagar Khanna

Role of Corporate Social Responsibility Committee is as follows:


1) Medical and health welfare facilities for the villagers including their animals
2) Initiative in education specially for girl children including contributions for schools, scholarships or grants for higher education etc.
3) Empowerment of the women of the village by forming of Women Self Help Group and taking steps in providing them training in vocational
activities, carrying out micro business activities etc. including educating them on women and child welfare, cleaniness and financial
inclusion.
4) Helping the villagers in getting loans for animals, vehicles or even construction of pucca loan by tying up with banks.
5) Covering insurances of the villagers including medical, personal accident and animal insurance
6) Acting as an agent for villagers to help them in getting the benefits in the form of subsidiaries etc. from State and Central Government.
7) Other activities for the upliftment, providing education and employment and welfare of the villagers.
Name, Designation and Address of Compliance Officer:
Ms. Deepa Kapoor
Compliance Officer
KDIL House
F-82, Shivaji Place, Rajouri Garden,
New Delhi-110027
Ph: 011-47006500 (100 lines)
7. Code of Business Conduct and Ethics for Directors and Senior Management:
Your Company has adopted a comprehensive code of conduct for its Board Members and Senior Management Personnel of the Company as
per the requirement of Clause 49(1) (D) of the Listing Agreement. The Board Members and Senior Management Personnel have affirmed their
compliance with the said code of conduct. The code of conduct has been posted on the website of the Company. The declaration to this effect
signed by Mr. Sanjay Dhingra, Chairman & Managing Director of the Company forms part of the report.
8. Annual General Meetings:
The Last three Annual General Meeting of the company were held as under

Year

Date

2012-2013

30.09.2013

9:30 A.M.

2011-2102

28.09.2012

10 A.M

Village Softa, Tehsil & District Palwal,


Faridabad, Haryana

2010-2011

26.09.2011

11 A.M

Village Softa, Tehsil & District Palwal,


Faridabad, Haryana

Time

Location
Lavanya, G.T. Karnal Road,
Palla Bakhtavarpor Mord, Alipur, Delhi-110036

Following Special Resolutions were passed at AGM held in 2010-2011:


Appointment of Executive Director for five years pursuant to Section 269, 198, 309, 310 & Schedule XIII of the Companies Act 1956, on the
remuneration as approved by remuneration committee
In pursuant to Section 269, 198, 309, 310 & Schedule XIII of the Companies Act 1956, the remuneration of Managing Director has been
increased with prior approval of the members at the meeting.
Issuance of ADRs / ADs / GDs / FCCBs / QIBs or any other securities
9. Extra-Ordinary General Meeting (EGM):
An extra ordinary General Meeting of the members of the company was held on 12th day of June, 2013 to transact the following businesses:
I. To fill casual vacancy caused due to resignation of M/s Walker Chandiok & Co.
II. To increase the borrowing power of the Company from 1500 cr. to 3000 cr.
III. To Change the name of the Company

Date

Time

Location

12.06.2013

9 A.M.

Village Softa, Tehsil & District Palwal, Faridabad, Haryana-121004

10. Postal Ballot:


The Company has sought approval of the Members, through Postal Ballot as per Section 110 of the Companies Act, 2013 read with Companies
(Management and Administration) Rules, 2014 for the following resolutions:
(I) Grant of Employee Stock Options to the employees of the Company under Kwality Employee Stock Option Plan 2014".
(ii) Grant of Employee Stock Options to the employees of the Subsidiary Companies of the Company under Kwality Employee Stock
Option Plan 2014".
(iii) Approval for extension of job work already executed with M/s Pashupati Dairies Private Limited and approval for taking land,
building, plant & machinery including godown on lease from M/s Pashupati Dairies Private Limited.
Mr. Mukun Arora of M/s Mukun Vivek & Company, Company Secretaries in practice, was appointed as the Scrutinizer for conducting the Postal
Ballot process. Based on the Scrutinizers Report the Result of Postal Ballot was declared on July 7, 2014 at the Registered Office of the
Company, as follows:

Resolutions

No. of valid
votes polled

Votes in favour
of the Resolution

Votes in against
of the Resolution

Result (%)

Special Resolution for approval of ESOP Plan


under Section 62(1)(b) read with the
applicable rules of the Companies Act, 2013
and SEBI (Employee Stock Option Scheme
and Employee Stock Purchase Scheme)
Guidelines, 1999

231

15,23,22,984

17,834

99.98

Special Resolution under Section 188 read


with the applicable rules of the Companies
Act, 2013 authorizing the Board to extend the
Job Work Agreement for further period of 2
months with M/s Pashupati Dairies Private
Limited and further to enter into Lease
Agreement with M/s Pashupati Dairies Private
Limited

225

1,41,526

12,038

84.56

Procedure for the Postal Ballot Process:


After receiving the approval of the Board of Directors, notice of the Postal Ballot, text of the resolution and explanatory statement, relevant
documents, Postal Ballot Form and self-addressed postage pre-paid envelopes are sent to the shareholders to enable them to consider and
vote for or against the proposal within a period of 30 days from the date of dispatch. Members are also given an option to vote in electronic form
using e-voting facilities provided by Central Depository Services Limited (CDSL). The calendar of events containing the activity chart was filed
with the Registrar of Companies within 7 days of the passing of the Resolution by the Board of Directors of the Company.
After the last date for receipt of the ballots, the Scrutinizer after due verification, submitted his report to the Chairman of the Board of Directors
of the Company. Thereafter, the Chairman declares the result of the Postal Ballot. The same is published in the Newspapers and displayed on
the website and the Notice Board at the registered office of the Company.
11. DISCLOSURE
(I) Disclosure on materially significant Related Party Transactions:
In terms of Accounting Standards 18, details of transactions with related parties transactions have been reported in the Notes to
Accounts, which form part of this Annual Report.
None of the transactions of Company of material nature, with its promoters and their relatives, the directors or the management and their
relatives or any other related parties were in conflict with the interest of the Company.
(ii) Disclosure on non-compliance on any matter related to capital markets during the last three years:
A Settlement fees of Rs. 3 Crore has been paid to SEBI for obtaining permission authorizing listing of shares allotted to erstwhile
promoters in the year 2000.

(iii) Disclosure of Accounting Treatment


There has not been any significant change in the accounting policies during the year.
(iv) Board disclosures- Risk Management
As the Company operate in extremely complex and dynamic environment, which exposes your Company to various internal and external
risks. Risk identification, assessment and mitigation assume paramount importance for the efficient & uninterrupted operations of the
Company. The Company has put in place Risk Management Policy and Procedures for assessing, timely responding and mitigating these
risks on continuous basis.
12. THE COMPANY HAS COMPLIED WITH ALL MANDATORY REQUIREMENTS AND HAS ADOPTED NON-MANDATORY REQUIREMENTS AS
PER DETAIL GIVEN BELOW:
(i) Shareholder Rights
Quarterly and Annual Financial Results of the company are published in leading newspapers and also displayed on website of the
company i.e. www.kdil.in. The results are not separately circulated to the shareholders.
(ii) Training to Board Members
At Present the company does not have such a training programme for the Board members..
(iii) Mechanism for evaluating non-executive Board members
The company has not adopted any mechanism for evaluating Non-Executive Directors.
(iv) Whistle blower policy
The Company has adopted a whistle blower policy to provide a formal mechanism to the employees to report their concerns about
unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The policy provides for
adequate safeguards against victimisation of employees who avails of the mechanism and also provides for direct access to the chairman
of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
13. MEANS OF COMMUNICATION
a) Stock Exchange Intimation: The unaudited quarterly financial statements are announced within forty-five days of the end of each
quarter and the audited annual results are announced within 60 days from the end of the last quarter. The aforesaid financial statements
after being taken on record by the Audit Committee and Board of Directors, are communicated to the Stock Exchanges where the shares
of the Company are listed
b) Newspapers: The financial results of the company (Quarterly & Annual) are published in leading newspapers viz The Financial Express,
Jan Satta, Business Standard and Economic Times in the format prescribed under Clause 41 of the Listing agreement with the stock
exchanges where the shares of the Company are listed.
c) Website: The financial results are also posted on the Companys Website www.kdil.in to inform and service the Shareholders allowing
them to access information at their convenience.
Management Discussion and Analysis report has been attached to the Director's Report and forms part of this Annual Report.

General Shareholder Information


1)

2)
3)

4)
5)

6)

22nd Annual General Meeting :


Date: 24th September, 2014
Time: 9:30 a.m.
Venue: Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036
Financial Calendar
The Financial year covers the period from 1st April to 31st March.
Key financial Reporting Dates for the Financial Year 2014-2015
Date of Book Closure
The Register of Members and Shares Transfer Register of the Company shall be closed from 17th September 2014 to 24th September 2014
(both days inclusive).
1st Quarter ending on 30-06-2014

On or before August 15, 2014

2nd Quarter ending on 30-09-2014

On or before November 15, 2014

3rd Quarter ending on 31-12-2014

On or before February 15, 2015

4th Quarter ending on 31-03-2015

On or before May 15, 2015 or if audited on


or before May 30, 2015

Dividend payment Date


The dividend as recommended by the Board of Directors, if declared at this Annual General Meeting will be paid within 30 days of declaration
Listing on Stock Exchange
Equity share of the Company are currently listed on Bombay Stock Exchange Limited & National Stock Exchange of India Limited. The
Company has paid the annual listing fees for the year 2014-15.The Company is listed with the Symbol KWALITY and the
ISIN INE775B01025.
Script Code
BSE- 531882
NSE- INE775B01025

7)

Market Price Data and Performance In Comparison to Index


The High & Low of Share Price of the Company during each month in last financial year at BSE were as under:
(Face value of each share is Re. 1)
8) Registrar and Share Transfer Agents
Beetal Financial & Computer Services (p) Ltd.
Beetal house, 3rd Floor, 99 Madangir,
Month
April 2013

High (Rs)

Low (Rs)

32.00

26.00

Volume (No.)
8,08,349

May 2013

36.65

27.50

21,08,595

June 2013
July 2013

29.50

23.75

11,20,670

29.00

23.05

16,74,723

August 2013

25.65

23.25

15,25,958

September 2013

30.60

23.65

14,72,819
24,40,422

October 2013

29.95

18.00

November 2013

29.05

25.00

17,49,139

December 2013
January 2014

31.20

26.60

19,80,200

35.80

28.50

26,01,110

February 2014

40.25

32.05

21,48,224

March 2014

34.60

29.25

11,63,655

Behind Local Shopping Centre, Near Data


Harsukhdas Mandir,
New Delhi-110062
Phone no.: 91-11-29961281-83
Fax: 91-11-29961284
Email: beetal@beetalfinancial.com
9) Share Transfer System
With a view to expedite the process of share transfers, Share Transfer Committee was constituted as per the requirement of listing agreement
and enter into an agreement with RTA for approval of transfer. The Share in physical mode received for transfer is transferred expeditiously
subject to completion of appropriate regulatory formalities. Confirmation in respect of the request for Dematerialization of the shares is
expeditiously sent to the respective depositories i.e. NSDL and CDSL.
10) Unclaimed Dividend
Dividend which remains unclaimed or unpaid for a period of 7 years for the date of declaration shall be transferred to the Investor Education
and Protection Fund (IEPF) in terms of Section 124 of the Companies Act, 2013 and the rules made thereunder. However the Company declares
dividend from the financial year 2008-09, no dividend remains unpaid or unclaimed for a period of 7 year from the date of declaration of
dividend and thus the Company is not required to transfer any amount to the Investor Education and Protection Fund.
11) Distribution of Shareholding as on 31st March 2014.

No. of Shares

No. of Shareholders
Total

1-5000
5001-10000
10001-20000
20001-30000
30001-40000
40001-50000
50001-100000
100001 & above

18,871
449
142
54
21
22
32
51

% of Share
Holder
96.07
2.29
0.72
0.27
0.11
0.11
0.16
0.26

No. of Equity Shares


Total
1,22,53,519
29,59,464
20,43,427
13,53,176
7,20,443
9,89,961
24,44,591
18,04,21,853

% of Share
Capital
6.0307
1.4565
1.0057
0.6660
0.3546
0.4872
1.2031
88.7962

12) Shareholding Pattern


The Shareholding pattern as on 31 March, 2014:

Category
A

No. of Share held

Percentage of
shareholding

Shareholding of Promoter & Promoter Group

Indian

Individual/HUF

15,21,54,714

74.88

Central Govt./ State Govt.

0.00

Bodies Corporate

0.00

Financial Institutions/ Banks

0.00

Any Other

0.00

Sub Total

15,21,54,714

74.88

Foreign

Individual(NRI/Foreign Individual)

0.00

Bodies Corporate

0.00

Institutions

0.00

Any Other

0.00

15,21,54,714

74.88

0.00

Total
B

Public Shareholding

Institutions

Mutual Funds/UTI

Financial Institution /Banks

75,759

0.04

Foreign Institution Investors

7,76,373

0.38

Central Govt./ State Govt.

0.00

Venture Capital Fund

0.00

Insurance Company

0.00

Foreign Venture Capital Investor

0.00

Any Other (Trust)

0.00

8,52,132

0.42

Non Institutional Investor

Body Corporate

94,06,254

4.63

Individual

3,99,55,383

19.66

Sub Total

Any Other(Specify)
1. NRI
2. Foreign National
3. Hindu Undivided Family
4. OCB
5. Clearing Members

2,37,097

0.12

0.00

3,84,263

0.19

0.00

1,95,591

0.10

1000

0.00

Sub Total

5,01,79,588

24.70

Total

5,10,31,720

25.12

Grand Total

20,31,86,434

100.00

6. Trust

13) Detail of Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting
Name of the Directors

Mr. Arun Srivastava

Dr. Rattan Sagar Khanna

Mr. Sanjay Dhingra

Date of Birth

03rd April, 1968

12th April, 1945

12th October, 1970

Relationship with other


Directors Inter-se

None

None

None

Date of Appointment

25th June, 2003

18th May, 2010

18th June, 2003

Qualification

Graduate

M.Sc. (Hons) from Punjab


Agri University, Diploma in
Semen Freezing Gynecology
& Andrology from Royal
Veterinary and Agriculture
University, Copenhagen
and Diploma in Farm &
Science Journalism form
Institute of Farm & Science
Journalism, New Delhi

Graduate

Expertise in specific
functional area

Expertise in Financial
Modeling & Resource
Moblisation

Dairy, Farming and in


Agricultre Sector

Vast experience in dairy


business

Directorship held in other


Companies as on date.

DELTA AGROTECH
PRIVATE LIMITED

NIL

Kwality Dairy Investments


Pvt. Ltd.

Chairman/Member of the
committee of the Board
of Directors of the
Company as on
31 March 2014

Chairman of Audit
Committee
Member of Remuneration,
Compensation & Nomination
Committee
Member of Stakeholders
Relationship Committee
Member of Share
Transfer Committee

Member of Audit
Committee
Member of Remuneration,
Compensation & Nomination
Committee
Member of Stakeholders
Relationship Committee
Member of Share Transfer
Committee
Member of Corporate
Social Responsibility
Committee

Member of Remuneration,
Compensation & Nomination
Committee
Member of Management
Committee
Member of Corporate
Social Responsibility
Committee

Chairman/Member of the
committee of the Director
of the other companies
in which he is a director
as on 31 March 2014

NIL

NIL

NIL

Number of Shares held


in the Company

NIL

NIL

152,154,714

14) Dematerialization of Equity Shares and Liquidity


The trading of shares of the company are in compulsory demat and are available for trading in the both depositary system, i.e. NSDL and CDSL.
As on 31st March 2014 96.43% of the Company's total listed capital representing 19,59,26,730 share were held in dematerlizated form and
the balance 3.57% comprising 72,59,704 shares were held in physical form.
Under the depositary system, the International Securities Identification Number (ISIN) allotted to the company is INE775B01025.
15) Outstanding ADR's/GDR's /Warrants/ Convertible Instruments
Not Applicable
16) Registered Office
Kwality Limited
KDIL House, F-82, Shivaji Place
Rajouri Garden
New Delhi - 110027
CIN : L74899DL1992PLC255519

17)

Plant Location (Owned)


Village Softa, Tesil & Distt. Palwal,
Faridabad, Haryana-121004
Bakra Mandi, Ajmer, Rajasthan, Village
Kumarherha, NH-73, Saharanpur, U.P.
Village Mumrejpur, Dibai, Bulandsaher, U.P.

