Order in the matter of Kwality Dairy India Limited

1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) has observed a huge rise in the price and trading volume of Kwality Dairy India Limited (hereinafter referred to as “company”) during the period October 2008 to November 2009. The shares of the company are traded at Bombay Stock Exchange Limited (BSE). From the trading history in the shares of the company it was observed that from a low of Rs. 14.6 on October 27, 2008 it had risen to Rs. 1114.45 as on November 11, 2009. In view of the increase in the price of the shares of the company an examination was carried out by SEBI to look into the dealing of the shares of the company for the period January 01, 2009 till September 23, 2009. The observations from the preliminary examination are given in the following paragraphs. A. Background of Company 2. The registered office of the company is Village Softa, Tehsil Palwal, Faridabad, 121004 while the corporate office of the company is located at 5/1-B, Ramesh Nagar, New Delhi – 110015 (source: www.capitaline.com). 3. The shares of the company are listed at BSE. The face value of the shares of the company is Rs. 10. A gist of the shareholding of the promoters and other shareholders as per the filings made by the company with BSE is as under:

Table 1 : Shareholding pattern Category Share- Shares % share Share- Shares % share Share- Shares % share holders holding holders holding holders holding Quarter Ending June 2009 March 2009 December 2008 Promoter & 4 15,233,900 83.70 4 15,233,900 83.70 4 15,248,900 83.79 Promoter Group Public 5,057 2,966,100 16.30 5366 2,966,100 16.30 5851 2,951,100 16.21 Shareholding Total 5,061 18,200,000 100 5370 18,200,000 100 5855 18,200,000 100 (Source: BSE website) 4. From the disclosures made by the company (as available on BSE website) regarding shareholding pattern it is observed that since 2003 there has been no major change in the shareholding of the promoters and in the capital structure of the company. Further, the promoters have 67.17% of their shareholding in dematerialized form. There are no disclosures regarding pledge of the shares reported by the promoters. 5. From the unaudited financial results for the quarter ending June 2009 the net profit was Rs. 36.11 million as compared to Rs. 9.78 million during quarter ending March 2009. From the unaudited financial results for the quarter ending September 2009, the net profit was Rs. 68.56 million. For the year ending March 2009 the annualized Earning per Share (EPS) was Rs. 4.98. As on September 23, 2009 the Earning per Share (EPS) of the company was Rs. 5.40, Price-Earning ratio (PE) was 111.24, Market capitalization was Rs. 11114.7 million, Book Value (BV) was Rs. 18.89 and the ratio of price to Book value was 32.33. As on November 25, 2009, the Earning per Share (EPS) of the company was Rs. 7.27, Price-Earning ratio (PE) was 178.26, Market capitalization was Rs. 23586.3 million, Book Value (BV) was Rs. 17.62 and the ratio of price to Book value was 73.54 (source www.capitaline.com)

Table 2 : Financials Period Ending 30-Jun-09 31-Mar-09 31-Dec-08 30-Sep-08 No. of Months 3 3 3 3 Particulars Rs. in millions Net Sales / Interest Earned / Operating 1,976.83 1,884.33 1,684.94 1,203.92 Income Other Income 0.32 0.31 0.23 0.54 Total Income 1,977.15 1,884.64 1,685.17 1,204.46 Expenditure -1,883.55 -1,831.23 -1,625.63 -1,122.30 Interest -35.83 -35.44 -29.63 -24.09 Profit Before Depreciation and Tax 57.77 17.97 29.91 58.07 Depreciation -3.05 -3.15 -2.85 -3.25 Profit before Tax 54.72 14.82 27.06 54.82 Tax -18.60 -5.04 -9.20 -18.64 Net Profit 36.11 9.78 17.86 36.18 (Source: BSE website) B. Major Corporate Announcements 6. Major corporate announcements made by the company during the period of examination are as under:

Table 3 : Corporate Announcements Date Announcement September 04, 2009 • The Board has recommended a dividend of Re. 1.00 per equity shares (i.e. @ 10%) for the financial year 2008-09 as final dividend. • The Board has recommended a split of face value of equity share of Rs. 10/- each into face value equity share of Re. 1/- each. July 03, 2009 Company is contemplating to enhance the capacity around five lacs liter per day by taking over dairy plant in Uttranchal which will be operational within three months. The Company is in advance stages of negotiation for takeover of the plant. Such acquisition will enhance the capacity of the Company and also the product line by adding various new products &

Date Announcement SKU's. Such acquisition will have great impact on the financial position of the Company and will also enhance the profitability of the Company as the Company will cover wider area of state of Uttranchal for the marketing of its various products. For this purpose, Company is expanding the Dealer Network and getting into tie ups with various institutions. (Source: BSE website) C. Price Volume movement in the shares of the company 7. It was observed that during the period from January 01, 2009 till June 06, 2009 the share price of the company rose from Rs. 55 to Rs. 160. During the period June 06, 2009 till June 29, 2009 the share price of the company was range bound in a range of Rs. 140 - Rs. 160. Thereafter from June 29, 2009 to September 23, 2009 the share price of the company moved from Rs. 155 to Rs. 600. The Price volume (PV) chart of the company for the examination period is depicted below:

225000 650 600 200000 550 175000 500 450 150000 400 125000 350 300 100000 250 75000 200 50000 150 100 25000 50 0 0 30- 9- 20- 30- 10- 19- 3- 16- 25- 6- 20- 29- 12- 22- 2- 11- 22- 1-Jul- 10- 21- 30- 10- 19- 28- 8- 17- Dec- Jan- Jan- Jan- Feb- Feb- Mar- Mar- Mar- Apr- Apr- Apr- May- May- Jun- Jun- Jun- 09 Jul- Jul- Jul- Aug- Aug- Aug- Sep- Sep- 08 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 09 Total Volume Close Price

