Kwality Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2018

1. The above result have been reviewed by the Audit Committee and approved by the Board of the directors of the Company at their respective meeting held on 28th May 2018 The statutory auditors of the Company have earned out audit for the quarter and year ended 31 March 2018.

2. In accordance with the requirements of the Accounting Standard 17 "Segment Reporting", the Company’s business consists of one reportable business segment if, “Manufacturing & Processing of Milk & Milk Products” hence no separate disclosures pertaining to attributable Revenue. Profits, Assets - liabilities, Capital Employed art given.

3. During the fourth quarter Company in its Remuneration, Compensation and Nomination Committee meeting held on 10 January 2018 granted 5,00,000 stock options in accordance to 'Kwality Employee Stock Option Plan 2014".

4. During the fourth quarter, the company in its Board meeting held on 19 February 2018, had converted 1 (One) warrant into 21,69,762 equity shares at a price of INR 115.22 per share aggregating to INR 25 crore allotted to Bennett, Coleman & Co Ltd at a face value of INR 1 each and converted 1 (One) Compulsorily Convertible Debenture into 12,15,066 equity shares at a price of INR 115.22 per share aggregating to INR 14 crore allotted to IIT Media Ltd at a face value of INR 1 each.

5. The matter between HUL and Company regarding entry into each other business areas under the brand name involving the word ’Kwality' is sub judice in Kolkata High Court. The subject matter took place after the Balance Sheet date.

6. The Company has in past couple of years invested in development of new manufacturing facility for production of ‘Value Added Products’ at Softa (Pahwal). In view of the said expansion and to part fund the working capital requirement there has been a delay in payment of Income Tax and interest thereon.

7. Trade payables includes foreign currency balance INR 2,54,86,696 outstanding for a more than six months from the date of GRN. Similarly Trade receivables includes foreign currency balances INR 87,81,77,366 which is pending for collection more than nine months from the date of the invoices. The Company believe that there will be no significant penalty on account of foreign exchange payable and receivable delay.

8. Income Tax search u/s132 of Income Tax Act, 1961 was conducted on 22 August 2017. Subsequently. Company has received notices u/t 148 and 153A Further the proceedings in this matter are yet to start. At tins point of time it is not possible to predict the outcome of ascertain the demand of Tax, if any from the Income Tax Department accordingly no adjustments have been recorded in the financial statements.

9. Having regard to enhanced production facility and planned funding, management is confident of meeting all its liabilities accordingly the financial statements have been prepared on a 'going concern' basis.

10. The figures for the quarter ended 31 March 2018 are the balancing figures between unaudited figures for the Nine Month period ended 31 December 2017 and audited figures year ended 31 March 2018.

11. According to schedule III of the Companies Act 2013, sales for the period upto 30 June 2017 and earlier periods in these financial results arc inclusive of excise duty. Consequent to applicability of Goods and Service Tax ( GST) wef 1 July 2017, sales are net of GST in accordance with the requirement of IND AS-18 "Revenue" refer 2(g) in above result.

12. The figures for the previous periods have been regrouped/ rearranged wherever necessary.