18) Address for correspondence


The Company Secretary
Kwality Limited,
KDIL House, F-82, Shivaji Place,
Rajouri Garden,
New Delhi-110027.
Tel No: 011-47006500
Fax No: 011-25191800,
E-Mail: Investor@kdil.in,
Website: www.kdil.in

19)

Any Shareholder complaint/queries may be addressed to:


Beetal Financial & Computer Services Private Limited
Beetal house, 3rd Floor, 99 Madangir,
Behind Local Shopping Centre, Near Data
Harsukhdas Mandir, New Delhi-110062
Phone no.: 91-11-29961281-83,
Fax: 91-11-29961284,
Email: beetal@beetalfinancial.com

Certificate by the Chief Executive Officer on compliance with the condition of Corporate
Governance under Clause 49 of the Listing Agreement
The Board of Directors
Kwality Limited
We hereby certify that for the Financial Year 2013-14
1
We have reviewed the financial statements and the cash flow statement and that to the best of our knowledge and belief :
a. These statement do not contain any materially untrue statement or omit any material fact or contain statements that might be
misleading;
b. These statements together present a true and fair view of the Companys affairs and are in compliance with existing accounting
standards, applicable law and regulations.
2. There are no transactions entered into by the Company during the year which are fraudulent, illegal or violate the Companys code of
conduct to the best of our knowledge and belief.
3. We accept responsibility for establishing and maintaining internal controls for the financial reporting and that we have evaluated the
effectiveness of internal control system of the Company and we have disclosed to the auditors and the audit committee those
deficiencies, of which we are aware, in the design or operation of the internal control systems and that we have taken the required steps to
rectify these deficiencies.
4. We further certify that:a. There have been no significant changes in internal control during this year.
b. There have been no significant changes in accounting policies during this year.
c. There have been no instances of significant fraud of which we have become aware and the involvement therein of management or an
employee having a significant role in the Companys internal control system.

Place: New Delhi


Date: 14.07.2014

Sd/Sanjay Dhingra
Chairman & Managing Director

DECLARATION BY THE MANAGING DIRECTOR UNDER CLAUSE 49 OF THE LISTING AGREEMENT


As per the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, the Company has laid down a code of conduct for its
Board of Directors and Senior Management.
Mr. Sanjay Dhingra, Managing Director of the Company confirm the compliance of this code of conduct by myself and other members of the
Board of Directors and Senior Managerial Personnel affirmed by them individually, for the year ended 31st March, 2014.

Place: New Delhi


Date: 14.07.2014

Sd/Sanjay Dhingra
Chairman & Managing Director

AUDITORS CERTIFICATE UNDER CLAUSE 49 OF THE LISTING AGREEMENTS


COMPLIANCE CERTIFICATE

To The Members,
Kwality Limited
We have examined the compliance of conditions of Corporate Governance by Kwality Limited for the year ended on 31st March, 2014 as
stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.
The Compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to
procedures and implementations thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It
is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with
the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.
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 P.P Mukerjee & Associates


Chartered Accountants

Place: New Delhi


Date: 14th July, 2014

Sd/P.P. Mukerjee
Proprietor
Membership No.089854

INDEPENDENT AUDITOR'S REPORT

INDEPENDENT AUDITORS REPORT


To the Members of
KWALITY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of M/s Kwality Limited, which comprise the Balance Sheet as at March 31, 2014,
the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and
other explanatory information.
Management's Responsibility for the Financial Statements
The Companys management is responsible for the preparation of these financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles
generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;
(b) in the case of the statement of Profit and Loss , of the profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of
section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of
our audit;
b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of
those books including all the branches audited by us.
c. The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the
books of account including all the branches audited by us.
d. In our opinion, the balance sheet, the Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September
2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.
e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

Place: New Delhi


Dated: 30.05.2014

For P.P Mukerjee & Associates


Chartered Accountants
Firm's Registration Number 023276N
Sd/P.P. Mukerjee
Proprietor
Membership No.089854

INDEPENDENT AUDITOR'S REPORT

ANNEXURE TO THE AUDITORS REPORT OF M/S KWALITY LIMITED FOR


THE YEAR ENDED 31ST MARCH 2014
1. In respect of Fixed Assets :
1.a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of
fixed assets.
1.b) The company has a regular programme of verification of its fixed assets in a phased manner. In accordance with this
programme, certain fixed assets were verified during the year and no material discrepancy was noticed on such verification. In our
opinion, physically verification is reasonable having regard to the size of the Company and the nature of its assets.
1c) During the year, the Company has not disposed off a substantial part of the fixed assets. Based on the information and
explanation given by the management and on the basis of audit procedures performed by us, we are of the opinion that the sale of the
fixed assets, if any, has not affected the going concern status of the Company.
2. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification
is reasonable.
2.a) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
2.b) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper
records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.
3. In respect of Loans, Secured or Unsecured, granted or taken by the Company to/ from companies, firms or other parties
covered in register maintained under section 301 of the Companies Act, 1956 :
3.a) The Company has not given any loan to companies, firms or other parties covered in register maintained under section 301 of
the Companies Act, 1956.
3.b) The Company has taken unsecured loans from one company covered in the register maintained under section 301 of the
Companies Act 1956. The maximum amount outstanding at any time during the year was Rs.7500.00 lacs (Previous year 7500 lacs)
and year end balance is Rs. 7500.00 lacs (Previous Year 7500 lacs).
3.c) The rate of interest on loan is nil and other terms and conditions of such loans taken are, in our opinion, prima facie not
prejudicial to the interests of the Company
3.d) In respect of the loan taken by the Company, the terms of repayment of principal amount and interest thereon are regular.
4. In our opinion and according to the information and explanations given to us, there are adequate internal control
procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and
fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure
to correct major weaknesses in the internal control systems.
5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956.
5.a) Based on the audit procedures applied by us and according to the information and explanations provided by the management,
we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
5.b) According to information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered
in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 Lac in respect of each
party during the year have been made at prices which appear reasonable as per information available with the Company.
6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits
covered by the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 and hence the provisions of clause 4 (vi) of the Companies (Auditors Report)
Order, 2003 are not applicable to the Company.
7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies ( Cost Accounting
Records ) Rules , 2011 prescribed by the Central Government under Section 209 (1)(d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed cost records have been maintained . We have, however, not made a detailed
examination of the cost records with a view to determine whether they are accurate or complete.
9. In respect of Statutory dues :
9 a). According to the records of the Company examined by us, the Company has been generally regular in depositing with
appropriate authorities undisputed statutory dues including, investor educations protection fund, employees state insurance, sales
tax ,Vat, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues with appropriate authorities except an
undisputed Advance Income Tax liability of Rs. 1418.07 Lacs (Previous Year Rs. 951.89Lacs) is outstanding as at the last day of the
financial year for a period exceeding six months from the date they became payable.
9 b). According to the records of the Company examined by us and according to the information and explanations given to us, there
are no dues of income-tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on
account of any dispute, except as under:-

Nature of Statute

Nature of Dues

Amount unpaid
(In Lacs Rs.)

Year to which
the amount
relates

Forum where
pending

Haryana Livestock
Development
Board, Gurgaon

Milk cess

194.63 (131.96
deposited against
326.59 under protest)

2002-2014

Supreme Court
of India

--Do--

Interest on ?
Milk Cess

866.44

2002-2014

Supreme Court
of India

Punjab VAT Act

VAT

22.04

2013-14

Excise and Taxation


Comm.(Appeal)

Kerala VAT Act

VAT

1.40

2013-14

High Court
(Kerala)

UP VAT Act

VAT

152.27

2013-14

Add. Comm.(Appeal)
Ghaziabad

10.
The company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the
current and immediately preceding financial year.
11.
Based on our audit procedures and according to the information and explanations given by the management, We are of the
opinion that the Company has not defaulted in repayment of dues to financial institutions and banks . The company has not issued any
debenture.
12
As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and
other securities the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.
13
In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society, hence the provisions of clause 4 (xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the Company.
14.
According to the information and explanation given to us, the company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause (xiv) of paragraph 4 of the Companies (Auditors Report) order
2003 (as amended) are not applicable to the Company.
15.
The Company has given guarantees for loans taken by its subsidiary company from banks and financial institutions. According
to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial
to the interest of the Company.
16
In our opinion and according to the information and explanations furnished to us, the term loans have been applied for the
purpose for which they were obtained.
17.
According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company,
we report that no funds raised on short-term basis have been used for long-term investment.
18.
The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
19.
As the Company has not issued any debentures the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003
are not applicable to the Company.
20
As the Company has not raised any money by public issue the provisions relating to end use thereof as per clause 4 (xx) of the
Companies (Auditors Report) Order, 2003 are not applicable to the Company.
21.
In our opinion and according to the information and explanation given to us , no material fraud on or by the Company has been
noticed or reported during the year.

For P.P Mukerjee & Associates


Chartered Accountants
Firm's Registration Number 023276N
Sd/Place: New Delhi

P.P. Mukerjee

Dated: 30.05.2014

Proprietor
Membership No.089854

Kwality Limited
Balance Sheet as at 31 March, 2014
Particulars

Note
No.

As at 31 March, 2014

As at 31 March, 2013

(INR In Lacs)

(INR In Lacs)

EQUITY AND LIABILITIES


1 Shareholders funds
(a) Share capital
(b) Reserves and surplus

2
3

2,031.86
37,777.33
39,809.19

2,031.86
25,352.03
27,383.89

2 Non-current liabilities
(a) Long-term borrowings
(b) Long-term provisions

4
5

9,711.71
74.99
9,786.70

10,755.17
55.67
10,810.84

3 Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions

6
7
8
9

89,671.85
10,930.89
4,534.83
3,429.71
1,08,567.28

75,527.88
4,839.13
2,778.80
2,448.90
85,594.71

1,58,163.17

123,789.45

9,769.69
142.27
2,200.33
12,112.30
626.56
4,010.42
76.34
79.27
16,904.89

7,166.21
126.96
860.92
8,154.09
564.62
2,916.67
182.96
116.25
11,934.60

16,747.97
1,19,998.82
1,272.35
3,041.68
197.45

9,866.08
93,090.45
3,059.36
5,813.93
25.03

1,41,258.28

1,11,854.85

1,58,163.17

1,23,789.45

TOTAL
B

ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work-in-progress

10.A
10.B
10.C

(b) Non-current investments


(c) Long-term loans and advances
(d) Other Non Current Assets
(e) Deffered Tax Assets (Net)

11
12
13
25.2

2 Current assets
(a) Inventories
(b) Trade receivables
(c) Cash and cash equivalents
(d) Short-term loans and advances
(e) Other current assets

14
15
16
17
18
TOTAL

Notes forming part of the financial statements


In terms of our report attached.

0.86
1-25
For and on behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N


sd/CA P.P. Mukerjee
Membership No.:089854
Proprietor
Place : New Delhi
Date : 30.05.2014

sd/(Sanjay Dhingra)
Managing Director

sd/(Sidhant Gupta)
Executive Director
sd/(Deepa Kapoor)
Company Secretary

Kwality Limited
Statement of Profit and Loss for the year ended 31 March, 2014
Particulars

Note
No.

For the year ended


31 March, 2014
(INR In Lacs)

For the year ended


31 March, 2013
(INR In Lacs)

Revenue from operations

19

4,57,804.78

369,228.67

Other income

20

395.09

71.70

Total revenue (1+2)

4,58,199.87

369,300.37

Expenses
(a) Cost of materials consumed
(b) Purchases of stock-in-trade
(c) Changes in inventories of finished goods, work-in-progress and
stock-in-trade
(d) Employee benefits expense
(e) Finance costs
(f) Depreciation and amortisation expense
(g) Other expenses

3,75,035.45
49,473.01
(6,512.89)

332,489.65
4,681.92
187.54

1,794.74
11,261.33
1,290.73
10,806.48

1,347.68
9,227.88
1,028.88
9,189.25

4,43,148.85

3,58,152.79

15,051.03

11,147.58

21.a
21.b
21.c
22
23
10
24

Total expenses
5

Profit / (Loss) before Extraordinary & Exceptional Items (3-4)

Extraordinary / Exceptional Items

Profit / (Loss) Before Tax (5-6)

15,051.03

10,847.58

Tax expense:
(a) Tax expense for current year
(b) (Less): MAT credit related to current year
(c) Net current tax expense
(d) Tax expense relating to prior years
(e) Deferred tax

3,155.91
(1,123.32)
2,032.59
318.44
36.97

2,230.70
- 941.97
1,288.73
69.63
-163.57

2,388.01

1,194.79

12,663.02

9,652.79

6.23
6.23

4.75
4.75

Total Tax expense:


9

Profit from operations (7-8)

10

Earnings per share (of INR 1/- each):


(a) Basic
(b) Diluted

Notes forming part of the financial statements


In terms of our report attached.

300.00

1-25
For and on behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N

Sd/CA P.P. Mukerjee


Membership No.:089854
Proprietor
Place : New Delhi
Date : 30.05.2014

Sd/(Sanjay Dhingra)
Managing Director

Sd/(Sidhant Gupta)
Executive Director
Sd/(Deepa Kapoor)
Company Secretary

Kwality Limited
Cash Flow Statement for the year ended 31 March, 2014
Particulars

For the year ended


31 March, 2014
(INR In Lacs)

A. Cash flow from operating activities


Net Profit / (Loss) before extraordinary items and tax
Adjustments for:
Depreciation and amortisation
Amortisation of Expenses
(Profit) / loss on sale on assets
Finance costs
Interest income
Liablity no longer payable
Provision for Doubtful debts
Bad Debts & Other Balances W/off
Unrealised Exchange Fluctuation
Security Forfeited
Other non-cash charges
Operating profit / (loss) before working capital changes
Changes in working capital:
Adjustments for (increase) / decrease in operating assets/Liablities:
Inventories
Trade receivables
Short-term loans and advances
Other Current Assets
Other than Cash and Cash Equivalents
Long-term loans and advances
Long-term provision
Trade payables
Other current liabilities
Cash Generated from Operations
Cash flow from extra ordinary Items
Net income tax (paid) / refunds
Net cash flow from / (used in) operating activities (A)
B. Cash flow from investing activities
Capital expenditure on fixed assets, including capital advances
Proceeds from sale of fixed assets
Purchase of long-term investments- Subsidiaries
Interest received
Net cash flow from / (used in) investing activities (B)
C. Cash flow from financing activities
Proceeds from long-term borrowings
Repayment of long-term borrowings
Net increase / (decrease) in working capital borrowings
Finance cost
Dividends paid
Tax on dividend
Net cash flow from / (used in) financing activities (C)
Net increase / (decrease) in Cash and cash equivalents (A+B+C)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Reconciliation of Cash and cash equivalents with the Balance Sheet:
Cash and cash equivalents as per Balance Sheet (Refer Note 16)
Less: Bank balances not considered as Cash and cash equivalents
as defined in AS 3 Cash Flow Statements (give details)
Net Cash and cash equivalents (as defined in AS 3 CFS)
Cash and cash equivalents at the end of the year *
* Comprises:
(a) Cash on hand
(b) Balances with banks ( In Current Accounts)
Notes forming part of the financial statements (1-25)

In terms of our report attached.

