201420142014201420142014

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

PERFORMANCE ACCELERATED.

TRUST & QUALITY DELIVERED

KWALITY LIMITED

In this annual report, we have disclosed forward looking information, to enable investors, to

comprehend our prospects and take informed investment decisions. This report and other

statements - both written and oral that we periodically make, may contain forward looking

statements that set out anticipated result based on the managements plans and

assumptions.

We cannot guarantee that these forward looking statements will be realized. Although we

believe we have been prudent in our assumptions, the achievements of results are subject to

risk, uncertainties and even inaccurate assumption. We undertake no obligation to publicly

update any forward looking statements, whether as a result of new information, future

events or otherwise.

DISCLAIMER

CORPORATE OVERVIEW & STATUTORY REPORTS

Letter from CMD

Corporate Identity

Corporate Information

Key Trends (FY 2010-2014)

Plant & Operation

Wholly Owned Subsidiary Company

Product Portfolio

New Launches

Dealers & Distributor's Meet

Marketing Initiatives

Notice

Director Reports

Annexure to The Directors' Report

Report on Corporate Governance

Auditor's Report & Balance Sheet (Standalone)

Auditor's Report & Balance Sheet (consolidated)

Statement pursuant to Section 212(8) of the Companies Act,

1956 relating to Subsidiary Company. TA

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Letter from CMDDear Shareholders,

It gives me tremendous pleasure to write to you at the end of another successful year for Kwality Limited. Its the matter

of great pride to be associated with such sector where we are directly providing livelihoods to millions of small farmers.

Due to the continuous efforts of these farmers, India became the largest milk producing country in the world. Milk has

become the second largest agricultural commodity produced in our country next only to rice and its being a matter of

pride to be part of it. Over the last five years, Indias milk production has increased by about 25 million tonnes as

compared to an increase of about 6.6million tonnes in US and other countries.

To take the benefits, your company has also increased focus on procurement and processing capabilities which is

reflected in our growth. It has recorded a net profit of 126.63 Crore as against 96.53crores in Financial Year 2012-

2013. It has also enhanced the procurement /distribution network to ensure the widespread availability of products

across the country and to meet the increasing demands for milk and its products. It continue to invest strongly behind

the procurement, processing, brands and value chain.

The demand for milk and its products is increasing worldwide. As we know 7% of total milk production is traded in the

world. However, our country is not a major player in the international market. The future outlook for export of Indian

Dairy Products is rather positive as indigenous milk products are becoming popular with ethnic population spread all

over the world and there is a strong likelihood that the export demand for these products will grow. Your Company

continues to identify attractive and significant growth opportunities both in India and around the world and have huge

potentials to expand its business in the global market and to capture the overseas market and during the year revenue

from export of products of the Company is Rs. 183.45 Crores. We export to more than 28 countries at present and plan

to tap more international markets.

Your Company has to-date taken conscious steps towards raising the quality & hygiene of raw milk obtained and also to

improve the health and life style of the farmer community. Your Company besides its commercial operations is also

committed to the upliftment of the rural community of milk producers. Some of the activities that have built faith of the

farmers in the Company includes: productivity enhancement programme, clean milk production campaign , dairy

animal health management, financial inclusion initiative, Go Green initiative and capacity building programme. Our

reach was expanded to 4000 villages situated across the states of Rajasthan, Haryana, Punjab and Uttar Pradesh.

With the support of our team, State Bank of India and Punjab National Bank have sanctioned the loan of Rs. 50 lacs to

each purchase of 50 dairy animals. The Loan sanctioned is interest free and repayment period is of 5 years.

We are grateful to Central and State Governments and Financial Institutions, Consumers, business partners, Vendors,

Farmers, Society at and to specially shareholders of the Company for their trust and support. It is the support of

stakeholders that has helped the Company to become leader in the dairy industry in India.

Sanjay Dhingra

Chairman & Managing Director

To become the fastest growing

profitable Dairy Company

while maintaining

the highest standards of

quality & ethics.

MISVISSION

Board of Directors

Mr. Sanjay Dhingra (Chairman & Managing

Director)

Mr. Sidhant Gupta (Executive Director)

Dr. Rattan Sagar Khanna (Independent Non

Executive Director)

Mr. Arun Srivastava (Independent Non

Executive Director)

Company Secretary

Ms. Deepa Kapoor

Statutory Auditors

M/s. P.P. Mukherjee and Associates

Secretarial Auditors

M/s Mukun Vivek & Co.

Internal Auditor

M/s Mohan Gupta & Company

Registered & Corporate Office

KDIL House, F-82,

Shivaji Place, Rajouri Garden,

New Delhi 110027

CIN : L74899DL1992PLC255519

Registrars & Transfer Agents

Beetal Financial & Computer Services (P) Ltd.

Beetal House, 3rd Floor, 99 Madangir,

Behind Local Shopping Centre,

Near Data Harsukhdas Mandir, New Delhi-

110062

Plant Locations:

Village Softa, Palwal, Haryana

Bakra Mandi, Ajmer, Rajasthan.

Village: Kumarherha, NH-73, Sharanpur, UP

Village: Mumrejpur, Dibai, Bulandsahar, UP

Listing Detail

Bombay Stock Exchange Limited

National Stock Exchange of India Limited

Depositories Detail

National Securities Depositary Limited

Central Depositary Securities (India) Limited

Bankers

Andhra Bank

Allahabad Bank

Bank of Baroda

Bank of India

IDBI Bank Ltd.

Syndicate Bank

Canara Bank

Corporation Bank

Central Bank of India

Dhanlaxmi Bank Ltd.

CORPORATE INFORMATION

KEY TRENDS(FY 20102014)

INR in Crores

* Equity Shares of Face value of INR 1/- each*

** Equity Shares of Face value of INR 10/- each

Revenue Net ProfitEBITDA EPS( )

2014

2013

2012

2011

2010

4578.04

3692.29

2394.63

1608.04

1054.12

126.63

96.53

90.99

45.94

17.95

214.04

165.26

99.73

50.23

6.23*

4.75*

4.48*

2.26*

0.99*

276.03

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WHOLLY OWNED SUBSIDIARY COMPANY IN DUBAI

To increase its international presence and cater to the new markets, Kwality Limited has established its wholly-owned

subsidiary, Kwality Dairy Products FZE in free trade zone of UAE. The subsidiary is mainly involved in the trading of

various milk products and imports skimmed and whole milk powder and various derivatives of milk, ghee, butter & other

dairy products. The products are sold both domestically and export to other countries.

The Revenue from sale as on 31.03.2014 is 278,168,956 AED as compared to 165,717,194 AED in the previous year.

Profit After Tax (PAT) for financial year stood at 11,011,346 AED as against 6,204,305 AED in the previous year.

DELIVERING ON OUR PROMISE OF

ONE STOP SOLUTION FOR DAIRY PRODUCTS

OUR PRODUCT PORTFOLIO

MILK IN POUCHES

Dairy Best Nutrified Milk is enriched with more vital minerals and vitamins. Compared to normal milk, Dairy Best Nutrified

Milk has more Calcium and Vitamins A & D. It also contains Vitamin B2 for releasing the body's energy and Vitamin B12 for

blood formation and healthy growth. It thus promises stronger bone development in the formative years, better muscle

strength and a tougher immune system, in short a strong foundation for life, for your child.

Dairy Best Nutrified Milk is available in 3 variants:

Dairy Best Full Cream Milk (Both in 1 ltr & Half ltr)

Dairy Best Toned Milk (Both in 1 ltr & Half ltr)

Dairy Best Double Toned Milk (Half ltr)

CURD

We launched our variety of Curd to give customers greater choice. As curd is a staple and popular food of every Indian

household, we are capturing the imagination of consumers with our 100% pure and high quality pasteurized toned cow's

milk. It has all the goodness of natural calcium, is thick, consistent, delicious and easy to digest.

Available in different packaging like:

Matka - 1 kg, 2kg, 5kg & 15kg

Pouch - 500gm, 1kg

Cup - 80gm, 200gm & 400gm

DAIRY BEST TETRA PACK MILK

We've taken the tetra pack route to give our customers more choice and convenience. This Grade A fluid requires no refrigeration until the

package is opened thanks to ultra pasteurization and the special shelf safe carton. The milk is enriched with Vitamin B2 that releases the

bodys energy and Vitamin B12 for blood formation and healthy growth.

