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STUDY OF CORPORATE GOVERNANCE PRACTICES IN KWALITY LTD
AND VADILAL LTD.
A report submitted to
UKA TARSADIA UNIVERSITY
in Partial Fulfilment of the Requirements for the Degree of
Master of Bus!ess A"#!strato!
in
$%$$&$'(' Cor)orate Go*er!a!+e ,Fe-"or/0
B1
Gu"e" 21 3
Dr.4tes5Par#ar 6 Mr. Ma!s5 Pat5a/7
Assistant Professor, SRIMCA
De)art#e!t of Ma!a8e#e!t7 S5r#a" Ra9+5a!"ra I!sttute of Ma!a8e#e!t a!"
Co#)uter A))-+ato!7
Go)a- V"1a!a8ar7 Bar"o-7 Surat.
4u-1 '$(:
F.Y M.B.A
A
E!ro-#e!t No. Na#e of Stu"e!ts
12 rambhatt!e"ur
2# MullaRahila Ahmed
2$ Patel Mitali %iteshbhai
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.e hereb" 'ertif" that (e are the sole author of this resear'h (or) and that neither an" part
of this report nor the (hole of the report has been submitted for a degree to an" other
/ni-ersit" or Institution*
.e 'ertif" that, to the best of our )no(ledge, our report does not infringe upon an"one0s
'op"right nor -iolate an" proprietar" rights and that an" ideas, te'hniques, quotations, or an"
other material from the (or) of other people in'luded in our report, published or other(ise,
are full" a')no(ledged in a''ordan'e (ith the standard referen'ing pra'ti'es*
.e de'lare that this is a true 'op" of our report, in'luding an" final re-isions, as appro-ed b"
our report re-ie( 'ommittee*
Date3
P-a+e3 S8!ature a!" !a#e of stu"e!ts
Verfe"
S8!ature a!" !a#e of Su)er*s
ACKNOWLEDGEMENTS
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.rite this paragraph of "our 'hoi'e* ut it must 'o-er A')no(ledgements to Dr*Prashant
oshi, Dean and Professor, Department of Commer'e and Management, Corporate
o-ernan'e Sub3e't &ea'her +Dr*iteshParmar4Mr* Manish Patha) A%5 6&78R FAC/9&5
%AM8 .76 789P8D 56/, Compan" Mentor, An" other 8mplo"ees and A%5 6&78R
P8RS6% (hom "ou (ould li)e to than)*
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E>ECUTIVE SUMMARY
&7IS S76/9D 8 6F MA:IM/M 2 PA8S 96% C6;8RI% S/MMAR5 6F
.7698 PR68C&* M8A%C8 I& M/S& C6;8R I% S76R& I%&R6D/C&I6%, RI8F
A6/& C6RP6RA&8 6;8R%A%C8 PRAC&IC8S 6F C6MPA%5 1, RI8F A6/&
C6RP6RA&8 6;8R%A%C8 PRAC&IC8S 6F C6MPA%5 2, C6MPARISI6% 6F
C6RP6RA&8 6;8R%A%C8 PRAC&IC8S 6F &.6 C6MPA%I8S, FI%DI%S A%D
R8C6MM8%DA&I6%S &6 C6MPA%5 1, R8C6MM8%DA&I6%S &6 C6MPA%5 2*
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TABLE OF CONTENTS
C5a)ter
No.Part+u-ars Pa8e Nos.
< Certifi'ate
< De'laration
< A')no(ledgements
< 8=e'uti-e Summar"
< 9ist of &ables
< 9ist of Figures
< 9ist of Charts
1
Introdu'tion
Compan" 1
Compan" 2
2 Stud" of Corporate o-ernan'e Pra'ti'es
>
!e" Findings
Compan" 1
Compan" 2
#
Re'ommendations
Compan" 1
Compan" 2
? Con'lusions
@ Referen'es
< A%%8:/R8S
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LIST OF TABLES
Ta2-e No. Tt-e of Ta2-ePa8e
No.
&able 1*1
LIST OF C=ARTS
C5art No. Tt-e of C5artPa8e
No.