(INR In Lacs)

For the year ended


31 March, 2013
(INR In Lacs)

(INR In Lacs)

15051.03
1290.73
3.84
-0.39
11261.33
-37.44
-66.84
0.00
16.56
37.13
-216.66
4.14

-6881.89
-27025.05
2772.25
-174.78
168.47
78.27
19.32
6156.75
1976.34

12292.39
27343.42

-22910.32
4433.10
0.00
-2547.95
1885.15

-5251.27
2.73
-61.94
37.44

11147.58
1028.88
5.90
0.35
9227.88
-31.84
-1.62
296.13
3.06
-30.16
0.00
28.46

8.31
-27466.08
-1970.23
0.00
-698.20
-10.60
24.81
2777.55
216.57

897.08
-1879.36
14143.97
-11261.33
-203.19
-32.96

-3158.33
4583.07
-3834.76
20664.64
-9227.88
-203.19
-33.29

1664.21
-1723.68
2370.76
647.08
1347.10
-700.02

11948.60
1652.20
718.56
2370.76
3239.26
-868.50

647.08
647.08

647.08

2370.76
2370.76
60.64
2310.12

For and on behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N


Sd/CA P.P. Mukerjee
Proprietor
Membership No.:089854
Place : New Delhi
Date : 30.05.2014

Sd/(Sanjay Dhingra)
Managing Director

-27117.86
-5443.27
-300.00
-1394.81
-7138.08

-2828.70
3.61
-365.08
31.84
-5273.04

6.62
640.46

10527.01
21674.59

Sd/(Sidhant Gupta)
Executive Director
Sd/(Deepa Kapoor)
Company Secretary

2370.76

Kwality Limited

1) SIGNIFICANT ACCOUNTING POLICIES


(a) Basis of Preparation of Accounts
The financial statements are prepared under historical cost convention on an accrual basis of accounting and in accordance
with the generally accepted accounting principles (GAAP) in India and comply with the Accounting Standards prescribed by the
Companies (Accounting Standards) Rules, 2006 to the extent applicable and in accordance with the provisions of the
Companies Act, 1956, (the Act) as adopted consistently by the Company.
(b) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure
of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
(c)Revenue recognition
Sale of Goods
Sale is recognized when the significant risks and rewards of ownership of the goods have passed to the customer. Sales are
recorded net of sales returns, rebates, trade discounts and price differences.
Income from Services
Revenue from Milk Processing services are recognized as and when services are rendered, and are accounted on an accrual
basis.
Interest Income
Interest income is recognised on time proportion basis taken into account the amount outstanding and the rate applicable.
Exports benefits are recognised in the statement of profit and loss when the reasonable right to receive and the same is
established.
Other Income & Expenditure
Other Income & expenditure are accounted for an accrual basis except where the receipt of income is uncertain in which case it
is accounted for on receipt basis.
(d) Fixed Assets
Tangible Assets
Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost
includes financing cost relating to borrowed funds attributable to the construction or acquisition of qualifying fixed assets upto
the date the assets are ready for use. Where the acquisition of fixed assets are financed through long term foreign currency
loans (having a term of 12 months or more at the time of their origination) the exchange differences on such loans are added to
or subtracted from the cost of such fixed assets. In respect of new projects, all cost including borrowing cost incurred upto the
date of commencement of commercial production or when related asset is put to use are capitalised.
Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits
from the existing asset beyond its previously assessed standard of performance.
Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets are recognised in the Statement
of Profit and Loss.
Intangible Assets
Acquired computer software are capitalised at cost of acquisition and disclosed as intangible assets
(e) Depreciation:
Depreciation on fixed assets have been provided on written down value method at the rates and in the manner prescribed in
Schedule xiv of the Companies Act, 1956. Assets individually costing Rs. 5000/- or less are depreciated fully in the year when
the assets are ready to use.
(f) EMPLOYEE BENEFITS
Short Term Employee Benefits :
Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account for the
year in which employee renders the related service.
Post Employment Benefits
Defined Contribution Plans:
Company's contribution to state governed Provident Fund Scheme, Employees State Insurance Contribution Scheme and Staff
welfare fund are charged to the revenue of the year when the contribution to the respective fund is due.
Defined benefit plans:
The present value of gratuity obligation is determined based on an actuarial valuation using the Projected Unit Credit Method .
Actuarial gains and losses arising on such valuation are recognized immediately.
Other Defined Plans:
Other long term benefits (leave entitlement) are recognized in a manner similar to defined benefit plans:
Termination Benefits are recognized as an expense in the year in which they are incurred.

Kwality Limited

(g) Inventories :
Raw Material, components, stores and spares are valued at lower of cost and net realisable value.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials, labour
and related production overheads in the ordinary course of business, less estimated cost of completion and estimated cost
necessary to make the sale.
(h) Investments
Investments which are readily realizable and intended to be held for not more than a year from the date on which the investment
made are classified as current investment. All other investment are classified as long term investment.
Current investments are stated at lower of cost or fair value. Long-term investments are stated at cost however provision for
diminution in their value is made to recognise a decline, other than temporary value of the investment.
(i) Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act,
1961. Deferred Tax resulting from "timing difference " between taxable and accounting income is accounted for using the tax
rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred Tax asset is recognised and
carried forward only to the extent that there is a virtual certainty that the asset will be realised in the future.
(j) Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such
indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount
is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of
profit and loss. Where there is any indication that an impairment loss recognised for an asset in prior accounting periods may no
longer exist or may have decreased, the Company books a reversal of the impairment loss not exceeding the carryingamount
that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in
prior accounting periods."
(k) Foreign Exchange Transactions
Initial Recognition
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange
rate between the reporting currency and the foreign currency at the date of the transaction.
Subsequent Recognition
All monetary assets and liabilities in foreign currency are restated using the exchange rate prevailing at reporting date.
Exchange Differences
The Company has opted to avail the choice provided under paragraph 46A of AS-11 "The Effect of Changes in Foreign Exchange
Rates" inserted vide Notification dated December 29, 2011. Consequently, Exchange differences arising on long-term foreign
currency monetary items related to acquisition of depreciable capital asset added to or deducted from the cost of the asset and
depreciated over the remaining useful life of the asset. For this purpose, the company treats a foreign monetary item as "longterm foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.
All other exchange differences are recognised as income or expenses in the period in which they arise.
(l) Government Grants
Government grants are recognized when there is reasonable assurance that the company will comply with the conditions
attached to them and the grants will be received.
Government grants whose primary condition is that the company should purchase, construct or otherwise acquire capital
assets are presented by deducting them from the carrying value of the assets. The grant is recognised as income over the life of
a depreciable asset by way of a reduced depreciation charge.
Other government grants are recognised as income over the periods necessary to match them with the costs for which are
intended to compensate on a systematic basis.
(m) Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction of qualifying assets are capitalised as part of the cost of
such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for the intended use. All
other borrowing costs are charged to revenue in the period in which these are incurred.
(n) Business Segments
The Company is engaged mainly in trading, processing, manufacturing of milk and dairy poducts. These, in the context of
Accounting Standard 17 on Segment reporting, as specified in the Companies (Accounting Standards) Rules 2006, are
considered to constitute one single primary segment. Hence Segment reporting is not required.

Kwality Limited

(o) Provisions, Contingent Liabilities and Contingent Assets


Provisions: Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the
amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present
obligation at the Balance sheet date and are not discounted to its present value.
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly
within the control of the company or a present obligation that arises from past events where it is either not probable that an
outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent
liability.
Contingent Assets : Contingent assets are neither recognised nor disclosed.
(p) Leases
(i) Finance Lease
Assets acquired under finance lease are recognised at lower of the fair value of the leased assets at inceptions and the present
value of minimum lease payment. Lease payment are apportioned between the finance charge and the outstanding liability.The
finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of
the liability.
(ii) Operating Lease
Leases other than finance lease are operating and leased assets are not recognised in the company Balance sheet. Payment
under operating leases are recognised in the Statement of Profit and Loss on a straight line over the lease term.
(q) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equityshareholders by
theweighted average number of equity shares outstanding during the year
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity sharholders and
theweighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity
shares, except where results would be anti-dilutive.

Kwality Limited

Notes forming part of the financial statements


Note 2 Share capital
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

10,000.00

10,000.00

10,000.00

10,000.00

(b) Issued ,Subscribed and fully paid up


20,31,86,434 Equity Shares of INR1/- each fully paidup
(March 31,2013 : 20,31,86,434 Equity Shares of INR1/- each fully paidup)

2,031.86

2,031.86

Total

2,031.86

2,031.86

(a) Authorised Capital


100,00,00,000 equity shares of INR 1/- each
(March 31, 2013 : 100,00,00,000 equity share of INR 1/- each)

Refer Notes (i) to (v) below


(i) Reconciliation of the number of shares outstanding and amount of share capital:
As at 31 March, 2014

Particulars

Equity Shares at the beginning of the year


Add: Shares issued during the year
Equity Shares at the end of the year

As at 31 March, 2013

No. of Shares

Amount (INR in Lac)

No. of Shares

Amount (INR in Lac)

20,31,86,434
20,31,86,434

2,031.86
2,031.86

20,31,86,434
20,31,86,434

2,031.86
2,031.86

(ii) Right, preference and restriction attached to the equity shares :


- The Company has only one class of equity shares having a par value of INR 1/-per share. Each shareholder is eligible for one vote per
share held
- The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval
of the shareholders in ensuing Annual General Meeting.
- During the year ended 31 March 2014 , the amount of per share dividend recognised as distributions to equity shareholders is INR 0.10
(previous year INR 0.10)
- In the event of liquidation of the company, the equity share holders will be entitled to receive remaining assets of the Company, after
distribution of all preferential amounts, in proportion of their shareholding.
(iii) Details of shares held by each shareholder holding more than 5% of the aggregate shares in the Company:
As at 31 March, 2014

Class of shares / Name of shareholder

Equity shares with voting rights


Sanjay Dhingra
Kanika Dhingra

Number of shares
held
152154714

As at 31 March, 2013

% holding of shares

Number of shares
held

% holding of shares

74.88

99660714
52494000

49.05
25.84

(iv) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash,
by way of bonus shares and shares bought back for the period of 5 years immediately preceding the Balance Sheet date:
(a) The Company has not issued any shares pursuant to contract(s) without payment being received in cash.
(b) The Bonus issue is made by capitalisation of profit. The detail of bonus issues in preceding 5 years are given below

Particulars
Equity shares with voting rights
Fully paid up by way of bonus shares
Year 2013-14
Year 2012-13
Year 2011-12
Year 2010-11
Year 2009-10

No. of Shares

21186434
-

(c) The Company has not undertaken any buy back of shares.
(v) No shares have been reserved for any purpose like esop, share warrant and for conversion.

Kwality Limited

Notes forming part of the financial statements


Note 3 Reserves and surplus
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

(a) Surplus in Statement of Profit and Loss


Balance as at the begining of the year
Add: Profit for the year
Less: Appropriations:
Proposed Dividends on equity share (INR 0.10 per share)
Dividend distribution tax
Balance as at the end of the year
Total

25,352.03
12,663.02
38,015.05

15,935.38
9,652.79
25,588.17

203.19
34.53

203.19
32.96

37,777.33

25,352.03

37,777.33

25,352.03

Note 4 Long-term borrowings


Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

Non Current

Current

Non Current

Current

(1) Secured
(a) Term loans from Banks (refer note 1)
(b) Term loans from Other Parties (refer note -2)
(2) Unsecured
(a) Term loans From Bank (refer Note-3 below)
(b) Term loans From Other Parties (refer Note-4 below)
(c) Loans and advances from related parties (refer Note-5 below)
(d) Deferred payment liabilities

Total

158.52

93.24

177.25

94.31

53.19

11.43

0.00

0.00

211.71

104.67

177.25

94.31

2,000.00

666.67

2,000.00

250.00

0.00

1,077.92

1,077.92

1,441.56

7,500.00

0.00

7,500.00

0.00

0.00

0.00

0.00

2.21

9500.00

1744.58

10577.92

1693.77

9,711.71

1,849.25

10,755.17

1,788.07

Notes:
1). Term loans was taken from various banks which are secured by hypothecation of assets ( Vehicles ). Rate of Interest is ranging b/w 8.67% to 13.5 %.
Period of maturity for loans is ranging b/w 3 year to 5 year and No.of repayment installments is ranging b/w 36 to 60 months.
Maturity profile of loans are as set out below:-

Particulars
a) Term Loans from Banks

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

93.24
93.24

80.05
80.05

64.49
64.49

13.97
13.97

2). Term loans from others are secured by hypothecation of assets ( Vehicles ) . Rate of Interest is ranging b/w 8.67% to 13.5 %.
Period of maturity is ranging b/w 3 year to 5 year and No.of repayment installments is ranging b/w 36 to 60 months.
Maturity profile of loans are as set out below:-

Particulars
a) Term Loans from others

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

11.43
11.43

12.75
12.75

14.07
14.07

26.37
26.37

3). Term Loan was taken from IDBI Bank. The loans is secured by way of exclusive charge on Immovable property held in the name of Director & Other party
situated at Golden Park, Rampura Road, Basai Darapur, New Delhi and the land / properties held in the name of JTPL Townships Pvt Ltd. situated at JTPL
City, Sector-115 Mohali (Punjab) . The loan is further secured by personal / Corporate guarantee of Sh. Sanjay Dhingra, Managing Director of Company
& Smt. Kanika Dhingra wife of Mr. Sanjay Dhingra and Property owners. Present rate of Interest on loan is 12 % . Maturity profile loans are as set out
below:-

Particulars
a) IDBI Bank Ltd

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

666.67
666.67

666.67
666.67

666.67
666.67

666.67
666.67

Kwality Limited

Notes forming part of the financial statements


4) Term Loans from Other party are from Tata Capital Ltd INR 714.28 Lacs ( 1428.56 lacs) and from L & T Finance Ltd INR 363.64 Lacs (1090.90 lacs).
4.a) Loan from Tata Capital Limited is secured by way of first mortgage/ charge on the immovable property in the name of JTPL Townships Pvt Ltd. situated in
Mohali (Punjab) and further secured by personal guarantee of Sh. Sanjay Dhingra , Managing Director of company and Corporate Guarantee of JTPL
Townships Pvt Ltd. The present rate of Interest on loan is 14.25%. Maturity profile of loans are as set out below.
4.b) Loan from L & T is secured by way of pledge of shares of Kwality Limited held in the name of Mr. Sanjay Dhingra (Director). Pledge value of the shares (1crore
shares) was INR 3155 lacs as on 31.03.2014 and further secured by first mortgage/charge on the immovable property located at Mohali in the name of
JTPL Townships Pvt Ltd. & personal guarantee Sh. Sanjay Dhingra, Managing Director of Co. and Corporate Guarantee of JTPL Townships Pvt Ltd. Rate of
interest on loan is 12.75%. Maturity profile of loans are as set out below.

Particulars
a) Tata Capital Limited
b) L& T Finance Ltd
Total Long Term Loans

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

714.28
363.64

0.00
0.00

0.00
0.00

0.00
0.00

1077.92

0.00

0.00

0.00

5) The Loan from related party is unsecured and there is no interest payable on the loan .The loan will be payable in 3 to 5 year.

