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GNotice is hereby given that the Twenty First Annual General Meeting of the Members

of KWALITY DAIRY (INDIA) LIMITED will be held on Monday, the 30th day of

September, 2013 at 9.30 A.M. at Lavanya, G.T. Karnal Road, Palla Bakhtavarpor

Mord, Alipur Delhi-110036 to transact the following business: -

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2013 and Profit & Loss Account 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 2012-13.

3. To appoint a Director in place of Arun Srivastava who retires by rotation and being eligible, offers himself for re-appointment.

4. To consider and if thought fit, to pass with or without modification(s) the following resolution as ordinary resolution :

“RESOLVED THAT pursuant to the provisions of Section 224 and other applicable provisions, if any, of the Companies Act, 1956, M/s.

P.P. Mukerjee & Associates, Chartered Accountants, retiring Auditors of the company be and are hereby re-appointed as Auditors of

the Company, to hold the office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General

Meeting at remuneration to be fixed by the Board of Directors in consultation with the recommendation of Audit Committee.”

ORDINARY BUSINESS:

SPECIAL BUSINESS

TO CONSIDER AND IF THOUGHT FIT, TO PASS WITH OR WITHOUT MODIFICATION(S) THE FOLLOWING RESOLUTIONS:

1. As Special Resolution:

"RESOLVED THAT pursuant to the provisions of Sections 81(1A) and other applicable provisions, if any, of the Companies Act, 1956 (including any modification(s) or re-enactment(s) thereof, for the time being in force) and other applicable laws, rules and regulations 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 private placement, by issuing Compulsory Convertible Debenture(s) (CCDs)/Compulsory Convertible Preference Share(s) (CCPSs) and/or Qualified Institutional Placements under chapter VIII of the 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 or persons resident outside India including Foreign Institutional Investors/ Qualified institutional Buyers (“QIBs”)/ Companies/ Individuals in India or abroad, with or without an over allotment/ 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.”

RESOLVED FURTHER THAT in the event of issue of securities by way of a qualified institutional placement to QIB’s in accordance with chapter VIII of the 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 Company’s 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, 1956, 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.”

2. As An Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 2(26), 198, 269 and 309, 317 read with schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 and all statutory modifications, re-enactment thereof and the applicable clauses of Listing Agreement and subject to such approvals as may be necessary, approval of the members of the company be and is hereby accorded to the re-appointment of Mr. Sanjay Dhingra as the Managing Director of the company for a period of Five years with effect from 14th July, 2013, who has been reappointed by the Board of Directors in the meeting held on 14th August, 2013 with the remuneration and other terms and

conditions as mentioned in the resolution and approved by remuneration committee in their meeting held on 11th July, 2013 and as agreed by Mr. Sanjay Dhingra.

RESOLVED FURTHER THAT Ms. Deepa Kapoor, Company Secretary of the company be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary or desirable to give effect to this resolution.

By Order of the Board

Sd/ Place: New Delhi (Deepa Kapoor)Date: August 14, 2013 (Company Secretary & Compliance Officer)

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 173(2) of the Companies Act, 1956, setting out material facts relating to the business at item no. 5 and item no. 6 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, 1956 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 187 of the Companies Act, 1956, 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, 2013, may visit the company’s website of the Company.

8. The dividend as recommended by the Board of Directors, if declared at this Annual General Meeting, will be paid with in 30th days after the deceleration.

• To those shareholders whose names appear on the Company 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 Monday, 14hSeptember 2013.

• 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 Monday, 14hSeptember 2013.

• 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 o 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 2012-13 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 14th September, 2013 to 30th September, 2013 (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 10062, 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 109A of the Companies Act, 1956.

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 identifiation of membership at the meeting.

14. Members desiring of having any information regarding Accounts are requested to address their queries to the Company atleast seven days before the date of Annual General Meeting, so that requisite information is made available at the meeting.

15. As per the requirement of Clause 49 of the Listing Agreement on Corporate Governance for appointment of the Director /re-appointment of the retiring Directors, a statement containing details of the concerned Directors are given below.

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 205A of the Companies Act, 1956 by the Company to he Investor Education & Protection Fund onstituted by the Central Government under Section 205C of the Companies Act, 1956. It may please be noted that once unclaimed / un-encashed dividend is transferred to Investor Education & Protection Fund s above, no claims shall lie in respect of such amount by the shareholder.

17. Details of Director seeking re-appointment at the forthcoming Annual General Meeting (Pursuant to clause 49 of the Listing Agreement entered into with Stock Exchanges)

www.kdil.in

NOTES:

Sanjay Dhingra

12th October, 1970

None

18/05/2010

Graduation

Vast experience in the Dairy Business

Pashupati Dairies Pvt. Ltd.Kwality Dairy Investments Pvt. Ltd.

Member of Remuneration Committeeand Management Committee

Name of Director

Date of Birth

Relationship with other Directors Inter-se

Date of Appointment

Qualification

Expertise in specific functional area

Directorship held in other Companies as on date.

Chairman/Member of the committee of the Board of Directors of the Company as on 31 March 2013

Arun Srivastava

03rd April, 1968

None

18/05/2010

Graduation

Expert in Financial Modeling & Resource Moblisation

JMD Veg Oil Pvt. Ltd.

Member of Audit Committee, Member of Remuneration Committee, Member of Share Transfer Committee, Member of Shareholders/Investor Grievance Committee

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956ITEM NO.1

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, Compulsory Convertible Debenture(s) (CCDs)/Compulsory Convertible Preference Share(s) (CCPSs), QIP under chapter VIII of 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 Rupees 10,000 million in one or more tranches, 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 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 Sections 81 (1A), and other applicable provisions, if any, of the Companies Act, 1956 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 of the company is concerned or interested in the resolution except to the extent of their shareholding.

ITEM NO.2

Mr. Sanjay Dhingra has been reappointed with effect from 14th July, 2013 by the Board of Directors in its meeting held on14th August, 2013, an abstract of the resolution containing the remuneration and other terms and conditions as approved by the remuneration committee in their meeting held on 11th July, 2013 is furnished below for your due approval.

The present proposal seeks the approval of shareholders as per the provisions of Sections 269 read with the provisions of Schedule XIII of the Companies Act, 1956. Mr. Sanjay Dhingra upon re-appointment as Managing Director shall continue to hold office of the Managing Director.

Following are the main terms and conditions of the re-appointment of Mr. Sanjay Dhingra.

1. Tenure of Appointment: 14th July, 2013 to 13th July, 2018.

2. Nature of Duties: Subject to the supervision and control of the Board, Mr. Sanjay Dhingra will be responsible for day-to-day management and operations of the Company and shall carry out such duties and exercise such powers as may be entrusted to him from time to time by the Board.

3. Remuneration:

A) Salary, Allowances and Perquisites:

(i) Basic Salary: ̀ 1,30,20,000/- (Rupees One Crore Thirty Lakh Twenty Thousand Only) Per Annum.

(ii) Allowance and Perquisites: In addition to Basic Salary, the Managing Director will be entitled to allowances and perquisites in the nature of accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance allowance together with reimbursement of expenses and/ or allowance for utilization of gas, electricity, water, furnishing and repairs; medical reimbursement; leave travel concession for self and family including dependents; club fees, medical insurance and such other perquisites and/or allowance not exceeding ` 10,00,000/- (Rupees Ten Lakhs Only) Per Annum. The said perquisites and allowance shall be evaluated, wherever applicable, as per the provisions of Income Tax Act, 1961 or any rules there under or any statutory modification(s) or re-enactment thereof; in the absence of any such rules, perquisites and allowances shall be evaluated at the actual cost.

(iii) Other Benefits: The Managing Director may also eligible to the following perquisites which shall not be included in the computation of the ceiling on remuneration specified above:

(a) Company’s contribution to Provident Fund, Superannuation Fund, and Annuity Fund as per the rules of the Company to the extent these rules singly or put together is not taxable under the Income Tax Act, 1961.

(b) Gratuity as per the rules of the company.

(c) Leave with full pay as per the company’s rules.

(d) Encashment of leave at the end of the tenure.

B) General:

The office of the Managing Director may be terminated by the company or the concerned Director by giving 3 (three) months’ prior notice in writing.

The terms and conditions set out for re-appointment and payment of remuneration herein may be altered and varied by Board as it may, from time to time, deem fit.

If in any financial year after the appointment, Company has no profits or inadequate profits, the Managing Director shall be entitled to receive the same remuneration, perquisites and benefits as specified in the above clauses, subject to compliance with the applicable provisions of Schedule XIII of the Companies Act, 1956.”

Mr. Sanjay Dhingra satisfies all the conditions set out in Part-I of Schedule XIII to the Companies Act 1956 for being eligible for there-appointment.

Therefore, your Board of Directors recommend for approval for reappointment and the remuneration payable to Mr. Sanjay Dhingra as proposed in item No. 6 of the notice by way of special resolution.

Except Mr. Sanjay Dhingra, being appointee, none of the Directors are interested or concerned in the resolution.

By Order of the Board

Sd/

Place: New Delhi (Deepa Kapoor)

Date: August 14, 2013 (Company Secretary & Compliance Officer)

KWALITY DAIRY (INDIA) LIMITEDRegd. Office: KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi- 110027

ATTENDANCE SLIPANNUAL GENERAL MEETINGTH

30 September 2013 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 30th September, 2013 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.

KWALITY DAIRY (INDIA) LIMITEDRegd. Office: KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi- 110027

PROXY FORMI/We......................................................................................................................................................................

...................................... R/o.................................................................................................................................

being a member / members of Kwality Dairy (India) Limited, hereby appoint

Mr./Ms......................................................... R/o ........................................................................ or failing him /

her, Mr./Ms............................................................................. R/o.......................................................................

as my / our proxy in my / our absence to attend and vote for me / us on my / our behalf at the Annual General Meeting of the Company to be held on 30th September, 2013 at 9.30 a.m. at Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036, and at any adjournment there of.

DP ID:........................................ Folio No:..................................................................

Client ID:........................................ No. of Shares held:.............................................

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

Signed this ..........day of……................2012 Signature of the Member:........................................

Note: The proxy form, to be effective, must be deposited, duly filled and authenticated at the Registered office of the Company not less than 48 hours before the scheduled time of the Meeting.

&...........................................................................................................................................................................

Affix 1Rupees

Revenue Stamp

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TDear Shareholders,

Your Directors have pleasure in presenting their Twenty First Annual Report together with AuditedAccounts of the Company for the financial year ended 31st March 2013.

1. Financial Highlights

DetailsYear ended 31.03.2013

INR in croresYear ended 31.03.2012

INR in crores

Turnover 3692.29 2394.63

Profit before Interest, Depreciation, Extraordinary Items & Tax

214.04 165.26

Interest & Finance Charge 92.28 65.09

Depreciation 10.29 7.50

Profit before Tax 108.48 92.67

Extraordinary Items 3.00 0.00

Tax Expense 1.6811.95

Profit after Tax 90.9996.53

2. TurnoverYour Company's turnover during the year was Rs. 3692.29 Crores as compared to Rs. 2394.63 Crores in the previous year, registering an increase of 54.19% over last year.

3. ProfitsProfit from operations before 'Extraordinary Items & Exceptional Items' for the year ended March 31, 2013 stood at 111.48 Crores as against 92.67 Crores in the previous year, reflecting an increase of 20.29%. Profit before Tax at Rs. 108.48 Crores vis-à-vis Rs. 92.67 Crores in the previous year reflects an increase of 17.05%. Profit after Tax for the Financial Year 2012-13 stood at Rs. 96.53 Crores as against Rs. 90.99 Crores in the previous year.

4. Dividend Your 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 will absorb an amount of Rs. 2.03 crores (excluding dividend tax of Rs. 0.33crores). 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 14th September, 2013, 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 14th September, 2013.

As the world's largest producer and consumer of milk and milk products, India represents one of the world's most lucrative dairy markets, accounting for around 17% of world's total milk production.Indian dairy sector has evolved from rags to riches…….

5. Indian Dairy Scenario

• ·Per Capita Milk availability – 132 g/ day• ·Milk rationing and scarcity• ·Dependent on import• ·High intermediation

·• Per Capita milk availability – 276 g/ day(>WHO recommendation)• ·17% of global output• ·Net exporter• ·Increased share of producers share in consumer price (<40% in Europe, USA)

Countrywide milk grid - Linking producers to consumers

Cutting out middle man

Strenghtening, production,procurement, infrastructure& technology transfer

White Revolution

1940 2013

Made dairy farming India's largest self – sustainable rural employment generator

Profit Before Extraordinary Item & Tax 111.48 92.67

Top 7 Milk Producing states contributemore than 65% of milk production

Source: GOI, PwC analysis

6. Significant DevelopmentsYour Company has made significant developments during the year. During the year, your Company has increased its capital expenditure and taken steps towards to increase the production capacity of the plant situated at Softa.

Your Company has introduced the concept of Shopees in Delhi and NCR through which the product of the company is made available to the end consumers directly. The performances of these shopees are remarkable and company is planning to increase the numbers of these shopees in other regions. The company also strengthening its distribution channels so that the products of the company are made available easily to the end consumers.

7. Milk Producer Procurement NetworkDuring the year KDIL has increased Milk Procurement network in Haryana, Western Uttar Pradesh and Rajasthan. Milk producers supplied milk directly to the KDIL Village Milk Collection Centres (VMCs). Milk from these VMCs are brought to Milk Chilling Centres for chilling. KDIL has adopted producer-centric approach to buy raw milk based on the quality of milk. So as to build the confidence of the milk producers, KDIL has been practicing transparent system for purchase based on testing the quality of milk through highly efficient, Automatic Milk Collection Units. Similarly, milk is weighted on electronic weigh machines. The quantity, quality and price payable are automatically controlled by the computer. The machine prepares payment slip online that is immediately handed over to the milk producers supplying milk. The farmers are given payment slips based on a predetermined and openly declared price well in advance. The pricing approach followed by the KDIL is to pay a remunerative price to the milk producers. Payment to the milk producers is made every 10 days through the Authorised banks.

8. Corporate Social ResponsibilitySupply of Cattle Feed

The purchase of milk is a core commercial activity. In addition KDIL has mounted milk productivity enhancement programme covering the dairy animals of the milk producers. This is one of the most important initiative taken up as Corporate Social Responsibility. KDIL provides balanced cattle feed sold on no-profit-no-loss basis to meet with the requirement of dairy farmer's needs and preferences. Balanced cattle feed is manufactured according to feed formulations of the Bureau of Indian Standards. Feed is sold under the brand of DAIRY BEST in 40 kg bags & 50 kg bags in villages of western Uttar Pradesh and Rajasthan

Dairy Animal Health Supplements

For improving the health and immunity of the dairy animals, KDIL is supplying quality feed supplements manufactured by the NDDB subsidiary company. During 2012-13, KDIL covered 300 villages in Uttar Pradesh and 250 villages in Rajasthan. Plans are underway to cover more villages during the year 2013-14 to provide quality medicines and vaccines for the animals. Your Company had served free veterinary services through doctors/staff and through audio visual presentation. KDIL Collaborated with the NDDB-IIL to provide animal breeding services to milk producer members of KDIL in 287 villages. The programme is likely to be extended further during the next year.

Credit for purchase of dairy animal-kakky yojana

KDIL has also signed Memorandum of understanding with Allahabad Bank, for financing of dairy animals to the milk producers in Rajasthan and Uttar Pradesh. The dairy animal induction programme through the Allahabad Bank has been titled as the “Kwality Dairy Allahabad Bank Kisan Kalyan Yojana (KAKKY)”. Since the programme has been started towards the close of the FY 2012-13, credit support has been provided for purchases of 49 dairy animals in the Bagpat district of the Uttar Pradesh.

Farmer capacity building activities

It is widely recognized that the dairy and animal husbandry education and research is well spread in India. But the major deficiency is taking the results of lab research and developmental education to the milk producers who are the end users. During the FY 2012-13, KDIL took up a major programme for rural level capacity building. Workshops were conducted to prepare KDIL field staff so that they are made capable and efficient in communication to the milk producers. The subjects included livestock nutrition, health and animal productivity. The KDIL rural extension team conducted a few workshops for village level service providers covering 580 Village Service Providers VSPs.

The KDIL extension team and VSPs together conducted 598 milk producers' awareness programme. A total of 12,555 milk producers participated in these educational and awareness development workshops at village level.

Women participation

Smt. Sona Devi from Sabka village and Smt. Kunti Devi from Sirsali village, Uttar Pradesh participated as KDIL delegates in the Second All Indian Women Entrepreneurs Workshop held on 21st February 2013 in Delhi. Smt. Sona Devi shared her experiences of managing a small dairy animal- herd of 10 animals as women dairy entrepreneurs. Her efforts and contribution was applauded by the delegates. On the same day, both of them were invited by the All India Radio, New Delhi. They delivered talks sharing their practical experience and wisdom on dairy animals feeding, breeding and management. Their talk was later broadcast by the AIR under 'Krishi Jagat' programme.