Dairy Best Tetra Pack Milk contains:

Vitamin B2 and Vitamin 12 1.5 times more Calcium 2 times more Vitamin A 2.5 times more Vitamin D

The milk therefore promises stronger bone development in the formative years, better muscle strength and a tougher immune system, in

short a strong foundation for life, for your child.

Dairy Best Tetra Pack is available in 4 variants:

Dairy Best Skimmed Milk Dairy Best Standarised Milk Dairy Best Toned Milk Dairy Best Double Toned Milk

DAIRY BEST CHAACH

We had entered the fray in this product segment with our own version of Chaach. Available in salted & masala flavours, our healthy and

refreshing drink is the perfect thirst quencher for all ages. It ranks high on the health meter as it contains live probiotic bacteria which

helps in digestion and improves immunity. It is manufactured using natural ingredients and a special culture that gives it a smooth, mildly

acidic taste. The product is available widely all across India in various size packs.

Available in: 500 ml Salted Chaach Pack Size

200 ml Masala Chaach Pack Size

SWEET LASSI

Lassi, the refreshing and healthy milk based natural drink now gets a delicious twist from Dairy Best. We have introduced a range of

mouthwatering flavours to enrich this traditional drink. So what you now get is the goodness of nature blended with a refreshingly

exquisite taste. This new product is available in various package sizes, one can therefore enjoy it directly on the move (small pack) or at

home, parties, picnics etc. (family pack). So be it summer or winter, India can now enjoy its favourite drink in the flavour of one's choice.

Available in: 200 ml Pack Size

LOW CHOLESTEROL GHEE - LIVLITE

In its endeavor to produce nutritious and innovative products, Kwality Limited launched India's first Low

Cholesterol Pure Ghee, Dairy Best Livlite.

The first-of-its-kind, Livlite has been developed and patented by National Dairy Research Institute

(NDRI) Karnal, of ICAR and licensed by National Research and Development Corporation (NRDC), which

is a Government of India body. It is the only pure ghee available with 85% Less Cholesterol. A product of

many years of research, Livlite keeps the traditional form, color, aroma, consistency, texture and flavor

of ghee intact and has a shelf life of twelve months.

Available in:

RT Packs - 194 ml, 400 ml, 800 ml & 970 ml pack

Tin- 400ml, 800ml & 1ltr

PURE GHEE

Dairy Best Desi Ghee is produced from directly supplied fresh milk of the highest quality. The ghee is

manufactured under the most hygienic conditions, using the most modern equipment and is completely

untouched by hand. The combined factors ensure that it is tasty, has a traditional granular texture and

gives off a rich and mouth-watering aroma, and is healthy too. It contains plenty of antioxidants, easily

absorbs vitamins and minerals from other foods and helps strengthen the body's immune system, and

has high concentrations of butyric acid that inhibits the growth of cancerous tumours. Our Pure Ghee

has been awarded the AGMARK certification by the Ministry of Agriculture, Government of India.

Available in:

RT - 194ml, 400ml, 485 ml, 800ml & 970 ml,

Poly Pack - 480 ml, 970 ml, 1.940 ltr, and 4.850 ltr

Tin containers 400 ml, 485 ml, 800 ml, 975 ml, 1.94 ltr, 4.85 ltr & 15 kg

Jars - 194 ml, 480 ml, 970 ml, 1.940 ltr. and 4.850 ltr

100% PURE COW GHEE

Kwality's 100% Pure Cow Ghee is another high value product manufactured exclusively from fresh cow's

milk. Such is its quality that it has come to set the standard in the perceptive and ghee appreciating

hinterland of Delhi, Punjab, Rajasthan and Haryana.

The 100% Pure Cow Ghee is totally automated and machine manufactured. It is untouched by human

hand and thus is hygienic. Its pale perfect yellow has a pleasant look and gives off a rich appetizing

aroma. The texture of the ghee is granular in the manner of traditional home-made ghee. This is highly

appreciated by our customers.

Available in:

RT - 194ml, 400ml, 485 ml, 800ml & 970 ml,

Poly Pack - 480 ml, 970 ml, 1.940 ltr, and 4.850 ltr

Tin containers 400 ml, 485 ml, 800 ml, 975 ml, 1.94 ltr, 4.85 ltr & 15 kg

Jars - 194 ml, 480 ml, 970 ml, 1.940 ltr. and 4.850 ltr

SKIMMED MILK POWDER

Skimmed Milk Powder is made from fresh milk and is completely free from artificial flavors and colors. It

can be used for making milk, tea, coffee, curd, lassi, mishti doi, milk shake, ice cream, pudding and

sweets. It has less than 1.5 % fat content and has no added colours.

Available in:

500 gm and 1 kg laminated pack

WAKE UP - INSTANT DAIRY CREMER

Contains milk solids, milk fat sucrose, and emulsifiers.

It is appropriate for making milk, tea, coffee, curd, lassi, mishthi doi, milk shake, ice cream, pudding and

sweets.

It is granular, free flowing, lump free and is white in color.

Available in:

5 gm - specially designed for railways, flight catering, and hotels etc.

25 and 50 gm - pouch pack

200 gm and 500 gm - poly jar

1kg laminated pouch

PANEER

This traditional milk product is an absolute favourite in households all over the country and consumed in

different forms, raw or cooked. In line with our commitment to quality, we have ensured that the paneer

we produce is totally pure and the softest our customers have ever tasted. Paneer is known to be a very

valuable source of protein and we ensure that our product maintains all the healthy nutrients and

conforms to the strictest testing and quality standards.

Available in:

Masala variety

and in 200gm packs. 400gm, 1kg & 5kg Brick to be launched.

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A Mega Credit Camp was organised at MCC Durgapur (Sultanpur) on July 21, 2014 by Baroda Uttar Pradesh

Grameen Bank in collaboration with Kwality Limited and NABARD to promote self-employment through dairying

in the region in which total 453 milk producers participated. A loan of Rs. 53.26 Crores was approved for 3530

beneficiaries during the camp. A credit of Rs.30.43 Crores was disbursed, out of which Rs. 67 Lakhs was

disbursed to 67 milk producer members associated with Kwality Limited. Remaining portion of the loan was

disbursed for other agriculture allied activities and SHGs promoted by NABARD.

Shri K.R.Kanojia, Chairman, Baroda Uttar Pradesh Grameen Bank in his keynote address, emphasized on the

role of dairying as a sustainable source of livelihood in the rural areas and asked the farmers to avail dairy related

schemes run by the Govt. /NABARD etc. and pave the way for development of the region. He also appreciated the

efforts of Kwality Limited in ensuring better price realization of milk and establishing a fair and transparent milk

procurement system at the village level.

Dr. R.S.Khanna, Director, Kwality Limited chaired the programme. In his remarks, he reiterated the companys

commitment towards betterment of the milk producers of the region. Kwality Limited envisages to establish 1

more milk chilling centre (MCC) and reaching out to 20,000 families in 500 villages during the current financial

year. He also spoke about the various initiatives of the company like human health camps, farmer insurance,

animal health camps, animal insurance, SHG formation, supply of cattle feed & medicines etc.

The programme ended with vote of thanks from Shri O.P.Tiwari, Deputy Regional Manager, Baroda Uttar Pradesh

Grameen Bank. Shri Rajendra Singh, Shri Rajeev Agrawal, Shri B.K.Sinha, Shri Alok Singh, Smt. Pushplata

Tripathi were present in the programme.

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Notice is hereby given that the Twenty Second Annual General Meeting of the

Members of KWALITY LIMITED will be held on Wednesday, the 24th day of September,

2014 at 9.30 A.M. at Lavanya, G.T. Karnal Road, Palla Bakhtavarpur Mord, Alipur, New

Delhi - 110036, to transact the following business: -

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2014 and Profit & Loss Account and cash flow

statement for the year ended on that date, together with the reports of the Directors and Auditors thereon.

2. To declare dividend for the financial year 2013-14.

3. To appoint a Director in place of Mr. Sanjay Dhingra (DIN: 00025376), who retires by rotation and being eligible, offers himself for

re-appointment (subject to the alteration of Article of Association).