8. From the above graphical representation, it is observed that the price rise in the shares can be attributed to trading carried out in two patches: the first patch period as January 01, 2009 till June 06, 2009 while the second patch period as June 29, 2009 till September 23, 2009. In the first patch i.e. January 01, 2009 till June 06, 2009 the share price of the company had moved from Rs. 55 to Rs. 160 while in the second patch i.e. June 29, 2009 till September 23, 2009 the share price of the company rose from Rs. 155 to Rs. 610. It was also observed that in the first patch the trading volumes were more than the trading volumes in the second patch. The average daily volume and price range for the pre-examination, examination & post examination period is as under:

Table 4 : Price-Volume Period Price Range Average Daily (Low- High) Volume Pre Examination July 01, 2008 till December 31, 2008 14.6 - 52.9 18652 First Patch January 01, 2009 till June 06, 2009 51.6 – 171.85 38686 Second patch June 29, 2009 till September 23, 2009 139.15 – 615.25 21373 Post September 23, 2009 till November 11, 595.65- 1114.45 72735 Examination 2009 9. From the above table it is observed that during pre-examination period the percentage rise in the price of the scrip was approximately 262% on average daily volume of approximately 18000 shares. During the first patch the percentage rise in the share price of the company was approximately 233% on average daily volume of approximately 38000 shares. For the second patch the percentage rise in the share price of the company was approximately 342% on an average daily volume of approximately 21000 shares, while during the post examination period the percentage rise in the share price of the company was approximately 87% on an average daily volume of approximately 72000 shares. The price has risen most in the second patch on lower volumes as compared to the first patch.

Thus, across the entire examination period the price of the shares of the company had risen by more than 1000%. D. Client concentration 10. From the IMSS data analysis of client concentration for the top 15 clients on the net buy/sell basis for both the patches was carried out and following are the observations: 11. In the first patch the top purchaser on net basis was an entity Leela Surana R (LSR) having address as No. - 48 G.M Street, Sowcarpet, Chennai- 600079. Among the top sellers in first patch were a group of clients, majority of which were based in Chennai, all trading through broker MSE Financial Services Limited. Both the top purchaser and top sellers viz. the Chennai based clients, were trading through same Chennai based broker, sub-broker and trader. 12. In the second patch top purchasers on net basis were Mahasagar Securities (MS) and Bhupendra Singh Rathore (BSR) having addresses as Renuka Sadan 43 Jati Colony Rambagh Indore-452001 and D-1681 Sudama Nagar Indore - 452001. In the examination it was notice that BSR has a joint demat account with one Rajesh Kumar Vyas (RKV).

Further the address of RKV is same as that of MS. Thus, Mahasagar Securities, Bhupendra Singh Rathore and Rajesh Kumar Vyas (hereinafter referred to as BSR Group) appeared to be acting together. In second patch top sellers on net basis were mainly placing their orders through brokers MPSE Securities Ltd. and SMC Global Securities Ltd. These clients were having addresses as C-11, HIG Ravishankar Sukla Nagar, Indore and Pusa Niwas, Near Kashipuri, Bhilwara – 311001. Among the top 15 sellers the clients belonging above addresses had altogether sold 63,000 shares constituting approximately 50% of the volume of the top 15 sellers. E. Analysis of the trading pattern and Off Market transfers in the shares of the company during the examination period 13. Data was sought from the depositories, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to examine the market transactions and off-market transfers in the scrip for selected entities. Analysis was carried out based on the data received from the depositories as well as the data captured in IMSS regarding off-market transfer and trading data of stock exchanges.

The major observations in this regard are as under: 14. Movement of shares in off market and through exchange transactions: The representation of the movement of shares in off market and the exchange among the various entities of Leela Surana R (hereinafter referred to as Surana group) group and Bhupendra Singh Rathore/ Mahasagar Securities/Rajesh Kumar Vyas group (hereinafter referred to as BSR group) in first and second patch is tabulated as under:

Table 5 : Movement of shares in off market and through exchange transactions Transaction Execution date Nature of Qty Buyer client Seller client Remarks date / Settlement transaction date * First patch 6-Feb-09 10-Feb-09 Market Transaction 5000 LSR Scattered 6-Feb-09 10-Feb-09 Off Market Transfer 5000 Kamlesh Devi Agarwal LSR Cycle 1 9-Feb-09 11-Feb-09 Market Transaction 5000 LSR Kamlesh Devi Agarwal 7-Feb-09 11-Feb-09 Off Market Transfer 5000 Manju Agarwal LSR Cycle 2 10-Feb-09 12-Feb-09 Market Transaction 5000 LSR Manju Agwarwl 9-Feb-09 12-Feb-09 Off Market Transfer 5000 Alka Jain LSR Cycle 3 11-Feb-09 13-Feb-09 Market Transaction 4900 LSR Alka Jain 5100 Scattered 10-Feb-09 13-Feb-09 Off Market Transfer 5000 Alka Jain LSR Cycle 4 11-Feb-09 14-Feb-09 4866 M L Agarwal HUF 12-Feb-09 16-Feb-09 Market Transaction 4495 LSR Alka Jain 12-Feb-09 5000 M L Agarwal HUF 12-Feb-09 16-Feb-09 Off Market Transfer 5600 M Sachin LSR Cycle 5 4266 Sharda Khemka 13-Feb-09 17-Feb-09 Market Transaction 5600 LSR M Sachin 4300 Sharda Khemka 13-Feb-09 17-Feb-09 Off Market Transfer 700 Sharda Khemka LSR Cycle 6 4400 Meeth A 4700 Rahul H 16-Feb-09 18-Feb-09 Market Transaction 700 LSR Sharda Khemka 4400 Meeth A 4688 Rahul H 16-Feb-09 19-Feb-09 Off Market Transfer 10000 Tejraj Jain HUF LSR Cycle 7 17-Feb-09 19-Feb-09 Market Transaction 9425 LSR Tejraj Jain HUF 16-Feb-09 19-Feb-09 Off Market Transfer 10000 Indira Bai P. LSR Cycle 8 18-Feb-09 24-Feb-09 Market Transaction 9500 LSR Indira Bai P. Second patch 25 & 26 May 27 & 28 may Market Transaction 5588 BSR/MS/RKV scattered 2009 2009 29-May-09 2-Jun-09 Off Market Transfer 5500 Amit Chotwani BSR/MS/RKV Cylce 1 2-Jun-09 4-Jun-09 Market Transaction 5500 BSR/MS/RKV Amit Chotwani 5-Jun-09 9-Jun-09 Off Market Transfer 5500 Amit Chotwani BSR/MS/RKV Cycle 2

Transaction Execution date Nature of Qty Buyer client Seller client Remarks date / Settlement transaction date * 8-Jun-09 10-Jun-09 Market Transaction 5000 BSR/MS/RKV Amit Chotwani 13-Jun-09 17-Jun-09 Off Market Transfer 5500 Amita Chandresh Jain BSR/MS/RKV Cycle 3 18-Jun-09 22-Jun-09 Market Transaction 5500 BSR/MS/RKV Amita Chandresh Jain 22-Jun-09 25-Jun-09 Off Market Transfer 2000 Amita Chandresh Jain BSR/MS/RKV Cycle 4 23-Jun-09 26-Jun-09 3500 Sunil Bandi 25-Jun-09 29-Jun-09 Market Transaction 2000 BSR/MS/RKV Amita Chandresh Jain 3-Jul-09 7-Jul-09 3500 Sunil Bandi 4-Jul-09 7-Jul-09 Off Market Transfer 2000 Bhagwandas Hotani BSR/MS/RKV Cycle 5 3500 Ajay Kumar bandi 15-Jul-09 17-Jul-09 Market Transaction 3500 BSR/MS/RKV Ajay Kumar bandi 13-Jul-09 15-Jul-09 Market Transaction 2500 Bhagwandas Hotani 16-Jul-09 20-Jul-09 Off Market Transfer 6000 Amar Veer Kaur BSR/MS/RKV Cycle 6 Chadha 20-Jul-09 22-Jul-09 Market Transaction 6000 BSR/MS/RKV Amar Veer Kaur Chadha 20-Jul-09 23-Jul-09 Off Market Transfer 6000 Amar Veer Kaur BSR/MS/RKV Cycle 7 Chadha 21-Jul-09 24-Jul-09 2000 Naveen Kumar Bhageria 27-Jul-09 29-Jul-09 Market Transaction 6000 BSR/MS/RKV Amar Veer Kaur Chadha 28-Jul-09 30-Jul-09 2000 Naveen Kumar Bhageria * For off market transfer Execution date is considered while for market transaction settlement date is considered 15. From the above table, it is observed that the cycle of off-market transfer and market transaction i.e. purchase through market, has been repeated a number of times among various entities in the same/similar manner wherein either Leela Surana R. (in first patch) or Bhupendra Singh Rathore/Mahasagar Securities/Rajesh Kumar Vyas (in second patch) they had purchased shares initially from the market and then carried out an off market transfers to various related entities.

Then they had once again purchased the shares that are transferred off-market from such entities on a subsequent day by carrying out market transaction on exchange platform. 16. Off market transfers made by Leela Surana R. and Bhupendra Singh Rathore/Mahasagar Securities/Rajesh Kumar Vyas to various entities during the examination period: As already mentioned above, the entities Leela Surana R. & Bhupendra Singh Rathore/Rajesh Kumar Vyas/Mahasagar Securities were actively trading and were top purchasers during the first patch and second patch respectively. From the off-market transfers, it appears that majority of the top sellers on net basis during both the patches had received off market transfer from the above two clients in first and second patch respectively. 17. The sellers who figured in top 15 clients on net basis in either of the patches had received shares from either Leela Surana R (in first patch) or from Bhupendra Singh Rathore/Rajesh Kumar Vyas/Mahasagar Securities (in second patch) in off-market transactions on various occasions. Thus, in both the patches it was observed that the entities who were the top sellers in the market had met their pay-in obligations form the shares received through off-market transfers from the top purchasers.