9. Change of Name & Registered Address of the CompanyTo expand its operations in line with the vision of the Company, the Board of Directors of the Company in their meeting held on 30.03.2013 proposed to change the name of the Company and recommended few new names and after approval from the Registrar of Companies, adopted the name of the Company to "Kwality Limited. In this respect, special resolution had already been passed by the members of Company on 12th day of June, 2013 at the Extraordinary General Meeting of the members of the Company.

The change of name of the Company as aforesaid does not change the legal status or constitution of the Company, nor does it affects any rights or obligation of the Company

The Registered office of the Company has been shifted from the State of Haryana to NCT of Delhi and the order for the same has been received by the Company from Regional Director dated on February 01, 2013.

The Registered office of the Company is KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi-110027. All the communication shall henceforth be made on this address.

10. Credit Rating India Rating & Research Pvt. Ltd (Fitch Group) has assigned Long-Term rating of Fitch BBB+ (ind)' with Stable Outlook and A2 as short term rating to KDIL's overall Working Capital facilities.

11. Future ProspectsDairy Industry plays an important role in in the socio-economic development of India generating huge rural employment and providing cheap and nutritional food to a vast population. The Indian Dairy Industry is growing very rapidly, trying to keep a pace with the galloping progress around the world.

Presently, India is the world's largest milk producer, accounting for more than 17% of the world's total milk production. In the next 10 years, India's dairy sector is expected to triple its production in view of expanding potential for export to Europe and West.

The urban market for milk products is expected to grow at an accelerated pace of around 33 % per annum to around Rs. 43,500 crore by 2015. The emergence of a significant middle-class, urbanisation and the expansion of modern shopping habits by busy, health conscious and well-informed consumers is raising the consumption of packaged milk in India. Economic growth is sustaining the purchasing power of Asia's middle-class, which is convenience store from Shanghai to Mumbai.

The global opportunities available to the Indian dairy industry arise primarily out of availability of a large quantity of competitively priced milk. Most of the traditional health and wellness products sold through the dairy sector are represented by processed dairy products such as malt beverages and infant nutritional products. The visible trends are that the consumption of milk products is on the rise. While it is growing at about 1-1.2% elsewhere in the developed world, India and China are beating these trends. A number of categories which are highly dependent on organised retail like frozen food products are expected to witness significant growth in the years ahead.

India enjoys dual distinction – it is both the world's largest milk producer and the world's largest milk consumer. However with 300 million cattle, it appears that the productivity with regard to milk is low. For sure, it is, but things are improving and the per capita milk consumption is expected to rise by 4% in 2012, and milk production is forecasted to sustain its normal growth of about 2.3%. Thus India shows no sign of slowing down when it comes to milk. In fact, India ranks first in the world contributing about 17% of the total milk produced globally. Milk and milk products are emerging as important sources for improving nutritional security, providing 9.0% protein intake in rural areas and 12.5% in urban areas. Growing demand for milk products presents a great opportunity for your company and with modernise and scaling up the production of both the indigenous, exotic products and introducing new product range we feel we will be able to maintain our growth.

12. ExportWith the removal of ban on the export of Skimmed Milk Powder in June'2012 and Whole Milk Powder & Dairy Whitener in November'2012, Company foresaw huge opportunity in international operations. The Company started export of goods and achieved the export turnover of Rs.71.74 crores ( in which Forgein currency earning Rs. 34.18 Crore ) in the FY 2012-13. In the current fiscal year the Company has estimated upright increase in export sales based upon the huge demand of dairy products in the international market and the acceptance of its products from its existing and prospective buyers.

The Company currently export to various countries including Algeria, Afghanistan, Bangladesh, Iran, Japan, Jordan, Lebanon, Togo, Pakistan, Saudi Arabia, Seychelles, Syria, Turkey, UAE, Yemen and is planning to export to other countries viz Australia,Netherland, Singapore, Holland etc.

13. Subsidiary Company & Consolidated Financial StatementsYour 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.

In accordance with the Accounting Standards 21 and 23 of Companies (Accounting Standards) Rules, 2006 and pursuant to Listing Agreement with Stock Exchanges on consolidated financial statements which form part of this Annual Report. These consolidated financial statements provide all relevant financial information about the Company.

14. Cash Flow StatementIn conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 31st March, 2013 is attached as a part of the Annual Accounts of the Company.

15. Management Discussion And AnalysisThe 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 statement in Annual Report.

16. DirectorAs per the Articles of Association of the Company and relevant provisions of the Companies Act, 1956, Mr. Arun Srivastava, Director of Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The term of office of Mr. Sanjay Dhingra as Managing Director of the company has expired on 14th July 2013. The Board of Directors in its meeting held on 14th August 2013 have reappointed him to hold office as the Managing Director for another tenure of 5 years.

The Board recommends their 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.

17. Directors' Responsibility StatementPursuant 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, 2013, 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, 2013 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, 2013 as a going concern basis.

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

19. Human Resource DevelopmentHuman resource continues to be the biggest asset of the Company. Your company aims at creating a corporate culture that respects people, develop and trains them to deliver high quality performance with growth opportunities.

Talent development remained a key focus during the year under review. Well-structured HR systems were used for talent identification, development and retention. The organization continues to develop home –grown leaders to support its growth and maintain its competitiveness and leadership in the industry. The Company maintains cordial relations during the year under review.

Therefore, and in view of the importance of these KDIL values, special attention is paid in matching between a candidate's values and the Company culture. Your Company organizes workshop for employees.

20. Supply ChainAs you know, your Company operates in dairy products, which belong to an environment that is full of complex supply chain configuration. Your company has continued working to manage this efficiently, ensuring timely and efficient supply of materials and distributing the finished goods to consumers across the country. The Company is also working to reduce the complexities and increase the efficiencies further.

To tap emerging demand from small towns and interior markets, your Company had adopted a model of distribution, wherein your Company had appointed distributers who service in small markets through their network. Your Company has approx. 1000 distributors and 27000 retailers across the nation for all the product ranges under Brand Name of Dairy Best & Kream Kountry.

21. Internal Audit & Control SystemYour Company has a well-defined internal control system, which is adequately monitored. Checks & balances and control systems have been established to ensure that assets are safe guarded, utilized with proper authorization and recorded in the books of account. The Internal control systems are improved and modified continuously to meet the changes in business conditions, statutory and accounting requirements. These are supplemented by internal audit carried out by reputed firm of Chartered Accountants M/s Mohan Gupta & Co. Your Company has an Audit Committee consisting of three Directors. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. The Audit Committee of the 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.

22. BrandsBrand is an intangible asset for any company. It is basically a name, design or symbol which differentiates the company from others available in the market. Since branding is very important to any business in the current competitive environment, your Company is continuously working to enhance its brand value.

Brand Value of the brand increases by product availability, preference of the consumer, awareness and association towards the product. Your company is continuously focussing on all the parameters to attract the consumers towards it, thus resulting in capturing the bigger market share for the company.

24. Manufacturing OperationYour Company has revised its manufacturing footprint to support profitable growth. In that context, capacities were created at relevant locations to meet the growing demand by the consumers. Additionally, there was the continual focus on de-bottlenecking existing capacities and improving the productivity levels at current units.

The creation of these capacities and capabilities has helped the Company deliver the volume growth at improved customer service levels and at optimized costs.

The climate and natural resources allow production based on year-round pasture grazing. 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 specialised equipment, often from a sophisticated control room, to produce the variety of dairy products.

25. Information TechnologyYour Company continues to invest in Information Technology to improve operational efficiencies and enhance productivity. During the year a business intelligence system was implemented so as to analyze the secondary sales data and information that would help drive the top line growth through identification of new opportunities and area of growth.

26. Environment And SafetyYour Company is sensitized to the need for responsible action that helps 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 complies with governmental policies, environmental laws and regulations, and adheres to strict internal 'Kwality Environmental Management System' norms. The Environmental Performance Indicator [EPIs] helps to constantly monitor the use of natural resources in the manufacturing operations. The efforts to make the operations more environment-friendly are continuous and ongoing. Your Company continuously reviews energy usage to track and replace energy inefficient equipments, invests in installing processes that reduces energy losses, modifies processes to reduce energy needs, and innovatively use waste heat of one process as input for another. In consonance with the policy of the company, pollution prevention and waste minimization is done through reduction in pollution, recovery of Biogas, and utilization of treated water for plantation Your Company believes that every such step, no matter how small it may seem, is important.

Several initiatives were continued as part of energy saving measures. The drive for energy conservation is always a key priority and your Company continually strives to achieve this through process improvements and through enhancing equipment capability.

Your Company has adopted all the essential Techniques, Mechanisms and International Standard Measures for the Safety & Protection of workers at all the factories of the Company.

27. AuditorsThe 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 until the conclusion of next Annual General Meeting. The Company has received a letter from them that their appointment, if made, would be within the limits specified under sections of the Companies Act, 1956.

A resolution seeking your approval on this item is included in the Notice convening the Annual General Meeting.

The observation made in the Auditor's Report are self-explanatory and therefore, do not call for any further comments under section 217(3) of the Companies Act, 1956.

28. ListingThe shares of the Company are listed at 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 EmployeesDuring the year under review no employee of the company is covered under the provision of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

23. Quality StandardsEach year your Company review its quality standards and makes them stringent and updated. 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. KDIL commitment to international 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. Every new KDIL product must pass a full test to evaluate its life/yield, and overall performance under a wide range of environmental conditions. KDIL also ensures that every shipment of products is up to your high quality standards. Extensively trained quality assurance inspectors maintain samples and thorough specification documentation for every product we offer. This enables us to enforce ongoing compliance with all specifications. Sophisticated sampling techniques and statistical methods directly enhance the effectiveness of these stringent QA procedures.

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..

30. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and OutgoThe particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 are set out in an Annexure to this report.

31. Corporate Governance The Company complied with the Corporate Governance requirements as stipulated under the Listing Agreement with the stock exchanges. A separate section on corporate governance, along with a certificate of Auditors confirming the compliance, is annexed and forms the part of this Annual Report.

32. AppreciationWe 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 Dairy (India) Limited. To them goes the credit for the Company's 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 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 continued support.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For & on behalf of the Board of Directors Sd/-

Place: New Delhi Sanjay DhingraDate: 14th August, 2013 Chairman & Managing Director

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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 DIRECTOR’S REPORT FOR THE YEAR ENDED MARCH 31,

2013

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO

CONSERVATION OF ENERGYPower & Fuel Consumption

(a) Electricity 2012-13 2011-12

Purchased

Units 31,86,389 26,64,840

Total Amount (Rs.) 2,07,95,923 1,46,05,727

Rate Per Unit (Rs.) 6.53 5.48

(b) Fuels

(Diesel, FO, Burada,

Husks & Turi)

Quantity (ltrs/Kgs) 1,26,84,245 1,17,21,108

Total Amount (Rs.) 12,27,53,817.80 6,32,12,003.9

Rate per Unit (Rs.) 9.68 5.39

TECHNOLOGY ABSORPTIONR &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 & develop new present age nutritionally-balanced healthy products. • Foraying in the nutraceuticals market.

Total Foreign Exchange 2012-13 2011-12

Earned And Used:

(i) Earnings 3417.73 NIL

(ii) Expenditure* 909.51 313.25

• 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.

For & on behalf of the Board of Directors Sd/-

Place: New Delhi Sanjay DhingraDate: 14th August, 2013 Chairman & Managing Director

FOREIGN EXCHANGE EARNINGS & OUTGO:INR in lacs

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TManagement Discussion & Analysis

Management Discussion and Analysis detailing the company‘s 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

India’s production of milk has strongly increased over time with significant technical, policy and institutional support. This led to significant changes in the Indian dairy sector. In fact, the Indian dairy sector has undergone significant structural changes over time and some interesting patterns are unfolding along the milk value chain. Now, India represents one of the world’s most lucrative dairy markets, accounting for around 17% of world’s total milk production as the world’s largest producer and consumer of milk and milk products.

India’s dairy industry is largely traditional, local and informal. Milk production is dominated by smallholders. About 80 percent of raw milk comes from producers having only two to five cows/buffalo. Approximately 78 percent of milk producers are marginal and small farmers and they together contribute around 68 percent to total milk production. small farmers traditionally do not have access to organized markets due to the lack of an effective system to procure milk produced in the rural areas. A series of efforts have been made to promote organized milk procurement in the country.

Achieving higher growth of the dairy sector is essential to ensure long-term inclusive agricultural growth. Productivity-led growth is the only viable option for accelerated sustainable growth of the Indian dairy sector.

India can emerge as an important exporter of milk and milk products. For SAARC countries, inclusion of milk in the South Asian Free Trade Area may increase trade among South Asian countries.

Quality & Food Safety policy

The company is being an ISO 22000:2005, HACCP-IS: 15000 and Agmark approved company. Each year your Company reviews its quality standards and makes them stringent and updated. 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. KDIL commitment to international 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. Every new KDIL product must pass a full test to evaluate its life/yield, and overall performance under a wide range of environmental conditions. KDIL also ensures that every shipment of products is up to your high quality standards. Extensively trained quality assurance inspectors maintain samples and thorough specification documentation for every product we offer. This enables us to enforce ongoing compliance with all specifications. Sophisticated sampling techniques and statistical methods directly enhance the effectiveness of these stringent QA procedures.

Financial performance

During the year, your company has scaled new heights and set several new benchmarks in term of sales, profit, net worth and assets. Turnover for the year was Rs. 3692.29 Crores as compared to Rs. 2394.63 Crores in the previous year, registering an increase of 54.19% over last year.

Profit after Tax for the Financial Year 2012-13 stood at Rs. 96.53 Crores as against Rs. 90.99 Crores in the previous year.

Opportunities:

• Great potential for export of milk products.

• Expanding domestic market for dairy products.

• Increasing demand for milk as well as value added consumer products.

• By products utilization for import substitution.

• Liberalized Government policies in dairy sector.

• Availability of diverse germplasm of cattle and buffaloes that have unique features like heat tolerance, disease resistance, draft ability and ability to survive, breed and produce under stress conditions.

• Availability of animal production technologies for faster development and effective implementation.

• Market information intelligence system for milk and milk products.

Threats:

• Breeding and Genetics resources

• Availability of fodder

• Poor microbiological quality of milk

• Excessive grazing pressure on marginal and small community lands resulting in complete degradation of land.

• Labour shortage or increased herd sizes

• Low productivity

• Low adoption of technology (such as milking equipments)

• Animal health & sanitation

• Seasonality of production

• Availability of homogenous quality milk /highly fragmented supply

• Logistics infrastructure

• Manpower

• Unorganised market

• Heterogeneous consumer requirements

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The analysis also shows that the strengths and opportunities far outweigh weakness and threats, strengths and opportunities are fundamental and weaknesses & threats are transitory.

Segment Wise /product Wise Reporting

The Company is primarily engaged in the business of manufacture, purchase and sale of a wide range of Dairy products like Ghee, Skimmed Milk Powder, Curd, Whole Milk Powder, Dairy Lactose and Milk. The income from these activities and export of dairy produts is not materially significant in financial terms. Accordingly segment information has not disclosed.

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 and international prices of dairy products 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 company products.

d) Dairy business is primarily influenced by monsoon. Unfavorable monsoon may affect the milk availability.

Adequacy of Internal Control System

The Company has adequate system of internal controls which 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 wit applicable statutes, safeguarding of assets from unauthorized use 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.

Human resource Development

As already discussed in Director's report.

Corporate social Responsibility

As already discussed in Director's report.

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The Corporate Governance philosophy of the company is based on transparency, accountability, values and ethics and more over, it is an integral part of the management's initiative in its pursuit towards excellence, growth and value creations. Your company's Corporate Governance is based on this philosophy and is practicing and committed to adopt highest standards of corporate Governance. Responsible corporate conduct is integral to the way we do our business. Our actions are governed by our values and principles, which are reinforced at all levels within the Company. We, at Kwality Dairy (India) Limited, are committed to doing things the right way which means taking business decisions and acting in a way that is ethical and is in compliance with all applicable legislations. Our code of business principles is an extension of our values and reflects our continued commitment to ethical business practices and regulatory compliance. Our code of Business Principles inspires us to set highest standards of corporate behavior towards everyone we work with, the communities we touch and the environment on which we have an impact. This is our road to responsible, sustainable and profitable growth and creating long term value for our shareholders, our people and our business partners.

1. Company's Philosophy on Corporate Governance

The Company's policy towards 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 is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the Company and has been vested with the requisite powers, authorities and duties. The Board plays a crucial role in overseeing how the management serves the short and long terms interests of shareholders and other stakeholders.