Note 5 Long-term provisions


Particulars
a) Provision for employee benefits:
(i) Provision for compensated absences (net) (Refer Note 25.9)
(ii) Provision for gratuity (net) (Refer Note 25.9)
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

27.70
47.29
74.99

22.16
33.52
55.67

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

89,671.85

75,527.88

89,671.85

75,527.88

Note 6 Short-term borrowings


Particulars
(1) Secured
(a) Loans From Banks
Cash Credit Facilities ( Refer Note 1 below)
Total

Note.-1
Cash Credit facilities are secured by way of :a) First pari passu charge on the entire current assets of the company.
b) 1st paripassu charge on entire movable and immovable fixed assets including Eq.mortgage of factory land and building of the company situated
at village Softa, Palwal (Haryana) and at Village Mumrejpur , Tehsil Dibai, District- Bulandsahar (U.P.).
c) 1st paripassu charge on entire fixed assets of M/s Pashupati Dairies Pvt. Ltd. including Equitable mortgage of Land and Building situated
at village Kumarhera, Saharanpur (UP).
d) Corporate guarantee of M/s Pashupati Dairies Pvt Ltd.
e) Negative lien for non disposal/ non transfer of 51 % of equity share held by Mr. Sanjay Dhingra.
f) Personal guarantee of Sh. Sanjay Dhingra, Managing Director of the Company and Mrs. Kanika Dhingra, Wife of Mr. Sanjay Dhingra.

Note 7 Trade payables


Particulars

Trade payables / Acceptances


- For Goods
- For Services
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

10,559.53
371.36

4,596.27
242.86

10,930.89

4,839.13

Kwality Limited

Notes forming part of the financial statements


Note 8 Other current liabilities
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

1,849.25
101.64
8.65
30.07

1,788.07
27.65
0.00
25.70

73.85
18.23
412.86
478.65
1,281.62
280.03

67.30
15.74
141.51
382.86
91.93
238.04

4,534.83

2,778.80

(a) Current maturities of long-term debt (Refer Note (4))


(b) Interest accrued and due on borrowings
(c) Interest accrued but not due on borrowings
(d) Unclaimed dividends
(e) Other payables
(i) Statutory payments
(ii) Contractually reimbursement expenses to Employee
(iii) Payables for capital goods
(iv) Trade / security deposits received
(v) Advances from customers
(vi) Expenses Payable
Total

Note 9 Short-term provisions


Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

33.52
3.93
2.59
40.05

31.36
2.86
1.70
35.91

3,150.80
203.19
34.53
1.14
3,389.66

2,176.08
203.19
32.96
0.76
2,412.98

3,429.71

2,448.90

(a) Provision for employee benefits:


(i) Provision for bonus
(ii) Provision for compensated absences (net) (Refer Note 25.9)
(iii) Provision for gratuity (net) (Refer Note 25.9)
(b) Provision - Others:
(i) Provision for Income tax ( Net of TDS INR 3.96 lacs)
(ii) Provision for proposed equity dividend
(iii) Provision for tax on proposed dividends
(iv) Provision for Wealth Tax
Total

Note 10 Fixed Assets


DESCRIPTION

GROSS BLOCK
Opening
As at
01.04.13

Additions

DEPRECIATION

Deduction/

During the Adjustment during


Year

the year

Closing

Opening

For the

Adjustment

Closing

As at

As at

Year

on account of

As at

31.03.2014

01.04.13

31.03.2014

sales/transfer

31.03.2014

WDV As On

WDV As On

31.3.2014

31.3.2013

Tangible Assets
Land

397.98

648.12

1,046.10

Computer

103.06

36.11

Building

646.63

708.29

Plant & Machinery

8,924.95

2,292.67

Furniture & Fixture

31.58

11.44

597.60

Vehicles & Motor Cars


Tangible Assets

Subtotal ( A)

1,046.10

397.98

139.17

69.83

18.79

88.61

50.55

33.23

1,354.92

331.78

50.46

382.24

972.68

314.85

1.75

11,215.87

2,902.92

1,100.87

4,003.30

7,212.57

6,022.02

43.02

11.28

4.65

15.94

27.09

20.30

196.21

3.32

790.50

219.77

112.27

2.25

329.79

460.71

377.83

10,701.80

3,892.85

5.07

14,589.58

3,535.59

1,287.03

2.74

4,819.88

9,769.69

7,166.21

129.01

19.00

148.01

2.05

3.69

5.74

142.27

126.96

129.01

19.00

148.01

2.05

3.69

5.74

142.27

126.96

860.92

1,339.41

2,200.33

2,200.33

860.92

860.92

1,339.41

2,200.33

2,200.33

860.92

11,691.73

5,251.27

5.07

16,937.92

3,537.64

1,290.73

2.74

4,825.62

12,112.30

8,154.09

8,922.96

2,788.31

19.54

11,691.73

2,513.28

1,028.88

4.52

3,537.64

8,154.09

6,409.68

0.49

Intangible Assets
Computer Software
Subtotal ( B)
Work in Progress
Total

Subtotal ( C)

Figures for the Current Year


Figures for the Previous Year

Kwality Limited

Notes forming part of the financial statements


Note 11 Non-current investments
Particulars
Investments (At cost):
A.Trade
Unquoted
(a) Investment in equity instruments
(i) of Wholly Owned subsidiaries
1 Share (As at 31 March, 2013: 1 Share) of AED1 Million each fully
paid up in Kwality Dairy Products FZE, Dubai
(b) Share Application Money in Kwality Dairy Products FZE,Dubai
of Wholly Owned subsidiaries
Total - Trade (A)
Aggregate amount of unquoted investments

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

143.20

143.20

483.36

421.42

626.56
626.56

564.62
564.62

626.56

564.62

Note 12 Long-term loans and advances


Particulars

Unsecured considered good


(a) Capital advances
(b) Security deposits
(c) Mat Credit entitlement
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

130.04
29.91
3,850.47

209.28
28.94
2,678.45

4,010.42

2,916.67

Note 13 Other Non Current Assets


Particulars

Unsecured considered good


(a) Balance with Banks ( Refer note below 1)
(b) Unamortised Expenses
(i) Deferred Licences Fee
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

74.75

179.90

1.59

3.06

76.34

182.96

(1) Represent bank deposits not due for realisations within 12 month of balance sheet date. Further refer note no.16.

Note 14 Inventories
Particulars

(a) Raw materials


(b) Work-in-progress (Refer Note below)
(c) Finished goods (other than those acquired for trading)
(d) Stock-in-trade (acquired for trading)
(e) Stores and spares
(f) Packing Material
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

298.83
4,412.66
11,592.30
11.46
86.22
346.51

93.77
2,298.48
6,972.42
232.63
40.35
228.43

16,747.97

9,866.08

Kwality Limited

Notes forming part of the financial statements


Note 15 Trade receivables
Particulars
Trade receivables outstanding for a period exceeding six months from the
date they become due for payment
Unsecured, considered good
Less: Provision for doubtful trade receivables
Other Trade receivables
Unsecured, considered good
Less: Provision for doubtful trade receivables
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

369.39
369.39
296.13
73.26

384.86
384.86
296.13
88.73

1,19,925.56
1,19,925.56
0.00
1,19,925.56

93,001.71
93,001.71
0.00
93,001.71

1,19,925.56

93,090.45

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

Note 16 Cash and Bank Balance


Particulars
Cash and Cash Equivalents :
(a) Cash in hand
(b) Balances with banks
(i) In current accounts

6.62

60.64

640.46

2,310.12

Other Bank Balances


(a) In deposit accounts held against bank guarantee / letter of credit

669.95

842.80

30.07
1,347.10

25.70
3,239.26

74.75

179.90

1,272.35

3,059.36

(b) In earmarked accounts


- Unpaid dividend accounts
Less: Deposit having maturity more than 12 month from balance sheet
date are shown under note no.13
Total

Note 17 Short-term loans and advances


Particulars
Unsecured considered good
(a) Security deposits
(b) Loans and advances to employees
(c ) Advance Recoverable in cash or kind or for value to be received
(d) Prepaid Expenses
(e) Balances / Deposits with government authorities *
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

193.13
4.97
2,645.15
25.67
172.77

35.61
6.10
5,595.75
40.54
135.93

3,041.68

5,813.93

* Includes INR 131.96 lacs ( 98.06 lacs) with Haryana Livestock Development Board against demand and disputed before Supreme Court of India.
Further refer note 25.1.

Note 18 Other current assets


Particulars
(a) Unamortised expenses
(i) Deferred Licences Fee
(b) Accruals
(i) Interest accrued on Fixed deposits
(ii) Incomes Receivables
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

3.36

5.72

12.97
181.12

19.31
0.00

197.45

25.03

Kwality Limited

Notes forming part of the financial statements


Note 19 Revenue from operations
Particulars

(a)

Sale of products (Refer Note (i) below)

(b)

Other Operating Income (Refer Note (ii) below )


Total
Particulars

1)

Sale of products comprises :


Manufactured goods
Fat/Butter/Cream/Ghee
SMP/WMP/DW/DC/SNF
Milk/Toned Milk/Double Toned Milk
Curd
Total - Sale of manufactured goods
Traded goods
Fat/Butter/Cream/Ghee
SMP/WMP/DW/DC/SNF
Milk
Cattle Feed & Suppliments
Other
Total - Sale of traded goods
Total - Sale of products

2)

Other Operating Income comprises :


Income From Export incentive
Sale of Scrap
Other
Total - Other Operating Income

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

4,56,988.76

3,69,162.28

816.03

66.38

4,57,804.78

3,69,228.67

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

72,082.09
68,566.34
2,26,577.73
39,191.56

71,597.57
62,472.23
2,00,110.49
30,473.23

4,06,417.73

3,64,653.53

832.81
7,509.10
41,947.29
278.64
3.19

1,686.78
2,611.21
0.00
210.76
0.00

50,571.02
4,56,988.76

4,508.75
3,69,162.28

810.26
5.76
0.00

60.17
6.04
0.18

816.03

66.38

Note 20 Other income


Particulars

a)

Interest income (Refer Note (a) below)

b)

Net gain on foreign currency transactions and translation


(other than considered as finance cost)

c)

Other non-operating income (net of expenses directly attributable to


such income) (Refer Note (ii) below)
Total
Particulars

(i)

Interest income comprises:


Interest from banks on deposits
Total - Interest income

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

37.44

31.84

0.00

30.16

357.65

9.70

395.09

71.70

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

37.44

31.84

37.44

31.84

Kwality Limited

Notes forming part of the financial statements


Particulars

(ii)

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

0.39
21.99
42.85
216.66
66.84
8.92

0.00
8.07
0.00
0.00
1.62
0.00

357.65

9.70

Other non-operating income comprises:


Profit on sale of fixed assets
Miscellaneous income
Claims recovered
Security Forfeited
Liability no longer payable
Prior Period Items (Net off Expenses) ( Refer note 24.1)
Total - Other non-operating income

Note 21.a Cost of materials consumed


Particulars

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

93.77
3,75,240.51
3,75,334.28
298.83
3,75,035.45

69.35
3,32,514.07
3,32,583.42
93.77
3,32,489.65

3,37,814.80
13,281.22
23,939.44

3,05,131.83
12,681.77
14,676.05

3,75,035.45

3,32,489.65

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

41,246.55

0.00

794.35
7,153.31
278.80

1,687.41
2,792.70
201.81

49,473.01

4,681.92

Opening stock
Add: Purchases
Less: Closing stock
Cost of material consumed
Material consumed comprises:
Milk
Butter fat/Ghee
Others
Total

Note 21.b Purchase of traded goods


Particulars

Milk
Fat/Butter/Cream/Ghee
SMP/WMP/DW/DC/SNF
Cattle Feed & Suppliments
Total

Note 21.c Changes in inventories of finished goods, work-in-progress and stock-in-trade


Particulars

Inventories at the end of the year:


Finished goods
Work-in-progress

Inventories at the beginning of the year:


Finished goods
Work-in-progress

Net (increase) / decrease

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

11,603.76
4,412.66

7,205.05
2,298.48

16,016.42

9,503.53

7,205.05
2,298.48

7,478.09
2,212.98

9,503.53

9,691.07

-6,512.89

187.54

Kwality Limited

Notes forming part of the financial statements


Note 22 Employee benefits expense
Particulars

Salaries and wages


Contributions to provident and other funds
Gratuity & Leave Encashment (Refer Note 25.9)
Recruitment Expenses
Staff welfare expenses
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

1701.77
39.53
22.08
2.02
29.33

1229.52
33.97
30.80
1.53
51.86

1794.74

1347.68

Note 23 Finance costs


Particulars

Interest expense on Borrowings


Other Borrowings Cost
Exchange Fluctuations
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

11013.98
165.35
82.00

9043.64
184.23
0.00

11,261.33

9,227.88

Note 24 Other expenses


Particulars

Advertisement & Sales Promotion


Bad- Debts & Balances W/off
Bank Charges
Commission & Brokerage
Communication Expenses
Consumption of Packing Materials
Consumption of Stores and Spare Parts
Donations and Contributions
Export Expenses
Insurance
Legal and Professional
Loss on Fixed Assets Sold
Miscellaneous Expenses
Payments To Auditors (Refer Note (25.5)
Payments To Cost Auditors
Power and Fuel
Printing and Stationery
Prior Period Items ( Refer note 24.1)
Processing Charges Of Milk
Provision For Bad Debts
Rates and Taxes
Rebate & Discount
Rent
Repairs and Maintenance - Buildings
Repairs and Maintenance - Machinery
Transportation Charges
Travelling and Conveyance
Vehicle Running Expenses
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

497.74
16.56
112.78
116.29
44.92
2203.26
163.12
3.55
223.96
30.57
77.87
0.00
277.30
7.53
0.50
1871.23
18.95
0.00
1796.08
0.00
54.73
5.97
180.01
76.16
85.26
2643.74
226.38
72.00

317.23
3.06
61.42
139.60
36.74
2160.08
90.46
2.46
79.72
17.22
133.71
0.35
204.19
7.50
0.00
1420.77
13.47
30.34
1519.35
296.13
19.46
22.81
109.20
59.57
223.02
2003.71
173.95
43.71

10806.48

9189.25

Note 24.1) Detail of Prior period Items


Particulars

Prior Period Expenses


Prior Period Incomes
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

16.08
25.00

30.34
0.00

-8.92

30.34

Kwality Limited

Notes forming part of the financial statements


25.1).Contingent Liabilities and other Commitments:
Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

1,193.03

1,166.03

A civil recovery suit has been filed by M/s S.M. Milkose Ltd.
regarding dispute in supply of material which is disputed by the Co.
& is pending before The Hon'ble High Court of Delhi.

156.97

156.97

Sales Tax Matters in Appeallate Authorities

175.72

0.00

0.00

67.97

Contingent Liability under Bank Guarantee

922.18

511.07

Contingent Liability under Letter of Credit

315.42

3,597.54

Contingent Liability under EPCG Licence

99.58

0.00

16,226.95

5,438.93

965.56

1,114.43

Contingent liabilty (to the extent not provided for)


Claim against the company not acknowledged as debts
Milk cess disputed by the company relating to issue of applicability
against which the company has preferred an SLP against the order
of Punjab & Haryana High Court before Hon'ble Supreme Court of India.
A liablity of Cess principal amounting Rs. 326.59 lacs (from which a sum
of Rs. 131.96 lacs ( pre. Yr Rs. 98.06 lacs) deposited under protest )
and a sum of Rs. 866.44 lacs on account of interest liability raised by
Semen Bank officer, of Haryana Livestock Development Board for
which the matter is already before Hon'ble Supreme Court.

Contingent Liability for Bills Discounted

Corporate Gurantee given on behalf of wholly owned subsidiary


Commitments
Estimated amount of Contracts remaining to be executed on
capital account and not provided for

25.2). The deferred tax liability comprise of the following :


Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

79.27

116.25

79.27

116.25

Deferred Tax Assets


Related to Fixed Assets
Due to Disallowance under the Income Tax Act, 1961

25.3).The Company has not received information from vendors regarding their status under the Micro, Small and Medium
Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together
with interest paid / payable under this Act have not been given.