Prima facie the various entities which appears to be part of these two groups in first patch and second patch respectively are as under. Entities during first patch (Surana Group) 1. Alka Jain 2. Hiralal Patel (HUF) 3. Indira Bai P 4. Kamlesh Devi Agrawal 5. Leela Surana. R 6. M Sachin 7. Manju Agarwal 8. Meeth A 9. M L Agrawal (HUF) 10. N Rakesh Kumar 11. Pooja H 12. Pradeep Jain 13. Radha H Patel 14. Rahul H 15. Rajendra Patel & Sons 16. Ramawatar Agarwal 17. Reena 18. Shanti Lal B 19. Shantilal V Patel (HUF) 20. Sharda Khemka 21. Tejraj Jain HUF 22. Yogesh Khemka

Entities during Second patch (BSR Group) 1. Adarsh Kumar Mansinghka 2. Ajay Kumar Bandi 3. Ajay Kumar Malpani 4. Amar Veer Kaur Chadha 5. Amit Chothwani 6. Amita Chandresh Jain 7. Ashok Kumar Agrawal 8. Bhagwandas Hotwani 9. Bhupendra Singh Rathore 10. Gulab Chand Mandwani 11. Harsh Kumar Mansinghka 12. Mahasagar Securities 13. Mamta Bhageria 14. Mangla Agrawal 15. Manish Mandwani 16. Manish Mangilal Jain 17. Naveen Kumar Bhageria 18. Neeraj Kumar Mansinghka 19. Pankaj Kumar Mansinghka 20. Pradeep Kumar Pirodia

21. Radha Mundra 22. Rajendra Agrawal 23. Rajesh Kumar Vyas 24. Raminder Chadha HUF 25. Raminder Chadha 26. Sangeeta Agrawal 27. Sunil Bandi 28. Super Sack Private Limited 29. Suresh Kumar Bandi 30. Vinod Kumar Gupta 18. Synchronized trading by the entities of Surana Group & BSR Group: During the first patch, from the analysis of the IMSS data, it was observed that the trader id from which the orders were routed for the entities of LSR Group belongs to one Mr. Dinesh Kumar Surana of MSE Financial Services Limited. All these clients are also having their demat accounts with Madras Stock Exchange Limited (MSE), the promoter of MSE Financial Services Limited and a Depository Participant (DP) of CDSL. It was further noted that Dinesh Kumar Surana with trade name Surana Capital Markets, is a broker-member of MSE as well as sub-broker of BSE and NSE affiliated through MSE Financial Services Limited (subsidiary of MSE) having SEBI registration numbers as INB041148116, INS011004517 and INS234538218 respectively. Moreover, one of the addresses of Leela Surana R is same as that of the sub-broker’s address.

19. It was further observed that these entities had placed orders through the three trader ids belonging to Dinesh Kumar Surana and entered into synchronized trading with each other by placing the buy-sell orders in a synchronized manner wherein the buy order time and sell order time had very little difference. Further, the trades occurred with buy and sell orders that were placed from the location ids belonging to the same office of the sub-broker viz. No. 45, Elephant gate Street, 2nd Floor Chennai. From the IMSS data it was observed that the trader for Leela Surana R as well as for other clients was Mr. Dinesh Kumar Surana and in most cases the difference between the bid-order and sell order was less than a second. 20. During second patch, it was observed that in most of the cases the difference of bid order and ask order time is less than minute which implies that the entities of BSR group were placing the orders in synchronized manner. On few occasions in second patch (as tabulated below) it was observed that before entering into a synchronized trade Bhupendra Singh Rathore/Rajesh Kumar Vyas/Mahasagar Securities had placed a big buy order at a price away from the prevailing price /last traded price and then latter amended/deleted those buy orders.

On each occasion the synchronized trade was with a counter party which received shares from BSR/MS/RKV through off-market transfer. 21. Few instances of synchronized trading carried out in both the patches are listed in the tables below:

Table 6 : Few instances of synchronized trades Order Id Date Qty Order time Counter party client Bid Ask Bid Ask difference Bid Client Leela Surana R 24605600020129700 24604900020165900 9/2/2009 2500 10:16:02 10:16:02 0:00:00 Kamlesh Devi Agrawal 24605600020129700 24604900020165900 9/2/2009 2500 10:16:02 10:16:02 0:00:00 Kamlesh Devi Agrawal