Chart 1*1
Se+tor 3 Foo" I!"ustr1
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I!"a! Foo" I!"ustr1
I!tro"u+to!3
&he Indian food industr" is poised for huge gro(th, in'reasing its 'ontribution to (orld food
trade e-er" "ear* In India, the food se'tor has emerged as a high2 per 'ent of the 'ountr"0s total food mar)et, the food pro'essing
industr" is one of the largest industries in India and is ran)ed fifth in terms of produ'tion,
'onsumption, e=port and e=pe'ted gro(th* &he total food produ'tion in India is li)el" todouble in the ne=t 1 "ears (ith the 'ountr"0s domesti' food mar)et estimated to rea'h /SB
2? billion b" 21?*
&he o-ernment of India has been instrumental in the gro(th and de-elopment of the food
pro'essing industr"* &he go-ernment through the Ministr" of Food Pro'essing Industries
+MoFPI is ma)ing all efforts to en'ourage in-estments in the business* It has appro-ed
proposals for 3oint -entures +;, foreign 'ollaborations, industrial li'en'es and 1 per 'ent
e=port oriented units*
Mar/et S?e 3
&he Indian food and gro'er" mar)et is the (orld0s si=th largest, (ith retail 'ontributing $
per 'ent of the sales* It is pro3e'ted to gro( at the rate of 1# per 'ent, tou'hing /SB #2
billion b" 22*
&he Indian food pro'essing industr" a''ounts for >2 per 'ent of the 'ountr"0s total food
mar)et, (% )er +e!t of #a!ufa+tur!8 Gross Do#est+ Pro"u+t ,GDP07 1> per 'ent of
India0s e=ports and si= per 'ent of total industrial in-estment* Indian food ser-i'e industr" is
e=pe'ted to rea'h /SB $ billion b" 21*&he Indian gourmet food mar)et is 'urrentl"
-alued at /SB 1*> billion and is gro(ing at a Compound Annual ro(th Rate +CAR of 2
per 'ent* It is e=pe'ted to 'ross /SB 2* billion b" 21?*
&he online food ordering business in India is in its nas'ent stage, but (itnessing e=ponentialgro(th* &he organised food business in India is (orth /SB # billion, of (hi'h food deli-er"
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is -alued at /SB 1? billion* .ith online food deli-er" pla"ers li)e FoodPanda, omato,
&in"6(l and S(igg" building s'ale through partnerships, the organised food business has a
huge potential and a promising future*
I!*est#e!ts 3
A''ording to the data pro-ided b" the Department of Industrial Poli'ies and Promotion
+DIPP, the food pro'essing se'tor in India has re'ei-ed around /SB @*?? billion (orth of
Foreign In-estments during the period April 2ESeptember 21?* &he Confederation of
Indian Industr" +CII estimates that the food pro'essing se'tors ha-e the potential to attra't as
mu'h as /SB >> billion of in-estment o-er the ne=t 1 "ears and also generate emplo"ment
of nine million person
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Ka-t1 LTD =stor1*
T1)e Su2s"ar1
I!"ustr1 Foo"
Fou!"e" (:
=ea"Huarters Mu#2a7Ma5aras5tra7I!"a
Pro"u+ts Fro?e! Dessert
Pare!t =!"usta! U!-e*er L#te"
!(alit" Dair" +India +!DI9 India0s premier dair" foods 'ompan", fo'uses on building
leadership positions in branded and added -alue mar)ets a'ross the dair" se'tor* !DI9
spe'ialiGes in the storage of mil) and related produ'ts*
!DI9 is ideall" situated in the 'it" of Faridabad, in the state of 7ar"ana in %orthern India*
.ith a distan'e of around an hours dri-e from Delhi, !DI9 operates from si= and half a'res
of 'omple=* 9o'ated in a mil) ri'h belt of India, the 'ompan" follo(s a (ell
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It has supplied its goods and (on appre'iation from reno(ned 'ompanies li)e %estle India
9td, 7industan 9e-er and Mother Dair", ;adilal Industries 9td and Smith !line ee'ham to
name a fe(* &he 'ompan" also e=ports its produ'ts to -arious 'ountries* .ith qualit",
integrit" and te'hnolog" being the hallmar) of its gro(th the 'ompan" is toda" perfe'tl"
poised to fa'e all 'hallenges and obsta'les and stri-e for greater su''ess in the "ears to 'ome*
&heir business philosoph" is simpleJ Ser-e the needs of the 'ustomer b" pro-iding
them!(alit"produ'ts*
In 21 !DI9 laun'hed HDair" est heeH
In 212 !(alit" Dair" 9aun'hed ne( dair" produ'ts < Paneer, Curd K Mil)*
Ka-t1 LTD Pro"u+tsJ
S)immed mil) po(der
.hole mil) po(der
Dair" (hitener
Dair" mi=
I'e 'ream mi=
hee
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Shri* San3a" Dhingra
+Managing Dire'tor,
Dr* R* S*!hanna
+Independant
Dire'tor,
Shri Siddhant 2upta
+8=e'uti-e Dire'tor,
Admin 7RD Mar)eting Finan'e 9egal A''ounts
Shri Arun Sri-asta-a
+Independant Dire'tor)
Or8a!sato!a- Stru+ture 3
A+5e*e#e!ts 3
IS6 L1
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Last F*e Year Perfor#a!+e Of Ka-t1 Lt" 3
Atta'hed belo( in A%%8:/R8*
Ot5er I!for#ato! 3
T5e +o#)a!1 s soo! 8o!8 to -au!+5
Rasgula &in +# gm +Sugar Free
ulabamun &in +# gm +Sugar Free
Fresh Paneer +2 gmK # gm
Fresh pasteuriGed mil) in pol" pa')s
Fla-ored mil)
Malted foods
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Va"-a- I!"ustres LTD.