Kwality Limited

Notes forming part of the financial statements


25.4).Foreign Exchange Transactions
Particulars

a) Value of imports on CIF basis


Plant & Machinery
Purchase of Traded Goods
Consumables

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

211.44
7,182.01
0.00

0.00
1,651.80
3.77

0.00
0.00

0.00
0.00

3,75,035.45
100.00
3,75,035.45

3,32,489.65
100.00
3,32,489.65

7,182.01
14.52

1,651.80
35.28

42,291.00
85.48
49,473.01

3,030.12
64.72
4,681.92

0.00
0.00

3.77
4.16

163.12
100.00
163.12

86.70
95.84
90.46

61.94
0.00
86.05

365.08
116.08
0.00

7,182.01
0.00
11.65
4.46
7,346.11

410.06
3.77
14.52
0.00
909.51

18,344.62

3,417.73

3,170.23
5,851.18
0.00
1,093.19
385.39
0.17

1,249.87
754.77
116.08
0.00
589.88
0.00

b) Imported and Indigenous raw material, componenets and consumable


consumed
(i) Raw material consumed
- Imported
Amount
Percentage
- Indigenous
Amount
Percentage
Total
(ii) Purchase of Traded Goods
- Imported
Amount
Percentage
- Indigenous
Amount
Percentage
Total
(iii) Consumables
- Imported
Amount
Percentage
- Indigenous
Amount
Percentage
Total
c) Expenditure in Foreign Exchange (on accrual basis)
Capital Transaction
Capital Investment in Subsidiary
Capital Advance
Capital Goods
Revenue Transaction
Raw Material & Purchase Traded Goods
Consumable Goods
Tour and Travelling
Other
d) Earnings in Foreign Exchange (on accrual basis)
- Value of Exports on FOB basis
e) Particulars of unhedged foreign currency as on reporting date
Import trade payable
Export trade receivable
Trade Advance paid
Trade advance received
Packing Credit in Foreign Credit (PCFC)
Export Earner in Foreign Credit (EEFC)

Kwality Limited

Notes forming part of the financial statements


25.5). Payment to Auditors :
Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

Audit Fees

6.50

6.50

Tax Audit Fees

1.00

1.00

Other Charges

0.03

0.00

7.53

7.50

25.6). Managerial Remuneration


Particulars

Salaries and Allowances

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

228.43

225.00

25.7). Statement of Earning Per Share


Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

12,663.02

9,652.79

20,31,86,434

20,31,86,434

ii) Nominal value per share (in INR)

1.00

1.00

iii) Basic/Diluted Earning Per Share (in INR)

6.23

4.75

Net Profit attributable to Equity Shareholders (INR In lacs)


Weighted Average Number of Equity Shares
i) used as denominator for calculating EPS

25.8). RELATED PARTY DISCLOSURES


As per Accounting Standard 18 disclosures of transactions with the related parties are given below:
Relationships
1

Subsidiary Company

Kwality Dairy Products FZE

Key managerial personnel (KMP)

Sh. Sanjay Dhingra


Sh. Sidhant Gupta

Enterprises on which Key Managerial


person having significant influence

JTPL Townships Pvt Ltd


Pashupati Dairies Pvt Ltd
Kwality Dairy Investments Pvt Ltd.

Relative of Key Managarial Person

Ms. Kanika Dhingra


Dr Ved Parkash Gupta

Kwality Limited

Notes forming part of the financial statements


Balances with related parties
Related Party

Nature of Transactions

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

143.20
483.36
16,226.95
156.71

143.20
421.42
5,438.93
0.00

Kwality Dairy Products FZE

Investment in Subsidiary
Share Application Money
Corporate Gurantee
Amount Recoverable

Pashupati Dairies Pvt Ltd

Amount Payable in respect of Services rcd.


Amount Recoverable
Amount Payable in respect of Loans
Amount Payable in Respect of Royality

71.02
0.00
7,500.00
0.00

0.00
211.60
7,500.00
4.05

JTPL Townships Pvt Ltd

Collateral Security/guarantee

7,500.00

4,500.00

Sh. Sanjay Dhingra

Guarantee for Long Term Loans


Guarantee taken for Financial Limits
Shares Pledge for Loan

7,500.00
1,15,055.00
3,155.00

7,500.00
85,000.00
2,970.00

Ms Kanika Dhingra

Guarantee for Long Term Loans


Guarantee taken for Financial Limits

3,000.00
87,500.00

3,000.00
85,000.00

Sh. Sidhant Gupta

Collateral Security/guarantee

1,500.00

1,500.00

Disclosures in respect of material transactions with related parties


Related Party

Nature of Transactions

Kwality Dairy Products FZE

-Share Application Money


-Corporate Gurantee
-Sales

Pashupati Dairies Pvt Ltd

-Inter Corporate Loans received


-Services Received
-Royality

JTPL Townships Pvt Ltd

-Collateral Security/guarantee

Sanjay Dhingra

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

61.94
10788.02
2670.78

365.08
5438.93
65.55

0.00
719.34
9.00

1700.00
785.44
9.00

3,000.00

0.00

-Guarantee taken for Financial Limits


-Guarantee for Long Term Loans
-Mangerial Remunation
-Dividend Paid

30,055.00
0.00
128.43
152.15

85,000.00
3,000.00
125.00
99.66

Kanika Dhingra

-Guarantee taken for Financial Limits


-Guarantee for Long Term Loans
-Dividend Paid

2,500.00
0.00
0.00

0.00
3,000.00
52.49

Sidhant Gupta

-Collateral Security/guarantee
-Mangerial Remunation

0.00
100.00

1500.00
100.00

25.9) .EMPLOYEE BENEFITS :


Employee Benefits
The Company has made provisions for employee benefits in accordance with the Accounting Standard (AS) 15
"Employee Benefits". During the year, the Company has recognised the following amounts in its financial
statements based on actuarial valuation done as per Projected Unit Credit Method.
Defined Contribution Plan

Employer's contribution to Provident Fund


Employer's contribution to Employee State Insurance Fund
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

10.21
21.19

6.20
16.73

31.41

22.92

Kwality Limited

Notes forming part of the financial statements


Defined Benefit Plan

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

Gratuity

Gratuity

Liability at the beginning of the year


Interest Cost
Current service cost
Benefit Paid
Actuarial (gain)/loss on obligation
Liability at the end of year-recognized in the Balance Sheet

35.21
3.17
19.29
-0.40
-7.38
49.89

20.84
1.71
14.75
-2.08
-0.01
35.21

Expenses recognized in the Income Statement


Interest cost on benefit obligation
Current service cost
Expected return on plan assets
Net actuarial( gain)/loss recognized in the year
Expenses recognised in Profit and Loss statement

3.17
19.29
0.00
-7.38
15.07

1.71
14.75
0.00
-0.01
16.45

Change in Benefit Obligation

Defined Benefit Plan

Change in Benefit Obligation


Liability at the beginning of the year
Interest Cost
Current service cost
Benefit Paid
Actuarial (gain)/loss on obligation
Liability at the end of year-recognized in the Balance Sheet

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

Leave Encashment

Leave Encashment

25.01
2.25
13.75
-0.39
-9.00
31.63

12.51
1.03
11.58
-1.84
1.74
25.01

2.25
13.75
0.00
-9.00
7.00

1.03
11.58
0.00
1.74
14.35

Expenses recognized in the Income Statement


Interest cost on benefit obligation
Current service cost
Expected return on plan assets
Net actuarial( gain)/loss recognized in the year
Expenses recognised in Profit and Loss statement
Discount rate current
Salary escalation current
Mortality
Withdrawal rate 18 to 58 Years

8.75% per annum


5% per annum
LIC 94-96 Ultimate
2% per annum

8.75% per annum


5% per annum
LIC 94-96 Ultimate
2% per annum

The estimates of future salary increases, inflation, seniority, promotion and other relevant factors, considered in actuarial
valuation such as supply and demand in the employment market. The rate used to discount post employment benefit
obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on
government bonds. The currency and term of the government bonds should be consistent with the currency and estimated
term of the post employment benefit obligations.
An amount of Rs.22.08 Lacs /-(PY. - Rs. 30.80 Lacs) as contribution towards defined contribution plan is recognized as
expense in the Profit & Loss Statement

Kwality Limited

Notes forming part of the financial statements


25.10).Other Notes
a) Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges
Loans and advances in the nature of loans given to subsidiaries, associates and others and investment in shares of the
Company by such parties:
Name of the party

Relationship

Kwality Dairy Products FZE Dubai- Investment


(Maximum amount outstanding during the year INR 626.56 lacs (INR 564.62)

Subsidiary

Amount outstanding
as at 31 March, 2014
(INR in Lacs)
626.56
(564.62)

b) Previous year figure have been regrouped/reclassified wherever necessary to correspond with the current year
classification/disclosure.
c) Extraordinary/Exceptional Item

Particulars

As At 31 March, 2014

As At 31 March, 2013

( INR In Lacs)

( INR In Lacs)

0.00

300.00

During the year Company has paid a sum of Nil (Rs. 300 lacs) to SEBI
for obtaning permission authorising listing of shares alloted to
erstwhile promoters in the year 2000.

As per our Report of even date

On behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N


sd/CA P.P. Mukerjee
Membership No.:089854
Proprietor

Place : New Delhi


Date : 30.05.2014

sd/(Sanjay Dhingra)
Managing Director

sd/(Sidhant Gupta)
Executive Director
sd/(Deepa Kapoor)
Company Secretary

AUDITOR'S REPORT & BALANCE SHEET (CONSOLIDATED)

Independent Auditors Report


To the Members of KWALITY LIMITED
Report on the Financial Statements
We have audited the accompanying Consolidated Financial Statements of M/s Kwality Limited (the Company) and its subsidiary,
which comprise the Consolidated Balance Sheet as at March 31, 2014, and the Consolidated Statement of Profit and Loss and
Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory
information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation of these Consolidated Financial Statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13 September
2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting
principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the Consolidated Financial Statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit
in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the
Consolidated Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the Companys preparation and fair presentation of the Consolidated Financial Statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the overall presentation of the Consolidated Financial
Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the
information required by the Act in the manner so required and 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 Company as at March 31, 2014;
(b) In the case of the Consolidated statement of Profit and Loss , of the profit for the year ended on that date; and
(c) In the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
For P. P. Mukerjee & Associates
Chartered Accountants
Firms Registration Number 023276N

Place : New Delhi


Date : 30.05.2014

Sd/P. P. Mukerjee
Proprietor
Membership Number 089854

Kwality Limited
Consolidated Balance Sheet as at 31 March, 2014
Particulars

Note
No.

As at 31 March, 2014

As at 31 March, 2013

(INR In Lacs)

(INR In Lacs)

EQUITY AND LIABILITIES


1 Shareholders funds
(a) Share capital
(b) Reserves and surplus

2
3

2,031.86
40,810.36
42,842.22

2,031.86
26,420.95
28,452.81

2 Non-current liabilities
(a) Long-term borrowings
(b) Long-term provisions

4
5

10,920.11
74.99
10,995.10

11,281.22
55.67
11,336.89

3 Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions

6
7
8
9

96,806.26
16,628.32
4,651.27
3,429.71
1,21,515.55

83,124.95
9,175.14
2,788.62
2,448.90
97,537.61

1,75,352.88

1,37,327.32

10,435.01
142.27
2,200.33
12,777.62
4,010.42
76.34
79.27
16,943.65

7,182.97
126.96
860.92
8,170.85
2,926.36
182.96
116.25
11,396.42

18,739.48
1,33,115.26
3,146.77
3,210.27
197.45

10,328.83
1,00,910.04
8,629.98
6,035.25
26.79

1,58,409.23

1,25,930.90

1,75,352.88

1,37,327.32

TOTAL
B

ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work-in-progress

10.A
10.B
10.C
11
12
24.2

(c) Long-term loans and advances


(d) Other Non Current Assets
(e) Deffered Tax Assets (Net)

2 Current assets
(a) Inventories
(b) Trade receivables
(c) Cash and cash equivalents
(d) Short-term loans and advances
(e) Other current assets

13
14
15
16
17
TOTAL

Notes forming part of the financial statements


In terms of our report attached.

0.86
1-24
For and on behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N


sd/CA P.P. Mukerjee
Membership No.:089854
Proprietor
Place : New Delhi
Date : 30.05.2014

sd/(Sanjay Dhingra)
Managing Director

sd/(Sidhant Gupta)
Executive Director
sd/(Deepa Kapoor)
Company Secretary

Kwality Limited
Consolidated Statement of Profit and Loss for the year ended 31 March, 2014
Particulars

Note
No.

For the year ended


31 March, 2014
(INR In Lacs)

For the year ended


31 March, 2013
(INR In Lacs)

Revenue from operations

18

5,01,095.45

3,92,967.66

Other income

19

402.87

73.42

Total revenue (1+2)

5,01,498.32

3,93,041.08

Expenses
(a) Cost of materials consumed
(b) Purchases of stock-in-trade
(c) Changes in inventories of finished goods, work-in-progress and
stock-in-trade
(d) Employee benefits expense
(e) Finance costs
(f) Depreciation and amortisation expense
(g) Other expenses

3,75,035.45
91,700.56
(8,041.64)

3,32,489.65
27,455.39
(143.91)

1,859.08
11,557.87
1,299.21
11,206.61

1,379.18
9,307.03
1,029.94
9,468.24

4,84,617.13

3,80,985.50

16,881.19

12,055.57

20.a
20.b
20.c
21
22
10
23

Total expenses
5

Profit / (Loss) before Extraordinary & Exceptional Items (3-4)

Extraordinary / Exceptional Items

Profit / (Loss) Before Tax (5-6)

16,881.19

11,755.57

Tax expense:
(a) Tax expense for current year
(b) (Less): MAT credit related to current year
(c) Net current tax expense
(d) Tax expense relating to prior years
(e) Deferred tax

3,155.91
(1,123.32)
2,032.59
318.44
36.97

2,230.70
-941.97
1,288.73
69.63
-163.57

2,388.01

1,194.79

14,493.18

10,560.79

7.13
7.13

5.20
5.20

Total Tax expense:


9

Profit from operations (7-8)

10

Earnings per share (of INR 1/- each):


(a) Basic
(b) Diluted

Notes forming part of the financial statements


In terms of our report attached.