Order Id Date Qty Order time Counter party client Bid Ask Bid Ask difference 24605600020129700 24604900020165900 10/2/2009 1500 10:13:37 10:13:36 0:00:01 Manju Agarwal 24605600020129700 24604900020165900 10/2/2009 1500 10:13:37 10:13:36 0:00:01 Manju Agarwal 24605600020129700 24604900020165900 10/2/2009 2000 10:13:37 10:13:36 0:00:01 Manju Agarwal 24605600020129700 24604900020165900 11/2/2009 1000 10:05:11 10:05:11 0:00:00 Alka Jain 24605600020129700 24604900020165900 11/2/2009 1400 10:05:11 10:05:11 0:00:00 Alka Jain 24605600020129700 24604900020165900 11/2/2009 1500 10:05:11 10:05:11 0:00:00 Alka Jain 24605600020129700 24604900020165900 12/2/2009 1000 10:17:27 10:17:27 0:00:00 ML Agrawal (HUF) 24605600020129700 24604900020165900 12/2/2009 1000 10:17:27 10:17:27 0:00:00 ML Agrawal (HUF) 24605600020129700 24604900020165900 12/2/2009 2000 10:17:27 10:17:27 0:00:00 Alka Jain 24605600020129700 24604900020165900 12/2/2009 1500 10:17:27 10:17:27 0:00:00 ML Agrawal (HUF) 24605600020129700 24604900020165900 12/2/2009 1500 10:17:27 10:17:27 0:00:00 ML Agrawal (HUF) 24605600020129700 24604900020165900 12/2/2009 995 10:17:27 10:17:27 0:00:00 Alka Jain 24605600020129700 24604900020165900 12/2/2009 2000 10:17:27 10:17:27 0:00:00 Alka Jain 24605600020129700 24604900020166000 13/2/2009 1000 10:21:51 10:21:51 0:00:00 Sharda Khemka 24605600020129700 24604900020166000 13/2/2009 1400 10:21:51 10:21:51 0:00:00 Sharda Khemka 24605600020129800 24604900020166000 16/2/2009 2700 11:22:28 11:22:28 0:00:00 Rahul H 24605600020129800 24604900020166000 16/2/2009 2400 11:22:28 11:22:28 0:00:00 Meeth A 24605600020129800 24604900020166000 16/2/2009 700 11:22:28 11:22:28 0:00:00 Sharda Khemka 24605600020129800 24604900020166000 16/2/2009 1988 11:22:28 11:22:28 0:00:00 Rahul H 24605600020129800 24604900020166000 16/2/2009 1000 11:22:28 11:22:28 0:00:00 Meeth A 24605600020129800 24604900020166000 16/2/2009 1000 11:22:28 11:22:28 0:00:00 Meeth A 24605600020129800 24604900020166100 18/2/2009 2000 10:16:02 10:16:02 0:00:00 Indira Bai P 24605600020129800 24604900020166100 18/2/2009 1500 10:16:02 10:16:02 0:00:00 Indira Bai P 24605600020129800 24604900020166100 18/2/2009 2000 10:16:02 10:16:02 0:00:00 Indira Bai P 24605600020129800 24604900020166100 18/2/2009 1000 10:16:02 10:16:02 0:00:00 Indira Bai P 24605600020129800 24604900020166100 18/2/2009 1500 10:16:02 10:16:02 0:00:00 Indira Bai P 24605600020129800 24604900020166100 18/2/2009 1500 10:16:02 10:16:02 0:00:00 Indira Bai P 24605600020129900 24604900020166100 19/2/2009 400 14:19:07 14:19:07 0:00:00 Kamlesh Devi Agrawal 24605600020129900 24604900020166100 19/2/2009 400 14:19:07 14:19:07 0:00:00 Manju Agarwal 24605600020129900 24604900020166100 19/2/2009 400 14:19:07 14:19:07 0:00:00 ML Agrawal (HUF) 24605600020129900 24604900020166100 19/2/2009 700 14:19:07 14:19:07 0:00:00 Sharda Khemka 24605600020129900 24604900020166100 19/2/2009 1400 14:19:07 14:19:07 0:00:00 Ramawatar Agarwal 24605600020129900 24604900020166100 19/2/2009 950 14:19:07 14:19:07 0:00:00 Yogesh Khemka 24605600020129900 24604900020166100 19/2/2009 3000 14:19:07 14:19:07 0:00:00 Yogesh Khemka 24605600020129900 24604900020166100 19/2/2009 1500 14:19:07 14:19:07 0:00:00 Yogesh Khemka 24605600020129900 24604900020166100 19/2/2009 1500 14:19:07 14:19:07 0:00:00 Yogesh Khemka 24605600020129900 24604900020166100 24/2/2009 2500 11:59:58 11:59:58 0:00:00 Ramawatar Agarwal 24605600020129900 24604900020166100 24/2/2009 1495 11:59:58 11:59:58 0:00:00 Ramawatar Agarwal 24605600020129900 24604900020166100 24/2/2009 2000 11:59:58 11:59:58 0:00:00 Tejraj Jain HUF 24605600020129900 24604900020166100 24/2/2009 1500 11:59:58 11:59:58 0:00:00 Ramawatar Agarwal 24605600020129900 24604900020166100 25/2/2009 1800 11:15:54 11:15:54 0:00:00 Reena 24605600020129900 24604900020166100 25/2/2009 1450 11:15:54 11:15:54 0:00:00 Rajesh Kumar Jain 24605600020129900 24604900020166100 25/2/2009 2000 11:15:54 11:15:54 0:00:00 Reena 24605600020129900 24604900020166100 25/2/2009 1500 11:15:54 11:15:54 0:00:00 Rajesh Kumar Jain 24605600020129900 24604900020166100 25/2/2009 2000 11:15:54 11:15:54 0:00:00 Reena 24605600020129900 24604900020166100 25/2/2009 1500 11:15:54 11:15:54 0:00:00 Rajesh Kumar Jain