Va"-a- I!"ustres LTD =stor13
Date of Esta2-s5#e!t (@
Re*e!ue @*>2># + /SD in Millions
Mar/et Ca) >1*?1#L2> + Rs* in Millions
Cor)orate A""ress
A41, &7 Floor,N&ime Square ldgN, C**
Road,%r*9alunglo( Char Rasta, %a-rangpura
AhmedabadL,
u3arat*
Bus!ess O)erato! Consumer Food
F!a!+a-s &otal In'ome < Rs* #1L@*$$> Million + "ear ending
Mar 2A1?,
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%et Profit < Rs* *@ Million + "ear ending Mar 21?
Co#)a!1 Se+retar1 Darshan Shah
Ba!/ers an) of India
Au"tors !antilal Patel K Co
;adilal Dair" International 9td (as in'orporated on ul" 2, 1LL> , as Super Mil) Ma)ers P-t9td* &he main ob3e't of the 'ompan" in'ludes produ'tion of I'eOCreams, Mil), utter,
Cheese, hee, malted mil) food, Infant mil) food, s)immed mil) po(der and 'asein*
&he 'ompan" too) up a di-ersifi'ation pro3e't to set up an integrated dair" in Sinnar,
Maharashtra to manufa'ture Mil), butter, 'heese, ghee, mil)food, s)im mil) po(der and
'asein in 1LL#* Performan'e of the 'ompan" suffered due to problems fa'ed b" the Dair"
Di-ision in 1LL$*
;adilal (as set up (hen i'e 'ream (asnHt e-en an industr"* From selling sodas in 1L$,
;adilal has tra-elled through four generations of andhis*
Initiall", the founder ;adilal andhi used to ma)e i'e 'ream b" the traditional !othi method,
using a hand
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ta)ing into the firm* As a result, b" the 1L$s, the ;adilal Compan" had alread" e-ol-ed into
a modern 'orporate entit" and had annuall" for the last 1 "ears, aims
to tou'h Rs #? 'rore this fis'al* ;adilal has a 'ore team of in
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&he Compan" laun'hed adabite, Flingo and ourmet (hi'h 'reated a storm in the Indian
I'e
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Pra-!e ! +re#e3Deli'ious pure mil) i'e 'ream (ith the 'run'h" goodness of 'rushed
'aramel*
Saffro! "e-te3Indulgent i'e 'ream made (ith fresh mil), garnished (ith e=oti'
saffron*
C5o+o 2ro!e ")3S'rumptious i'e 'ream made (ith fresh mil), 'ream and
'ho'olate fudge embellished (ith 'hun)s of 'ho'olate bro(nie*
Coffee +ara#e-3Deli'ious 'offee and 'aramel 'ream inside a nutt" la"er of 'risp
'ho'olate 'ra')ling*
Dou2-e +5o+o-ate +ara#e-3Dele'table 'ho'olate bar dipped in a sil)en la"er of ri'h
'aramel en-eloped in a de'adent*
Or8a!sato!a- Stru+ture 3
Ra3esh R handhi
+Chairman
Mamta R handhi
+%8D K %ID
De-anshu 9 handhi
+%8D K %ID
Darshan Shah
+Compan" Se'retar"Ashish 7 Modi
+%8ID
a"antilal M Shah
+%8ID
Preet P Shah
+%8ID
ignesh shah
+%8ID
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A+5e*e#e!ts 3
2$ a(ards o-er # 'onse'uti-e "ears at Q&he reat Indian I'e Cream ContestQ
Ran)ed %o* 1th in the Food Produ'ts Categor" b" &he 8'onomi' &imes , 21>
;adilal Industr" Certifi'ationJ IS6 L1J 2 ;adilal ui') &reats /nit is 'ertified (ith RC, IS6 L1J2, IS6 22J2?