300.00

1-24
For and on behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N

Sd/CA P.P. Mukerjee


Membership No.:089854
Proprietor
Place : New Delhi
Date : 30.05.2014

Sd/(Sanjay Dhingra)
Managing Director

Sd/(Sidhant Gupta)
Executive Director
Sd/(Deepa Kapoor)
Company Secretary

Kwality Limited
Cash Flow Statement for the year ended 31 March, 2014
Particulars

For the year ended


31 March, 2014
(INR In Lacs)

A. Cash flow from operating activities


Net Profit / (Loss) before extraordinary items and tax
Adjustments for:
Depreciation and amortisation
Amortisation of Expenses
(Profit) / loss on sale on assets
Finance costs
Interest income
Liablity no longer payable
Provision for Doubtful debts
Bad Debts & Other Balances W/off
Unrealised Exchange Fluctuation
Security Forfeited
Other non-cash charges
Operating profit / (loss) before working capital changes
Changes in working capital:
Adjustments for (increase) / decrease in operating assets/Liablities:
Inventories
Trade receivables
Short-term loans and advances
Other Current Assets
Other than Cash and Cash Equivalents
Long-term loans and advances
Long-term provision
Trade payables
Other current liabilities
Cash Generated from Operations
Cash flow from extra ordinary Items
Net income tax (paid) / refunds
Net cash flow from / (used in) operating activities (A)
B. Cash flow from investing activities
Capital expenditure on fixed assets, including capital advances
Proceeds from sale of fixed assets
Purchase of long-term investments- Subsidiaries
Interest received
Net cash flow from / (used in) investing activities (B)
C. Cash flow from financing activities
Proceeds from long-term borrowings
Repayment of long-term borrowings
Net increase / (decrease) in working capital borrowings
Finance cost
Dividends paid
Tax on dividend
Net cash flow from / (used in) financing activities (C)
Net increase / (decrease) in Cash and cash equivalents (A+B+C)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Reconciliation of Cash and cash equivalents with the Balance Sheet:
Cash and cash equivalents as per Balance Sheet (Refer Note 15)
Less: Bank balances not considered as Cash and cash equivalents
as defined in AS 3 Cash Flow Statements (give details)
Net Cash and cash equivalents (as defined in AS 3 CFS)
Cash and cash equivalents at the end of the year *
* Comprises:
(a) Cash on hand
(b) Balances with banks ( In Current Accounts)

(INR In Lacs)

For the year ended


31 March, 2013
(INR In Lacs)

(INR In Lacs)

17,015.13
1,299.21
3.84
-0.39
11,557.87
-45.22
-66.84
16.56
37.13
-216.66
4.14

-8,410.65
-32,321.90
2,824.98
-173.02
-26.17
87.96
19.32
7,518.17
2,064.00

12,055.57
1,029.94
5.90
0.35
9,307.03
-33.56
-1.62
296.13
3.06
-30.16
28.46

12,589.64
29,604.78

-28,417.32
1,187.46
0.00
-2,547.95
-1,360.49

-5,908.59
3.00
0.00
45.22

10,605.51
22,661.08

22,661.08

-323.14
-34,889.42
-2,191.55
-1,400.99
-15.39
24.81
6,633.49
225.70

-31,936.50
-9,275.42
-300.00
-1,394.81
-10,970.23

-2,845.13
3.61
1.85
33.56
-5,860.37

1,598.39
-1,879.36
13,681.31
-11,557.87
-203.19
-32.96

-2,806.11
5,137.20
-3,834.76
28,116.72
-9,307.03
-203.19
-33.29

1,606.33
-5,614.54
7,237.32
1,622.78
3,221.52
-1,598.74

19,875.66
6,099.32
1,138.01
7,237.32
8,809.88
-1,572.56

1,622.78
1,622.78
27.56
1,595.22

1,622.78

7,237.32
7,237.32
64.86
7,172.46

Notes forming part of the financial statements (1-25)

In terms of our report attached.

For and on behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N


Sd/CA P.P. Mukerjee
Proprietor
Membership No.:089854
Place : New Delhi
Date : 30.05.2014

Sd/(Sanjay Dhingra)
Managing Director

Sd/(Sidhant Gupta)
Executive Director
Sd/(Deepa Kapoor)
Company Secretary

7,237.32

Kwality Limited
Notes Forming Part of Financial Statements
1) SIGNIFICANT ACCOUNTING POLICIES
(a)

Basis of Preparation of Accounts


(i) The consolidated financial statements have been prepared on a going concen basis to comply with the requirements of
clause 32 of the listing agreement and in accordance with Accounting Standard (AS) 21 on "Consolidated Financial
Statements " and Accounting Standard (AS) 3 "Cash Flow Statements".
(ii) The consolidated financial statements comprise the financial statements of Kwality Limited (Holding Company )
incorporated in India and its 100% subsidiary, incorporated in Dubai, namely Kwality Dairy Products FZE.
(iii) The financial statement of subsidiary used in consolidation is drawn upto the same reporting date as that of parent
company.
(iv) The financial statement of the subsidiary are prepared by them on the basis of generally accepted accounting
principles, local laws and regulation as prevelant its respective country and such financial statement are considered for
consolidation.
(v) The consolidated financial statements have been prepared based on a line-by-line consolidation. The effect of inter
company transactions are eliminated in consolidation.
(vi) The excess of the cost to the parent company of its investment in subsidiary, on the acquisition date, is recognized in
the financial statements as Goodwill.
Name of Company

Country of Incorporation

Ownership

Voting Rights

1) Kwality Dairy Products FZE

United Arab Emirates (Dubai)

100%

100%

These consolidated financial statements have been prepared by consolidation of the financial statements of the
Company and its subsidiaries on a line-by-line basis after fully eliminating the inter-company transactions and amount
arises on account of converting foreign currency in consolidation procedures are recognise in Foreign Currency
Fluctuation Reserve.
(b)

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting
estimates is recognized prospectively in the current and future periods.

(c)

Revenue recognition
Sale of Goods
Sale is recognized when the significant risks and rewards of ownership of the goods have passed to the customer. Sales
are recorded net of sales returns, rebates, trade discounts and price differences
Income from Services
Revenue from Milk Processing services are recognized as and when services are rendered, and are accounted on an
accrual basis.
Interest Income
Interest income is recognised on time proportion basis taken into account the amount outstanding and the rate
applicable.
Exports benefits are recognised in the statement of profit and loss when the reasonable right to receive and the same is
established.
Other Income & Expenditure
Other Income & expenditure are accounted for an accrual basis except where the receipt of income is uncertain in which
case it is accounted for on receipt basis.

(d)

Fixed Assets
Tangible Assets
Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if
any. Cost includes financing cost relating to borrowed funds attributable to the construction or acquisition of qualifying
fixed assets upto the date the assets are ready for use. Where the acquisition of fixed assets are financed through long
term foreign currency loans (having a term of 12 months or more at the time of their origination) the exchange differences
on such loans are added to or subtracted from the cost of such fixed assets. In respect of new projects, all cost including
borrowing cost incurred upto the date of commencement of commercial production or when related asset is put to use
are capitalised.
Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future
benefits from the existing asset beyond its previously assessed standard of performance.
Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets are recognised in the
Statement of Profit and Loss.

Kwality Limited
Notes Forming Part of Financial Statements
Intangible Assets
Acquired computer software are capitalised at cost of acquisition and disclosed as intangible assets
(e)

Depreciation:
Depreciation on fixed assets have been provided on written down value method at the rates and in the manner
prescribed in Schedule xiv of the Companies Act, 1956. Assets individually costing Rs. 5000/- or less are depreciated
fully in the year when the assets are ready to use.

(f)

EMPLOYEE BENEFITS
Short Term Employee Benefits :
Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account
for the year in which employee renders the related service.
Post Employment Benefits
Defined Contribution Plans:
Company's contribution to state governed Provident Fund Scheme , Employees State Insurance Contribution Scheme
and Staff welfare fund are charged to the revenue of the year when the contribution to the respective fund is due.
Defined benefit plans:
The present value of gratuity obligation is determined based on an actuarial valuation using the Projected Unit Credit
Method.
Actuarial gains and losses arising on such valuation are recognized immediately .
Other Defined Plans:
Other long term benefits (leave entitlement) are recognized in a manner similar to defined benefit plans:
Termination Benefits are recognized as an expense in the year in which they are incurred.

(g)

Inventories :
Raw Material, components, stores and spares are valued at lower of cost and net realisable value.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials,
labour and related production overheads in the ordinary course of business, less estimated cost of completion and
estimated cost necessary to make the sale.

(h)

Investments
Investments which are readily realizable and intended to be held for not more than a year from the date on which the
investment made are classified as current investment. All other investment are classified as long term investment.
Current investments are stated at lower of cost or fair value. Long-term investments are stated at cost however provision
for diminution in their value is made to recognise a decline, other than temporary value of the investment.

(i)

Provision for Current and Deferred Tax


Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income
Tax Act, 1961. Deferred Tax resulting from "timing difference " between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred Tax
asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in
the future.

(j)

Impairment of Assets
"The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any
such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount,
the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. Where there is any indication that an impairment loss recognised for an
asset in prior accounting periods may no longer exist or may have decreased, the Company books a reversal of the
impairment loss not exceeding the carrying amount that would have been determined (net of amortisation or
depreciation) had no impairment loss been recognised for the asset in prior accounting periods."

(k)

Foreign Exchange Transactions


Initial Recognition
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Kwality Limited
Notes Forming Part of Financial Statements
Subsequent Recognition
All monetary assets and liabilities in foreign currency are restated using the exchange rate prevailing at reporting date.
Exchange Differences
The Company has opted to avail the choice provided under paragraph 46A of AS-11 "The Effect of Changes in Foreign
Exchange Rates" inserted vide Notification dated December 29, 2011. Consequently, Exchange differences arising on
long-term foreign currency monetary items related to acquisition of depreciable capital asset added to or deducted from
the cost of the asset and depreciated over the remaining useful life of the asset. For this purpose, the company treats a
foreign monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of
its origination.
All other exchange differences are recognised as income or expenses in the period in which they arise.
The financial statements of consolidated foreign subsidiaries are translated into Indian Rupees, which is the
functional currency of the Company, as follows:
- Assets and liabilities at rates of exchange ruling at year end.
- Income and expense items at the average rate for the year.
Exchange rate differences arising on the translation of consolidated foreign subsidiaries are transferred to the foreign
currency translation reserve.
(l)

Government Grants
Government grants are recognized when there is reasonable assurance that the company will comply with the conditions
attached to them and the grants will be received.
Government grants whose primary condition is that the company should purchase, construct or otherwise acquire
capital assets are presented by deducting them from the carrying value of the assets. The grant is recognised as income
over the life of a depreciable asset by way of a reduced depreciation charge.
Other government grants are recognised as income over the periods necessary to match them with the costs for which
are intended to compensate on a systematic basis.

(m)

Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction of qualifying assets are capitalised as part of the
cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for the
intended use. All other borrowing costs are charged to revenue in the period in which these are incurred.

(n)

Business Segments
The Company is engaged mainly in trading, processing , manufacturing of milk and dairy poducts . These, in the context
of Accounting Standard 17 on Segment reporting , as specified in the Companies (Accounting Standards) Rules 2006,
are considered to constitute one single primary segment. Hence Segment reporting is not required.

(o)

Provisions, Contingent Liabilities and Contingent Assets


Provisions: Provisions are recognised when there is a present obligation as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable
estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to
settle the present obligation at the Balance sheet date and are not discounted to its present value.
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the company or a present obligation that arises from past events where it is either not
probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is
termed as a contingent liability.
Contingent Assets : Contingent assets are neither recognised nor disclosed.

(p)

Leases
(i) Finance Lease
Assets acquired under finance lease are recognised at lower of the fair value of the leased assets at inceptions and the
present value of minimum lease payment. Lease payment are apportioned between the finance charge and the
outstanding liability.The finance charge is allocated to periods during the lease term at a constant periodic rate of interest
on the remaining balance of the liability.
(ii) Operating Lease
Leases other than finance lease are operating and leased assets are not recognised in the company Balance sheet.
Payment under operating leases are recognised in the Statement of Profit and Loss on a straight line over the lease term.

(q)

Earnings per share


Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equityshareholders by
theweighted average number of equity shares outstanding during the year
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
sharholders and theweighted average number of shares outstanding during the year are adjusted for the effects of all
dilutive potential equity shares, except where results would be anti-dilutive.

Kwality Limited
Notes forming part of the Consolidated financial statements
Note 2 Share capital
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

10,000.00

10,000.00

10,000.00

10,000.00

(b) Issued, Subscribed and fully paid up


20,31,86,434 Equity Shares of INR1/- each fully paidup
(March 31,2013 : 20,31,86,434 Equity Shares of INR1/- each fully paidup)

2,031.86

2,031.86

Total

2,031.86

2,031.86

(a) Authorised Capital


100,00,00,000 equity shares of INR 1/- each
(March 31, 2013 : 100,00,00,000 equity share of INR 1/- each)

Refer Notes (i) to (v) below


(i) Reconciliation of the number of shares outstanding and amount of share capital:
As at 31 March, 2014

Particulars

Equity Shares at the beginning of the year


Add: Shares issued during the year
Equity Shares at the end of the year

As at 31 March, 2013

No. of Shares

Amount (INR in Lac)

No. of Shares

Amount (INR in Lac)

20,31,86,434
20,31,86,434

2,031.86
2,031.86

20,31,86,434
20,31,86,434

2,031.86
2,031.86

(ii) Right, preference and restriction attached to the equity shares :


- The Company has only one class of equity shares having a par value of INR 1/-per share. Each shareholder is eligible for one vote per
share held
- The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the
shareholders in ensuing Annual General Meeting.
- During the year ended 31 March 2014 , the amount of per share dividend recognised as distributions to equity shareholders is INR 0.10
(previous year INR 0.10)
- In the event of liquidation of the company, the equity share holders will be entitled to receive remaining assets of the Company, after
distribution of all preferential amounts, in proportion of their shareholding.
(iii) Details of shares held by each shareholder holding more than 5% of the aggregate shares in the Company:
As at 31 March, 2014

Class of shares / Name of shareholder

Equity shares with voting rights


Sanjay Dhingra
Kanika Dhingra

Number of shares
held
152154714

As at 31 March, 2013

% holding of shares

Number of shares
held

% holding of shares

74.88

99660714
52494000

49.05
25.84

(iv) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash,
by way of bonus shares and shares bought back for the period of 5 years immediately preceding the Balance Sheet date:
(a) The Company has not issued any shares pursuant to contract(s) without payment being received in cash.
(b) The Bonus issue is made by capitalisation of profit. The detail of bonus issues in preceding 5 years are given below

Particulars
Equity shares with voting rights
Fully paid up by way of bonus shares
Year 2013-14
Year 2012-13
Year 2011-12
Year 2010-11
Year 2009-10

No. of Shares

21186434
-

(c) The Company has not undertaken any buy back of shares.
(v) No shares have been reserved for any purpose like esop, share warrant and for conversion.

Kwality Limited

Notes forming part of the Consolidated financial statements


Note 3 Reserves and surplus
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

(a) Foreign Currency translation reserve (On Consolidation) #


Foreign Currency Transaction Reserve
(b) Surplus in Statement of Profit and Loss
Balance as at the begining of the year
Add: Profit for the year
Less: Appropriations:
Proposed Dividends on equity share (INR 0.10 per share)
Dividend distribution tax
Balance as at the end of the year
Total

133.95
133.95

24.98
24.98

26,420.95
14,493.18
40,914.13

16,071.33
10,560.79
26,632.12

203.19
34.53
40,676.41

203.19
32.96
26,395.97

40,810.36

26,420.95

# Translation reserve represent conversion of balance in functional currency of foreign subsidiaries.

Note 4 Long-term borrowings


Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

Non Current

Current

Non Current

Current

(1) Secured
(a) Term loans from Banks (refer note 1)
(b) Term loans from Other Parties (refer note -2)
(2) Unsecured
(a) Term loans From Bank (refer Note-3 below)
(b) Term loans From Other Parties (refer Note-4 below)
(c) Loans and advances from related parties (refer Note-5 below)
(d) Loans and advances from other parties (refer Note-6 below)
(e) Deferred payment liabilities

Total

423.40

114.13

183.02

96.23

53.19

11.43

0.00

0.00

476.59

125.55

183.02

96.23

2,000.00
0.00
7,500.00
943.52
0.00

666.67
1,077.92
0.00
0.00
0.00

2,000.00
1,077.92
7,500.00
520.28
0.00

250.00
1,441.56
0.00
0.00
2.21

10443.52

1744.58

11098.20

1693.77

10,920.11

1,870.14

11,281.22

1,790.00

Notes:
1). Term loans was taken from various banks which are secured by hypothecation of assets ( Vehicles ) . Rate of Interest is ranging b/w 8.67% to 13.5 %.
Period of maturity for loans is ranging b/w 3 year to 5 year and No.of repayment installments is ranging b/w 36 to 60 months.
Maturity profile of loans are as set out below:-

Particulars
a) Term Loans from Banks

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

93.24
93.24

80.05
80.05

64.49
64.49

13.97
13.97

2). Term loans from others are secured by hypothecation of assets ( Vehicles ) . Rate of Interest is ranging b/w 8.67% to 13.5 %. Period of maturity
for lease obligations is ranging b/w 3 year to 5 year and No.of repayment installments of loans is ranging b/w 36 to 60 months.
Maturity profile of loans are as set out below:-

Particulars
a) Term Loans from others

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

11.43
11.43

12.75
12.75

14.07
14.07

26.37
26.37

3). Term Loan was taken from IDBI Bank. The loans is secured by way of exclusive charge on Immovable property held in the name of Director & Other party
situated at Golden Park, Rampura Road, Basai Darapur, New Delhi and the land/properties held in the name of JTPL Townships Pvt Ltd situated at JTPL City,
Sector-115 Mohali (Punjab). The loan is further secured by personal / Corporate guarantee of Sh. Sanjay Dhingra, Managing Director of Company & Smt.
Kanika Dhingra wife of Mr. Sanjay Dhingra and Property owners. Rate of Interest on loan is 12 % . Maturity profile of loans are as set out below:-

Particulars
a) IDBI Bank Ltd

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

666.67
666.67

666.67
666.67

666.67
666.67

666.67
666.67

Kwality Limited

Notes forming part of the Consolidated financial statements


4)

Term Loans from Other party are from Tata Capital Ltd INR 714.28 Lacs ( 1428.56 lacs) and from L & T Finance Ltd INR 363.64 Lacs (1090.90 lacs).