The composition of the Board represents an optimal mix of professionalism, knowledge and experience and enables the Board to discharge its responsibilities and 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.

The Managing Directors alongwith a team of professionals manages the day to day operations of the Company. The Non-executive Directors are eminent professionals, drawn from amongst persons with experience in business, industry & finance. The Board has ideal composition with more than half the Directors being Non executive directors.

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.

Composition of the Board

As on March 31, 2013, total numbers of Directors of the company was four comprising of two Executive Director and two Non-Executive & Independent Directors.

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:

2. Board of Directors

i. Composition and categories of Board of Directors as on 31st March, 2013

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

Non-Executive-Independent Director

Director

DirectorDr. Rattan Sagar Khanna

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

Name of the DirectorNo. of Board Meeting Attendance at the previous

AGM held on 28.09.2012

Mr. Sanjay Dhingra Yes

Mr. Sidhant Gupta Yes

Mr. Arun Srivastava Yes

YesDr. Rattan Sagar Khanna

Held Attended

13 13

13 12

13 13

13 13

III. Number of Board/Committees of which a Director is a member or chairman

Name of the DirectorNo. of Directorship held

in other CompaniesNumber of Committee Memberships

held in other public companies

Mr. Sanjay Dhingra Nil1

Mr. Sidhant Gupta NilNil

Mr. Arun Srivastava Nil1

NilNilDr. Rattan Sagar Khanna

IV. Date of the Meetings of the Board of Directors

During the Financial Year 2012-13 the Board met thirteen times. The date of the meetings are as under:

Date of Board Meetings

23.04.2012 11.05.2012 14.08.2012 25.08.2012

19.09.2012 29.10.2012 14.11.2012 30.11.2012

18.12.2012 16.01.2013 14.02.2013 20.02.2013

30.03.2013

Director's ProfileSanjay Dhingra

KDIL is managed by a Board of Directors headed by Shri Sanjay Dhingra. A graduate by qualification, Shri Sanjay Dhingra 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 Dairy (India) limited one 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. 3692 Crs. of turnover for financial year 2012-2013.

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

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. He has versatile experience in liasioning with various government departments like, Food Corporation of India, Ministry of Agriculture, Ministry of Defence, Canteen Stores Department etc. while working with various Multinationals including Fortune 500 group like Adani Wilmar, Cadbury, Britannia, Markfed, etc.

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 KDIL 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

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 joined the Board of KDIL 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 Co-operative 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 was instrumental in introduction and launch of our anchor Brand “Dairy Best - Livlite”. Dr. Khanna has also extended his expertise in implementation and establishment of collection centers 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 joined the Board of KDIL on 25th June 2003. He brings to the Board an extensive experience of Financial Modeling and Resource Moblisation. 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 troubleshooter for the Company vis-à-vis clients and lenders and ensure smooth execution of mandated deals.

None of the Non- Executive Director's 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 2012-2013, thirteen Board meeting were held and the gap between two meetings did not exceed four months.

Currently, the Board has 5 (five) Committees i.e. Audit Committee, Remuneration Committee, Share Transfer Committee, Shareholders'/Investors' Grievances Redressal Committee and Management 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 meeting held during the financial year 2012-13 are as under:

1. Audit Committee:

The Audit Committee covers the areas as contemplated under Clause 49 of the Listing Agreement 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 invites to the committees meeting. The Company Secretary acts as Secretary of the Committee.

All the members of the Audit Committee are financially literate

I. Composition of Audit Committee:

The Board has constituted an Audit Committee in accordance with the requirements of section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement entered with the Stock Exchanges. Statutory Auditors and Internal Auditors were regular invites to the committees meeting.

The Company Secretary acts as Secretary of the Committee.

3. Board Committee

Name of Director Category No. of Meeting Held

No. of Meeting Attended

Mr. Arun Srivastava Non-Director

Executive-Independent

12 12

Mr. Sidhant Gupta Executive Director

12 11

Dr. Rattan Sagar Khanna

12 12 Non-Director

Executive-Independent

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 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) The going concern assuming and compliance with accounting standards.

v) Compliances with Stock Exchange and legal requirements concerning financial statements.

vi) Any related party transaction i.e. transaction of the Company of material nature, that may have potential.

vii) 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 any 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 2012-13 the audit committee met twelve time. The date on which meeting of the Audit Committee held are as under:

11.05.2012 14.08.2012 25.08.2012 19.09.2012 29.10.2012 14.11.2012 30.11.2012 18.12.2012 16.01.2013 14.02.2013 20.02.2013 30.03.2013

2. Remuneration Committee

The Board has constituted a remuneration committee to renew and approve the annual salaries, commission, service agreement and other employment conditions for Executive Directors.

The Remuneration Committee of the Board comprises of two Non-Executive Independent Directors and the Executive Director. The Remuneration Committee has been constituted to recommend/review the remuneration of Managing Directors/Whole Time Director. The remuneration policy is directed towards rewarding performance base on review of achievements on a periodical basis. The remuneration policy is in consonance with existing industry practice.

I. Composition of Remuneration Committee

Name of Director Category

Mr. Arun Srivastava

Mr. Sanjay Dhingra

Chairman & Managing Director

Dr. Rattan Sagar Khanna Non-Executive-Independent

Director

Non-Executive-Independent Director

The Details of Remuneration during the year ended 31st March, 2013 as follows:-

Gross Remuneration Sitting Fees TotalName

Mr. Sanjay Dhingra (Managing Director)

1,24,00,000 1,24,00,000

Mr. Sidhant Gupta (Executive Director)

1,00,00,000

1,00,00,000

-

-

During the year, there was no meeting held.

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 ensuring smooth operation and timely action/compliances. The Committee meets at frequent intervals and disposes matters which are of routine but urgent in nature without having to wait for the next Board Meeting.

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).

4. Shareholders/Investor's Grievance Redressal Committee

The Board has constituted a shareholder's/Investor's Grievance Committee to specifically look into redressal of shareholder's and investor's grievances such as transfer, dividend, demat and related matters.

The Shareholder's and Investor's Grievance Redressal Committee has been constituted as per the provisions of Listing Agreement. The Company Secretary of the Company acts as Compliance Officer for the purpose of Shareholders'/ Investors' Grievance Redressal Committee.

I. Composition of the Shareholder / Investor's Grievance Redressal Committee

II. The Terms of Reference of The Shareholders & Investor Grievances 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 2012-2013 are given below:

10.04.2012 03.05.2012 11.06.2012 02.07.2012 06.08.2012 05.09.2013 03.10.2012 02.11.2012 27.12.2012 11.01.2013 06.02.2013 02.03.2013

II. During the year, twelve meetings of the committee were held.

Name of the Director Category No. of Meeting Held

Mr. Sanjay Dhingra 12 12

12 12

12 11

12 11

Chairman & Managing Director

Mr. Sidhant Gupta Executive Director

Mr. Rajesh Verma VP-International Trade

VP-TechnicalMr. Manjeet Singh Dahiya

No. of Meeting Attended

Name of the Director Categories Chairman/Member

Dr. Rattan Sagar Khanna Member

Member

Member

Non-Executive-Independent Director

Non-Executive-Independent Director

Mr. Sidhant Gupta Executive Director

Mr. Arun Srivastava

Name of the Director

Dr. Rattan Sagar Khanna

No. of Meeting Held No. of Meeting Attended

4

3

4

4

4

Mr. Sidhant Gupta 4

Mr. Arun Srivastava

II. Date of the Committee Meetings:During the financial year 2012-13 the members of the committee met Thirty Six time. The detail of the same is as under:

IV. Date of the Meetings

11.05.2012 13.08.2012 13.11.2012 13.02.2013

V. Status Report of investor's complaint/ request for the year ended 31st March, 2013

• Number of Complaint/request Received- 11

• Number of Complaint/request Resolved- 11

• Number of Complaint/request Pending - 0

5. Share Transfer Committee

Share Transfer Committee was constituted as per the requirement of listing agreement and agreement with RTA for approval of transfer. The terms of reference of the Share transfer Committee is to approve, transfer and transmission of shares and to approve Sub-division, 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 overseas the performance of Share Transfer Agents and review all the matters connected with transfer of 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

30.04.2012 10.07.2012 21.09.2012 30.11.2012

19.04.2012

30.06.2012

10.09.2012

20.11.2012

28.01.2013 07.02.2013

10.05.2012

20.07.2012

29.09.2012

10.12.2012

14.02.2013

19.05.2012

31.07.2012

10.10.2012

21.12.2012

28.02.2013

31.05.2012

10.08.2012

20.10.2012

31.12.2012

09.03.2013

09.06.2012

20.08.2012

31.10.2012

07.01.2013

20.03.2013

10.04.2012

20.06.2012

31.08.2012

10.11.2012

17.01.2013

30.03.2013

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)

6. Code of Business Conduct and Ethics for Directors and Senior Management:

The Company has adopted a comprehensive code of conduct for its directors and senior management, which lays the standard of business conduct, ethics and governance. The code have been posted on the Company's website.

7. Annual General Meetings:

The Last three Annual General Meeting of the company were held as under

Year Date Time Location

Village Softa, Tehsil Faridabad, Haryana

& District Palwal,

Village Softa, Tehsil & District Palwal, Faridabad, Haryana

Village Softa, Tehsil & District Palwal, Faridabad, Haryana

Name of the Director Category No. of Meeting Held

Dr. Rattan Sagar Khana 36 36

36 35

36 36

Mr. Sidhant Gupta Executive Director

Mr. Arun SrivastavaNon-Executive-

Independent Director

Non-Executive-Independent Director

No. of Meeting Attended

2011-2102 28.09.2012 10 A.M

2010-2011

2009-2010

26.09.2011

27.09.2010

11 A.M

11 A.M

Following Special Resolution 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

8. Extra- Ordinary General Meeting (EGM):An extra ordinary General Meeting of the members of the company was held on 20th day of March, 2013 to fill up the casual vacancy caused due to the resignation of M/S P.P. Mukerjee, Statutory Auditors of the Company.

Date Time Location

20-03-13

10.00 A.M.

Village Softa, Tehsil & Distt. Palwal, Faridabad, Haryana

9. 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 ̀ 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 police during the year.

(iv) Board disclosures- Risk Management

The Company has a policy to inform the board about Risk Management, Risk assessment & Minimization procedure. The Board of Directors periodically reviews risk to ensure that executive management controls risk through means of properly defined framework of the company.

10. THE COMPANY HAS COMPLIED WITH ALL MANDATORY REQUIREMENTS AND HAS ADOPTED NON-MANDATORY REQUIREMENTS AS PER DETAIL GIVEN BELOW:

(i) Remuneration committee

The Company has constituted Remuneration committee. Chairman of the committee is an independent director and was present at the Last Annual General Meeting.

(ii) Shareholder Rights

Quarterly financial results of the company are published in newspapers and also displayed on website of the company. The results are not separately circulated to the shareholders.

(iii) Training to Board Members

At Present the company does not have such a training programme for the Board members.

(iv) Mechanism for evaluating non-executive Board members

The company has not adopted any mechanism for evaluating Non-Executive Directors.

(v) Whistle blower policy

The Company encourages an open door policy where employees have access to the Head of the business/ function. In terms of the Company's Code of Conduct, any instance of non-adherence to the code / any other observed unethical behavior are to be brought to the attention of the immediate reporting authority, who is required to report the same to the Head of Corporate Resources.

We hereby affirm that no personnel have been denied any access to the Audit Committee.

11. MEANS OF COMMUNICATION

In compliance with the requirements of listing Agreement, the Company regularly intimate unaudited as well as audited financial results to the Stock Exchange immediately after they are taken on record by the Board. These Financial results are published in the leading newspapers which includes The Financial Express, Jan Satta, Business Standard and Economic Times. The same are sent to stock Exchanges and were also displayed on the website of the Company, www.kdil.in.

Management Discussion and Analysis report has been attached to the Director's Report and forms part of this Annual Report.

Month High (Rs) Low (Rs) April 2012 39.10 33.40 May 2012

38.05

28.00

June2012

35.05

27.00

July 2012

36.00

29.30

August 2012

34.80

29.50

September 2012

33.10

30.00

October 2012

33.90

25.30

November2012

47.95

25.25

December 2012

34.50

30.05

January 2013

38.70

30.60

February2013 36.00 31.30

March 2013 34.90 28.15

1) 21st Annual General Meeting :

Date: 30th September, 2013 Time: 9:30 AMVenue: Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036

2) Financial Calendar

The Financial year covers the period from 1st April to 31st March.Key financial Reporting Dates for the Financial Year 2013-2014

General Shareholder Information

3) Date of Book Closure

The Register of Members and Shares Transfer Register of the Company shall be closed from 14th September 2013 to 30th September 2013

4) 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

5) Listing on Stock Exchange

Equity share of the Company are currently listed on Bombay Stock Exchange Limited & National Stock Exchange Limited The Company has paid the annual listing fees for the year 2013-14.The Company is listed with the Symbol KWALITY and the ISIN –INE775B01025.

6) 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,

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

st1 Quarter ending 30-06-2013 On or before August 15,2013

On or before November 15,2014

On or before February 15,2014

On or before May 15, 2014 before May 2014

or if Audited ,on or

nd2 Quarter ending 30-09-2013

rd3 Quarter ending 31-12-2013

th4 Quarter ending 31-03-2014

Volume (No.)

19,76,617

32,44,073

22,08,676

19,02,571

19,87,377

18,44,194

17,34,267

1,74,51,417

19,26,813

34,37,694

22,75,133

13,73,360

9) Share Transfer System

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) Distribution of Shareholding as on March 2013.

No. of Shares No. of Shareholders No. of Equity Shares Total % of Share -

Holder Total % of Share

Capital 1-5000 21,254 96.31 1,35,49,509 6.6685 5001-10000 425 1.93 28,79,739 1.4173 10001-20000 165 0.75 23,48,105 1.1556 20001-30000 70 0.32 17,48,786 0.8607 30001-40000 32 0.15 11,21,855 0.5521 40001-50000 14 0.06 6,17,972 0.3041 50001-100000 43 0.19 32,58,708 1.6038 100001 & above 65 0.29 17,76,61,760 87.4378

11) Shareholding Pattern

The Shareholding pattern as on 31 March, 2013:

Category

No. of Share held

Percentage of shareholding

A

Shareholding of Promoter & Promoter Group

1

Indian

A

Individual/HUF

15,21,54,714

74.88

B

Central Govt./ State Govt.

0

0

C

Bodies Corporate

0

0

D

Financial Institutions/ Banks

0

0

E

Any Other

0

0

Sub Total

15,21,54,714

74.88

2

Foreign

A

Individual(NRI/ Foreign Individual)

0

0

B

Bodies Corporate

0

0

C

Institutions

0

0

E

Any Other

0

0

Total

15,21,54,714

74.88

B

Public Shareholding

1

Institutions

a

Mutual Funds/UTI

976

0.00

b

Financial Institution /Banks

1,60,834

0.08

c

Foreign Institution Investors

3,21,569

0.16

d

Central Govt./ State Govt.

0

0

e

Venture Capital Fund

0

0

f

Insurance Company

0

0

g

Foreign Venture Capital Investor

0

0

h

Any Other (Trust)

0

0

Sub Total

4,83,379

0.24

2

Non – Institutional Investor

a

Body Corporate

1,23,90,273

6.10

b

Individual

3,74,03,338

18.40

c

Any Other(Specify)

1 NRI

2,60,397

0.13

2 Foreign National

0

0

3 Hindu Undivided Family

3,09,531

0.15

4 OCB

0

0

5 Clearing Members

1,84,802

0.09

Sub Total

5,05,48,341

24. 88

Total

5,10,31,720

25.12

Grand Total 20,31,86,434 100.00

12) Details of Directors Appointing and Re-appointing at AGM

13) 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 2013¸72.14% of the Company's total listed capital representing 14,65,71,860 share were held in dematerlizated form and the balance 27.86 % comprising 5,66,14,574 shares were held in physical form.

Under the depositary system, the International Securities Identification Number (ISIN) allotted to the company is INE775B01025.

14) Outstanding ADR's/GDR's /Warrants/ Convertible Instruments

Not Applicable

15) Registered Office

Kwality Dairy (India) Limited

KDIL House, F-82, Shivaji Place

Rajouri Garden

New Delhi - 110027

16) Plant Location (Owned & Lease)

Village Softa, Tesil & Distt. Palwal, Faridabad, Haryana-121004

Bakra Mandi, Ajmer, Rajasthan

Village Kumarherha, NH-73, Saharanpur, Uttar Pardesh

Village Mumrejpur, Dibai, Bulandsaher, Uttar pardesh

17) Address for correspondence

The Company Secretary

Kwality Dairy (India) 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

18) Any Shareholder complaint / queries may be addressed to:

Beetal Financial & Computer Services (p) Ltd.