;oted as IndiaHs Most &rusted brand in the i'e 'ream 'ategor" b" &rust Resear'h
Ad-isor" oard*
Last F*e Year Perfor#a!+e.
Atta'hed in A%%8:/R8*
Ot5er I!for#ato! 3
Pro"u+to! Ca)a+t1 3
Candies Made Per Da" 1
I'e'ream Cups Made Per Da"
Cones Made Per Da" @
E)e+te" E)a!so!3
?, ne( sales outlets planned in F51@
? ne( branded i'e 'ream parlors and ? more distributors e=pe'ted to be added in
F51@
In-estments in ne( te'hnologies
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STUDY OF CORPORATE GOVERNANCE PRACTICES.
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C-ause % for I!"a! Co#)a!es3
Corporate o-ernan'e 'onstituted b" the Se'urities 8='hange oard of India +S8I in
1LLL* Clause #L of the S8I guidelines on Corporate o-ernan'e as amended on 2L
6'tober 2# has made ma3or 'hanges in the definition of independent dire'tors,
strengthening the responsibilities of audit 'ommittees, impro-ing qualit" of finan'ial
dis'losures, in'luding those relating to related part" transa'tions and pro'eeds from publi'4
rights4 preferential issues, requiring oards to adopt formal 'ode of 'ondu't, requiring
C864CF6 'ertifi'ation of finan'ial statements and for impro-ing dis'losures to
shareholders* Certain non
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Se+to! VII. Mea!s of +o##u!+ato!3
. Juarter-1 resu-ts3
KWALITY LTD. VADILAL INDUSTRIES LTD.
De+( Se)( 4u!( Mar( De+(% De+( Se)( 4u!( Mar( De+
INCOME
%et Sales &urno-er 1##1*2> 1#>2*L$ 1#11*>@ 1>?*$$ 12@*22 @*2? 1>*#$ 1>*1 $$*L$ @?*
6ther In'ome #*$@ *@? *>> @*L$ >*#$ *2 *1L *> *$ *$@
&otal In'ome 1##?*LL 1##1*@2 1#11*@L 1>@?*$# 12L*@L @*#? 1>*@$ 1>*>1 $*? @@*
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E>PENSES
Sto') Ad3ustments 1L*#1 $2*1 2$*## $*2 *11 *?# $*#> 2 $L*1> 1*? L1*# L2*$ >*?2 ?@*>2 L>*1> ??*$1 >?*
Po(er and Fuel * * * * * * * * * *
8mplo"ee 8=penses L*# *$ ?*?@ @*1 @*1L @*11 @*#> ?*$ #*$L ?*2
Administration and
Selling 8=penses* * * * * * * * * *
Resear'h and
De-elopment
8=penses
* * * * * * * * * *
8=penses CapitaliGed * * * * * * * * * *
6ther 8=penses >>*L #$@*1@ #$?*@ >2$*2 >?1*L 2>*1 2$*#1 >?*?# 2>*>$ 1*
Pro-isions Made * * * * * * * * * *
TOTAL E>PENSES 1>#*?? 1>#@*>@ 1>1L*## 12$$*? 12#*>@ $*L2 L*$ 1#1*1@ $1*@L $1*
6perating Profit L2*@ @*@ L1*L2 1*1L 1*$
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9ine* usiness 9ine and usiness Standards*
. A!1 e2ste7 5ere "s)-a1e"3
&he (ebsites (here these all information0s of !(alit" ltd* and ;adilal industries ltd* is
displa"edJ
(((*mone"'ontrol*'om
(((*'bi*'om
Se+to! I>. Ge!era- S5are5o-"er !for#ato!3
AGM
MEETING
KWALITY LTD. VADILAL INDUSTRIES LTD.
Date7 T#e7
Ve!ue
>4L421?, LJ>am, la-an"a,
*&*!arnal Road, Palla
a)hata-arpur Mord, Alipur,
Delhi@
24L421?, 2*pm, IC8A, a33ar
7all, %irman ha-an, opp* 9a( arden,
8llisbridge, Ahmedabad@
F!a!+a- Year >4@421# O >14>421? >4@421# O >14>421?Date Of Boo/ 2?4L421? < >4L421? 14L421? < 24L421?
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C-osure
D*"e!"
Pa1#e!t Date
.ithin > da"s of de'laration .ithin > da"s of de'laration
*. Lst!8 o! Sto+/ E+5a!8es3
KWALITY LTD. VADILAL INDUSTRIES LTD.