Order Id Date Qty Order time Counter party client Bid Ask Bid Ask difference 24605600020129900 24604900020166100 26/2/2009 2835 14:34:49 14:34:49 0:00:00 Pooja H 24605600020129900 24604900020166100 26/2/2009 2000 14:34:49 14:34:49 0:00:00 Pooja H 24605600020129900 24604900020166100 26/2/2009 2400 14:34:49 14:34:49 0:00:00 Indira Bai P 24605600020129900 24604900020166100 26/2/2009 3000 14:34:49 14:34:49 0:00:00 Indira Bai P 24605600020129900 24604900020166200 2/3/2009 2500 14:09:02 14:09:02 0:00:00 Tejraj Jain HUF 24605600020129900 24604900020166200 2/3/2009 2500 14:09:02 14:09:02 0:00:00 Tejraj Jain HUF 24605600020129900 24604900020166200 3/3/2009 3750 10:47:32 10:47:32 0:00:00 Radha H Patel 24605600020129900 24604900020166200 3/3/2009 3750 10:47:32 10:47:32 0:00:00 Shantilal V Patel (HUF) 24605600020129900 24604900020166200 3/3/2009 2800 10:47:32 10:47:32 0:00:00 Rajendra Patel & Sons 24605600020129900 24607500000013300 4/3/2009 2300 11:45:19 11:45:19 0:00:00 Indira Bai P 24605600020129900 24607500000013300 4/3/2009 4000 11:45:19 11:45:19 0:00:00 Indira Bai P Bid client Mahasagar Securities/ Bhupendra Singh Rathore/Rajesh Vyas 180000030245 160002023230 18/6/2009 2500 14:02:21 14:02:15 0:00:06 Amita Chandresh Jain 230002033243 160002023230 18/6/2009 3000 14:02:28 14:02:15 0:00:13 Amita Chandresh Jain 140001015272 150000016590 25/6/2009 2000 12:52:18 12:52:16 0:00:02 Amita Chandresh Jain 110001030178 220000037496 20/7/2009 6000 13:18:31 13:18:31 0:00:00 Chadha Amarveer Kaur 130001009756 200000018951 27/7/2009 6000 12:33:51 12:33:48 0:00:03 Chadha Amarveer Kaur 140001022731 220000029695 3/8/2009 6000 14:09:44 14:09:45 0:00:01 Harsh Kumar Mansinghka 120001024358 230002022179 5/8/2009 1500 12:51:32 12:50:58 0:00:34 Ajay Kumar Malpani 210000024027 170001019145 7/8/2009 6000 14:20:03 14:20:00 0:00:03 Adarsh Kumar Mansinghka 110025034337 160023040272 11/8/2009 1000 15:28:43 15:28:39 0:00:04 Ajay Kumar Malpani 150017028037 110020019652 13/8/2009 5700 11:41:52 11:40:51 0:01:01 Neeraj Kumar Mansinghka 130050013702 180057006059 21/8/2009 2000 10:18:24 10:18:23 0:00:01 Raminder Chadha HUF 130050026838 200055015594 21/8/2009 2000 11:18:39 11:18:39 0:00:00 Raminder Chadha HUF 230056014755 180057015800 21/8/2009 200 12:14:42 12:14:40 0:00:02 Raminder Chadha HUF 140059036549 180057016582 21/8/2009 1800 12:29:14 12:29:15 0:00:01 Raminder Chadha HUF 130050057134 220060040553 25/8/2009 3000 14:47:08 14:47:07 0:00:01 Pankaj Kumar Mansinghka 130049064934 220060043699 26/8/2009 3000 14:53:11 14:53:07 0:00:04 Pankaj Kumar Mansinghka 220061040473 180066060402 4/9/2009 800 13:45:32 13:45:30 0:00:02 Abha Mansinghka 220061040512 180066060455 4/9/2009 800 13:45:51 13:45:47 0:00:04 Abha Mansinghka 180066060516 180066060505 4/9/2009 800 13:46:05 13:46:02 0:00:03 Abha Mansinghka 180066060556 180066060554 4/9/2009 600 13:46:21 13:46:21 0:00:00 Abha Mansinghka 160016054508 150019070360 8/9/2009 250 15:09:32 15:09:24 0:00:08 Adarsh Kumar Mansinghka 160016054508 150019070400 8/9/2009 250 15:09:32 15:09:39 0:00:07 Adarsh Kumar Mansinghka 160016054532 150019070400 8/9/2009 250 15:09:49 15:09:39 0:00:10 Adarsh Kumar Mansinghka 160016054532 150019070443 8/9/2009 250 15:09:49 15:09:56 0:00:07 Adarsh Kumar Mansinghka 160016054552 150019070443 8/9/2009 250 15:10:04 15:09:56 0:00:08 Adarsh Kumar Mansinghka 160016054552 150019070463 8/9/2009 250 15:10:04 15:10:09 0:00:05 Adarsh Kumar Mansinghka 160016054579 150019070463 8/9/2009 250 15:10:19 15:10:09 0:00:10 Adarsh Kumar Mansinghka 160016054579 150019070498 8/9/2009 250 15:10:19 15:10:23 0:00:04 Adarsh Kumar Mansinghka 230024036853 150019070498 8/9/2009 250 15:10:31 15:10:23 0:00:08 Adarsh Kumar Mansinghka 230024036853 150019070530 8/9/2009 250 15:10:31 15:10:36 0:00:05 Adarsh Kumar Mansinghka 160016054641 150019070530 8/9/2009 250 15:10:53 15:10:36 0:00:17 Adarsh Kumar Mansinghka 120056043126 150053021047 15/9/2009 500 14:28:11 14:28:02 0:00:09 Pankaj Kumar Mansinghka 120055053809 150053021075 15/9/2009 500 14:28:18 14:28:21 0:00:03 Pankaj Kumar Mansinghka 120055063710 150053025146 15/9/2009 500 15:29:53 15:29:50 0:00:03 Pankaj Kumar Mansinghka

Order Id Date Qty Order time Counter party client Bid Ask Bid Ask difference 160021018255 120018021052 16/9/2009 500 10:40:40 10:40:54 0:00:14 Raminder Chadha HUF 220061044821 230058057366 18/9/2009 500 9:55:59 9:55:56 0:00:03 Adarsh Kumar Mansinghka 200027022840 150024055215 23/9/2009 500 9:55:59 9:55:56 0:00:03 Adarsh Kumar Mansinghka 210031049692 150024055215 23/9/2009 500 9:59:50 9:59:37 0:00:13 Adarsh Kumar Mansinghka 180066038457 230058030599 29/9/2009 500 9:55:59 9:55:56 0:00:03 Harsh Kumar Mansinghka 180000010161 220000008990 3/7/2009 3500 10:49:53 10:49:48 0:00:05 Bandi Sunil 180001001829 180001001825 15/7/2009 3460 10:03:44 10:03:43 0:00:01 Bandi Ajay Kumar 120001004246 180001001825 15/7/2009 40 10:04:15 10:03:43 0:00:32 Bandi Ajay Kumar 110001000829 160002017679 28/7/2009 2000 12:26:53 12:26:46 0:00:07 Naveen Kumar Bhageria 200021040973 170022036482 11/8/2009 1000 15:06:49 15:06:44 0:00:05 Naveen Kumar Bhageria 210023016807 120023020352 20/8/2009 1500 10:51:36 10:51:30 0:00:06 Mamta Bhageria