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

Name of the Director

Date of Birth

Age

Date of Appointment

Qualification

Expert in specific Functional Area

Directorship held in other Companies as on date.

Arun Srivastava Sanjay Dhingra

03.04.1968 12.10.1970

45 43

25.06.2003 18.06.2003

Graduate Graduate

Expert in financial Modeling & Resource Moblisation

Vast experience in the Dairy Business

JMD Veg Oil Pvt. Ltd. Pashupati Dairies Pvt. Ltd.Kwality Dairy Investments Pvt. Ltd.

Chairman/Member of the committee of the Board of Directors of the Company as on 31 March 2013

Member of Audit Committee, Member of Remuneration Committee, Member of Share Transfer Committee, Member of Shareholders/Investor Grievance Committee

Member of Remuneration and Management Committee

Chairman/Member of the committee of the Director of the other companies in which he is a director as on 31 March 2013

NIL NIL

No. of Share Held in the Company NIL 15, 21, 54, 714

Certificate by Chief Executive Officer on compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement(s)

The Board of Directors

Kwality Dairy (India) Limited

We hereby certify that for the Financial Year 2012-13

1 We have reviewed the financial statements and the cash flow statement and that to the best of our knowledge and belief:

a. These statements 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 Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

2. There are no transactions entered into by the Company which are fraudulent, illegal or violate the Company's code of conduct to the best of our knowledge and belief.

3. We accept responsibility for establishing and maintaining internal controls and that we have evaluated the effectiveness of internal control systems of the Company and we have disclosed to auditors and 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 Company's internal control system.

Sd/-

Place: New Delhi Sanjay Dhingra

Date: 14 August 2013 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.

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 as affirmed by them individually, for the year ended 31st March, 2013.

Sd/-

Place: New Delhi Sanjay Dhingra

Date: 14 August 2013 Chairman & Managing Director

AUDITORS' CERTIFICATE UNDER CLAUSE 49 OF THE LISTING AGREEMENTS

COMPLIANCE CERTIFICATE

To the members of

Kwality Dairy (India) Limited

We have examined the compliance of the conditions of Corporate Governance by Kwality Dairy (India) Ltd. for the year ended 31st March 2013, 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 implementation 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(s).

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

Sd/-

Place: New Delhi P.P. Mukerjee

Dated: 14 August 2013 Proprietor

Membership No.089854

IND

EP

EN

DE

NT

AU

DIT

OR

'S R

EP

OR

TTo the Members of

KWALITY DAIRY (INDIA ) LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Kwality Dairy (India ) Limited , which comprise the Balance Sheet as at March 31, 2013, and 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

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 . 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.

Auditor's 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 auditor's judgement, 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 Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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, 2013;

(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 (Auditor's 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from branches not visited by us

d. in our opinion, the Balance Sheet, 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;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the director is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

For P.P Mukerjee & Associates

Chartered Accountants

Firm's Registration Number 023276N

Sd/-

Place: New Delhi P.P. Mukerjee

Dated: 5th July 2013 Proprietor

Membership No.089854

INDEPENDENT AUDITOR’S REPORT

IND

EP

EN

DE

NT

AU

DIT

OR

'S R

EP

OR

T

1. In respect of Fixed Assets :

a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification of its fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancy was noticed on such verification.

c) 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.

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.

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 :

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.

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 and year end balance is Rs. 7500.00 lacs.

c) The Company has taken interest free loans from the parties covered in the register maintained under Section 301 of the Companies Act,1956. In our opinion and according to the information and explanation given to us, the companies, firms or other parties listed in the registers maintained under Section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest wherever agreed.

e) There is no overdue amount of loans received from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

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.

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.

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 (Auditor's Report) Order, 2003 are not applicable to the Company.

7In 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 :

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. There have been delays in depositing undisputed Advance Income Tax and the amount outstanding as at the last day of the financial year for a period exceeding six months from the date they become payable , amounts to Rs. 951.89 Lacs (prev year Rs. 110.61 Lacs). There were no dues during the year towards Investor Education and Protection Fund and Excise Duty.

b). According to the records of the Company examined by us and according to the information and explanations

ANNEXURE TO THE AUDITOR'S REPORT OF M/S KWALITY DAIRY (INDIA) LIMITED FOR THE YEAR ENDED 31ST MARCH 2013

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:-

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 (Auditor's 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 (Auditor's 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 Companis (Auditor's Report) order 2003 ( as amended) are not applicable to the Company.

15 According to the information and explanation given to us , the Company has not given any guarantee for loans taken by others from bank or financial institutions.

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 (Auditor's 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 (Auditor's 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: 5th July 2013 Proprietor

Membership No.089854

Nature of Statute Nature of Dues Amount unpaid

(In Lacs Rs.)

Year to which the amount

relates

Forum where pending

Haryana Development

Board, Gurgaon

Livestock Milk cess

201.53 (98.06 deposited against

299.59 under protest)2002-2013

Supreme Court of India

---Do -- Interest on Milk Cess

866.44 2002-2013Supreme Court

of India

Balance Sheet as at 31 March, 2013

Note

No.

As at 31 March, 2013 As at 31 March, 2012

(INR In Lacs)

A EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital 2 2,031.86

2,031.86

(b) Reserves and surplus 3 25,352.03

15,935.38

27,383.89

17,967.24

2 Non-current liabilities

(a) Long-term borrowings 4 10,755.17

10,239.41

(b) Deferred tax liabilities (net) 24.2 0.00

47.32

(c) Long-term provisions 5 55.67

30.86

10,810.84

10,317.59

3 Current liabilities

(a) Short-term borrowings 6 75,527.88 54,863.24 (b) Trade payables 7 4,839.13 2,061.58 (c) Other current liabilities 8 2,778.80

2,044.16

(d) Short-term provisions 9 2,448.90

1,515.13 85,594.71

60,484.11

TOTAL 123,789.45

88,768.95

B ASSETS

1 Non-current assets

(a) Fixed assets

(i) Tangible assets 10.A 7,166.21

6,399.46

(ii) Intangible assets 10.B 126.96

1.23

(iii) Capital work-in-progress 10.C 860.92

8.99

8,154.09

6,409.68

(b) Non-current investments 11 564.62

143.20

(c) Long-term loans and advances 12 2,916.67

1,969.27

116.25

0.00

2 Current assets

(a) Inventories 13 9,866.08

9,874.39

(b) Trade receivables 14 93,090.45

65,624.37

(c) Cash and cash equivalents 15 3,239.26

888.86

(d) Short-term loans and advances 16 5,813.93

3,843.70

(e) Other current assets 17 28.10 15.48 112,037.81 80,246.80

TOTAL 123,789.45 88,768.95

0.86 (0.24)

Particulars

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

(Sanjay Dhingra) (Sidhant Gupta)

Membership No.:089854

Managing Director Executive Director

sd/-

Place : New Delhi (Deepa Kapoor)Company Secretary Date : 5th, July, 2013

sd/- sd/-

Kwality Dairy (India) Limited

(d) Deffered Tax Assets (Net) 24.2 11,751.63 8,522.15

Notes forming part of the financial statements 1-24

(INR In Lacs)

Kwality Dairy (India) LtdStatement of Profit and Loss for the year ended 31 March, 2013

Note

No.

For the year ended

31 March, 2013

For the year ended

31 March, 2012

(INR In Lacs) (INR In Lacs)

1 Revenue from operations 18 369,228.67 239,462.99

2 Other income 19 71.70 8.58

3 Total revenue (1+2) 369,300.37 239,471.58

4 Expenses

(a) Cost of materials consumed 20.a 332,489.65 216,858.63

(b) Purchases of stock-in-trade 20.b 4,681.92

3,379.37

(c) Changes in inventories of finished goods, work-in-progress and

stock-in-trade

20.c 187.54

(3,520.88)

(d) Employee benefits expense 21 1,347.68 855.83

(e) Finance costs 22 9,227.88 6,509.49

(f) Depreciation and amortisation expense 10 1,028.88 749.66

(g) Other expenses 23 9,189.25 5,372.23

Total expenses 358,152.79 230,204.34

5 Profit / (Loss) before Extraordinary & Exceptional Items (3-4) 11,147.58 9,267.23

6 Extraordinary / Exceptional Items 300.00 0.00

7 Profit / (Loss) Before Tax (5-6) 10,847.58 9,267.23

8 Tax expense:

(a) Tax expense for current year 2,230.70

(b) (Less): MAT credit related to current year (941.97)

(b) (Less): MAT credit related to previous year 0.00

(c) Tax expense relating to prior years 69.63

(d) Net current tax expense 1,358.36

(e) Deferred tax (163.57)

1,984.49

(1,016.04)

(720.72)

(41.50)

206.23

(37.55)

1,194.79 168.68

9 Profit / (Loss) from operations (7-8) 9,652.79 9,098.56

10 Earnings per share (of INR1/- each):

(a) Basic 4.75

4.48

(b) Diluted 4.75 4.48

Notes forming part of the financial statements 1-24

Particulars

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

CA P.P. MukerjeeProprietorMembership No.:089854

Sd/-(Sanjay Dhingra)

Managing Director

Sd/-(Sidhant Gupta)

Executive Director

Sd/-(Deepa Kapoor)

Company SecretaryPlace : New DelhiDate : 5th July, 2013

Sd/-

Kwality Dairy (India) LtdCash Flow Statement for the year ended 31 March, 2013

(INR In Lacs)

A. Cash flow from operating activities

Net Profit / (Loss) before extraordinary items and tax 11,147.58 9,267.23

Adjustments for:

Depreciation and amortisation 1,028.88 749.66

Amortisation of Expenses 5.90 5.90

(Profit) / loss on sale on assets 0.35 (4.11)

Finance costs 9,227.88 6,509.49

Interest income (31.84) (3.55)

Liablity no longer payable (1.62) 0.00

Provision for Doubtful debts 296.13 0.00

Bad Debts & Other Balances W/off 3.06 2.34

Net Exchane Gain/loss (30.16) 0.00

Other non-cash charges 28.46 10,527.01 (0.51) 7,259.22

Operating profit / (loss) before working capital changes 21,674.59 16,526.46

Changes in working capital:

Adjustments for (increase) / decrease in operating assets/Liablities:

Inventories 8.31 (3,532.45)

(27,466.08) (24,163.28)

Short-term loans and advances (1,970.23) (167.28)

Other Current Assets 0.00 (0.97)

Other than Cash and Cash Equivalents (698.20) (87.43)

Long-term loans and advances (10.60) (4.79)

Long-term provision 24.81 (3.14)

Trade payables 2,777.55

(46.54)

Other current liabilities 216.57 (27,117.86) 15.17 (27,990.71)

(5,443.27) (11,464.25)

Cash flow from extra ordinary Items (300.00) -

(1,394.81) (2,064.63)

Net cash flow from / (used in) operating activities (A) (7,138.08) (13,528.89)

B. Cash flow from investing activities

(2,828.70) (3,100.90)

Proceeds from sale of fixed assets 3.61 12.70

Purchase of long-term investments- Subsidiaries (365.08) (143.20)

Loans given- Subsidiaries 0.00 (56.34)

Interest received 31.84 3.55

Net cash flow from / (used in) investing activities (B) (3,158.33) (3,284.19)

C. Cash flow from financing activities

Proceeds from long-term borrowings 4,583.07 6,118.30

Repayment of long-term borrowings (3,834.76) (4,752.82)

Net increase / (decrease) in working capital borrowings 20,664.64 22,844.31

Finance cost (9,227.88) (6,509.49)

Dividends paid (203.19) (203.30)

Tax on dividend (33.29) (32.96)

Net cash flow from / (used in) financing activities (C) 11,948.60 17,464.03

Net increase / (decrease) in Cash and cash equivalents (A+B+C) 1,652.19 650.95

Cash and cash equivalents at the beginning of the year 718.56 67.61

Cash and cash equivalents at the end of the year 2370.76 718.56

Cash and cash equivalents as per Balance Sheet (Refer Note 15) 3,239.26 888.86

(868.50) (170.30)Less: Bank balances not considered as Cash and cash equivalents as defined in AS 3 Cash Flow Statements (give details)

For the year ended

31 March, 2013

For the year ended

31 March, 2012

Particulars

Net income tax (paid) / refunds

Capital expenditure on fixed assets, including capital advances

Reconciliation of Cash and cash equivalents with the Balance Sheet

2370.76 718.56

Cash and cash equivalents at the end of the year * 2370.76 718.56

* Comprises:

(a) Cash on hand 60.64 22.52

2,310.12 2370.76 696.05 718.56

CA P.P. MukerjeeProprietorMembership No.:089854

Sd/-(Sanjay Dhingra)

Managing Director

Sd/-(Sidhant Gupta)

Executive Director

Place : New DelhiDate : 5th July, 2013

Sd/-(Deepa Kapoor)

Company Secretary

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

Notes forming part of the financial statements (1-24)

(b) Balances with banks ( In Current Accounts)

Net Cash and cash equivalents (as defined in AS 3 CFS)

(INR In Lacs) (INR In Lacs) (INR In Lacs)

Sd/-

Notes Forming Part of Financial Statements

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 in accordance with the generally accepted accounting principles , Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof. The accounting policies have been consistently applied by the Company and are consistent with those used in previous year.

(b) Use of Estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions , that affect the application of accounting policies and reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented . Actual results may differ from these estimates . Estimates and underlying assumptions are revieved on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates is revised and results in future periods are affected.

(c) Revenue Recognition

Sale of GoodsSale is recognized when the significant risks and rewards of ownership of the goods have passed to the customer.Sale comprise amounts invoiced for goods sold and does not include sales tax/vat or any other tax levied on sales, and are net of sales returns, trade discounts and rebates.

Income from ServicesRevenue 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.

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) 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.

(e) Employee BenefitsShort 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 plansThe 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.

(f) InventoriesInventories are valued at the lower of cost and estimated net realizable value . Cost of work-in -process and finished goods includes manufacturing overheads. Net realisable value is estimated selling price in the ordinary course of business , less estimated cost of completion and estimated cost necessary to make the sale.

Kwality Dairy (India) Limited

(g) 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.

(h) Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in estimate of recoverable amount.

As per assesment conducted by the Company at March 31, 2013 there were no indications that the fixed assets have suffered an impairment loss.

(i) Foreign Exchange TransactionsForeign currency transactions during the year are recorded at the rates of exchange prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated into rupees at the rates of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the statement of Profit and Loss account.

(j) 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.

(k) 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.

(l) 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.

(m) Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

(n) Leases(i) Finance LeaseAssets 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 LeaseLeases 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.

Kwality Dairy (India) Limited

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 2 Share capital

Refer Notes (i) to (v) below

Particulars As at 31 March, 2013

( INR In Lacs) ( INR In Lacs)

(a) Authorised

100,00,00,000 Equity Shares of INR1/- each ( March 31, 2012 : 100,00,00,000 Equity Share of INR 1/- each) 10,000.00 10,000.00

10,000.00 10,000.00

(b) Issued ,Subscribed and fully paid up 2,031.86 2,031.86

20,31,86,434 Equity Shares of INR1/- each fully paidup

( March 31,2012 : 20,31,86,434 Equity Shares of INR1/- each fully paidup)

Total 2,031.86 2,031.86

As at 31 March, 2012

(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Particulars As at 31 March, 2013

No. of Shares Amount (INR in Lac) No. of Shares

Equity Shares at the beginning of the year 203,186,434 2,031.86 203,186,434 2,031.86 Add: Shares issued during the year - - - -

Equity Shares at the end of the year 203,186,434 2,031.86 203,186,434 2,031.86

As at 31 March, 2013

As at 31 March,

2012 As at 31 March

2012

(ii) Right,preference and restriction attached to the equity shares :- The Company has only one class of shares referred to as equity shares having a par value of INR 1/-per

share. Each holder of equity shares is entitled to one vote per share.- 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 2013 , 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 holders of equity shares will be entitled to receive remaining

assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

99660714

52494000

49.05

25.84

99660714

52494000

Class of shares / Name of shareholder As at 31 March, 2013 As at 31 March, 2012

% holding of shares

Equity shares with voting rights

Sanjay Dhingra 49.05

Kanika Dhingra 25.84

Number of shares held

Number of shares held

% holding of shares

(iii) Details of shares held by each shareholder holding more than 5% shares:

(iv) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash, 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 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 No. of SharesEquity shares with voting rights

Fully paid up by way of bonus sharesYear 2012-13 -Year 2011-12 -Year 2010-11 21186434Year 2009-10 -Year 2008-09 -

(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.