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

RESOLVED THAT pursuant to the provisions of Section 139 of the Companies Act, 2013 (Act), and other applicable provisions of the

Act, if any and the rules made there under, as amended from time to time, and subject to the approval of shareholders, M/s. P.P.

Mukerjee & Associates, Chartered Accountants (ICAI Firm Registration No. 023276N), retiring Auditors of the company be and is hereby

re-appointed as Statutory Auditors of the Company, to hold the office from the conclusion of this Annual General Meeting till the

conclusion of the Annual General Meeting of the Company to be held in the year 2019 (subject to ratification of their appointment at

every AGM) at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors.

SPECIAL BUSINESS

5. ALTERATION OF ARTICLE OF ASSOCIATION

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

RESOLVED THAT Pursuant to Section 14 and other applicable provisions, if any, of the Companies Act, 2013 and the rules made

thereunder, the Article of Association of the Company be and is hereby altered by substitution of regulation 104 and 127 of the Article of

Association of the Company with the following new regulation:

104. At each Annual General Meeting of the Company one third of such of the Directors for the time being as are liable to retire by

rotation or if their number is not three or a multiple of three, then the number nearest to one third shall retire from office.

127 (i) Directors liable to retire by rotation shall be determined on the basis of seniority i.e. those who have been longest in office

since their last appointment and in case of Directors appointed on same day, those who are to retire shall, in default of and subject to

any agreement among themselves, be determined by lot.

127 (ii) Subject to the provisions of Section 203 of the Companies Act, 2013 and the rules made thereunder an individual may be

appointed as the Chairperson as well as the Managing Director or Chief Executive Officer of the Company at the same time.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to file the necessary e-forms with the

Registrar of Companies, Delhi & Haryana in relation to the aforesaid amendment to the Articles of Association and further to do all such

acts, deeds, matters and things as may be deemed necessary to give effect to the above resolution.

6. APPOINTMENT OF MR. ARUN SRIVASTAVA AS AN INDEPENDENT DIRECTOR

To consider and if thought fit, to pass the following resolution with or without modification(s) as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013

(Act) and the Companies (Appointment and Qualifications of Directors) Rules 2014, read with Schedule IV to the Act, Mr. Arun

Srivastava (DIN: 01121929), who has submitted a declaration that he meets the criteria for independence as provided in Section

149(6) of the Act, and who is eligible for appointment, be and is hereby appointed as Non-Executive Independent Director of the

Company with effect from 12.08.2014 up to 11.08.2019.

7. APPOINTMENT OF DR. RATTAN SAGAR KHANNA AS AN INDEPENDENT DIRECTOR

To consider and if thought fit, to pass the following resolution with or without modification(s) as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013

(Act) and the Companies (Appointment and Qualifications of Directors) Rules 2014, read with Schedule IV to the Act, Dr. Rattan Sagar

Khanna (DIN: 03073914), who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6)

of the Act, and who is eligible for appointment, be and is hereby appointed as Non-Executive Independent Director of the Company with

effect from 12.08.2014 up to 11.08.2019.

8. AUTHORISATION TO BORROW MONEY UNDER SECTION 180(1)(c) OF THE COMPANIES ACT, 2013

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

RESOLVED THAT in supersession of resolution passed earlier and subject to the provisions of Section 180(1)(c), Section 186 of the

Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 ,if any, and the rules made there under and subject

NOTICE FOR TWENTY SECOND

ANNUAL GENERAL MEETING

to the provisions of the Articles of Association of the Company, consent of the members be and is hereby accorded to the Board of Directors of

the Company for and on behalf of company, severally and/or jointly to borrow any sum or sums of money, give and/or receive the corporate

guarantee, from time to time as the Board of Directors may think fit, for the purpose of business of the Company on such terms and conditions

and with or without security from financial institutions and/or Banks and/or depositors and/or other parties by way of rupee loans and/or

loans in any currency or currencies and/or deposits and/or credit facilities and/ or deferred payment facilities and/or non-fund based limit

and/or issue of debentures, as the Board of Directors may in its absolute discretion think fit, notwithstanding that the money or monies to be

borrowed together with the monies already borrowed by the Company including the corporate guarantee on behalf of the Company (apart from

the temporary loans obtained from the companys Banker in the ordinary course of business) may exceed the aggregate paid up share capital

of the company and its free reserve (i.e. reserve not set apart for any specific purpose) provided, however, that the total borrowings

outstanding at any one time including the monies already borrowed shall not exceed a sum of Rs. 3,000 Crores (Rupees Three Thousand

Crores Only).

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to file the necessary e-forms with the Registrar

of Companies, Delhi & Haryana and other concerned authorities and to take all such steps and to give all such directions and to do all such

acts, deeds, matters and things as may be necessary and/or expedient to give effect of the above resolution.

9. AUTHORISATION TO ISSUE SHARES ON PREFERENTIAL BASIS

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

RESOLVED THAT pursuant to the provisions of Section 42 and Sections 62(1)(c) and all other applicable provisions, if any, of the Companies

Act, 2013 and the rules made thereunder (including any modification(s) or re-enactment(s) thereof, for the time being in force) and other

applicable laws, rules, regulations, notifications and circulars and in accordance with the Memorandum and Articles of Association of the

Company and Listing Agreements between the Company and the Stock Exchanges where the shares of the Company are listed and subject to

such approvals, permissions and sanctions as may be necessary from the Government of India, Reserve Bank of India (RBI), Securities and

Exchange Board of India (SEBI), Registrar of Companies, NCT of Delhi & Haryana and/or any other regulatory authorities, any other

competent authorities, institutions or bodies, within or outside India and subject to such conditions, alterations and modifications as may be

prescribed by such concerned authorities while granting such approvals, permissions and sanctions, which the Board of Directors

(hereinafter referred to as the Board which term shall be deemed to include any committee(s) duly constituted/ to be constituted by the

Board to exercise its powers including the powers conferred by this resolution) is hereby authorized at its discretion to accept, consent of the

Company be and is hereby accorded to offer, issue and allot (including with provisions for reservations on firm and /or competitive basis, of

such part of issue and for such categories of person including employees of the Company as may be permitted) by way of rights issue and/or

public issue and/or offer for sale and/or private placement and/or by issuing compulsory convertible debenture (CCD)/compulsory

convertible preference shares (CCPS) and/or Qualified Institutional Placements/Institutational Placement Programmes under SEBI (Issue of

Capital and Disclosure Requirements) Regulations, 2009 and/or against subscription in foreign/ Indian Currency, through prospectus and/or

offering circular/offer letter/ term sheet, equity shares of the Company (which shall rank pari-passu to the existing equity shares of the

Company) (the shares), and/or non-convertible and partly convertible debentures, with or without warrants, and/or Global Depository

Receipts/Global Depository Shares (GDRs/GDSs) and/or American Depository Receipts/American Depository Shares (ADRs/ADSs))

against the issue of underlying shares and/or foreign currency convertible bonds (FCCBs) convertible into equity shares, which shall rank

pari passu with the then existing (hereinafter referred to as securities), whether to remain unlisted or to be listed on any stock exchanges in

India or any other international stock exchange outside India, to resident of India or persons resident outside India including Foreign

Institutional Investors/ Qualified institutional Buyers (QIBs)/ Companies/ Individuals in India or abroad, with or without an overallotment/

Green Shoe Option, as may be permitted under applicable laws, rules & regulations and policy whether or not they are members of the

Company in such form and terms, including as to pricing, the ratio in which such securities may be offered, issued and allotted to the existing

shareholders, the number of securities to be issued, face value of the securities, rate of interest, premium, number of equity shares to be

allotted on conversion, exercise of rights attached with warrants, ratio of exchange of shares and/or warrants and/or any other financial

instruments, period of conversion/redemption/fixing of record date or book closure, adjustment conditions for corporate actions and other

related or incidental matters as may be decided and deemed appropriate by the Board up to a sum of Rupees 10,000 million (inclusive of

premium as may be determined by the Board) (or an equivalent amount in any foreign currency) in one or more tranches, at such price or

prices, at a premium or discount to market price or prices and in such manner and on such terms and conditions as the Board may in its

absolute discretion think fit, in consultation with lead managers and/or underwriters and/or advisers as may be appointed by the Board,

whether with or without an option to subscribe for additional securities.