8quit" share of the 'ompan" are 'urrentl"
9isted on S8 K %S8 of India ltd*
&he 'ompan" has paid the annual listing fees
for the "ear 21?12
%S8< I%8$$?12?
< S8 9imited J ?1L1?@
< %ational Sto') 8='hange of +India 9imited
J ;ADI9A9I%D
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Ma", 21# >*2 2$*@ 2 1@>*1
une, 21# ?$*> >?*2? 21$*? 1
ul", 21# ? #? 22? 1L
August, 21# ?>*#? ##*$ 2@*L 1L1*2
September, 21# ?> #? 2?? 2
6'tober, 21# ?1*# #? 21$*L 1L@*?%o-ember, 21# #1*?? ##*?@ >1>*$ 1@*$
De'ember, 21# #$*> >@*2? >>*?? 2#2
anuar", 21? ##*#? >@*2 2 22L*L?
Februar",21? #?*# >$*#? 2@$*# 2>*>
Mar'h, 21? #> >?*2? 2$#*@ 2>#*#
*. Perfor#a!+e ! +o#)arso! to 2roa"2ase" !"+es su+5 as BSESe!se7 CRISIL !"e et+ 3
KWALITY LTD.3%ot A-ailable
VADILAL INDUSTRIES LTD 3
. Re8strar a!" Tra!sfer A8e!ts3
KWALITY LTD. VADILAL INDUSTRIES LTD.
eetal Finan'ial K Computer Ser-i'es ltd*
eetal house, >rdfollr, LL Madangir,
ehind 9o'al Shopping Center, %ear Dada
7arsu)hdas Mandir, %e( Delhi
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Phone %o*J L1
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No. of S5ares No. of S5are5o-"ers No. of EHut1 S5ares
&otal of Share
7older
&otal of Share
Capital
1
#1
?1 *1# 22?#$$ 1*>
1 K abo-e #@ *22 1L##??1 *LL#
VADILAL INDUSTRIES LTD 3
No. of s5ares No. of s5are 5o-"ers No. of s5ares of s5ares1$@ *$?
?1L 2LL##1 #*1$
11
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&he Compan", 'onsequent to introdu'tion of Depositor" S"stem +DS, has established an
ele'troni' 'onne'ti-it" (ith %SD9 K CDS9, Depositories* Members, therefore, ha-e the
option of holding and dealing in the shares of the Compan" in ele'troni' form through %SD9
and CDS9* In -ie( of the numerous ad-antages offered b" the DS, members are requested to
a-ail the fa'ilit" of dematerialiGation of the Compan"0s shares on either of the Depositories asaforesaid* If "ou (ish to maintain "our shareholding in the ele'troni' form b" 3oining DS,
"ou (ill ha-e to open an a''ount (ith a Depositor" Parti'ipant +DP, (ho are agents of
%SD9 or CDS9 and lodge "our share 'ertifi'ates (ith "our DP for DematerialiGation* &he
DP (ill then ensure that the ph"si'al share 'ertifi'ates are 'an'elled and after -erifi'ation b"
the Compan", an equi-alent number of shares (ill be 'redited to "our a''ount (ith the DP in
the ele'troni' form* 5ou are also permitted under the DS to re'on-ert "our ele'troni'
shareholding into the ph"si'al form of share 'ertifi'ates b" a pro'ess of RematerialiGation* It
ma" be noted that the DP (ould 'harge the in-estors for its ser-i'es, (hi'h ma" -ar" from
one DP to another* It is reiterated that requests for DematerialiGation and Rematerialisation
are to be made onl" to the DP (ith (hom "ou ha-e opened an a''ount and not dire'tl" to the
Compan" or its Registrar K Share &ransfer Agent* &otal @$??1$$ 8quit" Shares of the
Compan" representing L>*L of the total paid,1,,2 'on-ertible
.arrants, out of (hi'h 1,??,##,#1 .arrants are 'on-erted into equi-alent numbers of 8quit"
Shares of fa'e -alue of Re 1 ea'h and 1,??,##,#1 .arrants of Rs #*2? ea'h amounting to
Rs $? la's are still pending for 'on-ersion, for (hi'h 'ompan" has alread" re'ei-ed 2?
of the -alue of .arrants*
VADILAL INDUSTRIES LTD.3
%ot Appli'able
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*. P-a!t Lo+ato!s3
KWALITY LTD.3 VADILAL INDUSTRIES LTD.3
;illage Softa, &esil K dist* Pal(al,Faridabad, 7ar"ana
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