Amount (INR in Lac)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Particulars As at 31 March, 2013 As at 31 March, 2012( INR In Lacs) ( INR In Lacs)

(a) Surplus / (Deficit) in Statement of Profit and Loss

Opening balance 15,935.38 7,072.96

Add: Profit / (Loss) for the year 9,652.79 9,098.56

25,588.17 16,171.52

Less:

Proposed Dividends on equity share (INR .10 per share) 203.19 203.19

Tax on dividend 32.96 32.96

Closing balance 25,352.03 15,935.38

Total 25,352.03 15,935.38

Note 3 Reserves and surplus

Note 4 Long-term borrowings

Notes:

Particulars As at 31 March, 2013 As at 31 March, 2012

177.25 219.93 [Refer Note (i) for detail of maturity period, repayment term & Interest ]

[Secured by hypothecation of assets (vehicles) taken on lease ]

(b) Term loans From Bank 2,000.00 0.00

[Refer Note (ii) for detail of maturity period, repayment terms]

[Refer Note (ii) below for detail of Security]

2,177.25 219.93

(2) Unsecured

(a) Term loans From Other Parties 1,077.92 2,519.48

[Refer Note (iii) for detail of maturity period, repayment terms]

[Refer Note (iii) below for detail of Security]

(b) Loans and advances from related parties 7,500.00 5,800.00 [Refer Note (iv) below ]

(c) Loans and advances from other parties 0.00 1,700.00

8577.92 10019.48

Total 10,755.17 10,239.41

(1) Secured

(a) Long-term maturities of finance lease obligations

i). Rate of Interest for finance lease obligations ranging from 8.67 to 13.5 .

No. of repayment installments for lease obligation ranging from 36 to 60 Months.

Period of maturity for lease obligations ranging from 3 year to 5 year.

ii) The loan amounting INR 2250.00 lacs will be payable in 18 installment in next 5 years.

Loan is secured by way of first mortgage/ charge on the immovable property in the name of Director & Other party situated

at Golden Park, Rampura Road, Basai Darapur, New Delhi and second paripassu charge on fixed assets of the company.

Further loan in also secured by personal guarantee of shareholders of the Company.

Particulars As at 31 March, 2013 As at 31 March, 2012

a) IDBI Bank Ltd ( Total INR 2250.00 Lacs) 2000.00 -

2000.00 0.00

iii)

Particulars As at 31 March, 2013 As at 31 March, 2012

a) Tata Capital Limited ( Total INR 1428.56 Lacs) 714.28 1,428.57 b) L& T Finance Ltd (Total INR 1090.90 Lacs) 363.64 1,090.91

Total Long Term Loans 1077.92 2,519.48

( INR In Lacs) ( INR In Lacs)

( INR In Lacs)( INR In Lacs)

( INR In Lacs) ( INR In Lacs)

Kwality Dairy (India) Ltd

iii.a) The loan amounting INR 1428.56 lacs will be payable in 6 installment in next 2 years.

Loan is secured by way of first mortgage/ charge on the immovable property in the name of related enterprise situated in

Mohali Punjab and further secured by personal guarantee of Director of company.

iii.b) The loan amounting INR 1090.90 lacs will be payble in 8 equal installment in next 2 years.

Loan is secured by way of pledge shares of Mr. Sanjay Dhingra (Director of the Co.) .Pledge value of the shares

( 1crore shares ) was INR 2970 lacs as on 31.03.2013 and further secured by first mortgage/charge on the immovable

property in the name of related enterprise (landed property at Mohali) & personal guarantee by Director of Co.

Maturity Schedule of Long term finance debt

Financial year Installment to be paid

F.y. 2013-14 1691.56

F.y. 2014-15 1577.92

F.y. 2015-16 500.00

F.y. 2016-17 500.00

F.y. 2017-18 500.00

Total Amount 4769.49

iv) 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.

Notes forming part of the financial statements

Note 5 Long-term provisions

Particulars As at 31 March, 2013 As at 31 March, 2012(INR In Lacs) (INR In Lacs)

(a) Provision for employee benefits:

(i) Provision for compensated absences 22.16 11.22

(ii) Provision for gratuity (net) (Refer Note 24.9) 33.52 19.64

55.67 30.86

Total 55.67 30.86

Note 6 Short-term borrowings

Particulars As at 31 March, 2013 As at 31 March, 2012

(1) Secured

(a) Loans From Banks

Cash Credit Facilities # 75,527.88 54,863.24

Total 75,527.88 54,863.24

# Cash Credit facilities are secured by hypothecation of existing and future current assset of the company viz stock of Raw

material,stock in process, semi finished goods, finished goods, stores, bills receivables and books debts and all movable &

Immovable fixed assets. Further Cash credit facilities are secured by personal guarantee of shareholders of the Company.

Note 7 Trade payables

ParticularsAs at 31 March, 2013 As at 31 March, 2012

Trade payables 4,839.13 2,061.58

Total 4,839.13 2,061.58

Note 8 Other current liabilities

Particulars As at 31 March, 2013 As at 31 March, 2012

(a) Current maturities of long-term debt (Refer Note (i) below) 1,693.77

(b) Current maturities of finance lease obligations ( Refer note 24.10) 94.31

(c) Interest accrued and due on borrowings 27.65

(d) Unclaimed dividends 25.70

(e) Other payables

(i) Statutory remittances 67.30

(ii) Payables on purchase of fixed assets 141.51

(iii) Trade / security deposits received 382.86

(iv) Advances from customers 91.93

(v) Expenses Payable including contractually reimbursement expenses 253.78

1,457.65

97.86

32.00

22.11

39.55

40.64

153.72

78.81

121.81

Total 2,778.80 2,044.16

(INR In Lacs) (INR In Lacs)

(INR In Lacs) (INR In Lacs)

(INR In Lacs) (INR In Lacs)

Note (i): Current maturities of long-term debt (Refer Notes Note 4 - Long-term borrowings for details of security and guarantee):

Kwality Dairy (India) LtdNotes forming part of the financial statements

Particulars As at 31 March, 2013 As at 31 March, 2012

(a) Provision for employee benefits:

(i) Provision for bonus 31.36

(ii) Provision for compensated absences 2.86

(iii) Provision for gratuity (net) (Refer Note 24.9) 1.70

35.91

(b) Provision - Others:

2,176.08

(ii) Provision for proposed equity dividend 203.19

(iii) Provision for tax on proposed dividends 32.96

(iv) Provision for Wealth Tax 0.76

2,412.98

Total 2,448.90

19.25

1.29

1.20

21.73

1,255.85

203.19

32.96

1.40

1,493.39

1,515.13

(i) Provision for Income tax (net of advance tax INR 53.28) (As at 31 March, 2012 INR 728.64)

Particulars As at 31 March, 2013 As at 31 March, 2012(INR In Lacs)

Secured

(a) Term loans From Bank (Refer Note-4) 250.00 0.00

250.00 0.00 Unsecured

(a) Term loans From Other Parties (Refer Note-4) 1,441.56 1,441.56

(b) Deferred payment liabilities (Refer Note 24.11.b) 2.21 16.09

1,443.77 1,457.65

Total 1,693.77 1,457.65

Note 9 Short-term provisions

Note 10 Fixed Asstes

DESCRIPTION GROSS BLOCK DEPRECIATION

WDV As OnWDV As On31.03.2013 31.3.2012

Opening As at

01.04.12

AdditionsDuring the

Year

Deduction/Adjustment during

the year

Closing As at

31.03.13

Opening As at

01.04.12

For theYear

31.03.13

Adjustmenton account ofsales/transfer

Closing As at

31.03.13

58.08 339.90 397.98 397.98 58.08

87.43 15.62 103.06 33.23 34.65

639.51 7.12 646.63 314.85 342.16

7,574.27 1,350.68 8,924.95 6,022.02 5,524.90

19.03 12.55 31.58 20.30 10.65

22.40 11.06 33.46 7.26 5.92

8,400.73 1,736.93 10,137.66 6,795.64 5,976.35

511.15 72.52 564.14 370.57 423.11

511.15 72.52 564.14 370.57 423.11

8,911.89 1,809.45 10,701.80 7,166.21 6,399.46

2.09 126.92 129.01 126.96 1.23

2.09 126.92 129.01 126.96 1.23

8.99 851.93 860.92 860.92 8.99

8.99 851.93 860.92 860.92 8.99

8,922.96 2,788.31 11,691.73 8,154.09 6,409.68

Tangible AssetsOwn Assets

Land

Computer

Building

Plant & Machinery

Furniture & Fixture

Vehicles

Total (A)

Leased Assets

Vehicles

Total (B)

Tangible Assets (A) + (B)- 10A

Intangible Assets

Computer Software

Total (C )- 10B

Work in Progress (D)- 10 C

Figures for the Current YearFigures for the Previous Year 5,974.40 2,977.13

-

-

-

-

-

-

-

19.54

19.54

19.54

-

-

-

-

19.54 28.57 8,922.96

-

52.78

297.36

2,049.37

8.39

16.48

2,424.38

88.05

88.05

2,512.43

0.86

0.86

-

-

2,513.28 1,783.60

-

17.05

34.43

853.55

2.90

2.54

910.46

117.23

117.23

1,027.69

1.19

1.19

-

-

1,028.88 749.66

-

-

-

-

-

(7.19)

(7.19)

11.71

11.71

4.52

-

-

-

-

4.52 19.98

-

69.83

331.78

2,902.92

11.28

26.21

3,342.02

193.57

193.57

3,535.59

2.05

2.05

-

-

3,537.64 2,513.28 6,409.68 4,190.80

(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 12 Long-term loans and advances

Particulars As at 31 March, 2013 As at 31 March, 2012

Unsecured considered good

(a) Capital advances 209.28 157.83

(b) Security deposits 28.94 18.34

(c) Loans and advances to related parties (See note 24.8) 0.00 56.34

(d) Mat Credit entitlement 2,678.45 1,736.77

Total 2,916.67 1,969.27

Note 11 Non-current investments

Particulars As at 31 March, 2013 As at 31 March, 2012

Investments (At cost):

A. Trade

Unquoted

(a) Investment in equity instruments

(i) of Wholly Owned subsidiaries 143.20 143.20

(b) (i) of Wholly Owned subsidiaries 421.42 0.00

Share Application Money in Kwality Dairy Products FZE,Dubai

564.62 143.20

Total - Trade (A) 564.62 143.20

Aggregate amount of unquoted investments 564.62 143.20

1 Share (As at 31 March, 2012: 1 Share) of AED1 Million each fully paid up in Kwality Dairy Products FZE, Dubai

Note 13 Inventories

Particulars As at 31 March, 2013 As at 31 March, 2012

(a) Raw materials 93.77

(b) Work-in-progress (Refer Note below) 2,298.48

(c) Finished goods (other than those acquired for trading) 6,972.42

(d) Stock-in-trade (acquired for trading) 232.63

(e) Stores and spares 40.35

(f) Packing Material 228.43

Total 9,866.08

69.35

2,212.98

7,234.73

243.36

24.88

89.10

9,874.39

Note: Details of inventory of work-in-progress

Particulars As at 31 March, 2013 As at 31 March, 2012

Fat/Butter/Cream/Ghee 2,162.27 SMP/WMP/DW/DC/SNF 136.21

2,298.48

648.58

1,564.40

2,212.98

( Refer note 1 (f) for note of valuation for inventories)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 14 Trade receivables

Particulars As at 31 March, 2013 As at 31 March, 2012

Unsecured, considered good 384.86 1.77

384.86 1.77

Less: Provision for doubtful trade receivables 296.13 0.00

88.73 1.77

Other Trade receivables

Unsecured, considered good 93,001.71 65,622.59

93,001.71 65,622.59

Less: Provision for doubtful trade receivables 0.00 0.00

93,001.71 65,622.59

Total 93,090.45 65,624.37

Trade receivables outstanding for a period exceeding six months from the date they were due for payment

Note 15 Cash and Bank Balance

Particulars As at 31 March, 2013 As at 31 March, 2012

Cash and Cash Equivalents :

(a) Cash in hand 60.64 22.52

(b) Balances with banks

(i) In current accounts 2,310.12 696.05

Other Bank Balances

(a) In deposit accounts held against bank guarantee / letter of credit 842.80 148.19

(Refer Note (i) below)

(b) In earmarked accounts

- Unpaid dividend accounts 25.70 22.11

Total 3,239.26 888.86

Note 16 Short-term loans and advances

Particulars As at 31 March, 2013 As at 31 March, 2012

Unsecured considered good

(a) Security deposits 35.61 21.91

(b) Loans and advances to employees 6.10 2.56

(c ) Advance Recoverable in cash or kind or for value to be received 5,595.75 3,704.43

(d) Prepaid Expenses 40.54 14.77

(e) Balances with government authorities

(i) VAT credit receivable 36.45 19.40

(ii) Duty Drawback Receivable 1.42 1.42

(f) Deposit with Haryana Livestock Development Board (Cess) 98.06 79.22

Total 5,813.93 3,843.70

Note 17 Other current assets

Particulars As at 31 March, 2013 As at 31 March, 2012

(a) Unamortised expenses

(i) Deferred Licences Fee 8.79 14.25

(b) Accruals

(i) Interest accrued on Fixed deposits 19.31 1.23

Total 28.10 15.48

Notes:

(i) Balances with banks include deposits amounting to INR 179.90 (As at 31 March, 2012 INR 141.62) which have an maturity of

more than 12 months.

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 18 Revenue from operations

Particulars

(a) Sale of products (Refer Note (i) below) 369,162.28 239,035.42

(b) Sale of services (Refer Note (ii) below) 0.00 427.58

(c) Other Operating Income (Refer Note (iii) below ) 66.38 0.00

Total 369,228.67 239,462.99

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note Particulars

(i) Sale of products comprises :

Manufactured goods

Fat/Butter/Cream/Ghee 76,113.74

SMP/WMP/DW/DC/SNF 56,021.83

Milk/Toned Milk/Double Toned Milk 86,083.05

Curd 17,626.08

Total - Sale of manufactured goods 235,844.71

Traded goods

Fat/Butter/Cream/Ghee 1,639.56

SMP/WMP/DW/DC/SNF 1,524.18

Cattle Feed & Suppliments 26.97

Total - Sale of traded goods 3,190.71 Total - Sale of products 239,035.42

(ii) Sale of services comprises :

Milk Processing & Packing 427.58 Total - Sale of services 427.58

(iii) Other Operating Income comprises :

Income From Export incentive 0.00

Sale of Scrap 0.00

Other 0.00 Total - Other Operative Income

71,597.57

62,472.23

200,110.49

30,473.23

364,653.53

1,686.78

2,611.21

210.76

4,508.75 369,162.28

0.00

60.17

6.04

0.18 66.38 0.00

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note 19 Other income

Particulars

(a) Interest income (Refer Note (i) below) 31.84 3.55

(b) 30.16 0.20

(c ) 9.70 4.83

Total 71.70 8.58

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Net gain on foreign currency transactions and translation (other than considered as finance cost)

Other non-operating income (net of expenses directly attributable to such income) (Refer Note (ii) below)

Note Particulars

(i) Interest income comprises:

Interest from banks on deposits 31.84 3.55

Total - Interest income 31.84 3.55

For the year ended 31 March, 2013

For the year ended 31 March, 2012

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note Particulars

(ii) Other non-operating income comprises:

Profit on sale of fixed assets 0.00 4.11

Miscellaneous income 8.07 0.72

Liability no longer payble 1.62 0.00

Total - Other non-operating income 9.70 4.83

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note 20.a Cost of materials consumed

Particulars

Opening stock 69.35 65.03

Add: Purchases 332,514.07 216,862.95

332,583.42 216,927.98

Less: Closing stock 93.77 69.35

Cost of material consumed 332,489.65 216,858.63

Material consumed comprises:Milk 305,131.83 197,748.39

Butter fat/Ghee 12,681.77 12,658.71

Others 14,676.05 6,451.53

Total 332,489.65 216,858.63

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note 20.b Purchase of traded goods

Particulars

Fat/Butter/Cream/Ghee 1,687.41 1,827.57

SMP/WMP/DW/DC/SNF 2,792.70 1,524.18

Cattle Feed 201.81 27.61

Total 4,681.92 3,379.37

For the year ended 31 March, 2013

For the year ended 31 March, 2012

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 7,205.05 7,478.09

Work-in-progress 2,298.48 2,212.98

9,503.53 9,691.07

Inventories at the beginning of the year:

Finished goods 7,478.09 5280.63

Work-in-progress 2,212.98 889.56

9,691.07 6,170.19

Net (increase) / decrease 187.54 (3,520.88)

For the year ended 31 March, 2013

For the year ended 31 March, 2012

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 21 Employee benefits expense

Particulars

Salaries and wages 1229.52 825.80

Contributions to provident and other funds 33.97 15.88

Gratuity & Leave Encashment (Refer Note 24.9) 30.80 -0.65

Recruitment Expenses 1.53 0.00

Staff welfare expenses 51.86 14.79

Total 1347.68 855.83

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note 22 Finance costs

Particulars

Interest expense on Borrowings 9043.64 6356.27

Other Borrowings Cost 184.23 153.22

Total 9,227.88 6,509.49

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note 23 Other expenses

Particulars

Advertisement & Sales Promotion 317.23 456.98

Bad- Debts & Balances W/off 3.06 2.34

Bank Charges 61.42 9.62

Commission & Brokerage 139.60 99.17

Communication Expenses 36.74 23.27

Consumption of Packing Materials 2160.08 1283.52

Consumption of Stores and Spare Parts 90.46 28.07

Donations and Contributions 2.46 0.10

Export Expenses 79.72 0.00

Insurance 17.22 8.10

Legal and Professional 133.71 153.10

Loss on Fixed Assets Sold 0.35 0.00

Miscellaneous Expenses 204.19 146.34

Payments To Auditors (Refer Note (24.5) 7.50 2.50

Power and Fuel 1420.77 778.18

Printing and Stationery 13.47 16.19

Prior Period Items 30.34 3.10

Processing Charges Of Milk 1519.35 1260.58

Provision For Bad Debts 296.13 0.00

Rates and Taxes 19.46 2.80

Rebate & Discount 22.81 48.55

Rent 109.20 50.90

Repairs and Maintenance - Buildings 59.57 86.75

Repairs and Maintenance - Machinery 223.02 177.85

Transportation Charges 2003.71 585.40

Travelling and Conveyance 173.95 118.53

Vehicle Running Expenses 43.71 30.30

Total 9189.25 5372.23

For the year ended 31 March, 2013

For the year ended 31 March, 2012

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

24.3).The Company has not received information from vendors regarding their status under the Micro, Small 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.

and Medium Enterprises

24.1).Contingent Liabilities :

Particulars As At 31 March, 2013 As At 31 March, 2012

Claim against the company not acknowledged as debts

1166.03 271.81

Nil 32.73

156.97 156.97

Contingent Liability for Bills Discounted 67.97 Nil

Liability under Bank Guarantee 511.07 147.05

Liability under Letter of Credit 3597.54 -

Estimated amount of Contracts remaining to be executed on 1,114.43 84.83

capital account and not provided for

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. 299.59 lacs ( from which a sum of Rs. 98.06 lacs ( pre. Yr Rs. 79.22 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.