RESOLVED FURTHER THAT without prejudice to the generality of the above and subject to all applicable laws, the aforesaid issue of securities

may have all or any terms or combination of terms in accordance with Indian laws and/or international practices and regulations including, but

not limited to, conditions in relation to payment of interest, additional interest, premium on redemption, prepayment and other debt service

payments whatsoever, and all such terms are provided in issue of securities of this nature internationally and/or domestically including terms

for issue of shares upon conversion of securities or variation of conversion price of the securities during the term of securities as the Board

deems fit and appropriate and the Board is also entitled to enter into and execute all such arrangements/agreements, as the case may be,

with any lead managers, underwriters, registrar, advisors, guarantors, trustees, agents, depositories, custodians and all such agencies as may

be involved or concerned in such offering of securities and to remunerate all such agencies including the payment of commissions, brokerage,

fees or the like and also to seek the listing of such securities or securities representing the same in one or more stock exchanges within and/or

outside India.

RESOLVED FURTHER THAT the Board may enter into any agreement with any agency or body for issue and allotment of securities in such

form(s) with such features and attributes as are prevalent in domestic as well as international capital markets for instruments of that nature

and to provide for the tradability or free transferability thereof as per the domestic as well as international practices and regulations and under

the norms and practices prevalent in the international markets and the securities issued in foreign market and/or Indian markets shall be

deemed to have been made abroad and/or in the international market and/or at the place of issue of the securities in the international market

and/or Indian market and may be governed by applicable Indian laws and/or foreign laws, as the case may be.

RESOLVED FURTHER THAT in the event of issue of securities by way of a qualified institutional placement to QIBs on Private Placement basis

shall be in accordance with SEBI (Issue of Capital & Disclosure Requirement) Regulations 2009, the relevant date on the basis of which price

of the resultant shares shall be determined as specified under the SEBI (Issue of Capital & Disclosure Requirement) Regulations 2009 shall

be the date of the meeting in which the board or the committee of the directors duly authorized by the board, decide to open the proposed issue

of securities.

RESOLVED FURTHER THAT in the event the securities are proposed to be issued through FCCBs/ADRs/GDRs, the relevant date for the

purpose of pricing the securities is the date of the meeting at which the Board decides to open the proposed issue, as specified in the Issue of

Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism), Scheme 1993.

RESOLVED FURTHER THAT the Board be and is hereby authorized to finalize and approve the offering circular/ prospectus/ placement

document/ term sheets/ agreements, in respect of the proposed issue of the securities and to authorize any director or directors of the

Company or any other officer or officers of the Company to sign the above documents for and behalf of the Company together with the authority

to amend, vary or modify the same and to give such declarations, affidavits, certificates, consents as may be required from time to time, and to

arrange for the submission of the offering circular/ prospectus/ placement document/ term sheets agreements, and any amendments and

supplements thereto, with any applicable stock exchanges, government and regulatory authorities, institutions, as may be required.

RESOLVED FURTHER THAT in case securities are offered through rights issue, the shareholders shall have right to renounce all or any the

shares offered in favor of any person or persons who are Indian residents subject to the right of the Board to refuse allotment to a person, not

being a shareholder of the company without assigning any reason. The members can apply for additional shares and they may be entitled to

allotment of additional shares at the discretion of the Board and in consultation with the stock exchanges. The renouncees may also apply for

additional shares and they may be entitled to allotment of additional shares at the discretion of the Board and in consultation with the stock

exchanges.

RESOLVED FURTHER THAT in case of any over subscription of the issue, the Board be and is hereby authorized to retain such of the amount,

and issue and allot such securities as may be permitted in accordance with applicable laws, rules & provisions in consultation with concerned

authorities including stock exchanges.

RESOLVED FURTHER THAT the Board be and is hereby entitled to vary, modify, alter any of the foregoing terms and conditions at their

discretion and in conformity with those as may be approved by the SEBI, RBI or any other appropriate authority and/or department.

RESOLVED FURTHER THAT for giving effect to this resolution, the Board be and is hereby authorized to do all such acts, deeds and things as

the Board may at its absolute discretion, consider necessary, usual and expedient, including without limitation the utilization of issue

proceeds, entering into of underwriting, memorandum of understanding, marketing and depository arrangements, and with power on behalf

of the Company to settle any question, remove any difficulty or doubt that may arise from time to time in relation to the offer, issue, allotment

and utilization of the issue proceeds of the securities for the Companys projects/ expansions/ modernizations/ acquisitions/ direct

investments in the subsidiary companies/ joint ventures/ repayment of debts/ other corporate needs, as they may deem fit.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board/ committee be and is hereby authorized to do all such

acts, deeds and things as the Board may at its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or

doubt that may arise with regard to the offer/ issue, allotment and utilization of the issue proceeds including but without limitation to the

making of listing applications, creation of such mortgage/ charge, if necessary, under applicable provisions of the Companies Act, 2013, in

respect of the aforesaid securities either on pari-passu basis or otherwise, giving or authorizing the giving by concerned persons of such

declarations, affidavits, certificates, consents and authorities as may be required from time to time, without being required to seek any further

consent or approval of the members and the members shall be deemed to have given their approval thereto expressly by the authority of this

resolution.

RESOLVED FURTHER THAT in case of any debt instrument including but without limitation to any debentures, bonds, the members shall be

deemed to have given their approval expressly by the authority of this resolution.

RESOLVED FURTHER THAT the Board, be and is hereby authorized to delegate all the above powers and authorities to any person or persons

or committee of the Board, in connection with the issue of securities, and to give effect to the above resolutions.

By Order of the Board

Sd/

Place: New Delhi (Deepa Kapoor)

Date: August 12, 2014 (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 102 (1) of the Companies Act, 2013 setting out material facts relating to the

business at item no. 5 to item no. 9 of the Notice as set out above, is annexed hereto.

3. Member/Proxies should bring the Attendance Slip in the Meeting duly filed in, for attending the meeting.

4. Statutory Registers under the Companies Act, 2013 is available for the inspection at the registered Office of the Company during business

hours.

5. Corporate Members are requested to send a duly certified copy of the Board Resolution, pursuant to Section 113 of the Companies Act,

2013, authorizing their representative to attend and vote at the Annual General Meeting.

6. Members are requested to bring their admission slips along with copy of the report & accounts to the Annual General Meeting.

7. Members who wish to obtain information on the Company or view the accounts for the financial year ended 31st March, 2014, may visit the

Companys website www.kdil.in.

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

date of declaration:

To those shareholders whose names appear on the Companys Register of Members after giving effect to all valid share transfers in

physical form lodged with the Registrar and Transfer Agents (R&T Agents) of the Company on or before Tuesday, 16th September 2014.

In respect of shares held in electronic form (demat mode), dividend will be paid to those deemed members whose names appear in

the statements of beneficial ownership furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India)

Limited (CDSL) as at the close of business hours on Tuesday, 16th September 2014.

Physical shares Payment of dividend through NECS: Members holding shares in physical form are advised to submit particulars of

their bank account, viz. name and address of the branch of the bank, MICR Code of the branch, type of account and account number at the

earliest to our Registrar and Share Transfer Agent, M/s Beetal Financial & Computer Services Private Limited.

9. This may be taken as notice of declaration of dividend for the financial year 2013-14 in accordance with Article 138 of the Article of

Association of the Company in respect of dividend for that year when declared.

10. The Registered of Members and Transfer Books of the Company will remain closed from 17th September, 2014 to 24th September, 2014

(both days inclusive) for the purpose of ascertaining eligibility to dividend, if declared.

11. Members are requested to intimate the Registrar and Share Transfer Agent of the Company - M/s Beetal Financial & Computer Services

Private Limited, 99, Beetal House, Madangir, New Delhi 110062, immediately of any change in their address in respect of equity shares held

in physical mode and to their DPs in respect of equity shares in dematerialized form.

12. Members may avail nomination facility as provided under Section 72 of the Companies Act, 2013.

13. Members who hold shares in electronic form are requested to write their Client ID and DP ID numbers and those who hold shares in

physical form are requested to write their Folio number in the attendance slip for attending the meeting to facilitate identification of

membership at the meeting.