Table 7 : Few instances wherein BSR/MS/RKV had placed a large buy order away from last traded price and latter deleted those orders Bid order id Ask order id Time order Type Qty Price Buy Sell client / trade client Date: June 08, 2009 The last traded price prior to the order of BSR/MS/RKV was 166 140001024857 - 12:44:50 Enter 5500 160 BSR - 140001024857 - 12:44:50 Delete 5500 160 BSR - - 180001015365 12:45:51 Enter 5500 168 - Amit Chothwani - 180001015365 12:45:51 Delete 5500 168 - Amit Chothwani - 160000017772 12:46:16 Enter 5500 168 - Amit Chothwani - 160000017772 12:46:16 Amend 5500 165.5 - Amit Chothwani 200000022988 - 12:47:09 Enter 5500 165.5 BSR - 200000022988 160000017772 12:47:09 Trade 5000 165.5 BSR Amit Chothwani Date: June 25, 2009 The last traded price prior to the order of BSR/MS/RKV was 151.1 140001015223 - 12:51:07 Enter 2000 148 MS - 140001015223 - 12:51:07 Delete 2000 148 MS - - 150000016590 12:52:16 Enter 2000 152 - Amita Chandresh Jain 140001015272 - 12:52:18 Enter 2000 152 MS - 140001015272 150000016590 12:52:18 Trade 2000 152 MS Amita Chandresh Jain Date : August 07, 2009 The last traded price prior to the order of BSR/MS/RKV was 351 210000024008 - 14:19:37 Enter 6000 338 MS - 210000024008 - 14:19:37 Delete 6000 338 MS - - 170001019145 14:20:00 Enter 6000 349 - Adarsh Kumar Mansinghka 210000024027 - 14:20:03 Enter 6000 349 MS - 210000024027 170001019145 14:20:03 Trade 6000 349 MS Adarsh Kumar Mansinghka Date: August 25, 2009 The last traded price prior to the order of BSR/MS/RKV was 457.75 130050056897 - 14:45:47 Enter 6000 426 MS - 130050056897 - 14:45:47 Delete 6000 426 MS - - 220060040553 14:47:07 Enter 3000 457.5 Pankaj Kumar Mansinghka 130050057134 - 14:47:08 Enter 3000 457.5 MS - 130050057134 220060040553 14:47:08 Trade 3000 457.5 MS Pankaj Kumar Mansinghka

22. Trading within the group entities: From the IMSS data it was observed that for the period from February 6, 2009 till March 5, 2009, the total traded volume of Leela Surana R was 1,54,918 shares. During this period approximately 1,35,888 shares were traded with the entities who had received shares in off-market transfer from Leela Surana R. Thus, approximately 87.7% of trading by Leela Surana R was with the related entities while with other clients it was only 12.3%. Similarly for the period from May 25, 2009 till September 18, 2009 total traded volume of Bhupendra Singh Rathore and Mahasagar Securities was 1,17,003 shares. During this period approximately 97,010 shares were traded with the entities who had received shares in off-market transfer from Bhupendra Singh/Mahasagar securities/Rajesh Kumar Vyas. These trades constitute approximately 83% during the period while the trading by the client with other entities was only 17%. 23. Market share of trading by the entities in the two patches: The percentage of trading by Leela Surana R as well as Mahasagar Securities/ Bhupendra Singh Rathore/ Rajesh Kumar Vyas to total trading during the day is as under. It may further be noted that on most of the trading days the counter party clients were related to them as mentioned above: Table 8 : Contribution to daily trading Date Qty Traded Qty % to day’s volume Closing price First patch for Leela Surana R 6/2/2009 5000 57539 8.69 103.7 9/2/2009 5000 69070 7.24 102.2 10/2/2009 5000 116106 4.31 97.8 11/2/2009 10000 99528 10.05 102.5 12/2/2009 10000 41391 24.16 100.5 13/2/2009 10000 73382 13.63 100.6 16/2/2009 9800 52318 18.73 95.8 17/2/2009 10210 37057 27.55 91.2 18/2/2009 10040 92849 10.81 86.8 19/2/2009 10250 65523 15.64 83.1 24/2/2009 10250 34641 29.59 84.85 25/2/2009 10250 30725 33.36 86.9 26/2/2009 10235 15121 67.69 84.8 27/2/2009 5850 19213 30.45 82.25 2/3/2009 5000 30279 16.51 85.1 3/3/2009 10300 36154 28.49 83.85 4/3/2009 10300 27107 38.00 84.05 5/3/2009 7433 27415 27.11 82.6 Second patch for Mahasagar Securities/ Bhupendra Singh Rathore/ Rajesh Kumar Vyas 26/5/2009 5058 16643 30.39 157.5 2/6/2009 5500 27986 19.65 164.1 8/6/2009 5500 34810 15.80 165.2 18/6/2009 5500 14762 37.26 151.5 25/6/2009 2000 9970 20.06 152.4 3/7/2009 3500 35691 9.81 194.6