Demand by Dy. Excise and Taxation Commissioner relating to Sales Tax /Vat exemption /deferment with interest, against which company has filed an appeal before Joint Excise and Taxation Commissioner (Appeals), Faridabad . The said appeal was settled during the current F.Y.

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.

Particulars As At 31 March, 2013 As At 31 March, 2012

Deferred Tax Liability

Related to Fixed Assets - 46.80

Deferred Tax Assets

Related to Fixed Assets 116.25

Due to Disallowance under the Income Tax Act, 1961 - 0.52

116.25 47.32

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

(INR In Lacs)

(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Net Profit attributable to Equity Shareholders (INR In lacs) 9,652.79 9,098.56

Weighted Average Number of Equity Shares

i) used as denominator for calculating EPS 203,186,434 203,186,434

ii) Nominal value per share (in INR) 1.00 1.00

iii) Basic/Diluted Earning Per Share (in INR) 4.75 4.48

(INR In Lacs)

For the year ended 31 March, 2013

For the year ended 31 March, 2012

24.7). Statement of Earning Per Share

Particulars

Audit Fees 6.50 2.00

Tax Audit Fees 1.00 0.50

7.50 2.50

For the year ended 31 March, 2013

For the year ended 31 March, 2012

24.5). Payment to Auditors :

(INR In Lacs)

Salaries and Allowances 225.00 220.28

For the year ended 31 March, 2013

For the year ended 31 March, 2012

24.6). Managerial Remuneration

24.4).Earnings/ Expenditure etc. In foreign exchange during the year

a) Foreign Exchange Outgo

Capital Transaction

Capital Goods - 13.11

Capital Advance 116.08 -

Capital Investment in Subsidiary - 143.20

Share Application Money 365.08 -

Loan to Subsidiary - 56.34

Revenue Transaction

Raw Material & Purchase Traded Goods 410.06 73.71

Consumable Goods 3.77 -

Professional Fees - 22.71

Foreign Tour & Travels 14.52 4.06

Misc Expenses - 0.12

909.51 313.25

b) Foreign Exchange Earning

Export of goods 3,417.73 -

For the year ended 31 March, 2013

For the year ended 31 March, 2012

For the year ended 31 March, 2013

For the year ended 31 March, 2012

(INR In Lacs)

(INR In Lacs)

Particulars

Particulars

Kwality Dairy (India) LtdNotes forming part of the financial statements

24.8) RELATED PARTY DISCLOSURESAs per Accounting Standard 18 disclosures of transactions with the related parties are given below:

Relationships

1 Subsidiary Company Kwality Dairy Products FZE

2 Key managerial personnel (KMP) Sh. Sanjay Dhingra

Sh. Sidhant Gupta

3 Significant Influence Ms Kanika Dhingra

4 Enterprises on which Key Managerial JTPL Pvt Ltd

person having significant influence Pashupati Dairies Pvt Ltd

Kwality Dairy Investments Pvt Ltd.

5 Relative of Key Managarial Person Ms. Kanika Dhingra

Dr Ved Parkash Gupta

Transactions with related parties during the year

Relationship

Investment in Subsidiary Subsidiary 0.00 143.20

Loans to Subsidiary Subsidiary 0.00 56.34

Share application Money Subsidiary 365.08 0.00

Services Received Enterprises in which S.I. 785.44 938.00

Managerial remuneration KMP 225.00 220.28

Dividend Paid KMP 99.66 99.66

Significant Influence 52.49 52.49

Purchase of Goods Enterprises in which S.I. 0.00 86.29

Sales of Goods Enterprises in which S.I. 0.00 12.82

Royality Enterprises in which S.I. 9.00 9.00

Finance Taken --- Loans Enterprises in which S.I. 1,700.00 3,300.00

Collateral Security/guarantee KMP 1,500.00 4,500.00

Enterprises in which S.I. 0.00 2,000.00

KMP & S.I 3,000.00 0.00

Guarantee taken for Financial Limits KMP & S.I 85,000.00 60,000.00

Shares Pledge for Loan KMP - 3,700.00

For the year ended 31

March, 2013

For the year ended 31

March, 2012

Investment in Subsidiary

Loans to Subsidiary

Share Application Money

Amount Payable in respect of Services recd.

Amount Recoverable

Amount Payable in respect of Loans

Amount Payable in Respect of Royality

Collateral Security/guarantee

Guarantee taken for Financial Limits Shares Pledge for Loan

Relationship

Subsidiary

Subsidiary

Subsidiary

Enterprises in which S.I.

Enterprises in which S.I.Enterprises in which S.I.

Enterprises in which S.I.

KMP

Enterprises in which S.I.

KMP & S.I.

KMP & S.I.

KMP

143.20

0.00

421.42

0.00

211.60

7,500.00

4.05

6,000.00

4,500.00

3,000.00

85,000.00

2,970.00

As At 31 March, 2013

143.20

56.34

0.00

1.15

0.00

5,800.00

8.10

4,500.00

4,500.00

0.00

60,000.00

3,700.00

As At 31 March, 2012

Balances with related parties

Particulars

(INR In Lacs)

Particulars

(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

0.00

0.00

365.08

0.00

0.00

1700.00

For the year ended 31

March, 2013

0.00

0.00

785.44

9.00

0.00

85,000.00

3000.00

1500.00

143.20

56.34

0.00

4500.00

3700.00

3300.00

For the year ended 31

March, 2012

86.29

12.82

938.00

9.00

2,000.00

60,000.00

0.00

0.00

Kwality Dairy Products FZE

-Investment in Capital

-Loans

-Share Application Money

Sanjay Dhingra-Guarantee against loan

-Shares Pledge against loan

Pashupati Dairies Pvt Ltd-Inter Corporate Loans received

-Purchase of Goods

-Sales of Goods

-Services Received

-Royality

JTPL Pvt Ltd

-Collateral Security/guarantee

Sanjay Dhingra & Kanika Dhingra

-Guarantee taken for Financial Limits

-Guarantee against loan

Sidhant Gupta-Collateral Security/guarantee

Disclosures in respect of material transactions with related parties

24.9) .EMPLOYEE BENEFITS :

In accordance with the Accounting Standard 15 (AS-15) encashment based on actuarial valuation done as per Projected Unit Credit Method.

(Revised) 'Employee benefits' the Company has provided for gratuity and leave

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

Expenses recognized in the Income Statement

Current service cost

Net Actuarial (gain)/loss to be recognized

Expenses recognised in Profit and Loss statement

Discount rate current

Salary escalation current

Mortality

Withdrawal rate 18 to 58 Years

Gratuity & Leave

Encashment

33.35

2.74

26.33

-3.92

1.73

60.23

29.1

1.7

30.80

8.75% per annum

5% per annum

LIC 94-96 Ultimate

2% per annum

For the year ended 31 March, 2013

Gratuity & Leave

Encashment

34.95

3.06

13.04

-0.95

-16.75

33.35

16.1

-16.8

(1)

8.25% per annum

5% per annum

LIC 94-96 Ultimate

2% per annum

For the year ended 31 March, 2012

(INR In Lacs)

Name of Parties

(INR In Lacs)

An amount of Rs.30.80 Lacs /-(PY. - Rs. 0.65 Lacs) as contribution towards defined contribution plan is recognized as expense in the Profit & Loss Statement

Kwality Dairy (India) LtdNotes forming part of the financial statements

24.10) Future commitments in respect of assets acquired under Finance Sch:

Particulars As At 31 March, 2013 As At 31 March, 2012

Minimum Installments

Payable within one year

Later than one year but not later than 5 years

Present Value of minimum installments

Payable within one year

Later than one year but not later than 5 years

119.41 127.53

204.44 258.47

94.31 97.86

177.25 219.93

24.11).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 parties:

shares of the Company by such

Name of the party

Kwality Dairy Products FZE Dubai- Investment 564.62

(Maximum anount outstanding during the year INR 564.62 lacs (INR 143.20) (143.20)

Kwality Dairy Products FZE Dubai- Loans And advance

Relationship

Subsidiary

Subsidiary 0.00

(Maximum anount outstanding during the year INR Nil (INR 56.34) (56.34)

Amount outstanding as at 31 March, 2013

(INR in Lacs)

b) Deferred payment liability in respect of a deferement loan from sales tax department.c) Previous year figure have been regrouped/reclassified wherever necessary to correspond with the current year classification/ disclosure.

d) Extraordinary/Exceptional Item

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

Particulars As At 31 March, 2013 As At 31 March, 2012

300.00 0.00

FOR P.P. MUKERJEE & ASSOCIATES

Chartered Accountants

Firm's Registration No.023276N

sd/-(Sidhant Gupta)Executive Director

sd/-(Deepa Kapoor)

Company Secretary Place : New Delhi

Date : 5th, July, 2013

(Sanjay Dhingra)Managing Director

sd/-CA P.P. Mukerjee

Membership No.:089854

Proprietor

sd/-

As per our Report of even date On Behalf of Board of Directors

(INR In Lacs)

(INR In Lacs)

Report on the Financial Statements

We have audited the accompanying Consolidated Financial Statements of M/s Kwality Dairy (India ) Limited (‘’the Company’’) and its subsidiary, which comprise the Consolidated Balance Sheet as at March 31, 2013, 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.

Management’s 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. 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.

Auditor’s 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 auditor’s 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 Company’s preparation and fair presentation of the Consolidated Financial Statements in order to design audit procedures that are appropriate in the circumstances. 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 Consolidate Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(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

Firm’s Registration Number 023276N

Sd/-

P. P. Mukerjee

Place : New Delhi Proprietor

Date : 05.07.2013 Membership Number 089854

Independent Auditor’s ReportTo The Members Of Kwality Dairy (india ) Limited

AU

DIT

OR

'S R

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BA

LAN

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SO

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ATE

D)

Kwality Dairy (India) LtdConsolidated Balance Sheet as at 31 March, 2013

ParticularsAs at 31 March, 2013 As at 31 March, 2012

A EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital 2 2,031.86 2,031.86

(b) Reserves and surplus 3 26,420.95 16,066.62

28,452.81 18,098.48

2 Non-current liabilities

(a) Long-term borrowings 4 11,281.22 10,239.41

(b) Deferred tax liabilities (net) 23.2 0.00 47.32

(c) Long-term provisions 5 55.67 30.86

11,336.89 10,317.59

3 Current liabilities

(a) Short-term borrowings 6 83,124.95 55,008.23

7 9,175.14 2,541.66

(c) Other current liabilities 8 2,788.62 2,044.86

(d) Short-term provisions 9 2,448.90 1,515.13

97,537.61 61,109.87

TOTAL 137,327.32 89,525.94

B ASSETS

1 Non-current assets

(a) Fixed assets

(i) Tangible assets 10.A 7,182.97 6,400.98

(ii) Intangible assets 10.B 126.96 1.23

(iii) Capital work-in-progress 10.C 860.92 8.99

8,170.85 6,411.20

(b) Long-term loans and advances 11 2,926.36 1,919.68

23.2 116.25 -

11,213.45 8,330.88

2 Current assets

(a) Inventories 12 10,328.83 10,005.69

(b) Trade receivables 13 100,910.04 66,020.62

(c) Cash and cash equivalents 14 8,809.88 1,309.58

(d) Short-term loans and advances 15 6,035.25 3,843.70

(e) Other current assets 16 29.86 15.48

126,113.86 81,195.07

TOTAL 137,327.32 89,525.94

Notes forming part of the financial statements 1-23

Note No.

(b) Trade payables

(c) Deffered Tax Assets (Net)

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

CA P.P. MukerjeeProprietorMembership No.:089854

Sd/-(Sanjay Dhingra)

Managing Director

Sd/-(Sidhant Gupta)

Executive Director

Sd/-(Deepa Kapoor)

Company SecretaryPlace : New DelhiDate : 5th July, 2013

(INR In Lacs)(INR In Lacs)

Sd/-

Kwality Dairy (India) LtdConsolidated Statement of Profit and Loss for the year ended 31 March, 2013

Revenue from operations

Other income

Total revenue (1+2)

Expenses

(a) Cost of materials consumed

(b) Purchases of stock-in-trade

(d) Employee benefits expense

(e) Finance costs

(g) Other expenses

Total expenses

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

Extraordinary / Exceptional Items

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

Tax expense:

(a) Tax expense for current year

(b) (Less): MAT credit related to current year

(b) (Less): MAT credit related to previous year

(c) Tax expense relating to prior years

(d) Net current tax expense

(e) Deferred tax

Profit / (Loss) from operations (7-8)

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

(a) Basic

(b) Diluted

Notes forming part of the financial statements

(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade

(f) Depreciation and amortisation expense

Particulars

1 17 392,967.66 241,623.43

2 18 73.42 8.58

3 393,041.08 241,632.01

4

19.a 332,489.65 216,858.63

19.b 27,455.39 5,493.24

19.c (143.91) (3,652.18)

20 1,379.18 858.82

21 9,307.03 6,509.49

10 1,029.94 749.66

22 9,468.24 5,411.09

380,985.50 232,228.76

5 12,055.57 9,403.25

6 300.00 0.00

7 11,755.57 9,403.25

8

2,230.70 1,984.49

(941.97) (1,016.04)

0.00 (720.72)

69.63 (41.50)

1,358.36 206.23

(163.57) (37.55)

1,194.79 168.68

9 10,560.79 9,234.58

10

5.20 4.54

5.20 4.54

1-23

Note No.