14. Across the world, there is an increasing focus on doing our share to help save our environment from further degradation. Recognizing this

trend, the Ministry of corporate Affairs (vide circular nos. 17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011 respectively), has

undertaken a Green Initiative in Corporate Governance and allowed Companies to share documents/notices (including notice calling Annual

General Meeting, Audited Financial Statements, Directors Report, Auditors Report, etc) with its shareholders through an electronic mode.

The move of the Ministry allows public at large to contribute to the green movement.

To support this green initiative of the Government in full measure, shareholders who have not registered their e-mail addresses so far are

requested to register their e-mail addresses. Shareholders holding shares in physical form can avail the said facility by filling in the E-

Communication Registration Form available on Companys website (www.kdil.in) or as attached to this Annual Report and forward the same to

Companys Registrar i.e. Beetal Financial & Computer Services Private Limited. Shareholders holding shares in electronic form can also avail

said facility by registering/changing the E-mail address with the Depository through their concerned Depository Participants (DP) or by filling in

the E-Communication Registration Form as attached to this Annual Report and forward the same to the Companys Registrar i.e. Beetal

Financial & Computer Services Private Limited.

15. The Company hereby gives an opportunity to all the members, who have not get their e-mail id recorded, to get it registered to avail the

facility to receive any communication through electronic mode.

16. Members are hereby informed that Dividend which remains unclaimed / un-encashed over a period of seven years, has to be transferred

as per the provisions of Section 124 of the Companies Act, 2013 by the Company to The Investor Education & Protection Fund constituted by

the Central Government under Section 125 of the Companies Act, 2013. It may please be noted that once unclaimed / un-encashed dividend

is transferred to Investor Education & Protection Fund as above, no claims shall lie in respect of such amount by the shareholder.

17. In compliance with the provisions of Section 108 of the Companies Act, 2013 and the Rules framed thereunder and listing agreement, the

Members are provided with the facility to cast their vote electronically, through the e-voting services provided by CDSL, on all resolutions set

forth in this Notice.

18. Detail of Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting

NOTES:

Name of the Director Mr. Arun Srivastava Dr. Rattan Sagar Khanna Mr. Sanjay Dhingra

Date of Birth

Relationship with other

Directors Inter-se

None None None

03rd April, 1968 12th April, 1945 12th October, 1970

Instructions for members for voting electronically are as under:-

(A) In case of members receiving e-mail:

(i) Log on to the e-voting website www.evotingindia.com.

(ii) Click on Shareholders tab to cast your votes.

(iii) Now, select the Electronic Voting Sequence Number - EVSN along with KWALITY LIMITED from the drop down menu and click on

SUBMIT

(iv) If you are holding shares in Demat form and have already voted earlier on www.evotingindia.com for a voting of any Company, then

your existing login id and password are to be used. If you are a first time user follow the steps given below.

(v) Now, fill up the following details in the appropriate boxes:

For Members holding shares in Demat Form For Members holding shares in Physical Form

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

For CDSL: 16 digits beneficiary ID

Folio Number registered with the Company

PAN*

DOB#

Dividend Bank

Details#

Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department when prompted by the system while

e-voting (applicable for both demat shareholders as well as physical shareholders)

Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account

or folio in dd/mm/yyyy format.

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

account or folio.

Expertise in specific

functional area

Dairy, Farming and in

Agricultre Sector

Vast experience in dairy

business

Expertise in Financial

Modeling & Resource

Moblisation

Directorship held in other

Companies as on date.

NIL Kwality Dairy Investments

Pvt. Ltd.

DELTA AGROTECH

PRIVATE LIMITED

NIL

NIL

NIL

NIL

NIL

152,154,714

Chairman/Member of the

committee of the Director

of the other companies

in which he is a director

as on 31 March 2014

Number of Shares held

in the Company

Chairman/Member of the

committee of the Board

of Directors of the

Company as on

31 March 2014

Chairman of Audit

Committee

Member of Remuneration,

Compensation & Nomination

Committee

Member of Stakeholders

Relationship Committee

Member of Share

Transfer Committee

Member of Audit

Committee

Member of Remuneration,

Compensation & Nomination

Committee

Member of Stakeholders

Relationship Committee

Member of Share Transfer

Committee

Member of Corporate

Social Responsibility

Committee

Member of Remuneration,

Compensation & Nomination

Committee

Member of Management

Committee

Member of Corporate

Social Responsibility

Committee

Qualification

Date of Appointment

Graduate GraduateM.Sc. (Hons) from Punjab

Agri University, Diploma in

Semen Freezing Gynecology

& Andrology from Royal

Veterinary and Agriculture

University, Copenhagen

and Diploma in Farm &

Science Journalism form

Institute of Farm & Science

Journalism, New Delhi

25th June, 2003 18th May, 2010 18th June, 2003

*Members who have not updated their PAN with the Company/Depository Participant are requested to use the default number:

in the PAN field.

# Please enter any one of the details in order to login. In case either of the details are not recorded with the depository please enter the value

in the Dividend Bank details field.

(vi) After entering these details appropriately, click on SUBMIT tab.

(vii) Members holding shares in physical form will then reach directly the EVSN selection screen. However, members holding shares in demat

form will now reach Password Creation menu wherein they are required to mandatorily enter their login password in the new password field.

Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible

to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other

person and take utmost care to keep your password confidential. Kindly note that this changed password is to be also used by the Demat

holders for voting for resolutions for the Company or any other Company on which they are eligible to vote, provided that Company opts for e-

voting through CDSL platform.

(viii) For members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this notice.

(ix) Click on the relevant EVSN on which you choose to vote.

(x) On the voting page, you will see Resolution Description and against the same the option YES/NO for voting. Select the option YES or NO as

desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xi) Click on the Resolutions File Link if you wish to view the entire Resolutions.

(xii) After selecting the resolution you have decided to vote on, click on SUBMIT. A confirmation box will be displayed. If you wish to confirm

your vote, click on OK, else to change your vote, click on CANCEL and accordingly modify your vote.

(xiii) Once you CONFIRM your vote on the resolution, you will not be allowed to modify your vote.

(xiv) You can also take out print of the voting done by you by clicking on Click here to print option on the Voting page.

(xv) If Demat account holder has forgotten the changed password then Enter the User ID and Captcha Code click on Forgot password & enter

the details as promoted by the system.

(xvi) Institutional shareholders (i.e other than Individuals, HUF, NRI etc) are required to log on to https://www.evotingindia.co.in and register

themselves as Corporates. After receiving the login details they have to link the account(s) which they wish to vote on and then cast their vote.

They should upload a scanned copy of the Board resolution and Power of Attorney (POA) which they have missed in favour of the Custodian, if

any, in PDF format in the system for the scrutinizer to verify the same.

(B) In case of members receiving the physical copy of Notice of Annual General Meeting [for members whose e-mail IDs are not registered with

the company/depository participant(s) or requesting physical copy]:

Please follow all steps from sl. no. (i) to sl. no. (xvi) above, to cast vote.

(C) The e-voting period begins on 18.09.2014 at 10:00 AM and ends on 20.09.2014 at 6:00 PM. During this period shareholders of the

Company, holding shares either in physical form or in dematerialized form, as on the cut-off date, may cast their vote electronically. The e-voting

module shall be disabled by CDSL for voting thereafter. Once the vote on a resolution is cast by the shareholder, the shareholder shall not be

allowed to change it subsequently.

(D) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (FAQs) and e-voting manual

available at www.evotingindia.com under help section or write an email to helpdesk.evoting@cdslindia.com.

19. Mr. Mukun Arora of M/s Mukun Vivek & Company, Company Secretaries, has been appointed as the Scrutinizer to scrutinize the e-voting

process in a fair and transparent manner.

20. The notice is being dispatched/emailed to all the members whose names appear on the register of members/list of beneficial owners as

received from the National Securities Depository Ltd. (NSDL)/Central Depository Services (India) Ltd. (CSDL) on 22 August 2014 and voting

rights shall be reckoned on the paid-up value of the shares registered in the name of the shareholders as on the same date.

21. The Scrutinizer shall, within a period not exceeding three working days from the conclusion of the e-voting period, unblock the votes in the

presence of at least two witnesses not in the employment of the Company and make a Scrutinizers Report of the votes cast in favour or

against, if any, forthwith to the Chairman of the Company.

22. The results declared along with the Scrutinizers Report shall be placed on the Companys website www.kdil.in within two days of the

passing of the resolutions at the Annual General Meeting of the Company and communicate to Stock Exchanges, where the shares of the

Company are listed.

EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF

THE COMPANIES ACT, 2013ITEM NO. 5

In terms of Section 152 of the Companies Act, 2013 atleast two third of the Directors of the Company shall be persons whose period of office is

liable to retire by rotation and out of which atleast one third shall retire at each Annual General Meeting of the Company.

Currently the Company has two Independent Directors which are not liable to retire by rotation as per Section 152 of the Companies Act, 2013

and as per Articles of Association of the Company Managing Director and Whole Time Directors are not liable to retire by rotation.

Therefore the Company in order to comply with the provisions of Section 152 and Section 203 needs to alter its Article of Association by

substitution of regulation 104 and regulation 127 in such way that the office of Managing Director and Whole Time Directors are also come

under the preview of retirement by rotation and an individual may be appointed as Chairman and Managing Director of the Company at the

same time.

Except Mr. Sanjay Dhingra, Chairman & Managing Director and Mr. Sidhant Gupta, Director of the Company, none of the Directors and Key

Managerial Personnel of the Company and their relatives is concerned or interested, in the resolution.

ITEM NO. 6-7

Pursuant to the provisions of Section 149 of the Companies Act, 2013, every listed public company is required to have at least one-third of the

total number of directors as independent directors, who are not liable to retire by rotation.

The MCA has clarified wide its General Circular No. 18/2014 dated 11.06.2014 that the Companies are required to make fresh appointment of

Independent Directors as per the provisions of Companies Act, 2013 and any tenure of an Independent Directors on the date of

commencement of the Act shall not be counted for his appointment/holding office of director under the Act. In view of the transitional period of

one year provided under Section 149(5), it is hereby clarified that it would be neccessary that if it is intended to appoint existing Independent

Directors under the new Act, such appointment shall be made expressly under section 149(10)/(11) read with Schedule IV of the Act within one

year from 1st April, 2014 subject to compliance with eligibility and other prescribed conditions.

In view of the above the Board recommended the appointment of Mr. Arun Srivastava and Dr. Rattan Sagar Khanna as Non-Executive

Independent Directors from 12.08.2014 up to 11.08.2019.

In the opinion of the Board, Mr. Arun Srivastava and Dr. Rattan Sagar Khanna fulfils the criteria as mentioned in Section 149(6) of the

Companies Act, 2013 and recommend the appointment of these as Non-Executive Independent Directors and received a declaration from

them as specified in the above mentioned Section.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, the appointment of these directors as

Non-Executive Independent Directors is now being placed before the Members for their approval.

The Company and Non-Executive Independent Directors shall abide by the provisions specified in Schedule IV of the Companies Act, 2013.

The terms and conditions of appointment of the above Directors shall be open for inspection by the Members at the Registered Office of the

Company during normal business hours on any working day, excluding Saturday.

Dr. Rattan Sagar Khanna

Dr. Rattan Sagar Khanna did his M.Sc. (Hons) from Punjab Agri University. He is Diploma holder in Semen Freezing Gynecology & Anthology

from Royal Veterinary and Agriculture University, Copenhagen, Diploma in Farm & Science Journalism from Institute of Farm & Science

Journalism, New Delhi. Over 35 years, he worked at senior positions in Dairy, Farming and in Agriculture Sector in the areas of manufacturing,

consulting and marketing.

He has been providing his valuable inputs on major initiatives taken by the Company as well as the technologies introduced in the Company. He

is actively involved in introduction and launch of our anchor Brand Dairy Best - Livlite. Dr. Khanna has also extended his expertise in

implementation and establishment of collection centres and MCC's of the Company.

As an investor protection activist and proponent of good corporate governance, Dr. Khanna has been the guiding force in company's CSR

initiatives. An old war horse in Dairy Business, his experience has been a valuable asset for the company.

Arun Srivastava

Shri Arun Srivastava has been serving on various committees of Board and helps the Company in its smooth operations. He brings in corporate

finance and transaction experience to the Company and with consulting and liasoning background he remains the trouble shooter for the

Company vis--vis clients and lenders and ensure smooth execution of mandated deals.

Mr. Arun Srivastava and Dr. Rattan Sagar Khanna, are concerned or interested in the Resolutions of the accompanying Notice relating to their

own appointment.

ITEM NO. 8

Upon the commencement of new Companies Act, 2013, the Ministry of Corporate Affairs (MCA) vide its general circular no. 04 /2014 dated

March 25, 2014 has clarified the resolutions passed under Section 293(1)(d) of the Companies Act, 1956 prior to commencement of Section

180 of the Companies Act, 2013 which is to be valid upto one year from the date of notification of Section 180 of the Companies Act, 2013 and

thus fresh approval of shareholders is required to be obtained at the general meeting of the shareholders.

Therefore in order to comply with the provisions of Section 180(1)(c), Section 186 and other applicable provisions of the Companies Act, 2013,

the Company needs to obtain the fresh approval of shareholders by way of Special Resolution to authorized the Board to borrow money

including the corporate guarantee on behalf of the Company upto a sum of Rs. 3000 Crores (Rupees Three Thousand Crores Only).

Further to meet the working capital demand of the growing business of the Company, the Board is also authorized to give and/or receive the

corporate guarantee on behalf of the Company under Section 186 of the Companies Act, 2013 and the rules made there under.

None of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, in the resolution.

ITEM NO. 9

The Company has taken up and intends to take up in future several growth initiatives like expansions, modernizations, strengthening of

procurement mechanism, establishment of milk chilling centers, overseas direct investment in subsidiary companies/joint venture etc. and

therefore, there is need to strengthen its financial position by augmenting long term resources. The Company plans to achieve this by issue of

securities in international markets and/or in domestic market.

Several modes are available for raising capital by way of Public Issue, Right Issue, Offer for Sale, Private Placement, Compulsory Convertible

Debenture(s) (CCDs)/Compulsory Convertible Preference Share(s) (CCPS), QIP, Institutional Placement Programmes under Securities and

Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, Private Placement, Global Depositary Receipt,

American Depositary Receipt, Foreign Currency Convertible Bonds or other equity related instruments in the domestic and in the international

market.

The Company consulting various investment bankers for raising capital through one or more such manner or such instruments up to a sum of

Rupee 10,000 million in one or more trenches, whether with or without an option to subscribe for additional securities.

The Company intends to use the funds so raised towards capital expenditure for strengthening of procurements mechanism, establishment of

milk chilling centers, expansions, modernization, new projects, overseas direct investment in subsidiary companies/joint ventures, any other

use which may be required in the normal business and as permitted under applicable law from time to time.

The detailed terms and conditions for the offer and the rights and privileges of the holders of equity related instruments, with or without

warrant, non-convertible/partly convertible debentures with or without warrant and/or Global Depositary Receipts/ Shares (GDRs/GDSs)

and/or American Depositary Receipts/shares (ADRs/ADSs) against the issue of underlying shares and/or Foreign Currency Convertible Bonds

(FCCBs) convertible at the option of the holders into equity shares (herein referred to as the Securities) to resident of India or persons

resident outside India including Foreign Institutional Investor, Qualified Institutional Buyers (QIB) will be determined in consultation with

investment banker, advisors and underwriters to be appointed by the Company considering the prevailing market conditions and other

relevant factors. The resolution seeks to afford discretions to the Board of Directors (including a committee thereof) to finalize these terms in

consultation with the agencies aforesaid in accordance with applicable India Laws and/or International Laws. The Securities would be issued

at a price determined in accordance with SEBI Regulations, FEMA Regulations and other applicable Laws. The conversion of any of the

securities into equity shares at a later stage, if any, shall not be less than the minimum price as calculated as per SEBI Regulations and/or any

other authority concerned.

In view of the above, consent of the shareholders is being sought, by way of a special resolution, pursuant to the provisions of Section 42,

Section 62(1)(c), and other applicable provisions, if any, of the Companies Act, 2013 and other applicable Laws, rules and regulations and in

accordance with the Memorandum and Article of Association of the Company and Listing Agreement between the Company and Stock

Exchanges where the shares of the Company are listed. The Equity Shares arising out of issue of securities pursuant to this resolution shall

rank pari - passu in all aspects with the existing Equity Shares of the Company.