Date Qty Traded Qty % to day’s volume Closing price 13/7/2009 2500 21050 11.88 247.6 15/7/2009 3540 18643 18.99 260 20/7/2009 8000 29956 26.71 272.9 21/7/2009 1000 11133 8.98 292.1 27/7/2009 6000 29347 20.45 303.2 28/7/2009 2000 12750 15.69 313.6 3/8/2009 6000 13689 43.83 337.3 5/8/2009 3000 10108 29.68 345.9 7/8/2009 6000 15554 38.58 346.2 11/8/2009 2000 6480 30.86 334.5 13/8/2009 6000 15527 38.64 351.2 14/8/2009 1500 14814 10.13 364 19/8/2009 1500 15315 9.79 441.4 20/8/2009 1500 8429 17.80 428.3 21/8/2009 6000 22341 26.86 439.6 25/8/2009 4400 18818 23.38 447.5 26/8/2009 3000 18736 16.01 464.2 3/9/2009 1105 36102 3.06 455.7 4/9/2009 3000 61517 4.88 527.8 8/9/2009 3000 64471 4.65 552.4 9/9/2009 2000 56896 3.52 557.3 10/9/2009 1000 44627 2.24 561.5 24. From the above table it is observed that the contribution of trades by Leela Surana R during the first patch was in the range of 4% to 67% on the days when the entity had traded. Out of 18 trading days when the entity had purchased the shares during the first patch on 9 occasions its contribution to day’s volume was more than 20%. While in the second patch the contribution of trades by Mahasagar Securities/ Bhupendra Singh Rathore/ Rajesh Kumar Vyas was in the range of 2% to 43%.

Out of 28 trading days that the entities had purchased the shares, on 12 occasions its contribution was more than 20%. 25. From the above, it appears that by trading in a circular and synchronized manner the entities had generated fictitious trades and given a false misleading impression of large volumes in the scrip. Thus the entities mentioned above had carried out trading in such a manner as to attract the innocent and gullible investors in the shares of the company, that they have been which can be witnessed from the increase in the volumes as mentioned in above sections. The narration of the preliminary findings of SEBI examination conducted so far, leads to the conclusion that there is a prima facie case for SEBI to intervene immediately to prevent the continuing market abuse by the activities of above clients. If such devious practices are left unchecked the same would undermine the confidence of investors in the integrity of market and the trading systems. Further if such entities are left unchecked then they could potentially cause damage to securities market. It is, therefore, necessary and essential to urgently pass orders to protect the interests of investors and to preserve the safety and integrity of the market, pending completion of investigation.

26. Therefore, I find the said transactions are prima facie in violation of Regulation 4 (2) (a), (b), (g) and (n) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 which reads as under:- Regulation 4: Prohibition of manipulative, fraudulent and unfair trade practices (1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely:- a) indulging in an act which creates false or misleading appearance of trading in the securities market; b) dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; c) ………….. d) ………….. e) ……….. f) ………….. g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security; h) …………… i) …………… j) ……………. k) …………… l) ……………. m) …………… n) circular transactions in respect of a security entered into between intermediaries in order to increase commission to provide a false appearance of trading in such security or to inflate, depress or cause fluctuations in the price of such security; o) ……………. p) …………… q) ……………. r) …………….

27. Therefore, with a view to protect the interest of investors and securities market from such acts, I, in exercise of the powers delegated to me by the SEBI Board in terms of Section 19 of the Securities and Exchange Board of India Act 1992 read with Section 11B and 11(4)(b) thereof pending investigation, hereby issue following directions, by way of ad interim, ex-parte order:

a. Entities Bhupendra Singh Rathore (ALPPR1365R), Leela Surana R (AAJPS3594E), Mahasagar Securities (AAPFM5751R), Rajesh Kumar Vyas (AAPFM5751R) and Rajesh Kumar Vyas (AASPV7287J) are hereby directed not to buy, sell or deal in the securities in any manner till further directions in this regard. b. The Sub-broker Surana Capital Market having Pan No. AAJPS3597H is hereby directed not to buy, sell or deal in the securities of Kwality Dairy India Limited in any manner till further directions in this regard. The sub-broker is further directed not to buy, sell or deal in the securities in its own account in any manner till further directions in this regard. c. The major stock exchanges viz. The Bombay Stock Exchange Limited and the National Stock Exchange of India Limited and the depositories viz. National Securities Depository Limited and Central Depository Services Limited are directed to ensure that all the above directions are strictly enforced. The concerned stock exchanges are hereby directed to permit the members dealing for the above entities to square off their existing open positions, if any, in the F&O segment. Exchanges must strictly ensure that no fresh positions are created for these entities.

28. This order shall come into force with immediate effect. However, the entities/persons against whom this order is being passed may file their objections, if any, within 15 days from the date of this order and, if they so desire, may avail themselves of an opportunity of personal hearing at the Securities and Exchange Board of India, Head Office, Plot C4- A, G Block, Bandra Kurla Complex, Bandra East, Mumbai - 400 051 on a date and at a time to be fixed on a specific request, to be received in this behalf from the entities/persons within 15 days from the date of this order, in which case their representations shall be considered and a final view taken. If they do not respond within such stipulated time, it shall take final effect against them.

Dr. K M ABRAHAM Place : Mumbai WHOLE-TIME MEMBER Date: December 01, 2009 SECURITIES AND EXCHANGE BOARD OF INDIA