For the year ended 31 March, 2013

For the year ended 31 March, 2012

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. MukerjeeProprietorMembership No.:089854

Sd/-(Sanjay Dhingra)

Managing Director

Sd/-(Sidhant Gupta)

Executive Director

Sd/-(Deepa Kapoor)

Company SecretaryPlace : New DelhiDate : 5th July, 2013

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Consolidated Cash Flow Statement for the year ended 31 March, 2013

Particulars

12,055.57 9,403.25

1,029.94 749.66

5.90 5.90

0.35 (4.11)

9,307.03 6,509.49

(33.56) (3.55)

(1.62) 0.00

296.13 0.00

3.06 2.34

(30.16) 0.00

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

Net Exchange Gain/loss

Other non-cash charges 28.46 10,605.51 (0.51) 7,259.22

22,661.08 16,662.47

(323.14) (3,663.75)

(34,889.42) (24,559.53)

(2,191.55) (167.28)

0.00 (0.97)

(1,400.99) (88.70)

(15.39) (9.69)

24.81 0.00

6,633.49 433.54

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 225.70 (31,936.50) 12.72 (28,043.66)

(9,275.42) (11,381.18)

(300.00) 0.00

(1,394.81) (2,064.63)

(10,970.24) (13,445.82)

(2,845.13) (3,102.49)

3.61 12.70

1.85 (4.70)

0.00 (1.85)

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

Loans given- Subsidiaries

Interest received 33.56 3.55 (2,806.11) (3,092.79)

5,137.20 6,118.30 (3,834.76) (4,752.82)

28,116.72 22,989.29

(9,307.03) (6,509.49)

(203.19) (203.30)

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 (33.29) (32.96)

Net cash flow from / (used in) financing activities (C) 19,875.66 17,609.02

6,099.31

1,138.01 1,070.40

67.61

7237.32 1138.01

8,809.88 1,309.58

(1,572.56) (171.57)

7237.32 1138.01

7237.32 1138.01

64.86 156.66

7,172.46 7237.32 981.35 1138.01

Notes forming part of the financial statements (1-23)

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Less: Bank balances not considered as Cash and cash equivalents as

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

Cash and cash equivalents as per Balance Sheet (Refer Note 14)

Cash and cash equivalents at the end of the year *

* Comprises:(a) Cash on hand(b) Balances with banks (In Current Accounts)

Reconciliation of Cash and cash equivalents with the Balance Sheet:

defined in AS 3 Cash Flow Statements (give details)

Net Cash and cash equivalents (as defined in AS 3 CFS)

Sd/-CA P.P. MukerjeeProprietorMembership No.:089854

Sd/-(Sanjay Dhingra)

Managing Director

Sd/-(Sidhant Gupta)

Executive Director

Place : New DelhiDate : 5th July, 2013

Sd/-(Deepa Kapoor)

Company Secretary

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

(INR In Lacs)(INR In Lacs)(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes Forming Part of Financial Statements

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 in accordance with the generally accepted accounting principles , Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof. The accounting policies have been consistently applied by the Company and are consistent with those used in previous year.

(b) Use of Estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions , that affect the application of accounting policies and reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented . Actual results may differ from these estimates . Estimates and underlying assumptions are revieved on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates is revised and results in future periods are affected.

(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.Sale comprise amounts invoiced for goods sold and does not include sales tax/vat or any other tax levied on sales, and are net of sales returns, trade discounts and rebates.

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.

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) 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.

(e) 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.

(f) Inventories :

Inventories are valued at the lower of cost and estimated net realizable value . Cost of work-in -process and finished goods includes manufacturing overheads. Net realisable value is estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

(g) 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.

(h) Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in estimate of recoverable amount.

As per assesment conducted by the Company at March 31, 2013 there were no indications that the fixed assets have suffered an impairment loss.

Kwality Dairy (India) LtdNotes Forming Part of Financial Statements

(i) Foreign Exchange Transactions

Foreign currency transactions during the year are recorded at the rates of exchange prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated into rupees at the rates of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the statement of Profit and Loss account.

(j) 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.

(k) 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.

(l) 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.

(m) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

(n) 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.

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 2 Share capital

Particulars As at 31 March, 2013

As at 31 March, 2012

(a) Authorised

100,00,00,000 Equity Shares of INR 1/ -

each

( March 31, 2012 : 100,00,00,000 Equity Share of INR 1/ -

each)

10,000.00

10,000.00

10,000.00

10,000.00

(b) Issued ,Subscribed and fully paid up

2,031.86

2,031.86

20,31,86,434 Equity Shares of INR1/-

each fully paidup

(March 31,2012 : 20,31,86,434 Equity Shares of INR1/ -

each fully

paid-up)

Total

2,031.86 2,031.86 Refer Notes (i) to (v) below

(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Particulars As at 31 March,

2013

As at 31 March,

2013

As at 31 March,

2012

As at 31 March, 2012

No. of Shares Amount (INR in Lac) No. of Shares

Equity Shares at the beginning of the year 203,186,434

2,031.86

203,186,434 2,031.86

Add: Shares issued during the year -

-

- -

Equity Shares at the end of the year 203,186,434

2,031.86

203,186,434 2,031.86

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

- The Company has only one class of shares referred to as equity shares having a par value of INR 1/-per share. Each holder of equity shares is entitled to one vote per share.

- 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 2013 , 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 holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Class of shares / Name of shareholder

Number of shares held

% holding of shares

Number of shares held

% holding of shares

Equity shares with voting rights

Sanjay Dhingra 99660714 49.05 99660714 49.05

Kanika Dhingra 52494000 25.84 52494000 25.84

(iii) Details of shares held by each shareholder holding more than 5% shares:

As at 31 March, 2013 As at 31 March, 2012

(iv) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash, 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 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

(INR In Lacs)(INR In Lacs)

Amount (INR in Lac)

ParticularsNo. of Shares

Equity shares with voting rights

Fully paid up by way of bonus shares

Year 2012-13-

Year 2011-12-

Year 2010-1121186434

Year 2009-10-

Year 2008-09-

(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.

Note 3 Reserves and surplus

Particulars As at 31 March, 2013 As at 31 March, 2012

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

Foreign Currency Transaction Reserve 24.98 (4.71)

24.98 (4.71)

(b) Surplus / (Deficit) in Statement of Profit and Loss

Opening balance 16,071.33 7,072.96

Add: Profit / (Loss) for the year 10,560.79 9,234.51

26,632.12 16,307.47

Less:

Proposed Dividends on equity share (INR .10 per share) 203.19 203.19

Tax on dividend 32.96 32.96

Closing balance 26,395.97 16,071.33

Total 26,420.95 16,066.62

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

Note 4 Long-term borrowings

Particulars As at 31 March, 2013 As at 31 March, 2012

183.02 219.93 [Refer Note (i) for detail of maturity period, repayment term & Interest ]

[Secured by hypothecation of assets (vehicles) taken on lease ]

(b) Term loans From Bank 2,000.00 0.00

[Refer Note (ii) for detail of maturity period, repayment terms]

[Refer Note (ii) below for detail of Security]

2,183.02 219.93

(2) Unsecured

(a) Term loans From Other Parties 1,077.92 2,519.48

[Refer Note (iii) for detail of maturity period, repayment terms]

[Refer Note (iii) below for detail of Security]

(b) Loans and advances from related parties 7,500.00 5,800.00 [Refer Note (iv) below ]

(c) Loans and advances from other parties 520.28 1,700.00

[Refer Note (v) below ]

9098.20 10019.48

Total 11,281.22 10,239.41

(1) Secured

(a) Long-term maturities of finance lease obligations

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Maturity Schedule of Long term finance debt

Financial year Installment to be paid

F.y. 2013-14 1691.56

F.y. 2014-15 1577.92

F.y. 2015-16 500.00

F.y. 2016-17 500.00

F.y. 2017-18 500.00

Total Amount 4769.49

iii.a) The loan amounting INR 1428.56 lacs will be payable in 6 installment in next 2 years. Loan is secured by way of first mortgage/ charge on the immovable property in the name of related enterprise situated in Mohali Punjab and further secured by personal guarantee of Director of company.iii.b)The loan amounting INR1090.90 lacs will be payble in 8 equal installment in next 2 years. Loan is secured by way of pledge shares of Mr. Sanjay Dhingra (Director of the Co.) .Pledge value of the shares ( 1crore shares ) was INR 2970 lacs as on 31.03.2013 and further secured by first mortgage/charge on the immovable property in the name of related enterprise (landed property at Mohali) & personal guarantee by Director of Co.

iv) 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.v) 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.

Notes:

i). Rate of Interest for finance lease obligations ranging from 8.67 to 13.5 . to 60 Months. Period of maturity for lease obligations ranging from 3 year to 5 year.ii) The loan amounting INR 2250.00 lacs will be payable in 18 installment in next 5 years. Loan is secured by way of first mortgage/ charge on the immovable property in the name of Director & Other party situated at Golden Park, Rampura Road, Basai Darapur, New Delhi and second paripassu charge on fixed assets of the company. Further loan in also secured by personal guarantee of shareholders of the Company.

No. of repayment installments for lease obligation ranging from 36

Particulars As at 31 March, 2013 As at 31 March, 2012

a) IDBI Bank Ltd ( Total INR 2250.00 Lacs) 2000.00 -

2000.00 0.00

iii)

Particulars As at 31 March, 2013 As at 31 March, 2012

a) Tata Capital Limited ( Total INR 1428.56 Lacs) 714.28 1,428.57 b) L& T Finance Ltd (Total INR 1090.90 Lacs) 363.64 1,090.91

Total Long Term Loans 1077.92 2,519.48

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 5 Long-term provisions

ParticularsAs at 31 March, 2013 As at 31 March, 2012

(a) Provision for employee benefits:

(i) Provision for compensated absences 22.16 11.22

(ii) Provision for gratuity (net) (Refer Note 23.9) 33.52 19.64

55.67 30.86

Total 55.67 30.86

Note 6 Short-term borrowings

ParticularsAs at 31 March, 2013 As at 31 March, 2012

(1) Secured

(a) Loans From Banks

Cash Credit Facilities # 83,124.95 54,863.24

(2) Unsecured 0.00 144.99

Total 83,124.95 55,008.23

# Cash Credit facilities are secured by hypothecation of existing and future current assset of the company viz stock of Raw

material,stock in process, semi finished goods, finished goods, stores, bills receivables and books debts and all movable &

Immovable fixed assets. Further Cash credit facilities are secured by personal guarantee of shareholders of the Company.

Note 7 Trade payables

ParticularsAs at 31 March, 2013 As at 31 March, 2012

Trade payables 9,175.14 2,541.66

Total 9,175.14 2,541.66

Note 8 Other current liabilities

Particulars As at 31 March, 2013 As at 31 March, 2012

(a) Current maturities of long-term debt (Refer Note (i) below) 1,693.77 1,457.65

(b) Current maturities of finance lease obligations ( Refer note 23.10) 96.23 97.86

(c) Interest accrued and due on borrowings 27.65 32.00

(d) Unclaimed dividends 25.70 22.11

(e) Other payables

(i) Statutory remittances 67.30 39.55

(ii) Payables on purchase of fixed assets 141.51 40.64

(iii) Trade / security deposits received 382.86 153.72

(iv) Advances from customers 91.93 78.81

(v) Expenses Payable including contractually reimbursement expenses 261.67 122.51

Total 2,788.62 2,044.86

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Note (i): Current maturities of long-term debt (Refer Notes Note 4 - Long-term borrowings for details of security and guarantee):

Kwality Dairy (India) LtdNotes forming part of the financial statements

ParticularsAs at 31 March, 2013 As at 31 March, 2012

Secured

(a) Term loans From Bank (Refer Note-4) 250.00 0.00

250.00 0.00

Unsecured

(a) Term loans From Other Parties (Refer Note-4) 1,441.56 1,441.56

(b) Deferred payment liabilities (Refer Note 23.11.b) 2.21 16.09 1,443.77 1,457.65

Total 1,693.77 1,457.65

Note 9 Short-term provisions

ParticularsAs at 31 March, 2013 As at 31 March, 2012

31.36 19.25

2.86 1.29

1.70 1.20

35.91 21.73

2,176.08 1,255.85

203.19 203.19

32.96 32.96

0.76 1.40

2,412.98 1,493.39

Total 2,448.90 1,515.13

(a) Provision for employee benefits:

(i) Provision for bonus

(ii) Provision for compensated absences

(iii) Provision for gratuity (net) (Refer Note 23.9)

(b) Provision - Others:

(ii) Provision for proposed equity dividend

(iii) Provision for tax on proposed dividends

(iv) Provision for Wealth Tax

(i) Provision for Income tax (net of advance tax INR 53.28) (As at 31 March, 2012 INR 728.64)

Deduction/Adjustment during

the year

DESCRIPTION GROSS BLOCK DEPRECIATIONWDV As On WDV As On31.03.2013 31.3.2012

Opening

As at

01.04.12

AdditionsDuring the

Year

Closing As at

31.03.13

Opening

As at

01.04.12

For the

Year

31.03.13

Adjustmenton account ofsales/transfer

Closing As at

31.03.13Tangible AssetsOwn Assets

Land - 397.98 58.08

Computer - 33.54 34.65

Building - 314.85 342.16

Plant & Machinery - 6,022.89 5,526.42

Furniture & Fixture - 22.50 10.65

Vehicles - 7.26 5.92

Total (A) - 6,799.01 5,977.87

Leased Assets

Vehicles 19.54 383.95 423.11

Total (B) 19.54 383.95 423.11

Tangible Assets (A) + (B)- 10A 19.54 7,182.97 6,400.98

Intangible Assets

Computer Software - 126.96 1.23

Total (C )- 10B - 126.96 1.23

Work in Progress (D)- 10 C - 860.92 8.99

- 860.92 8.99

Figures for the Current Year 19.54 8,170.85 6,411.20 Figures for the Previous Year

58.08

88.10

639.51

7,574.27

19.95

22.40

8,402.32

511.15

511.15

8,913.47

2.09

2.09

8.99

8.99

8,924.55 5,974.40

339.90

15.62

7.12

1,351.63

14.19

11.06

1,739.52

86.36

86.36

1,825.89

126.92

126.92

851.93

851.93

2,804.74 2,977.13 28.57

397.98

103.59

646.63

8,925.90

34.14

33.46

10,141.71

577.98

577.98

10,719.69

129.01

129.01

860.92

860.92

11,709.61 8,922.96

-

52.81

297.36

2,049.37

8.42

16.48

2,424.44

88.05

88.05

2,512.49

0.86

0.86

-

-

2,513.35 1,783.60

-

17.25

34.43

853.63

3.22

2.54

911.06

117.68

117.68

1,028.75

1.19

1.19

-

-

1,029.94 749.66

-

-

-

-

-

(7.19)

(7.19)

11.71

11.71

4.52

-

-

-

-

4.52 19.98

-

70.05

331.78

2,903.01

11.65

26.21

3,342.69

194.02

194.02

3,536.72

2.05

2.05

-

-

3,538.76 2,513.28 6,409.68 4,190.80

Note 10 Fixed Assets

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

KWALITY DAIRY (INDIA) LIMITEDNotes forming part of the financial statements

Note 11 Long-term loans and advances

Particulars As at 31 March, 2013 As at 31 March, 2012

Unsecured considered good

(a) Capital advances 209.28 157.83

(b) Security deposits 38.63 23.23

(c) Loans and advances to related parties (See note 23.8) 0.00 1.85

(d) Mat Credit entitlement 2,678.45 1,736.77

Total 2,926.36 1,919.68

Note 12 Inventories

Note: Details of inventory of work-in-progress

Particulars

Fat/Butter/Cream/Ghee

SMP/WMP/DW/DC/SNF

(Refer note 1 (f) for note of valuation for inventories)

As at 31 March, 2013 As at 31 March, 2012

2,162.27 648.58

136.21 1,564.40

2,298.48 2,212.98

Particulars As at 31 March, 2013

(a) Raw materials 93.77

69.35

(b) Work-in-progress (Refer Note below) 2,298.48

2,212.98

(c) Finished goods (other than those acquired for trading) 6,972.42

7,234.73

(d) Stock-in-trade (acquired for trading) 695.38

374.66

(e) Stores and spares 40.35

24.88

(f) Packing Material 228.43

89.10

Total 10,328.83

10,005.69

As at 31 March, 2012

Note 13 Trade receivables

Particulars

Trade receivables outstanding for a period exceeding six

months from the date they were 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, 2013 As at 31 March, 2012

384.86

384.86

296.13

88.73

100,821.31

100,821.31

0.00

100,821.31

100,910.04

1.77

1.77

0.00

1.77

66,018.85

66,018.85

0.00

66,018.85

66,020.62

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Note 14 Cash and Bank Balance

Particulars As at 31 March, 2013 As at 31 March, 2012

Cash and Cash Equivalents :

(a) Cash in hand 64.86 156.66

(b) Balances with banks

(i) In current accounts 7,172.46 981.35

Other Bank Balances

(a) In deposit accounts held against bank guarantee / letter of credit 1,546.87 148.19

(Refer Note (i) below)

(b) in deposit accounts 0.00 1.27

(c) In earmarked accounts

- Unpaid dividend accounts 25.70 22.11

Total 8,809.88 1,309.58

Notes:

Note 15 Short-term loans and advances

Particulars As at 31 March, 2013 As at 31 March, 2012

Unsecured considered good

(a) Security deposits 35.61 21.91

(b) Loans and advances to employees 6.10 2.56

(c ) Advance Recoverable in cash or kind or for value to be received 5,810.56 3,704.43