In view of the reasons aforesaid, an enabling resolution is proposed for consideration of the shareholders to give adequate flexibility and

discretion to the Board to finalize the terms of the issue of Securities. The board recommends the resolution for the approval of the members of

the Company.

None of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, in the resolution.

By Order of the Board

Sd/

Place: New Delhi (Deepa Kapoor)

Date: August 12, 2014 (Company Secretary & Compliance Officer)

...........................................................................................................................................................................

Affix 1

Rupees

Revenue Stamp

KWALITY LIMITED

Regd. Office: KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi- 110027

CIN : L74899DL1992PLC255519

ATTENDANCE SLIP

ANNUAL GENERAL MEETING

Wednesday, 24th September, 2014 at 9.30 a.m.

VENUE: Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036

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

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

Member's Name:..................................................................................................................................................

Complete Address:...............................................................................................................................................

..............................................................................................................................................................................

I hereby record my presence at the Annual General Meeting of the Company to be held on 24th September,

2014 at 9.30 a.m. at Lavanya, G.T. Karnal Road, Palla Bakhatavarpur Mord, Alipur, Delhi-110036

..................................................................

Member's Signature

If proxy attended Instead of Member:

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

Note: Members / Proxy holders wishing to attend the meeting must bring their duly filled and signed

Attendance Slip with them. NO GIFT/COUPON WILL BE DISTRIBUTED AT THE ANNUAL GENERAL MEETING.

Form No. MGT-11

PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies

(Management and Administration) Rules, 2014]

CIN: L74899DL1992PLC255519

Name of Company : Kwality Limited

Registered office : KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi-110027

Name of Member (s) : ..................................................... E-mail Id : ................................................................

Folio No/Client Id : .......................................................... DP ID : .....................................................................

Registered address : ...........................................................................................................................................

.............................................................................................................................................................................

I/We, being the member (s) of ..................... shares of above named company, hereby appoint

1. Name : ........................................................................ E-mail Id : ..............................................................

Address :

Signature : ...................................., or failing him

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

Address :

Signature : ...................................., or failing him

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 22nd Annual General Meeting of

the company, to be held on the 24th day of September, 2014 at 9:30 a.m./p.m. at Lavanya, G.T. Karnal Road, Palla

Bakhtavarpur Mord, Alipur, Delhi-110036 and at any adjournment thereof in respect of such resolutions as are

indicated below :

Resolution

No.

Resolutions Votes

For Against

1

2

Adoption of Balance Sheet and Profit & Loss Account together

with the reports of the Directors and Auditors thereon

Approval of dividend for the financial year 2013-14

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

eligible, offers himself for re-appointment (subject to the

alteration of Article of Association).

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

Auditor of the Company

5 Approval for alteration of article of association of the Company

6 Appoint Mr. Arun Srivastava as an independent director

7 Appoint Dr. Rattan Sagar Khanna as an independent director

9 Authorization to issue shares on preferential basis

8 Authorize the Board of Directors to borrow money under

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

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

Signature of shareholder

Signature of Proxy holder(s)

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of

the Company, not less than 48 hours before the commencement of the Meeting.

Affix

Revenue

Stamp

DIR

EC

TO

R'S

RE

PO

RT

Dear shareholders,

Your Directors have pleasure in presenting their Twenty Second Annual Report together with Audited Accounts of the Company for

the financial year ended 31st March 2014.

1. Financial Highlights

2. COMPANY PERFORMANCE

Your Company achieved a turnover of Rs. 4578.05 crores for the year ended on March 31, 2014, registering a growth of 23.99% over

the last year turnover of Rs. 3692.29 crores.Profit before Tax at Rs. 150.51 crores is 38.75% higher than that of last year of Rs. 108.48

Crores. Profit after Tax for the Financial Year 2013-2014 stood at Rs. 126.63 crores as compared to Rs. 96.53 crores in the previous

year a growth of 31.18%.

3. THE COMPANIES ACT, 2013

The Ministry of Corporate Affairs (MCA) vide its Circular dated April 4, 2014 has clarified that the financial statements and documents

annexed thereto, auditors report and boards report in respect of financial year that have commenced earlier than April 1, 2014 shall

be governed by the provisions of the Companies Act, 1956.With respect to other provisions of the Act, appropriate references have

been made in this report to the extent these provisions have become applicable from April 1, 2014.

4. DIVIDEND

Based on the performance of your Company, the Directors are pleased to recommend a final dividend of Rs. 0.10 per equity share of

Rs. 1 each, which will be paid after your approval at the ensuing Annual General Meeting. The final dividend, if approved by the

members of the Company would involve a cash outflow of Rs. 2.03 Crores (excluding dividend tax of Rs. 0.35 crores).

The dividend will be paid to members whose names appear on the company's register of members after giving effect to all valid share

transfers in physical form lodged with the Registrar and Transfer Agents (RTA) of the company on or before 16th September, 2014, in

respect of shares held in electronic form (demat mode), dividend will be paid to those deemed members whose names appear in the

statement of beneficial ownership furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India)

Limited (CDSL) at the close of business hours on 16th September, 2014.

5. TRANSFER TO RESERVE

The Board of Directors of the Company have recommended a final dividend of Rs. 0.10 per equity share of Rs. 1 each for the financial

year 2013-14. As the dividend is up to 10% of the paid up capital, there is no requirement to transfer any amount to the reserve under

Companies (Transfer of Profit to Reserve) Rules, 1975.

6. SIGNIFICANT DEVELOPMENTS

Your company has during the year enhanced its manufacturing capabilities. The Company has acquired a plant situated at Village

Mumrejpur, Tehsil Dibai, District Bulandshahar, Uttar Pradesh. Your company has also taken initiatives to increase the production

capacities of the newly acquired plant as well as that of the plant situated at Softa to meet the growing demand of its products in the

market. The expanssion programme is under implementation.

The Company is also under process of launching new value added products like variants of flavored milk, UHT milk, Table butter in tubs,

Cream in tetra packs, variants of cheeses and yogurts etc. Some of the products are in production test stage and your Company is

confident of launching these products in the market in near future.

7. CORPORATE SOCIAL RESPONSIBILITY

Your Company defines Corporate Social Responsibility above the philanthropic activities and encompasses all related concepts such

as corporate sustainability, business responsibility and corporate citizenship as the way a company balances its economic, social and

environmental objectives while addressing stakeholder expectations and enhancing shareholder value. The Company is in Dairy

sector, which is an important primary source of livelihood for Indian rural families. Its main objective is to provide rural employment and

income generating opportunity particularly for small, marginal farmers and landless labour (men & women).

The Company shall continue to have among its objectives the promotion and growth of community residing in the vicinity of its plants,

MCCs etc where it seeks to actively assist to uplift the social economy, standard of living and making this community self-reliant as

community living around many of our factories comprises the weakest sections of rural and tribal India with no access to basic

amenities.

DetailsYear ended 31.03.2014

INR in crores

Year ended 31.03.2013

INR in crores

Turnover

Profit before Interest, Depreciation,

Extraordinary Items & Tax

Interest & Finance Charge

Depreciation

Profit Before Extraordinary Item & Tax

Extraordinary Items

Profit before Tax

Tax Expense

Profit after Tax

3692.29

214.04

92.28

10.29

111.48

3.00

108.48

11.95

96.53

4578.05

276.03

112.61

12.91

150.51

----

150.51

23.88

126.63

The Company has outsourced facilities to support the milk producers, who are directly linked in our commercial milk procurement activities. In

order to help such farmers to increase the productivity of their cattle and buffaloes, Kwality Limited has provided, on a principal of no-profit-no-

loss, good quality feed. Our Company is also providing such other technical inputs as vaccinations, artificial insemination, and free advice on

prevention and cure of common diseases.

The Sahayogi Foundation has been set up (the foundation) as a non-profit trust in July 2014. The Foundation will work closely with the Board

of Directors the CSR Committee in implementation of various CSR activities. The Foundation will also assist in reporting progress of deployed

initiatives and in making appropriate disclosures periodically.