4.a) Loan from Tata Capital Limited is secured by way of first mortgage/ charge on the immovable property in the name of JTPL Townships Pvt Ltd. situated in
Mohali (Punjab) and further secured by personal guarantee of Sh. Sanjay Dhingra , Managing Director of company and Corporate Guarantee of JTPL
Townships Pvt Ltd. The present rate of Interest on loan is 14.25%. Maturity profile of loans are as set out below.
4.b) Loan from L & T is secured by way of pledge of shares of Kwality Limited held in the name of Mr. Sanjay Dhingra (Director). Pledge value of the shares (1crore
shares ) was INR 3155 lacs as on 31.03.2014 and further secured by first mortgage/charge on the immovable property located at Mohali in the name of
JTPL Townships Pvt Ltd. & personal guarantee Sh. Sanjay Dhingra, Managing Director of Co. and Corporate Guarantee of JTPL Townships Pvt Ltd. Rate of
interest on loan is 12.75%. Maturity profile of loans are as set out below.

Particulars
a) Tata Capital Limited
b) L& T Finance Ltd
Total Long Term Loans

2014-15

2015-16

2016-17

Beyond 2016-17

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

( INR In Lacs)

714.28
363.64

0.00
0.00

0.00
0.00

0.00
0.00

1077.92

0.00

0.00

0.00

5) The Loan from related party is unsecured and there is no interest payable on the loan .The loan will be payable in 3 to 5 year.
6) The Loan from other party is unsecured and there is no interest payable on the loan .The loan will be payable in 3 to 5 year.
7) Term loans from Banks includes loan of INR 285.78 lacs ( INR 76.96 lacs) Lacs taken by Kwality Dairy Products FZE 'the Subsidiary', and are secured
by mortgage of Property and Vehicle ( Assets ). Loans against property is payable in 15 years and rate of interest has been fixed @4.99% for first two
year and EBOR plus 3% thereafter. Loan against vehicle is payable in next 3 years.

Note 5 Long-term provisions


Particulars
a) Provision for employee benefits:
(i) Provision for compensated absences (net) (Refer Note 25.9)
(ii) Provision for gratuity (net) (Refer Note 25.9)
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

27.70
47.29
74.99
74.99

22.16
33.52
55.67
55.67

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

96,806.26

83,124.95

96,806.26

83,124.95

Note 6 Short-term borrowings


Particulars
(1) Secured
(a) Loans From Banks
Cash Credit Facilities ( Refer Note 1 below)
Total

Note.-1
Cash Credit facilities of Kwality Limited 'the Company' are secured by way of :a) First pari passu charge on the entire current assets of the company.
b) 1st paripassu charge on entire movable and immovable fixed assets including Eq. mortgage of factory land and building of the company situated
at village Softa ,Palwal ( Haryana) and at Village Mumrejpur, Tehsil Dibai, District- Bulandsahar ( U.P).
c) 1st paripassu charges on entire fixed assets of M/s Pashupati Dairies Pvt. Ltd. including Equitable mortage of Land and Building situated at village
Kumarhera, Saharanpur (UP).
d) Corporate guarantee of M/s Pashupati Dairies Pvt Ltd.
e) Negative lien for non disposal/ non transfer of 51 % of equity share held by Mr. Sanjay Dhingra.
f) Personal guarantee of Sh. Sanjay Dhingra, Managing Director of the Company and Mrs. Kanika Dhingra, Wife of Mr. Sanjay Dhingra.
2) Loans from banks includes INR 7137.41 Lacs (INR 7597.07 lacs ) working capital loan avail by Kwality Dairy Products FZE, Dubai, and are secured
by way of Corporate guarantee given by Kwality Limited ' the Company' and personal guarantee of Mr. Sanjay Dhingra and Mrs. Kanika Dhingra
wife of Sh Sanjay Dhingra, promoter director of Kwality limited.
The limit also secured by way of assignment of receivable and pledged of assets.

Note 7 Trade payables


Particulars

Trade payables / Acceptances


- For Goods
- For Services
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

16,256.96
371.36

8,932.28
242.86

16,628.32

9,175.14

Kwality Limited

Notes forming part of the Consolidated financial statements


Note 8 Other current liabilities
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

1,870.14
101.64
8.65
30.07

1,790.00
27.65
0.00
25.70

73.85
18.23
412.86
478.65
1,356.62
300.58

67.30
15.74
141.51
382.86
91.93
245.93

4,651.27

2,788.62

(a) Current maturities of long-term debt (Refer Note (4))


(b) Interest accrued and due on borrowings
(c) Interest accrued but not due on borrowings
(d) Unclaimed dividends
(e) Other payables
(i) Statutory payments
(ii) Contractually reimbursement expenses to Employee
(iii) Payables for capital goods
(iv) Trade / security deposits received
(v) Advances from customers
(vi) Expenses Payable
Total

Note 9 Short-term provisions


Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

33.52
3.93
2.59
40.05

31.36
2.86
1.70
35.91

3,150.80
203.19
34.53
1.14
3,389.66

2,176.08
203.19
32.96
0.76
2,412.98

3,429.71

2,448.90

(a) Provision for employee benefits:


(i) Provision for bonus
(ii) Provision for compensated absences (net) (Refer Note 24.9)
(iii) Provision for gratuity (net) (Refer Note 24.9)
(b) Provision - Others:
(i) Provision for Income tax ( Net of TDS INR 3.96 lacs)
(ii) Provision for proposed equity dividend
(iii) Provision for tax on proposed dividends
(iv) Provision for Wealth Tax
Total

Note 10 Fixed Assets


DESCRIPTION

GROSS BLOCK
Opening
As at
01.04.13

DEPRECIATION

Additions

Deduction/
During the Adjustment during
Year

the year

Closing

Opening

For the

Adjustment

Closing

As at

As at

Year

on account of

As at

31.03.2014

01.04.13

31.03.2014

sales/transfer

31.03.2014

WDV As On

WDV As On

31.3.2014

31.3.2013

Tangible Assets
Land

397.98

648.12

1,046.10

Computer

103.59

36.16

Building

646.63

1,349.87

Plant & Machinery

8,925.90

Furniture & Fixture


Vehicles & Motor Cars
Tangible Assets

Subtotal ( A)

1,046.10

397.98

139.75

70.05

18.91

0.09

88.87

50.88

33.54

1,996.49

331.78

53.02

384.81

1,611.69

314.85

2,291.72

1.75

11,215.87

2,903.01

1,100.87

4,003.30

7,212.57

6,022.89

34.14

26.66

0.37

60.43

11.65

7.40

(0.14)

19.19

41.24

22.50

611.44

197.64

3.32

805.76

220.23

115.32

2.32

333.23

472.53

391.21

10,719.69

4,550.18

5.45

15,264.42

3,536.72

1,295.52

2.83

4,829.40

10,435.01

7,182.97

129.01

19.00

148.01

2.05

3.69

5.74

142.27

126.96

129.01

19.00

148.01

2.05

3.69

5.74

142.27

126.96

860.92

1,339.41

2,200.33

2,200.33

860.92

860.92

1,339.41

2,200.33

2,200.33

860.92

11,709.61

5,908.59

5.45

17,612.76

3,538.76

1,299.21

2.83

4,835.14

12,777.62

8,170.85

8,924.55

2,804.74

19.54

11,709.61

2,513.35

1,029.94

4.52

3,538.76

8,170.85

6,411.20

0.57

Intangible Assets
Computer Software
Subtotal ( B)
Work in Progress
Total

Subtotal ( C)

Figures for the Current Year


Figures for the Previous Year

Kwality Limited

Notes forming part of the Consolidated financial statements


Note 11 Long-term loans and advances
Particulars

Unsecured considered good


(a) Capital advances
(b) Security deposits
(c) Mat Credit entitlement
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

130.04
29.91
3,850.47

209.28
38.63
2,678.45

4,010.42

2,926.36

Note 12 Other Non Current Assets


Particulars

Unsecured considered good


(a) Balance with Banks ( Refer note below 1)
(b) Unamortised Expenses
(i) Deferred Licences Fee
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

74.75

179.90

1.59

3.06

76.34

182.96

(1) Represent bank deposits not due for realisations within 12 month of balance sheet date. Further refer note no.16.

Note 13 Inventories
Particulars

(a) Raw materials


(b) Work-in-progress (Refer Note below)
(c) Finished goods (other than those acquired for trading)
(d) Stock-in-trade (acquired for trading)
(e) Stores and spares
(f) Packing Material
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

298.83

93.77

4,412.66

2,298.48

11,592.30

6,972.42

2,002.96

695.38

86.22

40.35

346.51

228.43

18,739.48

10,328.83

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

369.39
369.39
296.13
73.26

384.86
384.86
296.13
88.73

1,33,042.00
1,33,042.00
0.00
1,33,042.00

1,00,821.31
1,00,821.31
0.00
1,00,821.31

1,33,115.26

1,00,910.04

Note 14 Trade receivables


Particulars
Trade receivables outstanding for a period exceeding six months from the
date they become due for payment
Unsecured, considered good
Less: Provision for doubtful trade receivables
Other Trade receivables
Unsecured, considered good
Less: Provision for doubtful trade receivables
Total

Kwality Limited

Notes forming part of the Consolidated financial statements


Note 15 Cash and Bank Balance
Particulars

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

Cash and Cash Equivalents :


(a) Cash in hand
(b) Balances with banks
(i) In current accounts

27.56

64.86

1,595.22

7,172.46

Other Bank Balances


(a) In deposit accounts held against bank guarantee / letter of credit

1,568.67

1,546.87

30.07
3,221.52

25.70
8,809.88

74.75

179.90

3,146.77

8,629.98

(b) In earmarked accounts


- Unpaid dividend accounts
Less: Deposit having maturity more than 12 month from balance sheet
date are shown under note no.13
Total

Note 16 Short-term loans and advances


Particulars
Unsecured considered good
(a) Security deposits
(b) Loans and advances to employees
(c ) Advance Recoverable in cash or kind or for value to be received
(d) Prepaid Expenses
(e) Balances / Deposits with government authorities *
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

193.13
4.97
2,801.43
37.98
172.77

35.61
6.10
5,810.56
47.05
135.93

3,210.27

6,035.25

* Includes INR 131.96 lacs ( 98.06 lacs) with Haryana Livestock Development Board against demand and disputed before Supreme Court of India.
Further refer note 24.1.

Note 17 Other current assets


Particulars
(a) Unamortised expenses
(i) Deferred Licences Fee
(b) Accruals
(i) Interest accrued on Fixed deposits
(ii) Incomes Receivables
Total

As at 31 March, 2014

As at 31 March, 2013

( INR In Lacs)

( INR In Lacs)

3.36

5.72

12.97
181.12

21.07
0.00

197.45

26.79

Note 18 Revenue from operations


Particulars

(a)

Sale of products (Refer Note (i) below)

(b)

Other Operating Income (Refer Note (ii) below )


Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

5,00,279.43

3,92,901.27

816.03

66.38

5,01,095.45

3,92,967.66

Kwality Limited

Notes forming part of the Consolidated financial statements


Particulars

1)

Sale of products comprises :


Manufactured goods
Fat/Butter/Cream/Ghee
SMP/WMP/DW/DC/SNF
Milk/Toned Milk/Double Toned Milk
Curd
Total - Sale of manufactured goods
Traded goods
Fat/Butter/Cream/Ghee
SMP/WMP/DW/DC/SNF
Milk
Cattle Feed & Suppliments
Other
Total - Sale of traded goods
Total - Sale of products

2)

Other Operating Income comprises :


Income From Export incentive
Sale of Scrap
Other
Total - Other Operating Income

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

72,082.09
68,566.34
2,26,577.73
39,191.56

71,597.57
62,472.23
2,00,110.49
30,473.23

4,06,417.73

3,64,653.53

2,409.93
49,222.65
41,947.29
278.64
3.19

5,222.60
22,814.38
0.00
210.76
0.00

93,861.69
5,00,279.43

28,247.74
3,92,901.27

810.26
5.76
0.00

60.17
6.04
0.18

816.03

66.38

Note 19 Other income


Particulars

a)

Interest income (Refer Note (a) below)

b)

Net gain on foreign currency transactions and translation


(other than considered as finance cost)

c)

Other non-operating income (net of expenses directly attributable to


such income) (Refer Note (ii) below)
Total
Particulars

(1)

Interest income comprises:


Interest from banks on deposits
Total - Interest income
Particulars

(2)

Other non-operating income comprises:


Profit on sale of fixed assets
Miscellaneous income
Claims recovered
Security Forfeited
Liability no longer payable
Prior Period Items (Net off Expenses) ( Refer note 23.1)
Total - Other non-operating income

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

45.22

33.56

0.00

30.16

357.65

9.70

402.87

73.42

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

45.22

33.56

45.22

33.56

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

0.39
21.99
42.85
216.66
66.84
8.92

0.00
8.07
0.00
0.00
1.62
0.00

357.65

9.70

Kwality Limited

Notes forming part of the Consolidated financial statements


Note 20.a Cost of materials consumed
Particulars

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

93.77
3,75,240.51
3,75,334.28
298.83
3,75,035.45

69.35
3,32,514.07
3,32,583.42
93.77
3,32,489.65

3,37,814.80
13,281.22
23,939.44

3,05,131.83
12,681.77
14,676.05

3,75,035.45

3,32,489.65

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

Opening stock
Add: Purchases
Less: Closing stock
Cost of material consumed
Material consumed comprises:
Milk
Butter fat/Ghee
Others
Total

Note 20.b Purchase of traded goods


Particulars

Milk

41,246.55

0.00

Fat/Butter/Cream/Ghee

2,573.77

5,056.27

SMP/WMP/DW/DC/SNF

47,601.44

22,197.30

278.80

201.81

91,700.56

27,455.39

Cattle Feed & Suppliments


Total

Note 20.c Changes in inventories of finished goods, work-in-progress and stock-in-trade


Particulars

Inventories at the end of the year:


Finished goods
Work-in-progress

Inventories at the beginning of the year:


Finished goods
Work-in-progress

Net (increase) / decrease

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

13,595.26
4,412.66

7,667.80
2,298.48

18,007.92

9,966.28

7,667.80
2,298.48

7,609.39
2,212.98

9,966.28

9,822.37

-8,041.64

-143.91

Note 21 Employee benefits expense


Particulars

Salaries and wages


Contributions to provident and other funds
Gratuity & Leave Encashment (Refer Note 24.9)
Recruitment Expenses
Staff welfare expenses
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

1766.12
39.53
22.08
2.02
29.33

1261.02
33.97
30.80
1.53
51.86

1859.08

1379.18

Kwality Limited

Notes forming part of the Consolidated financial statements


Note 22 Finance costs
Particulars

Interest expense on Borrowings


Other Borrowings Cost
Exchange Fluctuations
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

11310.52
165.35
82.00

9122.79
184.23
0.00

11,557.87

9,307.03

Note 23 Other expenses


Particulars

Advertisement & Sales Promotion


Bad- Debts & Balances W/off
Bank Charges
Commission & Brokerage
Communication Expenses
Consumption of Packing Materials
Consumption of Stores and Spare Parts
Donations and Contributions
Export Expenses
Insurance
Legal and Professional
Loss on Fixed Assets Sold
Miscellaneous Expenses
Payments To Auditors (Refer Note (24.5)
Payments To Cost Auditors
Power and Fuel
Printing and Stationery
Prior Period Items ( Refer note 23.1)
Processing Charges Of Milk
Provision For Bad Debts
Rates and Taxes
Rebate & Discount
Rent
Repairs and Maintenance - Buildings
Repairs and Maintenance - Machinery
Transportation Charges
Travelling and Conveyance
Vehicle Running Expenses
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

640.30
16.56
112.78
237.48
50.10
2203.26
163.12
3.55
223.96
34.28
151.54
0.00
279.33
7.53
0.50
1871.23
19.27
0.00
1796.08
0.00
54.73
5.97
229.65
76.16
85.26
2643.74
228.20
72.00

352.81
3.06
61.42
295.07
39.25
2160.08
90.46
2.46
79.72
18.18
154.16
0.35
212.27
7.50
0.00
1420.77
14.01
30.34
1519.35
296.13
19.46
22.81
149.31
59.57
223.02
2017.37
175.61
43.71

11206.61

9468.24

Note 24.1) Detail of Prior period Items


Particulars

Prior Period Expenses


Prior Period Incomes
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

16.08
25.00

30.34
0.00

-8.92

30.34

Kwality Limited

Notes forming part of the Consolidated financial statements


24.1).Contingent Liabilities and other Commitments:
Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

1,193.03

1,166.03

A civil recovery suit has been filed by M/s S.M. Milkose Ltd.
regarding dispute in supply of material which is disputed by
the Co. & is pending before The Hon'ble High Court of Delhi.

156.97

156.97

Sales Tax Matters in Appeallate Authorities

175.72

0.00

0.00

67.97

Contingent Liability under Bank Guarantee

922.18

511.07

Contingent Liability under Letter of Credit

315.42

3,597.54

Contingent Liability under EPCG Licence

99.58

0.00

16,226.95

5,438.93

965.56

1,114.43

Contingent liabilty (to the extent not provided for)


Claim against the company not acknowledged as debts
Milk cess disputed by the company relating to issue of applicability
against which the company has preferred an SLP against the order
of Punjab & Haryana High Court before Hon'ble Supreme Court of India.
A liablity of Cess principal amounting Rs. 326.59 lacs ( from which
a sum of Rs. 131.96 lacs ( pre. Yr Rs. 98.06 lacs) deposited under
protest ) and a sum of Rs. 866.44 lacs on account of interest liability
raised by Semen Bank officer, of Haryana Livestock Development
Board for which the matter is already before Hon'ble Supreme Court.

Contingent Liability for Bills Discounted

Corporate Gurantee to wholly owned subsidiary


Commitments
Estimated amount of Contracts remaining to be executed on
capital account and not provided for

24.2). The deferred tax liability comprise of the following :


Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

79.27

116.25

79.27

116.25

Deferred Tax Assets


Related to Fixed Assets
Due to Disallowance under the Income Tax Act, 1961

24.3). The Company has not received information from vendors regarding their status under the Micro, Small and Medium
Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together
with interest paid/payable under this Act have not been given.

Kwality Limited

Notes forming part of the Consolidated financial statements


24.4).Foreign Exchange Transactions
Particulars

a) Value of imports on CIF basis


Plant & Machinery
Purchase of Traded Goods
Consumables

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

211.44
7,182.01
0.00

0.00
1,651.80
3.77

0.00
0.00

0.00
0.00

3,75,035.45
100.00
3,75,035.45

3,32,489.65
100.00
3,32,489.65

7,182.01
7.83

1,651.80
6.02

84,518.55
92.17
91,700.56

25,803.59
93.98
27,455.39

b) Imported and Indigenous raw material, componenets and consumable


consumed
(i) Raw material consumed
- Imported
Amount
Percentage
- Indigenous
Amount
Percentage
Total
(ii) Purchase of Traded Goods
- Imported
Amount
Percentage
- Indigenous
Amount
Percentage
Total
(iii) Consumables
- Imported
Amount
Percentage
- Indigenous
Amount
Percentage
Total
c) Expenditure in Foreign Exchange (on accrual basis)
Capital Transaction
Capital Investment in Subsidiary
Capital Advance
Capital Goods
Revenue Transaction
Raw Material & Purchase Traded Goods
Consumable Goods
Tour and Travelling
Other
d) Earnings in Foreign Exchange (on accrual basis)
- Value of Exports on FOB basis
e) Particulars of unhedged foreign currency as on reporting date
Import trade payable
Export trade receivable
Trade Advance paid
Trade advance received
Packing Credit in Foreign Credit (PCFC)
Export Earner in Foreign Credit (EEFC)

0.00
0.00
0.00

3.77
4.16

163.12
100.00
163.12

86.70
95.84
90.46

61.94
0.00
86.05

365.08
116.08
0.00

7,182.01
0.00
11.65
4.46
7,346.11

410.06
3.77
14.52
0.00
909.51

18,344.62

3,417.73

3,170.23
5,851.18
0.00
1,093.19
385.39
0.17

1,249.87
754.77
116.08
0.00
589.88
0.00

Kwality Limited

Notes forming part of the Consolidated financial statements


24.5). Payment to Auditors :
Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

Audit Fees

6.50

6.50

Tax Audit Fees

1.00

1.00

Other Charges

0.03

0.00

7.53

7.50

24.6). Managerial Remuneration


Particulars

Salaries and Allowances

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

228.43

225.00

24.7). Statement of Earning Per Share


Particulars

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

14,493.18

10,560.79

20,31,86,434

20,31,86,434

ii) Nominal value per share (in INR)

1.00

1.00

iii) Basic/Diluted Earning Per Share (in INR)

7.13

5.20

Net Profit attributable to Equity Shareholders (INR In lacs)


Weighted Average Number of Equity Shares
i) used as denominator for calculating EPS

24.8) RELATED PARTY DISCLOSURES


As per Accounting Standard 18 disclosures of transactions with the related parties are given below:
Relationships
1

Subsidiary Company

Kwality Dairy Products FZE

Key managerial personnel (KMP)

Sh. Sanjay Dhingra


Sh. Sidhant Gupta

Significant Influence

Ms Kanika Dhingra

Enterprises on which Key Managerial


person having significant influence

JTPL Townships Pvt Ltd


Pashupati Dairies Pvt Ltd
Kwality Dairy Investments Pvt Ltd.

Relative of Key Managarial Person

Ms. Kanika Dhingra


Dr Ved Parkash Gupta

Kwality Limited

Notes forming part of the Consolidated financial statements


Related Party

Nature of Transactions

As At 31 March,
2014

As At 31 March,
2013

( INR In Lacs)

( INR In Lacs)

143.20
483.36
16,226.95
156.71

143.20
421.42
5,438.93
0.00

Kwality Dairy Products FZE

Investment in Subsidiary
Share Application Money
Corporate Gurantee
Amount Recoverable

Pashupati Dairies Pvt Ltd

Amount Payable in respect of Services recd.


Amount Recoverable
Amount Payable in respect of Loans
Amount Payable in Respect of Royality

71.02
0.00
7,500.00
0.00

0.00
211.60
7,500.00
4.05

JTPL Townships Pvt Ltd

Collateral Security/guarantee

7,500.00

4,500.00

Sh. Sanjay Dhingra

Guarantee for Long Term Loans


Guarantee taken for Financial Limits
Shares Pledge for Loan

7,500.00
1,15,055.00
3,155.00

7,500.00
85,000.00
2,970.00

Ms Kanika Dhingra

Guarantee for Long Term Loans


Guarantee taken for Financial Limits

3,000.00
87,500.00

3,000.00
85,000.00

Sh. Sidhant Gupta

Collateral Security/guarantee

1,500.00

1,500.00

Disclosures in respect of material transactions with related parties


Related Party

Nature of Transactions

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

61.94
10788.02
2670.78

365.08
5438.93
65.55

0.00
719.34
9.00

1700.00
785.44
9.00

3,000.00

0.00

Kwality Dairy Products FZE

-Share Application Money


-Corporate Gurantee
-Sales

Pashupati Dairies Pvt Ltd

-Inter Corporate Loans received


-Services Received
-Royality

JTPL Townships Pvt Ltd

-Collateral Security/guarantee

Sanjay Dhingra

-Guarantee taken for Financial Limits


-Guarantee for Long Term Loans
-Mangerial Remunation
-Dividend Paid

40,843.02
0.00
128.43
152.15

90,438.93
3,000.00
125.00
99.66

Kanika Dhingra

-Guarantee taken for Financial Limits


-Guarantee for Long Term Loans
-Dividend Paid

13,288.02
0.00
0.00

5,438.93
3,000.00
52.49

Sidhant Gupta

-Collateral Security/guarantee
-Mangerial Remunation

0.00
100.00

1500.00
100.00

24.9). EMPLOYEE BENEFITS :


Employee Benefits
The Company has made provisions for employee benefits in accordance with the Accounting Standard (AS) 15 "Employee Benefits".
During the year, the Company has recognised the following amounts in its financial statements based on actuarial valuation done
as per Projected Unit Credit Method.
Defined Contribution Plan

Employer's contribution to Provident Fund


Employer's contribution to Employee State Insurance Fund
Total

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

10.21
21.19

6.20
16.73

31.41

22.92

Kwality Limited

Notes forming part of the Consolidated financial statements


Defined Benefit Plan

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

Gratuity

Gratuity

Liability at the beginning of the year


Interest Cost
Current service cost
Benefit Paid
Actuarial (gain)/loss on obligation
Liability at the end of year-recognized in the Balance Sheet

35.21
3.17
19.29
-0.40
-7.38
49.89

20.84
1.71
14.75
-2.08
-0.01
35.21

Expenses recognized in the Income Statement


Interest cost on benefit obligation
Current service cost
Expected return on plan assets
Net actuarial( gain)/loss recognized in the year
Expenses recognised in Profit and Loss statement

3.17
19.29
0.00
-7.38
15.07

1.71
14.75
0.00
-0.01
16.45

Change in Benefit Obligation

Defined Benefit Plan

Change in Benefit Obligation


Liability at the beginning of the year
Interest Cost
Current service cost
Benefit Paid
Actuarial (gain)/loss on obligation
Liability at the end of year-recognized in the Balance Sheet

For the year ended


31 March, 2014

For the year ended


31 March, 2013

( INR In Lacs)

( INR In Lacs)

Leave Encashment

Leave Encashment

25.01
2.25
13.75
-0.39
-9.00
31.63

12.51
1.03
11.58
-1.84
1.74
25.01

2.25
13.75
0.00
-9.00
7.00

1.03
11.58
0.00
1.74
14.35

Expenses recognized in the Income Statement


Interest cost on benefit obligation
Current service cost
Expected return on plan assets
Net actuarial( gain)/loss recognized in the year
Expenses recognised in Profit and Loss statement
Discount rate current
Salary escalation current
Mortality
Withdrawal rate 18 to 58 Years

8.75% per annum


5% per annum
LIC 94-96 Ultimate
2% per annum

8.25% per annum


5% per annum
LIC 94-96 Ultimate
2% per annum

The estimates of future salary increases, inflation, seniority, promotion and other relevant factors, considered in actuarial valuation
such as supply and demand in the employment market. The rate used to discount post employment benefit obligations (both funded
and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds. The currency and
term of the government bonds should be consistent with the currency and estimated term of the post employment benefit obligations.
An amount of Rs. 22.08 Lacs /- (PY. - Rs. 30.80 Lacs) as contribution towards defined contribution plan is recognized as expense
in the Profit & Loss Statement

Kwality Limited

Notes forming part of the Consolidated financial statements


24.10). Other Notes
a) Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges
Loans and advances in the nature of loans given to subsidiaries, associates and others and investment in shares of the
Company by such parties:
Name of the party

Relationship

Kwality Dairy Products FZE Dubai- Investment


(Maximum amount outstanding during the year INR 626.56 lacs (INR 564.62)

Subsidiary

Amount outstanding
as at 31 March, 2014
(INR in Lacs)
#REF!
(564.62)

b) Previous year figure have been regrouped/reclassified wherever necessary to correspond with the current year
classification/disclosure.
c) Extraordinary/Exceptional Item
Particulars

As At 31 March, 2014

As At 31 March, 2013

( INR In Lacs)

( INR In Lacs)

0.00

300.00

During the year Company has paid a sum of Nil (Rs. 300 lacs) to SEBI for
obtaning permission authorising listing of shares allotted to erstwhile
promoters in the year 2000.

As per our Report of even date

On behalf of the Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES


Chartered Accountants

Firm's Registration No.023276N


sd/CA P.P. Mukerjee
Membership No.:089854
Proprietor

Place : New Delhi


Date : 30.05.2014

sd/(Sanjay Dhingra)
Managing Director

sd/(Sidhant Gupta)
Executive Director
sd/(Deepa Kapoor)
Company Secretary

Kwality Limited

Statement pursuant to Section 212(8) of the Companies Act, 1956 relating to Subsidiary Company.

STATEMENT

In accordance with the General Circular No. 2/2011, issued by the Ministry of Company Affairs, Government of India, the Balance
Sheet, the Statement of Profit & Loss and other documents of the subsidiary are not being attached with the Annual Accounts of the
Company. This Annual Report contains Consolidated Financial Statements of the company and its Subsidiary prepared in accordance
with the relevant Accounting Standards and the same has been duly audited by the statutory auditors. The Annual Accounts of the
following subsidiary Company and the related information will be made available to the shareholders of the Company and its
Subsidiary Company on request and will also be kept open for inspection by the shareholders at the Registered Office of the Company
and the Subsidiary Company.

Name of Subsidiary Company: Kwality Dairy Products FZE

(Amount in INR)

Reporting

INR

Exchange Rate (Closing Rate)

16.325

Exchange Rate(Average Rate)

15.563

Capital

1,43,20,000.00

Reserves

30,33,02,876.49

Total Assets

1,78,16,26,952.39

Total Liabilities excluding Shareholders funds

1,46,40,04,075.90

Investments other than Investments in Subsidiaries

Nil

Turnover

4,32,90,66,965.77

Profit before Tax

18,30,15,995.64

Provision for

Nil

Profit after Tax

18,30,15,995.64

Proposed Dividend

Nil

Country

United Arab Emirates

KWALITY LIMITED
Corporate & Registered Office: Kwality House, F-82, Shivaji Place, Rajouri Garden, New Delhi - 110027.
Ph.: +91-11-47006500 (100 lines) Toll Free: 1800 103 5345 E: info@kdil.in W: www.kdil.in

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