(d) Prepaid Expenses 47.05 14.77

(e) Balances with government authorities

(i) VAT credit receivable 36.45 19.40

(ii) Duty Drawback Receivable 1.42 1.42

(f) Deposit with Haryana Livestock Development Board (Cess) 98.06 79.22

Total 6,035.25 3,843.70

Note 16 Other current assets

Particulars As at 31 March, 2013 As at 31 March, 2012

(a) Unamortised expenses

(i) Deferred Licences Fee 8.79 14.25

(b) Accruals

(i) Interest accrued on Fixed deposits 21.07 1.23

Total 29.86 15.48

(i) Balances with banks include deposits amounting to INR 179.90 (As at 31 March, 2012 INR 141.62) which have an maturity of than 12 months.

more

KWALITY DAIRY (INDIA) LIMITEDNotes forming part of the financial statements

Note 17 Revenue from operations

Particulars

(a) Sale of products (Refer Note (i) below) 392,901.27 241,195.85

(b) Sale of services (Refer Note (ii) below) 0.00 427.58

(c) Other Operating Income (Refer Note (iii) below ) 66.38 0.00

Total 392,967.66 241,623.43

For the year ended 31 March, 2013

For the year ended 31 March, 2012

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Notes forming part of the financial statementsKwality Dairy (India) Ltd

Note

Particulars

(i) Sale of products comprises :

Manufactured goods

Fat/Butter/Cream/Ghee 71,597.57 76,113.74

SMP/WMP/DW/DC/SNF 62,472.23 56,021.83

Milk/Toned Milk/Double Toned Milk 200,110.49 86,083.05

Curd 30,473.23 17,626.08

Total - Sale of manufactured goods 364,653.53 235,844.71

Traded goods

Fat/Butter/Cream/Ghee 5,222.60 1,639.56

SMP/WMP/DW/DC/SNF 22,814.38 3,684.62

210.76 26.97

Total - Sale of traded goods 28,247.74 5,351.15 Total - Sale of products 392,901.27 241,195.85

(ii) Sale of services comprises :

Milk Processing & Packing 0.00 427.58 Total - Sale of services 0.00 427.58

(iii) Other Operating Income comprises :

Income From Export incentive 60.17 0.00

Sale of Scrap 6.04 0.00

Other 0.18 0.00

Total - Other Operative Income 66.38 0.00

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Cattle Feed & Suppliments

Note 18 Other income

Particulars

(a) Interest income (Refer Note (i) below) 33.56

(b) 30.16

(c ) 9.70

Total 73.42 8.58

For the year ended 31 March, 2013

3.55

0.20

4.83

For the year ended 31 March, 2012

Net gain on foreign currency transactions and translation (other than considered as finance cost)

Other non-operating income (net of expenses directly attributable to such income) (Refer Note (ii) below)

Note Particulars

(i) Interest income comprises:

Interest from banks on deposits 33.56 3.55

Total - Interest income 33.56 3.55

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Note Particulars

(ii) Other non-operating income comprises:

Profit on sale of fixed assets 0.00 4.11

Miscellaneous income 8.07 0.72

Liability no longer payble 1.62 0.00 Total - Other non-operating income 9.70 4.83

For the year ended 31 March, 2013

For the year ended 31 March, 2012

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Note 19.a Cost of materials consumed

Note 19.b Purchase of traded goods

Note 19.c Changes in inventories of finished goods, work-in-progress and stock-in-trade

Particulars

Opening stock 69.35 65.03

Add: Purchases 332,514.07 216,862.95

332,583.42 216,927.98

Less: Closing stock 93.77 69.35

Cost of material consumed 332,489.65 216,858.63

Material consumed comprises:Milk 305,131.83 197,748.39

Butter fat/Ghee 12,681.77 12,658.71

Others 14,676.05 6,451.53

Total 332,489.65 216,858.63

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Particulars

Fat/Butter/Cream/Ghee 5,056.27 1,827.57

SMP/WMP/DW/DC/SNF 22,197.30 3,638.05

Cattle Feed 201.81 27.61

Total 27,455.39 5,493.24

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Particulars

Inventories at the end of the year:

Finished goods 7,667.80 7,609.39

Work-in-progress 2,298.48 2,212.98

9,966.28 9,822.37

Inventories at the beginning of the year:

Finished goods 7,609.39 5280.63

Work-in-progress 2,212.98 889.56

9,822.37 6,170.19

Net (increase) / decrease (143.91) (3,652.18)

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Notes forming part of the financial statementsKwality Dairy (India) Ltd

(INR In Lacs)(INR In Lacs)

(INR In Lacs) (INR In Lacs)

(INR In Lacs) (INR In Lacs)

Kwality Dairy (India) LtdNotes forming part of the financial statements

Note 20 Employee benefits expense

For the year ended

31 March, 2013

For the year ended

31 March, 2012

Salaries and wages 1261.02 828.79

Contributions to provident and other funds 33.97 15.88

Gratuity & Leave Encashment (Refer Note 23.9) 30.80 -0.65

Recruitment Expenses 1.53 0.00

Staff welfare expenses 51.86 14.79

Total 1379.18 858.82

Note 21 Finance costs

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Interest expense on Borrowings 9122.79 6356.27

Other Borrowings Cost 184.23 153.22

Total 9,307.03

6,509.49

Note 22 Other expenses

For the year ended

31 March, 2013

For the year ended

31 March, 2012

Advertisement & Sales Promotion 352.81 456.98

Bad- Debts & Balances W/off 3.06 2.34

Bank Charges 61.42 9.78

Commission & Brokerage 295.07 99.17

Communication Expenses 39.25 23.57

Consumption of Packing Materials 2160.08 1283.52

Consumption of Stores and Spare Parts 90.46 28.07

Donations and Contributions 2.46 0.10

Export Expenses 79.72 0.00

Insurance 18.18 8.10

Legal and Professional 154.16 159.17

Loss on Fixed Assets Sold 0.35 0.00

Miscellaneous Expenses 212.27 151.97

Payments To Auditors (Refer Note (23.5) 7.50 2.50

Power and Fuel 1420.77 778.27

Printing and Stationery 14.01 16.28

Prior Period Items 30.34 3.10

Processing Charges of Milk 1519.35 1260.58

Provision For Bad Debts 296.13 0.00

Rates and Taxes 19.46 2.80

Rebate & Discount 22.81 48.55

Rent 149.31 76.45

Repairs and Maintenance - Buildings 59.57 86.75

Repairs and Maintenance - Machinery 223.02 177.85

Transportation Charges 2017.37 585.40

Travelling and Conveyance 175.61 119.49

Vehicle Running Expenses 43.71 30.30

Total 9468.24 5411.09

Particulars

Particulars

Particulars

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

(INR In Lacs)(INR In Lacs)

Claim against the company not acknowledged as debts

1166.03 271.81

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. 299.59 lacs ( from which a sum of Rs. 98.06 lacs ( pre. Yr Rs. 79.22 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 67.97 Nil

Liability under Bank Guarantee 511.07 147.05

Liability under Letter of Credit 3597.54 -

Estimated amount of Contracts remaining to be executed on 1,114.43 84.83

capital account and not provided for

156.97 156.97A 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.

Nil 32.73

Demand by Dy. Excise and Taxation Commissioner relating to Sales Tax /Vat exemption /deferment with interest, against which company has filed an appeal before Joint Excise and Taxation Commissioner (Appeals), Faridabad . The said appeal was settled during the current F.Y.

23.1).Contingent Liabilities :

Particulars As At 31 March, 2013 As At 31 March, 2012

As At 31 March, 2013 As At 31 March, 2012Particulars

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

Deferred Tax Liability

Related to Fixed Assets - 46.80

Deferred Tax Assets

Related to Fixed Assets 116.25

- 0.52

116.25 47.32

Due to Disallowance under the Income Tax Act, 1961

23.3).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 Dairy (India) LtdNotes forming part of the financial statements

(INR In Lacs)

(INR In Lacs)

23.4).Earnings/ Expenditure etc. in foreign exchange during the year

a) Foreign Exchange Outgo

Capital Transaction

Capital Goods - 13.11

Capital Advance 116.08 -

Capital Investment in Subsidiary - 143.20

Share Application Money 365.08 -

Loan to Subsidiary - 56.34

Revenue Transaction

Raw Material & Purchase Traded Goods 410.06 73.71

Consumable Goods 3.77 -

Professional Fees - 22.71

Foreign Tour & Travels 14.52 4.06

Misc Expenses - 0.12

909.51 313.25

For the year ended 31 March, 2013

For the year ended 31 March, 2012

b) Foreign Exchange Earning

Export of goods 3,417.73 -

For the year ended 31 March, 2013

For the year ended 31 March, 2012

23.5). Payment to Auditors :

Particulars

Audit Fees 6.50 2.00

Tax Audit Fees 1.00 0.50

7.50 2.50

For the year ended 31 March, 2013

For the year ended 31 March, 2012

23.6). Managerial Remuneration

Salaries and Allowances 225.00 220.28

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Kwality Dairy (India) LtdNotes forming part of the financial statements

(INR In Lacs)

(INR In Lacs)

(INR In Lacs)

(INR In Lacs)

Particulars

23.7). Statement of Earning Per Share

Net Profit attributable to Equity Shareholders (INR In lacs) 10,560.79

9,234.58

Weighted Average Number of Equity Shares

i) used as denominator for calculating EPS 203,186,434 203,186,434

ii) Nominal value per share (in INR) 1.00 1.00

iii) Basic/Diluted Earning Per Share (in INR) 5.20 4.54

For the year ended

31 March, 2013

For the year ended

31 March, 2012

Kwality Dairy (India) LtdNotes forming part of the financial statements

23.8) 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

2 Key managerial personnel (KMP) Sh. Sanjay Dhingra

Sh. Sidhant Gupta

3 Significant Influence Ms Kanika Dhingra

4 Enterprises on which Key Managerial JTPL Pvt Ltd

person having significant influence Pashupati Dairies Pvt Ltd

Kwality Dairy Investments Pvt Ltd.

5 Relative of Key Managarial Person Ms. Kanika Dhingra

Dr Ved Parkash Gupta

Transactions with related parties during the year

Relationship

Investment in Subsidiary Subsidiary 0.00 143.20

Loans to Subsidiary Subsidiary 0.00 56.34

Share application Money Subsidiary - 0.00

Services Received Enterprises in which S.I. 785.44 938.00

Managerial remuneration KMP 225.00 220.28

Dividend Paid KMP 99.66 99.66

Significant Influence 52.49 52.49

Purchase of Goods Enterprises in which S.I. 0.00 86.29

Sales of Goods Enterprises in which S.I. 0.00 12.82

Royality Enterprises in which S.I. 9.00 9.00

Finance Taken --- Loans Enterprises in which S.I. 1,700.00 3,300.00

Collateral Security/guarantee KMP 1,500.00 4,500.00

Enterprises in which S.I. 0.00 2,000.00

KMP & S.I 3,000.00 0.00

Guarantee taken for Financial Limits KMP & S.I 85,000.00 60,000.00

Shares Pledge for Loan KMP - 3,700.00

For the year ended 31

March, 2013

For the year ended 31

March, 2012

(INR In Lacs)

(INR In Lacs)

Particulars

Particulars

Kwality Dairy (India) LtdNotes forming part of the financial statements

Balances with related parties

Relationship

Investment in Subsidiary Subsidiary 143.20 143.20

Loans to Subsidiary Subsidiary 0.00 56.34

Share Application Money Subsidiary 421.42 0.00

Amount Payable in respect of Services recd. Enterprises in which S.I. 0.00 1.15

Amount Recoverable Enterprises in which S.I. 211.60 0.00

Amount Payable in respect of Loans Enterprises in which S.I. 7,500.00 5,800.00

Amount Payable in Respect of Royality Enterprises in which S.I. 4.05 8.10

Collateral Security/guarantee KMP 6,000.00 4,500.00

Enterprises in which S.I. 4,500.00 4,500.00

KMP & S.I. 3,000.00 0.00

Guarantee taken for Financial Limits KMP & S.I. 85,000.00 60,000.00

Shares Pledge for Loan KMP 2,970.00 3,700.00

Disclosures in respect of material transactions with related parties

Kwality Dairy Products FZE

-Investment in Capital 0.00 143.20

-Loans 0.00 56.34

-Share Application Money 0.00 0.00

Sanjay Dhingra-Guarantee against loan 0.00 4500.00

-Shares Pledge against loan 0.00 3700.00

Pashupati Dairies Pvt Ltd-Inter Corporate Loans received 1700.00 3300.00

-Purchase of Goods 0.00 86.29

-Sales of Goods 0.00 12.82

-Services Received 785.44 938.00

-Royality 9.00 9.00

JTPL Pvt Ltd

-Collateral Security/guarantee 0.00 2,000.00

Sanjay Dhingra & Kanika Dhingra

-Guarantee taken for Financial Limits 85,000.00 60,000.00

-Guarantee against loan 3000.00 0.00

Sidhant Gupta-Collateral Security/guarantee 1500.00 0.00

As At 31 March, 2013

As At 31 March, 2012

For the year ended 31

March, 2013

For the year ended 31

March, 2012

(INR In Lacs)

Particulars

Name of Parties

(INR In Lacs)

Defined Benefit Plan

Change in Benefit Obligation Gratuity & Leave Gratuity & Leave

Encashment Encashment

Liability at the beginning of the year 33.35 34.95

Interest Cost 2.74 3.06

Current service cost 26.33 13.04

Benefit Paid -3.92 -0.95

Actuarial (gain)/loss on obligation 1.73 -16.75

Liability at the end of year-recognized in the Balance Sheet 60.23 33.35

Expenses recognized in the Income Statement

Current service cost 29.1 16.1

Net Actuarial (gain)/loss to be recognized 1.7 -16.8

Expenses recognised in Profit and Loss statement 30.80 (1)

Discount rate current 8.75% per annum 8.25% per annum

Salary escalation current 5% per annum 5% per annum

Mortality LIC 94-96 Ultimate LIC 94-96 Ultimate

Withdrawal rate 18 to 58 Years 2% per annum 2% per annum

For the year ended 31 March, 2013

For the year ended 31 March, 2012

Particulars As At 31 March, 2013 As At 31 March, 2012

Minimum Installments

Payable within one year 121.34 127.53

Later than one year but not later than 5 years 210.21 258.47

Present Value of minimum installments

Payable within one year 96.23 97.86

Later than one year but not later than 5 years 183.02 219.93

An amount of Rs.30.80 Lacs /-(PY. - Rs. 0.65 Lacs) as contribution towards defined contributionProfit & Loss Statement

plan is recognized as expense in the

23.10) Future commitments in respect of assets acquired under Finance Sch:

23.11).Other Notes

23.9) .EMPLOYEE BENEFITS :In accordance with the Accounting Standard 15 (AS-15) encashment based on actuarial valuation done as per Projected Unit Credit Method.

(Revised) 'Employee benefits' the Company has provided for gratuity and leave

a) Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

Name of the party Relationship

Kwality Dairy Products FZE Dubai- Investment Subsidiary 564.62

(Maximum amount outstanding during the year INR 564.62 lacs (INR 143.20) (143.20)

Kwality Dairy Products FZE Dubai- Loans And advance Subsidiary -

(Maximum anount outstanding during the year INR Nil (INR 56.34) (56.34)

Amount outstanding as at 31 March, 2013

Loans and advances in the nature of loans given to subsidiaries, associates and others and investment in parties:

shares of the Company by such

Kwality Dairy (India) LtdNotes forming part of the financial statements

(INR In Lacs)

(INR In Lacs)

(INR In Lacs)

b) Deferred payment liability in respect of a deferement loan from sales tax department.c) Previous year figure have been regrouped/reclassified wherever necessary to correspond with the current year classification/ disclosure.

d) Extraordinary/Exceptional Item

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

Particulars As At 31 March, 2013 As At 31 March, 2012

300.00 0.00

As per our Report of even date On Behalf of Board of Directors

FOR P.P. MUKERJEE & ASSOCIATES

Chartered Accountants

Firm's Registration No.023276N

Sd/-CA P.P. MukerjeeProprietorMembership No.:089854

Sd/-(Sanjay Dhingra)

Managing Director

Sd/-(Sidhant Gupta)

Executive Director

Sd/-(Deepa Kapoor)

Company SecretaryPlace : New DelhiDate : 5th July, 2013

(INR In Lacs)

Kwality Dairy (India) Limited

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

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.

STA

TEM

EN

T

Name of Subsidiary Company: Kwality Dairy Product i (Amount in INR)

Reporting INR

Exchange Rate (Closing Rate) 14.80

Exchange Rate(Average Rate) 14.325

Capital 1,43,20,000.00

Reserves 10,68,92,100.80

Total Assets 1,41,02,48,991.20

Total Liabilities excluding Shareholders funds 1,28,90,36,890.40

Investments other than Investments in Subsidiaries Nil

Turnover 2,37,38,98,804.05

Profit before Tax 9,07,99,012.08

Provision for Nil

Profit after Tax 9,07,99,012.07

Proposed Dividend Nil

Country United Arab Emirates