MILK PRODUCER CENTRIC PROCUREMENT SYSTEM

Your Company is committed to the upliftment of the rural community by implementing a milk producer centric approach to procure milk and

enhance milk productivity. The approach is being operationalized by forming Village Level Collection Centres (VLCs). We have established a fair

and transparent system through Automatic Milk Collection Units (AMCUs) comprising of Electronic Weighing Scale, Eko Milk Analyser, Data

Processing Unit, printer & display to determine the rate of milk on the basis of quality to the milk producer. Milk is tested for quality parameters

of fat & SNF, quantity is weighed through the Electronic machine, the rate payable is displayed and a payment slip generated by the computer is

handed over to the milk producer. Milk payment is made on every tenth day and is transferred to the joint account, operated by the Village

Service Provider (VSP) and representative of the milk producers.

We have been able to reach out to around 4000 villages situated across the states of Rajasthan, Haryana, Punjab and Uttar Pradesh through

more than 2,70,000 farmers.

a) Productivity Enhancement Programme

Long inter-calving period is one of the greatest impediments in achieving sustainable dairying as the cost of the feed and forages are on the

rise. Nutritional deficiency across the project area is a limiting factor which attributes to infertility in dairy animals. In order to provide good and

balanced quality feed, Kwality Limited has outsourced animal feed processing under the brand of DAIRY BEST. Feed formulation is provided

by the company with an optimal mix of grains and mineral mixture as the ingredient. Feed is processed under the supervision of the competent

company representative to ensure the use of formulation ingredients during the processing.

b) Clean Milk Production Campaign

To ensure the procurement of good quality of raw milk and to create awareness among the milk producers, the Company had organised a

campaign on Clean Milk Production across the milk shed area covering more than 30,000 farmers across various villages.

c) Dairy Animal Health Management

Preventive and curative health management training programs related to dairy animals digestive system, reproductive system and mastitis

control were carried out in collaboration with Ayurvet Limited. About 50 Village Service Providers (VSPs) have been identified as KISSAN

MITRAS and were imparted elementary training at Ayurvet Training Centre. These supvisors are working under experienced veterinarians to

provide preventive treatment to dairy animals.

d) Financial Inclusion Initiative

Your Company has signed a MoUs with Allahabad Bank to assist milk producers to get access to bank credit for the purchase of dairy animals.

Similar arrangement has also been worked out with Central Bank of Indian and Bank of India. SBI and PNB has sanctioned interest free loan of

50 lacs for purchase of 50 dairy animals to two of our VSPs under Kamdhanu Scheme through our assistance.

e) Go Green Initiative

In the pursuit of the fulfillment of the environmental commitment of harnessing solar energy and saving fossil fuel, your Company has provided

75 solar panels at the VLC level which provide power to operate the AMCUs and lights.

f) Capacity Building

Your Company recognizes the need to have quality and trained manpower in order to achieve competitive advantage. With a view to unleash

the potential and sharpen the skills of the employees, a series of in-house and outbound training programs were organised. In accordance

with the skill and competency requirements of the various groups, training programmes on effective communication, team building, milk

chilling centre management, quality of milk testing, dairy animal health management were conducted.

Details of the programmes are as under:

S. No. Training Programme No. of programmes No. of participants

1. Effective communication 4 74

2. Teambuilding 2 20

3. Dairy animal health management 2 40

8. CREDIT RATING

BWR has assigned Long-Term rating of BWRA with Stable Outlook and BWR A1 as short term rating to Kwality Limited overall fund based

Working Capital facilities.

9. FUTURE OUTLOOK

Over the past decade, significant transformation took place in the Indian demographic space which led to heightened consumer interest in

value added products. This shift in the dynamics of the industry proved beneficial for the manufacturers since value added products have

higher margins as compared to liquid milk segment. Considering the higher rate of profit margin expected from the value added Products, your

Company has shifted focus to add new products in its existing product line. To increase procurement of milk through Producer Based Village

Centres. Your Company would be hiring more Milk Chilling Centers (MCC) and also setting up its own large MCCs with capacities of more than

50,000 LPD at different locations in North India.

Future Objectives :

Milk Procurement

Kwality Limited has developed its own comprehensive milk procurement strategy to increase the procurement of high quality milk directly

from the farmers

Setting up Company owned Milk Chilling Centre with a capacity more than 50,000 LPD.

A basis for payment for milk has been devised ensuring the supply of standardised milk by the farmers and preventing adulteration

Farmers are provided with veterinary doctors to look after animal health and artificial insemination need, subsidised animal feed and annual

FMD vaccination so as to provide incentive to farmers to be associated to us and thus increase the number of farmers under each VCC

New Products & Consumer Brands

After the launch of the Low Cholesterol Pure Ghee, Livlite, the Company plans to launch various new products catering to the increasing

health needs of the Indian Consumers

Launch of variants of flavored milk for retail consumers

Setting up manufacturing facilities for products like variant of cheese, drinking yogurt, butter in tubs, cream in tetra packs etc.

Overseas Expansion

Kwality FZE (100% subsidiary of your Company in dubai) plans to increase its import of SMP, WMP , other Dairy Products and derivatives , and

then reprocess, pack and sell these products under its brands, in Dubai and export to other countries.

10. EXPORT

With the removal of ban on the export of skimmed milk powder in June, 2012 and whole milk powder & dairy whitener in November, 2012. Your

Company started export of Dairy products and achieved the export turnover of Rs. 183.45 crores as compared to Rs. 71.74 crores in the FY

2012-13. In the next fiscal year the Company has estimated an increase in export sales based upon the rising demand of dairy products in the

international market and the acceptance of our products from our existing and prospective buyers. The strategy to develop new products and

target new export regions would continue, so that we have a broad based direction of exports.

However the export may be affected during the current year as the Government has withdrawn the VKYUG scheme on SMP.

11. SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

Your Company has a wholly owned subsidiary under the name and style of Kwality Dairy Products FZE in free trade zone of United Arab

Emirates to increase its global foot print and to develop and cater to the new markets.

Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21 and 23 of Companies (Accounting

Standards) Rules 2006. The Consolidated Statements reflect the results of the Company and those of its subsidiary. As required by Clause 32

of the Listing Agreement with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Independent Auditors

Report thereon are annexed and form part of this Annual Report. These consolidated financial statements provide all relevant financial

information about the Company.

12. CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 31st March, 2014 is

attached as a part of the Annual Accounts of the Company.

13. MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis of the Company for the year under review, as required under Clause 49 of the listing agreement with

the stock exchanges, is given as a separate Section in Annual Report.

14. KEY MANAGERIAL PERSONNELS (KMP):

The Companies Act, 2013 introduced the new concept of Key Managerial Personnel (KMP) which includes the Managing Director, Chief

Executive Officer or Manager, Whole Time Director, Company Secretary and Chief Financial Officer. The Key Managerial Personnel would guide

the Boards to achieve their defined objectives and purposes by adhering to good Corporate Governance practices. KMP would also be looked

upon by the Regulators for the non-compliances.

The new Companies Act, 2013 cast a significant duty on the KMPs in successful management of the company. It clearly specifies that whole

time KMP cannot hold office in more than one company except in its subsidiary at same time.

As per Section 203 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 if any, and the rules made

thereunder, Board of Directors of the Company has appointed Mr. Sunit Shangle as a Chief Financial Officer of the Company with effect from

12th August, 2014 under the preview of Key Managerial Personnel.

The Key Managerial Persons of the Company are:

Name Designation

Mr. Sanjay Dhingra Managing Director

Mr. Sidhant Gupta Director

Mr. Sunit Shangle Chief Financial Officer (CFO)

Ms. Deepa Kapoor Company Secretary

15. DIRECTORS

The Board of your Company is constituted of four Directors comprising of Mr. Sanjay Dhingra, Chairman & Managing Director, Mr. Sidhant

Gupta, Executive Director, Mr. Arun Srivastava, Non-Executive Independent Director and Dr. Rattan Sagar Khanna, Non-Executive Independent

Director.

In terms of Section 203 of the Companies Act, 2013 an individual may be appointed as the Chairperson as well as the Managing Director of the

Company at the same if it is provided in the Article of Association of the Company or the Company carries multiple businesses.

Therefore the Company in order to comply with the provisions of Section 203 proposes to alter its Article of Association in the ensuing Annual

General Meeting in such way that an individual may be appointed as Chairman and Managing Director at the same time.

As per the Companies Act, 2013 Mr. Sanjay Dhingra, Chairman & Managing Director of Company is liable to retire by rotation at the ensuing

Annual General Me